Exhibit 10(n)
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AMENDED AND RESTATED
STOCK AND ASSET PURCHASE AGREEMENT
between
ZENITH ELECTRONICS CORPORATION
and
LG ELECTRONICS ALABAMA, INC.
Dated as of November 9, 1999
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TABLE OF CONTENTS
Page
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1. Sale and Purchase ........................................................... 2
1.1 Sale and Purchase of Shares .......................................... 2
1.4 Closing .............................................................. 3
1.6 Purchase Price Adjustment ............................................ 4
2. Representations and Warranties of the Seller ................................ 6
2.1 Authorization, etc ................................................... 6
2.2 Title to Shares, Capitalization, etc ................................. 6
2.4 No Conflicts, etc .................................................... 8
2.5 Corporate Status ..................................................... 8
2.6 Financial Statements ................................................. 9
2.7 Litigation ........................................................... 10
2.8 Compliance with Laws and Instruments; Consents ....................... 10
2.9 Brokers, Finders, etc. ............................................... 12
2.10 Disclosure ........................................................... 12
3. Representations and Warranties of the Buyer ................................. 12
3.1 Corporate Status; Authorization, etc ................................. 13
3.2 No Conflicts, etc .................................................... 13
3.3 Brokers, Finders, etc ................................................ 14
4. Covenants of the Seller ..................................................... 14
4.1 Conduct of Business .................................................. 14
4.2 Access and Information ............................................... 17
4.3 Governmental Filings ................................................. 18
4.4 Further Actions ...................................................... 19
4.5 Further Assurances ................................................... 20
4.6 Insurance ............................................................ 21
5. Covenants of the Buyer ...................................................... 22
5.1 Further Actions ....................................................... 22
6. Covenants of the Buyer and the Seller ....................................... 23
6.1 Taxes ................................................................. 23
6.2 Employees ............................................................. 24
7. Conditions Precedent ........................................................ 24
7.1 Conditions to Obligations of Each Party .............................. 24
7.1.1 No Injunction, etc ........................................... 24
7.1.2 Restructuring of Seller ...................................... 25
7.2 Conditions to Obligations of the Buyer ............................... 25
7.2.1 Representations, Performance ................................. 25
7.2.2 Delivery of Shares ........................................... 25
7.2.3 Delivery of Purchased Equipment .............................. 26
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Page
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7.2.5 Audit of Specified Equipment .............................. 26
7.2.6 Delivery of Schedules ..................................... 26
7.2.7 Consents; Licenses ........................................ 30
7.2.8 Resignation of Directors .................................. 31
7.2.9 FIRPTA Certificate ........................................ 31
7.2.10 No Material Adverse Effect ................................ 31
7.2.11 Corporate and Other Proceedings ........................... 31
7.3 Conditions to Obligations of the Seller ........................... 32
7.3.1 Representations, Performance, etc ......................... 32
7.3.2 Corporate Proceedings ..................................... 32
8. Termination .............................................................. 32
8.1 Termination ...................................................... 32
8.2 Effect of Termination ............................................ 33
9. Indemnification .......................................................... 33
9.1 Indemnification by the Seller .................................... 33
9.2 Claims for Indemnification ....................................... 34
9.3 Payment Adjustments, etc ......................................... 34
9.4 Indemnification Procedures ....................................... 35
9.5 Tax Treatment of Indemnity Payments .............................. 37
10. Definitions .............................................................. 37
10.1 Terms Generally .................................................. 37
10.2 Certain Terms .................................................... 37
11. Miscellaneous ............................................................ 50
11.1 Expenses ......................................................... 50
11.2 Notices .......................................................... 51
11.3 Governing Law, etc ............................................... 52
11.4 Binding Effect ................................................... 54
11.5 Assignment ....................................................... 54
11.6 No Third Party Beneficiaries ..................................... 54
11.7 Amendment; Waivers, etc .......................................... 54
11.8 Entire Agreement ................................................. 55
11.9 Severability ..................................................... 56
11.10 Headings ......................................................... 56
11.11 Counterparts ..................................................... 56
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Page
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SCHEDULES
Schedule 2.5(a) - Organization
Schedule 2.5(b) - Qualification
Schedule 2.8(a) - Exceptions to Compliance
Schedule 2.8(b) - Consents
Schedule 3.2 - Consents
Schedule 4.1 - Conduct of Business: Permitted Bonuses or Advances
Schedule 7.2.6(a) - Personal Property
Schedule 7.2.6(b) - Real Property
Schedule 7.2.6(c) - Intellectual Property
Schedule 7.2.6(d) - Contracts
Schedule 7.2.6(e) - Insurance
Schedule 7.2.6(f) - Environmental Matters
Schedule 7.2.6(g) - Employees; Labor Matters, etc.
Schedule 7.2.6(h) - Employee Benefit Plans; ERISA
Schedule 7.2.6(i) - Accounts Receivable
Schedule 7.2.6(j) - Products
Schedule 7.2.6(k) - Bank Accounts
Schedule 7.2.6(l) - Consents
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AMENDED AND RESTATED
STOCK AND ASSET PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK AND ASSET PURCHASE AGREEMENT ("Agreement"),
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dated as of November 9, 1999, among Zenith Electronics Corporation, a Delaware
corporation (the "Seller"), and LG Electronics Alabama, Inc., an Alabama
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corporation (the "Buyer").
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W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller wishes to sell substantially all of the
outstanding capital stock of Partes de Television xx Xxxxxxx, a Mexican sociedad
anonima de capital variable and a wholly-owned subsidiary of the Seller (the
"Company") to the Buyer, and the Buyer wishes to purchase such shares from the
Seller, on the terms and conditions and for the consideration described in this
Agreement (defined terms having the meanings indicated in Section 10);
WHEREAS, as of the Closing Date, the authorized capital stock of the
Company will consist of 72,000 shares of Series B-1 common stock, par value 1
Mexican currency per share, and 70,504,292 shares of Series B-2 common stock,
par value 1 Mexican currency per share;
WHEREAS, as of the Closing Date, the Seller will have title to 71,979
shares of Series B-1 common stock and 70,504,292 shares of Series B-2 common
stock of the Company (the "Zenith Shares"), Zenith Texas will have title to 20
shares of Series B-1 common stock of the Company (the "Zenith Texas Shares") and
Xx. Xxxxxxx Xxxxxxx will
have title to one share of Series B-1 common stock of the Company (the "Xxxxxxx
Share");
WHEREAS, the Seller wishes to sell the Purchased Equipment to the
Buyer, and the Buyer wishes to purchase the Purchased Equipment, on the terms
and conditions and for the consideration described in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made herein and of the mutual benefits to be
derived herefrom, the parties hereto agree as follows:
1. Sale and Purchase.
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1.1 Sale and Purchase of Shares. Subject to the terms and conditions
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of this Agreement, at the Closing (as defined in Section 1.4), the Seller will,
and will cause Xx. Xxxxxxx Xxxxxxx to, sell, and the Buyer will purchase,
respectively, the Zenith Shares and the Xxxxxxx Share (together, the "Purchased
Shares").
1.2 Sale and Purchase of Purchased Equipment. Subject to the terms and
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conditions of this Agreement, at the Closing, the Seller will cause Zenith Texas
to sell, transfer, convey, assign and deliver to the Buyer, and the Buyer will
purchase and accept from Zenith Texas, all right, title and interest of Zenith
Texas in and to the Purchased Equipment.
1.3 Initial Purchase Amount. The Buyer will pay for the delivery of
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the Purchased Shares and the Purchased Equipment in advance on the date hereof
by the cancellation of Notes, held by the Buyer, in an aggregate principal
amount equal to the sum of the Initial Purchase Amount plus $5,733,870.83
(representing the appraised value
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of the Reynosa Leveraged Lease Equipment less depreciation expense). The
calculation of the Initial Purchase Amount shall be described in reasonable
detail in a special purpose balance sheet of the Company (the "Initial Balance
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Sheet") delivered on the date hereof and acceptable to both the Seller and the
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Buyer. The Initial Balance Sheet shall be based on the unaudited balance sheet
of the Company as of August 31, 1999 prepared in accordance with Mexican GAAP
and the following principles which, in the event of conflict with Mexican GAAP,
shall control: (i) Specified Equipment owned by Zenith Texas shall be included
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in the Initial Balance Sheet as though owned by the Company and valued at the
amount shown on the Greenwich Industrial Services, LLC appraisal, dated April 1,
1998, less depreciation expense from August 7, 1998 through August 31, 1999,
plus capital expenditures from August 7, 1998 through August 31, 1999 approved
by the Buyer, (ii) Specified Real Property consisting of the Trailer Parking
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Area shall be valued at $550,000 and all other Specified Real Property shall be
valued at the amount shown on the Insignia/ESG, Inc. report, dated April 1998,
less depreciation expense from August 7, 1998 through August 31, 1999, plus
capital expenditures from August 7, 1998 through August 31, 1999 approved by the
Buyer and (iii) any line items reflecting inventory owned by the Company shall
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be eliminated.
1.4 Closing. The closing of the sale and purchase of the Purchased
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Shares and the Purchased Equipment (the "Closing") shall take place at the
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offices of Xxxxxxxx & Xxxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000, at
10:00 a.m., Chicago time, on or about December 31, 1999 (the "Closing Date"). At
the Closing, the Seller shall deliver, or cause to be delivered, to the Buyer:
(i) free and clear of any Liens, one or more certificates
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representing the Purchased Shares, duly endorsed or accompanied by stock powers
in favor of the Buyer, and accompanied by all requisite stock transfer stamps,
(ii) such appropriately executed bills of sale, assignments and other
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instruments of transfer relating to the transfer of the Purchased Equipment,
free and clear of any Liens, from Zenith Texas to the Buyer, in form and
substance reasonably satisfactory to the Buyer and its counsel, (iii) such UCC
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and other Lien searches and such duly executed UCC-3 termination statements and
other releases, in each case as the Buyer or its counsel shall reasonably
request for the Purchased Equipment and (iv) such other documents as the Buyer
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or its counsel may reasonably request to demonstrate satisfaction of the
conditions and compliance with the covenants set forth in this Agreement.
1.5 Risk of Loss. Until the Closing, any loss of or damage to the
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Purchased Equipment from fire, casualty or any other occurrence not covered by
insurance payable to the Buyer shall be the sole responsibility of the Seller.
1.6 Purchase Price Adjustment. (a) Delivery of Closing Balance Sheet.
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As promptly as practicable, but no later than 90 days after the Closing Date,
the Seller will cause to be prepared and delivered to the Buyer a special
purpose balance sheet of the Company (including the notes thereto, the "Closing
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Balance Sheet"). The Closing Balance Sheet shall be based on an audited balance
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sheet of the Company as of December 31, 1999 prepared in accordance with Mexican
GAAP and the following principles which, in the event of conflict with Mexican
GAAP, shall control: (i) Specified Equipment owned by Zenith Texas shall be
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included in the Closing Balance Sheet as though owned by the Company and valued
at the amount shown on the Greenwich Industrial Services, LLC
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appraisal, dated April 1, 1998, less depreciation expense from August 7, 1998
through December 31, 1999, plus capital expenditures from August 7, 1998 through
December 31, 1999 approved by the Buyer, (ii) Specified Real Property consisting
--
of the Trailer Parking Area shall be valued at $550,000 and all other Specified
Real Property shall be valued at the amount shown on the Insignia/ESG, Inc.
report, dated April 1998, less depreciation expense from August 7, 1998 through
December 31, 1999, plus capital expenditures from August 7, 1998 through
December 31, 1999 approved by the Buyer and (iii) any line items reflecting
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inventory owned by the Company shall be eliminated. The Closing Balance
Sheet must be reasonably acceptable to the Buyer.
(b) Adjustment and Payment. The Initial Purchase Amount shall be (i)
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increased dollar for dollar by the amount by which the Net Book Value shown on
the Closing Balance Sheet exceeds the Net Book Value shown on the Initial
Balance Sheet or (ii) decreased dollar for dollar by the amount by which the Net
--
Book Value shown on the Closing Balance Sheet is less than the Net Book Value
shown on the Initial Balance Sheet; provided, however, that the Initial Purchase
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Amount shall be adjusted pursuant to this Section 1.6(b) only if the amount of
such adjustment exceeds $100,000. Any adjustments to the Initial Purchase Amount
made pursuant to this Section 1.6(b) shall be paid by wire transfer in
immediately available funds to an account specified by the party to whom such
payment is owed within five business days after the delivery of the Closing
Balance Sheet.
(c) No Limitation. The Buyer's rights to indemnification pursuant to
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Section 9 (and any limitations on such rights) shall not be deemed to limit,
supersede or
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otherwise affect the Buyer's rights to a full purchase amount adjustment
pursuant to this Section 1.6.
2. Representations and Warranties of the Seller. The Seller represents
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and warrants to the Buyer as follows, as of the date hereof and as of the
Closing Date:
2.1 Authorization, etc. The Seller has full corporate power and
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authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement, the performance of the Seller's obligations
hereunder, and the consummation of the transactions contemplated hereby, have
been duly authorized by all requisite corporate action of the Seller. The Seller
has duly executed and delivered this Agreement. This Agreement constitutes the
legal, valid and binding obligation of the Seller enforceable against the Seller
in accordance with its respective terms.
2.2 Title to Shares, Capitalization, etc. (a) Title. As of the Closing
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Date, the Seller will own, beneficially and of record, the Zenith Shares, free
and clear of any Liens, Zenith Texas will own, beneficially and of record, the
Zenith Texas Shares, free and clear of any Liens, and Xx. Xxxxxxx Xxxxxxx will
own, beneficially and of record, the Xxxxxxx Share, free and clear of any Liens.
Upon the delivery of and payment for the Purchased Shares at the Closing as
provided for in this Agreement, the Buyer will acquire good and valid title to
all the Purchased Shares, free and clear of any Lien other than any Lien created
by the Buyer.
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(b) Authorized Capital Stock of the Company. As of the date hereof,
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the authorized capital stock of the Company consists of 22,000 shares of Series
A common stock, par value 1,000 Mexican currency per share, 67,444,598 shares of
Series B common stock, par value 1,000 Mexican currency per share, and 3,059,694
shares of Series C common stock, par value 1,000 Mexican currency per share, all
of which shares are issued and outstanding. As of the Closing Date, the
authorized capital stock of the Company will consist of 72,000 shares of Series
B-1 common stock, par value 1 Mexican currency per share, and 70,504,292 shares
of Series B-2 common stock, par value 1 Mexican currency per share, all of which
shares will be issued and outstanding. All of the issued and outstanding shares
of the Company are as of the date hereof, and will be as of the Closing Date,
duly authorized and validly issued and fully paid and nonassessable.
(c) No Equity Rights. There are no preemptive or similar rights on the
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part of any holders of any class of securities of the Company. Except for this
Agreement, no subscriptions, options, warrants, conversion or other rights,
agreements, commitments, arrangements or understandings of any kind obligating
any member of the Seller Group or any other Person, contingently or otherwise,
to issue or sell, or cause to be issued or sold, any shares of capital stock of
any class of the Company, or any securities convertible into or exchangeable for
any such shares, are outstanding, and no authorization therefor has been given.
There are no outstanding contractual or other rights or obligations to or of any
member of the Seller Group or any other Person to repurchase, redeem or
otherwise acquire any outstanding shares or other equity interests of the
Company.
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2.3 Purchased Equipment. Zenith Texas has good and marketable title to
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the Purchased Equipment, free and clear of all Liens other than any Liens
created by the Buyer.
2.4 No Conflicts, etc. To the best of the Seller's knowledge and
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belief, the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, do not and will not
conflict with, contravene, result in a violation or breach of or default under
(with or without the giving of notice or the lapse of time or both), create in
any other Person a right or claim of termination, amendment, or require
modification, acceleration or cancellation of, or result in the creation of any
Lien (or any obligation to create any Lien) upon any of the properties or assets
of the Seller or the Company (including, without limitation, the Purchased
Equipment) under, (a) any Law applicable to any member of the Seller Group or
-
any of their respective properties or assets, (b) any provision of any of the
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Organizational Documents of any member of the Seller Group or (c) any Contract,
-
or any other agreement or instrument to which any member of the Seller Group is
a party or by which any of their respective properties or assets may be bound,
except, in the case of this clause (c), for violations and defaults that,
individually and in the aggregate, could not reasonably be expected to have or
result in a Material Adverse Effect or to impair materially the ability of the
Seller to perform its obligations hereunder.
2.5 Corporate Status. (a) Organization. Each of the Seller and the
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Company is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization, which
jurisdiction is set forth on
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Schedule 2.5(a), and has full corporate power and authority to conduct its
business and to own or lease and to operate its properties as and in the places
where such business is conducted and such properties are owned, leased or
operated.
(b) Qualification. The Company is duly qualified or licensed to do
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business and in good standing in each of the jurisdictions specified in Schedule
2.5(b), which includes each jurisdiction in which the nature of its business or
the properties owned or leased by it makes such qualification or licensing
necessary.
(c) Organizational Documents. The Seller has delivered to the Buyer
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complete and correct copies of the Organizational Documents of the Company, as
amended, modified or waived through and in effect on the date hereof. Each of
the Organizational Documents of the Company is in full force and effect. The
Company is not in violation of any of the provisions of its Organizational
Documents. The minute books of the Company, which have heretofore been made
available to the Buyer, correctly reflect in all material respects (i) all
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corporate actions taken by the stockholders that the stockholders were required
by applicable Law to take, (ii) all corporate actions taken by the directors of
--
the Company that the board of directors of the Company was required by
applicable Law to take and (iii) all other corporate actions taken by the
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stockholders and directors of the Company (including by any committee of the
board of directors of the Company).
2.6 Financial Statements. (a) The Seller has delivered to the Buyer
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complete and correct copies of the Financial Statements.
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(b) The Financial Statements are complete and correct in all respects,
have been derived from the accounting books and records of the Company, and have
been prepared in accordance with Mexican generally accepted accounting
principles, except as forth in the report of the Company's independent public
accountants, dated April 13, 1999, attached thereto ("Mexican GAAP"), applied on
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a consistent basis throughout the periods presented in the Financial Statements
subject, in the case of interim unaudited Financial Statements, only to normal
recurring year-end adjustments.
(c) The balance sheets included in the Financial Statements present
fairly the financial position of the Company as at the respective dates thereof,
and the statements of income, statements of stockholder's equity and statements
of cash flows included in such Financial Statements present fairly the results
of operations and cash flows of the Company for the respective periods
indicated.
2.7 Litigation. There is no Litigation pending or, to the knowledge of
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any member of the Seller Group, threatened by, against or affecting any member
of the Seller Group or any of its properties or assets, that, individually or in
the aggregate, could reasonably be expected to materially impair the ability of
the Seller to perform its obligations hereunder. There are no outstanding
orders, judgments, decrees or injunctions issued by any Governmental Authority
against the Company or in connection with the Purchased Equipment.
2.8 Compliance with Laws and Instruments; Consents. (a) Compliance.
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Except as set forth on Schedule 2.8(a), (i) the Company is not in conflict with
-
or in violation or breach of or default under (and there exists no event that,
with notice or
10
passage of time or both, would constitute a conflict, violation, breach or
default with, of or under) (x) any Law applicable to it or any of its
-
properties, assets, operations or business, (y) any provision of its
-
Organizational Documents, or (z) any Contract, or any other agreement or
-
instrument to which it is party or by which it or any of its properties or
assets is bound or affected, except in the case of the foregoing clauses (x) and
(z) for any such conflicts, breaches, violations and defaults that, individually
or in the aggregate, could not reasonably be expected to have or result in a
Material Adverse Effect, or to materially impair the ability of the Seller to
perform its obligations hereunder, and (ii) no member of the senior management
--
of the Company has received any notice or has knowledge of any claim alleging
any such conflict, violation, breach or default.
(b) Consents. Except as specified in Schedule 2.8(b), no Governmental
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Approval or other Consent is required to be obtained or made by any member of
the Seller Group in connection with the execution and delivery of this
Agreement, except for Consents the failure of which to be made or obtained,
individually and in the aggregate, could not reasonably be expected to have or
result in a Material Adverse Effect, or to impair materially the ability of the
Seller to perform its obligations hereunder or the ability of the Buyer,
following the Closing, to continue to operate the Purchased Equipment or the
business of the Company.
(c) Governmental Filings. To the best of the Seller's knowledge and
--------------------
belief, each registration, report, statement, notice or other filing requested
or required to be filed by the Company with any Governmental Authority under any
applicable Law has been timely filed, and when filed complied and continues to
comply with applicable Law. As of
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their respective dates, none of such registrations, reports, statements, notices
or other filings contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
2.9 Brokers, Finders, etc. All negotiations relating to this
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Agreement and the transactions contemplated hereby have been carried on without
the participation of any Person acting on behalf of any member of the Seller
Group in such a manner as to, and the transactions contemplated hereby will not
otherwise, give rise to any valid claim against the Company or the Buyer for any
brokerage or finder's commission, fee or similar compensation, or for any bonus
payable to any officer, director, employee, agent or representative of or
consultant to the Company upon consummation of the transactions contemplated
hereby.
2.10 Disclosure. This Agreement and each certificate or other
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instrument or document furnished by or on behalf of any member of the Seller
Group to the Buyer or any agent or representative of the Buyer pursuant hereto
or in connection herewith, taken as a whole, do not contain any untrue statement
of a material fact or omit to state a material fact required to be stated herein
or therein or necessary to make the statements contained herein or therein in
light of the circumstances under which they were made, not misleading.
3. Representations and Warranties of the Buyer. The Buyer represents
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and warrants to the Seller as follows, as of the date hereof and as of the
Closing Date:
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3.1 Corporate Status; Authorization, etc. The Buyer is a corporation
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duly incorporated, validly existing and in good standing under the laws of the
State of Alabama. The Buyer has full corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement, the performance of its obligations hereunder, and the
consummation of the transactions contemplated hereby, have been duly authorized
by all requisite corporate action of the Buyer. The Buyer has duly executed and
delivered this Agreement. This Agreement constitutes the legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its respective terms.
3.2 No Conflicts, etc. The execution, delivery and performance by the
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Buyer of this Agreement, and the consummation of the transactions contemplated
hereby, do not and will not conflict with, contravene, result in a violation or
breach of or default under (with or without the giving of notice or the lapse of
time, or both), create in any other Person a right or claim of termination,
amendment, modification, acceleration or cancellation of, or result in or
require the creation of any Lien (or any obligation to create any Lien) on any
of the properties or assets of the Buyer under (a) any Law applicable to the
-
Buyer or any of its properties or assets, (b) any provision of any of the
-
Organizational Documents of the Buyer, or (c) any contract, agreement or other
-
instrument to which the Buyer is a party or by which its properties or assets
may be bound, except, in the case of clause (c), for violations and defaults
that, individually and in the aggregate, would not materially impair the ability
of the Buyer to perform its obligations hereunder. Except as
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specified in Schedule 3.2, no Governmental Approval or other Consent is required
to be obtained or made by the Buyer in connection with the execution and
delivery of this Agreement, or the consummation of the transactions contemplated
hereby, except for Consents the failure of which to be made or obtained,
individually and in the aggregate, would not materially impair the ability of
the Buyer to perform its obligations hereunder.
3.3 Brokers, Finders, etc. All negotiations relating to this Agreement
---------------------
and the transactions contemplated hereby have been carried on without the
participation of any Person acting on behalf of the Buyer or any of its
Affiliates in such manner as to, and the transactions contemplated hereby will
not otherwise, give rise to any valid claim against the Seller for any brokerage
or finder's commission, fee or similar compensation.
4. Covenants of the Seller.
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4.1 Conduct of Business. On and after the date hereof to the Closing
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Date, except as expressly permitted or required by this Agreement or as
otherwise expressly consented to by the Buyer in writing, the Seller will, and
will cause the Company to:
(1) carry on its business in, and only in, the ordinary course of
business, in substantially the same manner as heretofore conducted, and use
all reasonable best efforts to preserve intact its present business
organization, keep available the services of its present officers and
significant employees, and preserve its relationships with customers,
suppliers and others having business dealings with it, to the end that its
goodwill and going business shall be in all material respects unimpaired
following the Closing;
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(2) not declare dividends on, or redeem or repurchase any shares
of, any class of its capital stock, increase any obligations of the Company
with respect to Indebtedness, repay any loans or other amounts outstanding
to the Seller or any of its Affiliates, make capital expenditures in excess
of $100,000 in any case or $1,000,000 in the aggregate, pay any bonuses or
advances against salaries except as set forth on Schedule 4.1, prepay any
accounts payable, delay payment of any trade payables other than in the
ordinary course of business, or make any other cash payments other than in
the ordinary course of business;
(3) maintain all of the tangible properties and assets owned,
leased, occupied, operated or used by it in good repair, working order and
operating condition subject only to ordinary wear and tear;
(4) not transfer, assign, mortgage, pledge, hypothecate, grant any
security interest in, or otherwise subject to any other Lien, any of its
assets;
(5) use all reasonable best efforts to keep in full force and
effect insurance comparable in amount and scope of coverage to insurance
now carried by it;
(6) pay accounts payable and other obligations, when they become
due and payable, in the ordinary course of business;
(7) perform in all material respects all of its obligations under
any Contracts, agreements or other instruments relating to or affecting the
Purchased Equipment, any of the properties and assets of the Company or the
business of the Company;
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(8) not enter into or assume any Contract (including, without
limitation, any Contract relating to the purchase of raw materials or other
supplies), or enter into or permit any amendment, supplement, waiver,
extension or other modification in respect thereof, except for such
Contracts and amendments, supplements, waivers, extensions and
modifications thereof that, individually and in the aggregate, are not
material to the Company or the Purchased Equipment and that are entered
into, assumed or permitted in the ordinary course of business and following
prior notice to and consent of the Buyer;
(9) maintain its books of account and records in the usual,
regular and ordinary manner consistent with past policies and practice;
(10) comply in all material respects with all Laws applicable to
it or any of its properties, assets or business;
(11) not compromise, settle, grant any waiver or release relating
to or otherwise adjust any Litigation, except in the ordinary course of
business, and following prior notice to and consultation with the Buyer;
(12) not cause or permit any amendment, supplement, waiver or
modification to or of any of its Organizational Documents;
(13) use all reasonable best efforts to maintain the Company's
good standing in its jurisdiction of organization and in the jurisdictions
in which it is qualified to do business as a foreign corporation and to
maintain all Governmental Approvals and other Consents necessary for the
conduct or operation of, or otherwise material to, the Purchased Equipment
or the business of the Company;
16
(14) not merge or consolidate with, or agree to merge or
consolidate with, or purchase substantially all of the assets of, or
otherwise acquire, any business, business organization or division thereof,
or any other Person;
(15) not take any action or omit to take any action, which action
or omission would result in a breach of any of the representations and
warranties set forth in Section 2.9;
(16) promptly advise the Buyer in writing of any event,
occurrence, fact, condition, change, development or effect that,
individually or in the aggregate, could reasonably be expected to have or
result in a Material Adverse Effect or a breach of this Section 4.1;
(17) not agree or otherwise commit to take any of the actions
described in the foregoing paragraphs (1) through (14); and
(18) conduct all Tax affairs relating to the Company only in the
ordinary course of business, in substantially the same manner as heretofore
conducted and in good faith in substantially the same manner as such
affairs would have been conducted if this Agreement had not been entered
into.
4.2 Access and Information. (a) So long as this Agreement
----------------------
remains in effect, the Seller will (and will cause each other member of the
Seller Group, and each of the Representatives of or to any member of the Seller
Group, to) give the Buyer and its Representatives full access during reasonable
business hours to all of such Person's respective properties, assets, books,
contracts, commitments, reports and records relating to the Company and the
Purchased Equipment, and furnish to them all such documents,
17
records and information with respect to the Purchased Equipment and the
properties, assets and business of the Company and copies of any work papers
relating thereto as the Buyer shall from time to time reasonably request. In
addition, the Seller will, and will cause each member of the Seller Group to,
permit the Buyer and its Representatives, reasonable access during reasonable
business hours to each member of the Seller Group, the Company's lenders,
customers and suppliers, other Persons with whom the Company does or has done
business, and other Representatives or other personnel of any member of the
Seller Group, as may be necessary or useful to the Buyer in its judgement in
connection with its review of the Purchased Equipment and the properties, assets
and business of the Company and the above-mentioned documents, records and
information. The Seller will, and will cause each member of the Seller Group to,
keep the Buyer generally informed as to all matters relating to the Purchased
Equipment or the business of the Company.
(b) The Seller will, and will cause each other member of the Seller
Group (other than the Company after the Closing) to, retain all books and
records relating to the Purchased Equipment and the Company in accordance with
the Seller's record retention policies as presently in effect. During the seven-
year period beginning on the Closing Date, the Seller shall not dispose of or
permit the disposal of any such books and records not required to be retained
under such policies without first giving 60 days' prior written notice to the
Buyer offering to surrender the same to the Buyer at the Buyer's expense.
4.3 Governmental Filings. From the date hereof to and including the
--------------------
Closing Date, the Seller will timely file, or cause to be timely filed, and
concurrently
18
deliver to the Buyer, copies of each registration, report, statement, notice or
other filing requested or required to be filed by the Company with any
Governmental Authority under any applicable Law. All such registrations,
reports, statements, notices and other filings shall comply with applicable Law.
As of their respective dates, none of such registrations, reports, statements,
notices or other filings shall contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
4.4 Further Actions. (a) The Seller shall use all reasonable best
---------------
efforts to take or cause to be taken all actions, and to do or cause to be done
all other things, necessary, proper or advisable in order for the Seller to
fulfill and perform its obligations in respect of this Agreement, or otherwise
to consummate and make effective the transactions contemplated hereby.
(b) The Seller shall (and shall cause each other member of the Seller
Group to), as promptly as practicable, (i) make, or cause to be made, all
-
filings and submissions required under any Law applicable to any member of the
Seller Group, and give such reasonable undertakings as may be required in
connection therewith, and (ii) use all reasonable best efforts to obtain or
--
make, or cause to be obtained or made, all Governmental Approvals and Consents
necessary to be obtained or made by any member of the Seller Group, in each case
in connection with this Agreement, the sale and transfer of the Purchased Shares
pursuant hereto, or the consummation of the other transactions contemplated
hereby.
19
(c) The Seller shall, and shall cause each other member of the Seller
Group to, coordinate and cooperate with the Buyer in exchanging such information
and supplying such reasonable assistance as may be reasonably requested by the
Buyer in connection with the filings and other actions contemplated by Sections
5.1.
(d) At all times prior to the Closing Date, the Seller shall promptly
notify the Buyer in writing of any fact, condition, event or occurrence that
could reasonably be expected to result in the failure of any of the conditions
contained in Sections 7.1 and 7.2 to be satisfied, promptly upon becoming aware
of the same.
(e) If any third party whose Consent is required to transfer the
benefit of any Contract or Governmental Approval to Buyer (the "Rights") does
------
not consent to such transfer, the Seller shall, at the request of the Buyer and
to the extent permitted by Law, enforce, use, carry out and comply with such
Right against such Person as agent of the Buyer, at the Buyer's cost and expense
and for the Buyer's exclusive benefit.
4.5 Further Assurances. Following the Closing Date, the Seller shall,
------------------
from time to time, execute and deliver such additional instruments, documents,
conveyances or assurances and take such other actions as shall be necessary, or
otherwise reasonably be requested by the Buyer, to confirm and assure the rights
and obligations provided for in this Agreement and render effective the
consummation of the transactions contemplated hereby, or otherwise to carry out
the intent and purposes of this Agreement (which include the transfer to the
Buyer of the ownership and intended related benefits of the Specified Equipment
and the Specified Real Property).
20
4.6 Insurance. (a) In the event that, after the Closing, the Buyer or
---------
any of its Affiliates (including but not limited to the Company or any successor
thereto) shall suffer any loss, arising out of a third party claim or otherwise,
that the Buyer in good faith notifies the Seller would be covered by any
insurance policy maintained by or for the benefit of any member of the Seller
Group (an "Insured Claim"), the Seller shall, and shall cause each member of the
-------------
Seller Group to, present and diligently prosecute a claim for payment under such
policy in respect of such loss, and pay to the Buyer the proceeds of such claim
under such policy as reimbursement in respect of the amount of such loss,
subject to the provisions of this Section 4.6.
(b) The amount of proceeds of any such insurance claim to be paid over
to the Buyer shall be limited to the amount actually received by the Seller
Group from its insurers with respect to such claim (net of any self-insured
retention amount, deductible amount, or other amount that the Seller Group is
required to reimburse its insurers under its contractual agreements with them,
in each case with respect to such claim), minus the aggregate amount of all
reasonable out-of-pocket expenses incurred by the Seller Group in presenting and
prosecuting such claim (to the extent not paid or reimbursed by its insurers).
The Buyer shall reimburse the Seller, upon written demand by the Seller
(accompanied by evidence reasonably satisfactory to the Buyer), for such amount
as the Seller is required to pay and does pay by way of retrospective premium
adjustment in respect of such insurance policy on account of any payment by the
insurer thereunder in respect of such claim.
21
(c) Nothing contained in this Section 4.6 shall require any member of
the Seller Group to keep in force and effect after the Closing any insurance
coverage in effect at the time of the Closing. The Seller will give the Buyer
(x) 30 days' prior written notice before any member of the Seller Group
-
terminates any insurance coverage in effect at the time of the Closing and
applicable to the Company and (y) prompt written notice in the event that any
-
member of the Seller Group receives notice from the insurer providing such
coverage that such coverage is being cancelled or is not being renewed.
5. Covenants of the Buyer.
----------------------
5.1 Further Actions. (a) The Buyer shall use all reasonable efforts to
---------------
take or cause to be taken all actions, and to do or cause to be done all other
things (including the provision of information in the Buyer's possession),
necessary, proper or advisable in order for the Buyer to fulfill and perform its
obligations in respect of this Agreement, or otherwise to consummate and make
effective the transactions contemplated hereby.
(b) The Buyer shall, as promptly as practicable, (i) make, or cause to
-
be made, all filings and submissions required under any Law applicable to the
Buyer, and give such reasonable undertakings as may be required in connection
therewith, and (ii) use all reasonable efforts to obtain or make, or cause to be
--
obtained or made, all Governmental Approvals and Consents necessary to be
obtained or made by the Buyer, in each case in connection with this Agreement,
the sale and transfer of the Purchased Shares pursuant hereto, or the
consummation of the other transactions contemplated hereby. The Buyer will
coordinate and cooperate with the Seller in exchanging such information and
22
supplying such reasonable assistance as may be reasonably requested by the
Seller in connection with the filings and other actions contemplated by Section
4.4.
(c) At all times prior to the Closing Date, the Buyer shall promptly
notify the Seller in writing of any fact, condition, event or occurrence that
could reasonably be expected to result in the failure of any of the conditions
contained in Sections 7.1 and 7.3 to be satisfied, promptly upon becoming aware
of the same.
6. Covenants of the Buyer and the Seller.
-------------------------------------
6.1 Taxes. (a) Termination of Existing Tax Sharing Arrangements. As of
----- ------------------------------------------------
the Closing Date, all existing tax sharing agreements and arrangements (other
than any tax sharing agreement or arrangement provided herein) between the
Company, on the one side, and the Seller or any Non-Company Affiliate, on the
other side, shall be terminated, and no additional payments shall be made
thereunder. After the Closing, neither the Company, the Seller, nor the Non-
Company Affiliates shall have any further rights or liabilities under any such
agreements or arrangements for any taxable period (whether the current year, a
future year, or a past year).
(b) Seller's Responsibilities. The Seller shall be responsible for and
-------------------------
shall pay (i) to the extent not accrued on the Closing Balance Sheet, any
-
liability for any income, profit, sales, use, value added, transfer, excise,
custom duties or other similar taxes (including all interest and penalties
thereon and additions thereto) imposed on, asserted against or incurred by the
Company with respect to any taxable period (or a portion thereof) ending on or
prior to the Closing Date, and (ii) any liability for Taxes of the Seller or any
--
other entity which, prior to the Closing, is or has been affiliated with the
23
Company. On or prior to the Closing Date, the Seller shall use its best efforts
to obtain a ruling from the appropriate Mexican taxing authority indicating that
no liability with respect to "Mexican excise taxes" for the period prior to the
Closing Date will be due and payable after the Closing Date.
6.2 Employees. On or before the Closing Date, the Seller and the Buyer
---------
shall agree upon (i) the treatment of any employees involved in the business of
-
the Company but employed by a member of the Seller Group (other than the
Company) and any associated liabilities and (ii) the manner, if any, in which
--
such agreement shall be reflected in the adjustment of the Initial Purchase
Amount pursuant to Section 1.6.
7. Conditions Precedent.
--------------------
7.1 Conditions to Obligations of Each Party. The obligations of the
---------------------------------------
Seller and the Buyer to consummate the transactions contemplated hereby shall be
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
7.1.1 No Injunction, etc. Consummation of the transactions
------------------
contemplated hereby shall not have been restrained, enjoined or otherwise
prohibited or made illegal by any applicable Law, including any order,
injunction, decree or judgment of any court or other Governmental Authority; and
no such Law that would have such an effect shall have been promulgated, entered,
issued or determined by any court or other Governmental Authority to be
applicable to this Agreement. No action or proceeding shall be pending or
threatened by any Governmental Authority or other Person on the Closing Date
before any court or other Governmental Authority to restrain, enjoin or
otherwise prevent the consummation of the transactions contemplated hereby, or
to recover any material
24
damages or obtain other material relief as a result of such transactions, or
that otherwise relates to the application of any such Law.
7.1.2 Restructuring of Seller. The transactions contemplated under the
-----------------------
Restructuring Agreement shall have been consummated.
7.2 Conditions to Obligations of the Buyer. The obligations of the
--------------------------------------
Buyer to consummate the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of the following additional
conditions, which the Seller agrees to use reasonable efforts to cause to be
fulfilled:
7.2.1 Representations, Performance. (a) The representations and
----------------------------
warranties of the Seller contained in Section 2 (i) shall be true and correct in
-
all material respects at and as of the date hereof, and (ii) shall be repeated
--
and shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though made on and as of the Closing Date.
(b) The Seller shall have in all material respects duly performed and
complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by the Seller prior to or on the
Closing Date.
(c) The Seller shall have delivered to the Buyer a certificate, dated
the Closing Date and signed by the Seller, to the effect set forth above in this
Section 7.2.1.
7.2.2 Delivery of Shares. At the Closing, the Seller shall have
------------------
delivered, and shall have caused Xx. Xxxxxxx Xxxxxxx to deliver, all of the
certificates for, respectively, the Zenith Shares and the Xxxxxxx Share as
provided in Section 1.4.
25
7.2.3 Delivery of Purchased Equipment. At the Closing, the Seller
-------------------------------
shall have caused Zenith Texas to execute and deliver to the Buyer all bills of
sale, assignments and other instruments necessary to transfer to the Buyer good
and marketable title to the Purchased Equipment as provided in Section 1.4.
7.2.4 Delivery of Specified Real Property. The Company shall have good
-----------------------------------
and marketable title to the Specified Real Property, free and clear of any
Liens.
7.2.5 Audit of Specified Equipment. The Buyer shall have completed, to
----------------------------
its reasonable satisfaction, an audit of the Specified Equipment.
7.2.6 Delivery of Schedules. On or before the Closing Date, the Seller
---------------------
shall have delivered to the Buyer the following:
(a) Personal Property. (1) A complete and correct list of (i) all
----------------- -
tangible personal property owned by the Company, (ii) the Specified Equipment
--
and (iii) the Xxxxxxx Leveraged Lease Equipment; including but not limited to
---
buildings, machinery, equipment and motor vehicles, setting forth the location
of such property; and (2) a complete and correct list of all tangible personal
property leased by the Company, including but not limited to buildings,
machinery, equipment and motor vehicles, setting forth the location of such
property.
(b) Real Property. (1) A complete and correct list of all Owned Real
-------------
Property (including the Specified Real Property) setting forth the address and
owner of each parcel of Owned Real Property and describing all improvements
thereon; (2) a complete and correct list of all Leases setting forth the
address, landlord and tenant for each Lease; and (3) correct and complete copies
of the Leases.
26
(c) Intellectual Property. (1) A complete and correct list of all
---------------------
Intellectual Property that is owned by the Company; and (2) all written or oral
agreements or arrangements (i) pursuant to which the Company has licensed
-
Intellectual Property to, or the use of Intellectual Property is otherwise
permitted (through non-assertion, settlement or similar agreements or otherwise)
with respect to, any other Person (including any member of the Seller Group) or
(ii) pursuant to which the Company has had Intellectual Property licensed to it,
--
or has otherwise been permitted to use Intellectual Property (through non-
assertion, settlement or similar agreements or otherwise), in each case to the
extent material to the operation of the Purchased Equipment or the business of
the Company.
(d) Contracts. (1) A complete and correct list, as of the Closing
---------
Date, of all Contracts; (2) complete and correct copies of all written
Contracts; and (3) accurate descriptions of all material terms of all oral
Contracts.
(e) Insurance. A complete and correct list and summary description of
---------
all insurance policies maintained (at the Closing Date or at any time during the
two years immediately preceding the Closing Date) by or on behalf of the
Company.
(f) Environmental Matters. All information, including, without
---------------------
limitation, all studies, analyses and test results, in the possession, custody
or control of or otherwise known to any member of the Seller Group relating to
(i) the environmental conditions on, under or about the Real Property or other
properties or assets owned, leased, operated or used by the Company or any
predecessor in interest thereto at the present time or in the past and (ii) any
Hazardous Materials used, managed, handled, transported, treated,
27
generated, stored or Released by any member of the Seller Group or any other
Person on, under, about or from any of the Real Property, or otherwise in
connection with the use or operation of any of the Purchased Equipment or any of
the properties and assets of the Company.
(g) Employees; Labor Matters, etc. (1) A complete and correct list of
-----------------------------
any collective bargaining agreement to which the Company is a party or by which
the Company is bound; (2) a complete and correct list of any labor unions or
other organizations representing, purporting to represent or attempting to
represent any employees employed by the Company; and (3) a complete and correct
list and summary description of all labor disputes subject, at the Closing Date,
to any grievance procedure, arbitration or litigation and all representation
petitions pending or threatened with respect to any employee of the Company.
(h) Employee Benefit Plans; ERISA. (1) A true and complete list of
-----------------------------
each Plan that identifies each of the Plans that is an "employee benefit plan"
subject to ERISA; and (2) with respect to each Plan, complete and correct copies
of each of the following documents (including all amendments to such documents):
(i) the Plan or a written description of any Plan not in
writing;
(ii) the two most recent annual reports and actuarial reports if
required under ERISA;
(iii) the most recent summary plan description with respect
thereto if required under ERISA or any comparable provision of foreign law;
28
(iv) if the Plan or any obligations thereunder are funded
through a trust, insurance contract or any other funding vehicle, the
trust, insurance contract or other funding agreement and the two most
recent financial statements thereof;
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan intended to qualify
under section 401(a) of the Code or, in the case of any non-U.S. Plan, the
most recent determination letter or tax qualification approval with respect
to any such non-U.S. plan that is intended to be tax-qualified; and
(vi) communications that the Seller or any of its Subsidiaries
has received from or sent to the PBGC, the Department of Labor, the
Internal Revenue Service or any comparable agency of any foreign
governmental authority concerning any termination of, withdrawal from or
appointment of a trustee to administer any plan or the failure or alleged
failure to comply with any provision of ERISA, the Code or comparable law
of a foreign jurisdiction with respect to any Plan, including any existing
written description of any such oral communication.
(i) Accounts Receivable. (1) A complete and accurate aging of all
-------------------
accounts receivable of the Company as of the end of each monthly period since
October 31, 1999; and (2) a complete and accurate list of any account receivable
of the Company reflected on the Initial Balance Sheet and any account receivable
arising after the date of the Initial Balance Sheet and reflected on the books
of the Company that is uncollectible or subject to counterclaim or offset,
except to the extent reserved against thereon.
29
(j) Products. Complete and correct copies of the standard terms and
--------
conditions of sale or lease for each of the products or services of the Company
(containing applicable guaranty, warranty and indemnity provisions).
(k) Bank Accounts. A complete and correct list setting forth the
-------------
names of each bank in which the Company has an account or safe deposit or lock
box, the account or box number, as the case may be, and the name of every person
authorized to draw thereon or having access thereto.
(l) Consents. A complete and correct list of all Governmental
--------
Approvals and other Consents necessary for, or otherwise material to, the
operation of the Purchased Equipment or the business of the Company.
7.2.7 Consents; Licenses. (a) All Governmental Approvals and Consents
------------------
required to be made or obtained by the Seller or the Buyer in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby shall have been made or obtained, except for
Consents (other than Governmental Approvals) the failure of which to be made or
obtained, individually and in the aggregate, could not reasonably be expected to
have or result in a Material Adverse Effect, or to materially impair the ability
of the Seller or the Buyer to perform their respective obligations hereunder or
the ability of the Buyer, following the Closing, to continue to operate the
Purchased Equipment or the business of the Company. Complete and correct copies
of all such Governmental Approvals and Consents shall have been delivered to the
Buyer.
30
(b) The Company shall have received the licenses, in form and
substance satisfactory to the Buyer in its reasonable judgment, in respect of
Intellectual Property under licenses specified or required to be specified
pursuant to Section 7.2.6(c).
7.2.8 Resignation of Directors. All directors and officers of the
------------------------
Company whose resignations shall have been requested by the Buyer not less than
five days prior to the Closing Date shall have submitted their resignations or
been removed from office effective as of the Closing Date.
7.2.9 FIRPTA Certificate. The Seller shall have delivered to the
------------------
Buyer a certificate, as contemplated under and meeting the requirements of
section 1.1445-2(b)(2)(i) of the Treasury Regulations, to the effect that the
Seller is not a foreign person within the meaning of the Code and applicable
Treasury Regulations.
7.2.10 No Material Adverse Effect. No event, occurrence, fact,
--------------------------
condition, change, development or effect shall exist or have occurred or come to
exist or been threatened since December 31, 1998 that, individually or in the
aggregate, has had or resulted in, or could reasonably be expected to become or
result in, a Material Adverse Effect.
7.2.11 Corporate and Other Proceedings. All corporate, partnership and
-------------------------------
other proceedings of each member of the Seller Group in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to the Buyer and its counsel in their reasonable judgement, and the
Buyer and its counsel shall have received all such documents and instruments, or
copies thereof, certified if requested, as may be reasonably requested.
31
7.3 Conditions to Obligations of the Seller. The obligation of the
---------------------------------------
Seller to consummate the transactions contemplated hereby shall be subject to
the fulfillment, on or prior to the Closing Date, of the following additional
conditions, which the Buyer agrees to use reasonable efforts to cause to be
fulfilled:
7.3.1 Representations, Performance, etc. (a) The representations and
---------------------------------
warranties of the Buyer contained in Section 3 (i) shall be true and correct in
all material respects at and as of the date hereof and (ii) shall be repeated
and shall be true and correct in all material respects on and as of the Closing
Date with the same effect as though made at and as of such time.
(b) The Buyer shall have in all material respects duly performed and
complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
(c) The Buyer shall have delivered to the Seller a certificate dated
the Closing Date and signed by the Buyer to the effect set forth above in this
Section 7.3.1.
7.3.2 Corporate Proceedings. All corporate proceedings of the Buyer in
---------------------
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Seller and their counsel in their
reasonable judgement, and the Seller and their counsel shall have received all
such documents and instruments, or copies thereof, certified if requested, as
may be reasonably requested.
8. Termination.
-----------
8.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing Date:
32
(a) By the written agreement of the Buyer and the Seller; or
(b) By either the Buyer or the Seller by written notice to the other
party if the Restructuring Agreement shall have terminated.
8.2 Effect of Termination. In the event of the termination of this
---------------------
Agreement pursuant to the provisions of Section 8.1, this Agreement shall become
void and have no effect, without any liability to any Person in respect hereof
or of the transactions contemplated hereby on the part of any party hereto, or
any of its directors, officers, Representatives, stockholders or Affiliates,
except for any liability resulting from such party's breach of this Agreement.
9. Indemnification.
---------------
9.1 Indemnification by the Seller. The Seller covenants and agrees to
-----------------------------
defend, indemnify and hold harmless each of the Buyer, its Affiliates, the
Company and their respective officers, directors, employees, agents, advisers
and representatives (collectively, the "Buyer Indemnitees") from and against,
-----------------
and pay or reimburse the Buyer Indemnitees for, any and all claims, demands,
liabilities, obligations, losses, fines, costs, expenses, royalties, Litigation,
deficiencies or damages (whether absolute, accrued, conditional or otherwise and
whether or not resulting from third party claims), including interest and
penalties with respect thereto and out-of-pocket expenses and reasonable
attorneys', consultants' and accountants' fees and expenses incurred in the
investigation or defense of any of the same or in asserting, preserving or
enforcing any of their respective rights hereunder (collectively, "Losses"),
------
resulting from or arising out of:
33
(1) any liability of the Company which existed at the Closing
Date but was not reflected in the Closing Balance Sheet to the extent such
Loss is incurred on or before December 31, 2000;
(2) the termination on or before December 31, 2000 of the
employment of any employee involved in the business of the Company that was
employed by a member of the Seller Group as of the Closing Date, up to an
amount not to exceed $6 million;
(3) all Environmental Conditions; or
(4) to the extent not covered by Section 9.1(1) above, any tax
liability described in Section 6.1(b).
9.2 Claims for Indemnification. All claims for indemnification
--------------------------
pursuant to this Section 9 shall be delivered as provided in Section 11.2.
9.3 Payment Adjustments, etc. (a) Any indemnity payment made by
-------------------------
the Seller to the Buyer Indemnitees pursuant to this Section 9 in respect of any
claim shall be net of an amount equal to (x) any insurance proceeds realized by
-
and paid to the Indemnified Party minus (y) any related costs and expenses,
-
including the aggregate cost of pursuing any related insurance claims plus any
correspondent increases in insurance premiums or other chargebacks. The
Indemnified Party shall use its reasonable efforts to make insurance claims
relating to any claim for which it is seeking indemnification pursuant to this
Section 9; provided, that the Indemnified Party shall not be obligated to make
--------
such an insurance claim if the Indemnified Party in its reasonable judgment
believes that the cost of pursuing such an insurance claim together with any
correspondent increase
34
in insurance premiums or other chargebacks to the Indemnified Party or the
Company, as the case may be, would exceed the value of the claim for which the
Indemnified Party is seeking indemnification pursuant to this Section 9.
(b) The provisions of this Section 9 shall in no way limit,
supersede or otherwise affect the rights of any party under Section 1.6, and
nothing contained in Section 1.6 relating to an adjustment to the Initial
Purchase Amount shall limit, supersede or otherwise affect the rights of any
party under this Section 9; provided, that no party shall be entitled to be
--------
compensated more than once for the same Loss.
9.4 Indemnification Procedures. In the case of any claim asserted
--------------------------
by a third party against a party entitled to indemnification under this
Agreement (the "Indemnified Party"), notice shall be given by the Indemnified
-----------------
Party to the party required to provide indemnification (the "Indemnifying
------------
Party") promptly after such Indemnified Party has actual knowledge of any claim
-----
as to which indemnity may be sought, and the Indemnified Party shall permit the
Indemnifying Party (at the expense of such Indemnifying Party) to assume the
defense of any claim or any litigation resulting therefrom, provided, that (i)
-
counsel for the Indemnifying Party who shall conduct the defense of such claim
or litigation shall be reasonably satisfactory to the Indemnified Party, and the
Indemnified Party may participate in such defense at such Indemnified Party's
expense, and (ii) the failure of any Indemnified Party to give notice as
--
provided herein shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement except to the extent that such failure results
in a lack of actual notice to the Indemnifying Party and such Indemnifying Party
is materially prejudiced as a result of such
35
failure to give notice. Except with the prior written consent of the Indemnified
Party, no Indemnifying Party, in the defense of any such claim or litigation,
shall consent to entry of any judgment or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting the Indemnified
Party or that does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such Indemnified Party of a release from all
liability with respect to such claim or litigation. In the event that the
Indemnified Party shall in good faith determine that the conduct of the defense
of any claim subject to indemnification hereunder or any proposed settlement of
any such claim by the Indemnifying Party might be expected to affect adversely
the Indemnified Party's (or any of its Affiliate's) Tax liability or the ability
of the Company to conduct its business, or that the Indemnified Party may have
available to it one or more defenses or counterclaims that are inconsistent with
one or more of those that may be available to the Indemnifying Party in respect
of such claim or any litigation relating thereto, the Indemnified Party shall
have the right at all times to take over and assume control over the defense,
settlement, negotiations or litigation relating to any such claim at the sole
cost of the Indemnifying Party, provided, that if the Indemnified Party does so
--------
take over and assume control, the Indemnified Party shall not settle such claim
or litigation without the written consent of the Indemnifying Party, such
consent not to be unreasonably withheld. In the event that the Indemnifying
Party does not accept the defense of any matter as above provided, the
Indemnified Party shall have the full right to defend against any such claim or
demand, and shall be entitled to settle or agree to pay in full such claim or
demand. In any event, the Seller and the Buyer shall cooperate in the defense of
any claim
36
or litigation subject to this Section 9 and the records of each shall be
available to the other with respect to such defense.
9.5 Tax Treatment of Indemnity Payments. Any payment made pursuant
-----------------------------------
to this Section 9 shall be treated for Tax purposes as an adjustment to the
Initial Purchase Amount, as adjusted, unless otherwise required by law.
10. Definitions.
-----------
10.1 Terms Generally. The words "hereby", "herein", "hereof",
---------------
"hereunder" and words of similar import refer to this Agreement as a whole
(including any Schedules hereto) and not merely to the specific section,
paragraph or clause in which such word appears. All references herein to
Articles, Sections and Schedules shall be deemed references to Articles and
Sections of, and Schedules to, this Agreement unless the context shall otherwise
require. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation." The definitions given for terms in
this Section 10 and elsewhere in this Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Except as otherwise expressly provided herein, all references to
"dollars" or "$" shall be deemed references to the lawful money of the United
States of America.
10.2 Certain Terms. Whenever used in this Agreement (including in the
-------------
Schedules), the following terms shall have the respective meanings given to them
below or in the Sections indicated below:
37
Affiliate: of a Person means a Person that directly or indirectly through
---------
one or more intermediaries, controls, is controlled by, or is under common
control with, the first Person, including but not limited to a Subsidiary of the
first Person, a Person of which the first Person is a Subsidiary, or another
Subsidiary of a Person of which the first Person is also a Subsidiary. "Control"
(including the terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise.
Agreement: this Amended and Restated Stock and Asset Purchase Agreement,
---------
including the Schedules hereto.
Buyer: as defined in the introductory paragraph of this Agreement.
-----
CERCLA: the Comprehensive Environmental Response, Compensation and
------
Liability Act, as amended, 42 U.S.C. (S) 9601 et seq.
-- ---
Closing: as defined in Section 1.4.
-------
Closing Balance Sheet: as defined in Section 1.6.
---------------------
Closing Date: as defined in Section 1.4.
------------
Code: the Internal Revenue Code of 1986, as amended.
----
Company: as defined in the first recital to this Agreement.
-------
Consent: any consent, approval, authorization, waiver, permit, grant,
-------
franchise, concession, agreement, license, certificate, exemption, order,
registration, declaration, filing, report or notice of, with or to any Person.
38
Contract: all loan agreements, indentures, letters of credit (including
--------
related letter of credit applications and reimbursement obligations), mortgages,
security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees, surety obligations, warranties, licenses, franchises, permits,
powers of attorney, purchase orders, leases, and other agreements, contracts,
instruments, obligations, offers, commitments, arrangements and understandings,
written or oral, to which the Company is a party or by which it or any of its
properties or assets may be bound or affected, in each case as amended,
supplemented, waived or otherwise modified, that are of the types listed in
clauses (a) through (o) below:
(a) leases, subleases, licenses, occupancy agreements, permits, franchises,
insurance policies, agreements, Governmental Approvals and other Contracts
concerning or relating to the Real Property;
(b) employment, consulting, severance, agency, bonus, compensation, or
other trusts, funds and other Contracts (other than the Plans) relating to or
for the benefit of current, future or former employees, officers, directors,
sales representatives, distributors, dealers, agents, independent contractors or
consultants (whether or not legally binding), including sales agency or
distributorship agreements or arrangements for the sale of any of the products
or services of the Company;
(c) loan agreements, indentures, letters of credit (including related
letter of credit applications and reimbursement obligations), mortgages,
security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees,
39
instruments and other contracts relating to the borrowing of money or obtaining
of or extension of credit;
(d) licenses, licensing arrangements and other Contracts providing in
whole or in part for the use of, or limiting the use of, any Intellectual
Property;
(e) finder's Contracts;
(f) joint venture, partnership and similar Contracts involving a sharing of
profits or expenses;
(g) stock purchase agreements, asset purchase agreements and other
acquisition or divestiture agreements, including but not limited to any
agreements relating to the acquisition, lease or disposition of the Company, any
material assets or properties (including the Purchased Equipment) (other than
sales of inventory made in the ordinary course of business), any business, or
any capital stock of or other interest in any Person by the Seller or the
Company, within the last five years, or involving continuing indemnity or other
obligations;
(h) Contracts prohibiting or materially restricting the ability of the
Company to conduct the business of the Company, to use or operate any of its
assets, to engage in any business or operate in any geographical area or to
compete with any Person;
(i) orders and other Contracts for the purchase or sale of materials,
supplies, products or services, involving aggregate payments in excess of
$100,000 in each case or $1,000,000 in the aggregate;
40
(j) orders and other Contracts with or for the direct or indirect benefit
of the Seller or any Affiliate of the Seller (other than the Company) (whether
or not legally binding);
(k) Contracts providing for future payments that are conditioned, in whole
or in part, on a change in control of the Company;
(l) powers of attorney, except routine powers of attorney relating to
representation before governmental agencies or given in connection with
qualification to conduct business in another jurisdiction;
(m) Contracts not entered into in the ordinary course of business;
(n) Contract or series of related Contracts with respect to which the
aggregate amount that could reasonably expected to be paid or received
thereunder in the future exceeds $100,000 per annum or an aggregate of
$1,000,000 under the term of the Contract; and
(o) Contracts that are or will be material to the Purchased Equipment or to
the business, operations, results of operations, condition (financial or
otherwise), assets or properties of the Company.
Environmental Conditions: all environmental conditions and areas of concern
------------------------
identified in the Report of Opinions of Environmental Cost dated February 25,
1999 prepared by Bradburne, Briller & Xxxxxxx, LLC, or the Report of Phase I
Environmental Site Assessments dated March 6, 1997 prepared by Law Engineering
and Environmental Services, Inc., including, without limitation, Remedial
Actions based on, arising out of or otherwise in respect of: (i) the
-
41
ownership or operation of the Real Property or the Purchased Equipment or the
business of the Company; (ii) the environmental conditions existing on, under,
--
above, about or emanating from the Real Property; and (iii) expenditures
---
necessary to cause the Real Property or any aspect of the Purchased Equipment or
the business of the Company to be in compliance with any and all requirements of
Environmental Laws as of the Closing Date, including, without limitation, all
Consents issued under or pursuant to such Environmental Laws.
Environmental Laws: all Laws relating to the protection of the environment,
------------------
to human health and safety, or to natural resources, including, without
limitation, (a) CERCLA, the Resource Conservation and Recovery Act, and the
-
Occupational Safety and Health Act, (b) all other requirements pertaining to
-
reporting, licensing, permitting, investigation or remediation of emissions,
discharges, releases or threatened releases of Hazardous Materials into the air,
surface water, groundwater or land, or relating to the manufacture, processing,
distribution, use, sale, treatment, receipt, storage, disposal, transport or
handling of Hazardous Materials, and (c) all other requirements pertaining to
-
the protection of the health and safety of employees or the public.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
-----
Financial Statements: (a) the financial statements of the Company as at and
-------------------- -
for the years ended December 31, 1997 and 1998, together with reports on such
year-end statements by the Company's independent public accountants, including
42
in each case a balance sheet, a statement of loss, a statement of changes in
stockholders' equity and a statement of cash flows, and accompanying notes and
(b) the unaudited balance sheet of the Company as of August 31, 1999.
-
Governmental Approval: any Consent of, with or to any Governmental
---------------------
Authority.
Governmental Authority: any nation or government, any state or other
----------------------
political subdivision thereof; any entity, authority or body exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, any government
authority, agency, department, board, commission or instrumentality of the
United States, any State of the United States or any political subdivision
thereof; any court, tribunal or arbitrator; and any self-regulatory
organization.
Hazardous Materials: any substance that: (a) is or contains asbestos, urea
------------------- -
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum-
derived substances or wastes, radon gas or related materials (b) requires
-
investigation, removal or remediation under any Environmental Law, or is
defined, listed or identified as a "hazardous waste" or "hazardous substance"
thereunder, or (c) is toxic, explosive, corrosive, flammable, infectious,
-
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is regulated by
any Governmental Authority or Environmental Law.
Indebtedness: as applied to any Person, means, without duplication, (a) all
------------ -
indebtedness for borrowed money, (b) all obligations evidenced by a note, bond,
-
43
debenture, letter of credit, draft or similar instrument, (c) that portion of
-
obligations with respect to capital leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (d) notes payable and
-
drafts accepted representing extensions of credit, (e) any obligation owed for
-
all or any part of the deferred purchase price of property or services, which
purchase price is due more than six months from the date of incurrence of the
obligation in respect thereof, and (f) all indebtedness and obligations of the
-
types described in the foregoing clauses (a) through (e) to the extent secured
by any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person.
Initial Balance Sheet: as defined in Section 1.3.
---------------------
Initial Purchase Amount: $33,747,225.57, as set forth in the Initial
-----------------------
Balance Sheet delivered on the date hereof pursuant to Section 1.3.
Insured Claim: as defined in Section 4.6.
-------------
Intellectual Property: the United States and foreign trademarks, service
---------------------
marks, trade names, trade dress, copyrights, and similar rights, including
registrations and applications to register or renew the registration of any of
the foregoing, the United States and foreign letters patent and patent
applications, and inventions, processes, designs, formulae, trade secrets, know-
how, confidential information, computer software, data and documentation, and
all similar
44
intellectual property rights, tangible embodiments of any of the foregoing (in
any medium including electronic media), and licenses of any of the foregoing.
IRS: the Internal Revenue Service.
---
LGE: LG Electronics Inc., a corporation organized under the laws of the
---
Republic of Korea, of which the Buyer is a wholly-owned subsidiary.
Law: all applicable provisions of all (a) constitutions, treaties,
--- -
statutes, laws (including the common law), codes, rules, regulations, ordinances
or orders of any Governmental Authority, (b) Governmental Approvals and (c)
- -
orders, decisions, injunctions, judgments, awards and decrees of or agreements
with any Governmental Authority.
Leased Real Property: all interests leased pursuant to the Leases.
--------------------
Leases: the real property leases, subleases, licenses and occupancy
------
agreements pursuant to which the Seller or the Company is the lessee, sublessee,
licensee, user or occupant of real property used in or held for use in
connection with, necessary for the conduct or operation of, or otherwise
material to, the Purchased Equipment or the business of the Company.
Lien: any mortgage, pledge, deed of trust, hypothecation, right of others,
----
claim, security interest, encumbrance, burden, title defect, title retention
agreement, lease, sublease, license, occupancy agreement, easement, covenant,
condition, encroachment, voting trust agreement, interest, option, right of
first offer, negotiation or refusal, proxy, lien, charge or other restrictions
or limitations
45
of any nature whatsoever, including but not limited to such Liens as may
arise under any Contract.
Litigation: any action, cause of action, claim, demand, suit,
----------
proceeding, citation, summons, subpoena, inquiry or investigation of any
nature, civil, criminal, regulatory or otherwise, in law or in equity,
pending or threatened, by or before any court, tribunal, arbitrator or
other Governmental Authority.
Material Adverse Effect: any (a) event, occurrence, fact, condition,
-----------------------
change, development or effect that is or may be materially adverse to the
Purchased Equipment or to the business, operations, prospects, results of
operations, condition (financial or otherwise), properties (including
intangible properties), assets (including intangible assets) or liabilities
of the Company or (b) material impairment of the ability of the Seller to
perform its obligations hereunder.
Mexican GAAP: as defined in Section 2.6(b).
------------
Net Book Value: the book value (net of reserves) of all assets of the
--------------
Company less the book value of all liabilities of the Company which are
reflected in the Initial Balance Sheet or the Closing Balance Sheet, as
applicable.
Notes: the Floating Rate Senior Secured Notes due 2009, issued by the
-----
Seller to LGE pursuant to the Seller's Prepackaged Plan of Reorganization,
dated August 24, 1999.
ordinary course of business: the usual, regular and ordinary course of
---------------------------
business of the Company consistent with the past custom and practice
thereof.
46
Organizational Documents: as to any Person, its certificate or
------------------------
articles of incorporation, by-laws and other organizational documents.
Owned Real Property: the real property owned by the Company, together
-------------------
with all structures, facilities, improvements, fixtures, systems, equipment
and items of property presently or hereafter located thereon or attached or
appurtenant thereto or owned by the Company and located on Leased Real
Property, and all easements, licenses, rights and appurtenances relating to
the foregoing.
PBGC: the Pension Benefit Guaranty Corporation.
----
Person: any natural person, firm, partnership, association,
------
corporation, company, trust, business trust, Governmental Authority or
other entity.
Plan: each "employee benefit plan," within the meaning of section 3(3)
----
of ERISA (whether or not subject to ERISA) and each bonus, deferred
compensation, incentive compensation, stock purchase, stock option or other
equity based, severance, termination, change in control, retention,
employment, hospitalization or other medical, life or insurance,
disability, other welfare, supplemental unemployment benefits, profit-
sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee compensation or benefit plan, program, agreement or
arrangement, sponsored, maintained or contributed to by any member of the
Seller Group or by any trade or business thereof, whether or not
incorporated, for the benefit of the Company or any employee, former
employee, director or former director of the Company or with
47
respect to which the Company has or could reasonably be expected to have
any material liability (matured or unmatured, absolute or contingent).
Purchased Equipment: the Specified Equipment and the Reynosa Leveraged
-------------------
Lease Equipment.
Purchased Shares: as defined in Section 1.1.
----------------
Real Property: the Owned Real Property and the Leased Real Property.
-------------
Release: any releasing, disposing, discharging, injecting, spilling,
-------
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, leeching, migration, transporting, placing and the like,
including without limitation, the moving of any materials through, into or
upon, any land, soil, surface water, ground water or air, or otherwise
entering into the environment.
Remedial Action: all actions required under Environmental Law to (i)
--------------- -
clean up, remove, treat or in any other way remediate any Hazardous
Materials; (ii) prevent the release of Hazardous Materials so that they do
--
not migrate or en-danger or threaten to endanger public health or welfare
or the environment; or (iii) perform studies, investigations and care
---
related to any such Hazardous Materials.
Representatives: as to any Person, its accountants, counsel,
---------------
consultants (including actuarial, environmental and industry consultants),
officers, directors, employees, agents and other advisors and
representatives.
Restructuring Agreement: the Amended and Restated Restructuring
-----------------------
Agreement, dated June 14, 1999, between the Seller and LGE.
48
Reynosa Leveraged Lease Equipment: the equipment identified on
---------------------------------
Schedule I to the Asset Sale and Purchase Agreement, dated the date hereof,
between The Zenith Electronics Equipment Owner Trust 1997-II, a non-
business trust organized under the laws of the State of Connecticut, and
Zenith Texas.
Rights: as defined in Section 4.4(e).
------
Seller: as defined in the introductory paragraph of this Agreement.
------
Seller Group: the Seller and its Subsidiaries, including (prior to the
------------
consummation of the Closing) the Company.
Specified Equipment: the equipment and other assets identified in
-------------------
Section 1(a) of the Disclosure Letter, dated August 7, 1998, from the
Seller to LGE, as amended and modified by the Disclosure Letter, dated as
of June 14, 1999, from the Seller to LGE, as further modified by written
agreement between the Seller and LGE.
Specified Real Property: (a) the land and buildings that comprise the
----------------------- -
Company's production facilities #12, #13 and #27 in Reynosa, Mexico and all
fixtures located thereon and (b) the Trailer Parking Area.
-
Subsidiaries: each corporation or other Person in which a Person owns
------------
or controls, directly or indirectly, capital stock or other equity
interests representing more than 50% of the outstanding voting stock or
other equity interests.
Tax: any federal, state, local or foreign income, alternative,
---
minimum, accumulated earnings, personal holding company, franchise, capital
stock, profits, windfall profits, gross receipts, sales, use, value added,
transfer, registration,
49
stamp, premium, excise, customs duties, severance, environmental (including
taxes under section 59A of the Code), real property, personal property, ad
valorem, occupancy, license, occupation, employment, payroll, social
security, disability, unemployment, workers' compensation, withholding,
estimated or other similar tax, duty, fee, assessment or other governmental
charge or deficiencies thereof (including all interest and penalties
thereon and additions thereto).
Trailer Parking Area: the trailer parking area formerly associated
--------------------
with the Company's production facilities #12A, #13A and #27 in Reynosa,
Mexico and all fixtures located thereon.
Treasury Regulations: the regulations prescribed under the Code.
--------------------
Xxxxxxx Share: as defined in the third recital to this Agreement.
-------------
Zenith Shares: as defined in the third recital to this Agreement.
-------------
Zenith Texas: Zenith Electronics Corporation of Texas, a Texas
------------
corporation and a wholly-owned subsidiary of the Seller.
Zenith Texas Shares: as defined in the third recital to this
-------------------
Agreement.
11. Miscellaneous.
-------------
11.1 Expenses. Except as otherwise specifically provided for in this
--------
Agreement, the Seller, on the one hand, and the Buyer, on the other hand, shall
bear their respective expenses, costs and fees (including attorneys', auditors'
and financing commitment fees) in connection with the transactions contemplated
hereby, including the
50
preparation, execution and delivery of this Agreement and compliance herewith,
whether or not the transactions contemplated hereby shall be consummated.
11.2 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
-
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
- -
sent by next-day or overnight mail or delivery or (d) sent by telecopy or
-
telegram, as follows:
(1) if to the Buyer,
LG Electronics Alabama, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Ki Xxxx Xxx
and to:
LG Electronics Inc.
LG Twin Towers
00, Xxxxx-xxxx
Xxxxxxxxxxx-xx
Xxxxx, Xxxxx 150-721
Telepcopy: 011-82-2-3777-5303
Telephone: 000-00-0-0000-0000
Attention: Chief Financial Officer
and to:
LG Electronics Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxx X. Xxx
with a copy to:
00
Xxxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
(2) if to the Seller,
Zenith Electronics Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, General Counsel
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxx X.X. Xxxxxxxxxx
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
-
after such delivery, (x) if by certified or registered mail, on the seventh
-
business day after the mailing thereof, (y) if by next-day or overnight mail or
-
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
-
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
11.3 Governing Law, etc. THIS AGREEMENT SHALL BE GOVERNED IN ALL
------------------
RESPECTS, INCLUDING AS TO VALIDITY,
52
INTERPRETATION AND EFFECT, BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF (OTHER THAN SECTION
5-1411 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). The Buyer and
the Seller hereby irrevocably submit to the jurisdiction of the courts of the
State of Illinois and the Federal courts of the United States of America located
in Chicago, Illinois solely in respect of the interpretation and enforcement of
the provisions of this Agreement and of the documents referred to in this
Agreement, and in respect of the transactions contemplated hereby and thereby.
Each of the Buyer and the Seller irrevocably agrees that all claims in respect
of the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby and thereby, or with respect to any such action or
proceeding, shall be heard and determined in such an Illinois State or Federal
court, and that such jurisdiction of such courts with respect thereto shall be
exclusive, except solely to the extent that all such courts shall lawfully
decline to exercise such jurisdiction. Each of the Buyer and the Seller hereby
waive, and agree not to assert, as a defense in any action, suit or proceeding
for the interpretation or enforcement hereof or of any such document or in
respect of any such transaction, that it is not subject to such jurisdiction.
Each of the Buyer and the Seller hereby waive, and agree not to assert, as a
defense in any action, suit or proceeding for the interpretation or enforcement
hereof or of any such document or in respect of any such transaction, that such
action, suit or proceeding may not be brought or is not maintainable in such
courts or that the venue thereof may not be appropriate or that this Agreement
or
53
any such document may not be enforced in or by such courts. The Buyer and the
Seller hereby consent to and grant any such court jurisdiction over the person
of such parties and over the subject matter of any such dispute and agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 11.2 or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
11.4 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective heirs, successors and
permitted assigns.
11.5 Assignment. This Agreement shall not be assignable or otherwise
----------
transferable by any party hereto without the prior written consent of the other
party hereto, and any purported assignment or other transfer without such
consent shall be void and unenforceable; provided, that the Buyer may assign
--------
this Agreement to any Affiliate of the Buyer without the prior written consent
of the Seller.
11.6 No Third Party Beneficiaries. Nothing in this Agreement shall
----------------------------
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns.
11.7 Amendment; Waivers, etc. No amendment, modification or discharge
-----------------------
of this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no
54
way impair the rights of the party granting such waiver in any other respect or
at any other time. Neither the waiver by any of the parties hereto of a breach
of or a default under any of the provisions of this Agreement, nor the failure
by any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall be construed as a waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions, rights or privileges
hereunder. The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.
The representations and warranties of the Seller shall not be affected or deemed
waived by reason of any investigation made by or on behalf of the Buyer
(including but not limited to by any of its advisors, consultants or
representatives) or by reason of the fact that the Buyer or any of such
advisors, consultants or representatives knew or should have known that any such
representation or warranty is or might be inaccurate.
11.8 Entire Agreement. This Agreement constitutes the entire agreement
----------------
and supersede all prior agreements and understandings (including, without
limitation, the
55
Restructuring Agreement), both written and oral, between the parties with
respect to the subject matter hereof.
11.9 Severability. If any provision, including any phrase, sentence,
------------
clause, section or subsection, of this Agreement is invalid, inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering such provision in question invalid, inoperative or unenforceable in
any other case or circumstance, or of rendering any other provision herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
11.10 Headings. The headings contained in this Agreement are for
--------
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
11.11 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
56
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
ZENITH ELECTRONICS CORPORATION
By ____________________________________
Name:
Title:
LG ELECTRONICS ALABAMA, INC.
By ____________________________________
Name:
Title:
57
