ASSET PURCHASE AGREEMENT
Dated as of April 30, 1999
By and Among
HITACHI METALS AMERICA, LTD.,
XXXX MANUFACTURING, INC.,
GUNITE CORPORATION AND
GUNITE ACQUISITION CORP.
For the Purchase of
Substantially All of the Assets of
THE EMI COMPANY DIVISION OF XXXX MANUFACTURING, INC.
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "AGREEMENT") dated as of this
30th day of April, 1999 is made and entered into by and among GUNITE
CORPORATION, a Delaware corporation ("GUNITE"), GUNITE ACQUISITION CORP., a
Delaware corporation and wholly-owned subsidiary of Gunite ("GUNITE
ACQUISITION"), HITACHI METALS AMERICA, LTD., a New York corporation ("HITACHI"),
and XXXX MANUFACTURING, INC., a Pennsylvania corporation and wholly-owned
subsidiary of Hitachi ("XXXX"). Gunite and Gunite Acquisition are referred to
collectively as the "BUYER". Hitachi and Xxxx are referred to collectively as
the "SELLERS".
WHEREAS, Xxxx is engaged primarily, through its EMI Company
Division (the "EMI DIVISION"), in the operation of a job shop iron foundry and
the manufacturing of wheel-end component parts for the heavy-duty truck and
trailer industry in Erie, Pennsylvania (the "BUSINESS"); and
WHEREAS, the Sellers desire to sell and the Buyer desires to
purchase substantially all of the assets used by the EMI Division in the
Business, subject to the Buyer's assumption of certain liabilities, upon the
terms and subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the parties hereto agree as follows:
I. PURCHASE OF ACQUIRED ASSETS AND
ASSUMPTION OF LIABILITIES
1.1 THE TRANSACTION. Upon the terms and subject to the conditions of
this Agreement, Xxxx agrees to sell, assign, transfer, convey and deliver to
Gunite Acquisition, and Gunite Acquisition agrees to purchase, at the Closing
(as defined in Section 2.1), all of Xxxx'x right, title and interest in the
Acquired Assets (as defined in Section 1.2), free and clear of all liens,
claims, charges or encumbrances other than Permitted Encumbrances (as defined in
Section 3.10(a)) and those encumbrances permitted by Section 3.9(a), and Gunite
Acquisition agrees to assume the Assumed Liabilities (as defined in Section
1.4).
1.2 ACQUIRED ASSETS. The term "ACQUIRED ASSETS" means all of the assets,
properties, goodwill and rights owned by Xxxx and used solely in the operation
of the Business, of whatever kind and nature, real, personal or mixed, tangible
or intangible, other than Excluded Assets (as defined in Section 1.3),
including, but not limited to, the following:
(a) all machinery, equipment (except as set forth in Section
1.3(c)), furniture, furnishings, automobiles, trucks, vehicles, tools, dies,
molds and parts and similar property (including, but not limited to, any of the
foregoing purchased subject to any conditional sales or title retention
agreement in favor of any other person) relating to the Business;
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(b) all rights in, to and under all leases of items described
under Section 1.2(a), including those listed on SCHEDULE 3.11;
(c) all inventories of raw materials, work in process, finished
products, goods, spare parts, replacement and component parts, and office and
other supplies, including inventories held at any location controlled by Xxxx
and inventories previously purchased and in transit to Xxxx at such locations,
in each case related to the Business;
(d) all rights in and to products sold or leased (including, but
not limited to, products hereafter returned or repossessed and unpaid sellers'
rights of rescission, replevin, reclamation and rights to stoppage in transit)
in connection with the Business;
(e) all intellectual property rights relating to the Business,
except as set forth in Section 1.5(j);
(f) all right, title and interest of Xxxx in, to and under the
sales agreements with Palmar, Inc. and Manac, Inc. from the Closing Date (as
defined in Section 2.1) until December 31, 1999 or March 31, 2000, as the case
may be;
(g) all right, title and interest of Xxxx in, to and under all
contracts, leases, purchase orders, customer orders, work orders, warranties and
undertakings relating to the Business (whether oral or written) to which Xxxx is
a party or by which Xxxx is bound, including those listed on SCHEDULE 1.2(G)
(the "ASSUMED CONTRACTS");
(h) all credits, prepaid expenses (except as set forth in Section
1.3(i) and (j)), deferred charges (except for deferred financing costs, less
accumulated amortization), advance payments, security deposits and prepaid items
relating to the Business;
(i) all notes and accounts receivable held by Xxxx and all notes,
bonds and other evidences of indebtedness of and, except for all intercompany
receivables from Hitachi, rights to receive payments from any person held by
Xxxx, including the benefits of and proceeds from all insurance policies (except
as set forth in Section 1.3(g)), in each case related to the Business;
(j) shipping records, operating data and records, sale and
purchase correspondence, and files relating to the Business (copies of which the
Buyer shall provide to the Sellers), but excluding (1) corporate, financial and
accounting books and records of the Sellers relating to the Business (copies of
which the Sellers shall provide to the Buyer) and (2) all tax returns, reports
and estimates of the Sellers and all workpapers and other materials used in
preparation of such tax returns, reports and estimates (in each case, whether or
not related to the Business and whether or not originals or copies) (the "TAX
MATERIALS");
(k) to the extent legally assignable without consent or payment,
all right, title and interest of Xxxx in, to and under all franchises, licenses,
permits, orders, certificates, approvals and
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other governmental authorizations which are necessary to own or lease and
operate the Acquired Assets and to conduct the Business as it has been conducted
by Xxxx, including all applications therefor;
(l) all interests in real property of Xxxx listed on SCHEDULE
3.10, together with all buildings, improvements, fixtures and all appurtenances
thereto;
(m) all of the Benefit Plans (as defined in Section 3.19), except
those listed on SCHEDULE 1.3(D);
(n) all funds held in trust pursuant to the Benefit Plans for the
purpose of providing retirement benefits, welfare benefits or other employee
benefits for employees of the Business;
(o) all computer hardware, software and programs, together with
all users' manuals, training manuals, sales literature, and other system and
operations documentation relating to such computer programs relating to the
Business;
(p) all customer lists and supplier lists for the Business;
(q) all guaranties, warranties, indemnities and similar rights in
favor of the Sellers with respect to any Acquired Asset;
(r) all rights to causes of action, lawsuits, judgments, claims
and demands of any nature available to or being pursued by Xxxx with respect to
the Business, except as set forth in Sections 1.3(f) and 1.3(g); and
(s) the rights to the names EMI, Erie Wheels and EMI Company and
any other names used in connection with the Business.
1.3 EXCLUDED ASSETS. The term "EXCLUDED ASSETS" means:
(a) all cash and cash equivalents as of the Closing Date;
(b) all intercompany receivables from Hitachi;
(c) the equipment held for sale or transfer to an affiliate of
Xxxx listed on SCHEDULE 1.3(C);
(d) those Xxxx Benefit Plans listed on SCHEDULE 1.3(D);
(e) deferred financing costs, less accumulated amortization;
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(f) the rights of Xxxx to receive any proceeds resulting from the
resolution of any of the pending litigation or claims relating to the Business
listed on SCHEDULE 1.3(F) and all rights to causes of action, lawsuits,
judgments, claims and demands of any nature relating to such pending litigation
or claims;
(g) the rights of Xxxx to receive any proceeds resulting from the
resolution of any of the pending insurance claims relating to the Business
listed on SCHEDULE 1.3(G);
(h) the rights of the Sellers in respect of any federal, state or
local tax refunds, credits or other assets of any nature in respect of any Taxes
(as defined in Section 3.12), whether or not relating to the Business,
attributable to periods ending on or prior to the Closing Date;
(i) all prepaid shutdown costs;
(j) a prepaid insurance premium listed on SCHEDULE 1.3(J);
(k) the rights of Xxxx to certain job work from Mitsubishi
consisting of the front and rear knuckle and damper fork parts described on
SCHEDULE 1.3(K);
(l) corporate, financial and accounting books and records of the
Sellers relating to the Business (copies of which the Sellers shall provide to
the Buyer), but only copies of (1) shipping records, operating data and records,
sale and purchase correspondence, and files relating to the Business and (2) the
Tax Materials;
(m) any rights to tax refunds with respect to the real property
listed on SCHEDULE 3.10 for the period before the Closing Date, and upon receipt
the Buyer agrees to promptly pay (or, when appropriate, forward) to Xxxx any
such refunds; and
(n) any rights of the Sellers under Section 8.2(f).
1.4 ASSUMPTION OF LIABILITIES. Except as set forth in Section 1.5, upon
the terms and subject to the conditions of this Agreement, the Buyer shall
assume and agree to pay, honor and discharge when due all of the following
liabilities relating to the Acquired Assets existing at or arising on or after
the Closing Date (collectively, the "ASSUMED LIABILITIES"):
(a) any and all liabilities, obligations and commitments relating
exclusively to the Business or the Acquired Assets that are (i) reflected on the
Closing Balance Sheet (as defined in Section 1.8(a)) and (ii) incurred as of the
Closing in the ordinary course of business consistent with prior practice and in
accordance with the terms of this Agreement, including, without limitation,
trade accounts payable,
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payroll taxes, accrued liabilities (other than Excluded Liabilities), and
operating lease liabilities for equipment such as telephone, office equipment,
automobiles, fork lifts and similar equipment;
(b) any and all liabilities, obligations and commitments arising
out of the Assumed Contracts, but not including any obligation or liability for
any breach thereof occurring prior to the Closing Date;
(c) any and all liabilities, obligations and commitments arising
out of Xxxx'x sales agreements with Palmar, Inc. and Manac, Inc. from the
Closing Date until December 31, 1999 or March 31, 2000, as the case may be;
(d) Transfer Taxes (as defined in Section 5.7(a)) and property
taxes that are the responsibility of the Buyer under Section 5.7(b);
(e) fees and expenses incurred by the Buyer in connection with
negotiating, preparing, closing and carrying out this Agreement and the
transactions contemplated by this Agreement, including the fees, expenses,
disbursements and expenses for the Buyer's attorneys, accountants, investment
bankers and consultants;
(f) liabilities relating to or arising with respect to any of the
Acquired Assets; and
(g) liabilities arising under Section 5.9(b).
1.5 EXCLUDED LIABILITIES. Notwithstanding the provisions of Section 1.4
or any other provision hereof or any Schedule or Exhibit hereto and regardless
of any disclosure to the Buyer, the Buyer shall not assume any liabilities,
obligations or commitments of the Sellers relating to or arising out of the
operation of the Business or the ownership of the Acquired Assets prior to the
Closing other than the Assumed Liabilities (the "EXCLUDED LIABILITIES"),
including, without limitation:
(a) liabilities resulting from outstanding checks of Xxxx
presented for payment on or after the Closing Date;
(b) liabilities related to any and all workers' compensation and
disability claims resulting from any injury incurred on or prior to the Closing
Date;
(c) liabilities for any medical treatment or service occurring on
or prior to the Closing Date;
(d) liabilities related to any and all obligations under loans
and capital leases of Xxxx relating to the Business and all related contingent
and accrued interest, fees and expenses, including those listed on SCHEDULE
1.5(D);
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(e) liabilities with respect to all pending or, based on written
notice, threatened litigation and claims relating to the Business listed on
SCHEDULE 3.14;
(f) liabilities with respect to all product liability, product
recalls, warranty claims, defective material claims and merchandise returns with
respect to products sold and delivered by Xxxx on or prior to the Closing Date;
(g) liabilities for intercompany accounts payable to Hitachi;
(h) liabilities for Taxes relating to or arising out of the
Business accruing with respect to any time period occurring at or prior to
Closing, except for (i) property taxes that are the responsibility of the Buyer
under Section 5.7(b), (ii) Transfer Taxes, which the Buyer will pay, and (iii)
any other Taxes to the extent specifically accrued for on the Closing Balance
Sheet;
(i) liabilities, obligations and commitments of Xxxx arising out
of certain job work for Mitsubishi consisting of the front and rear knuckle and
damper fork parts described on SCHEDULE 1.3(K);
(j) liabilities with respect to all pending or, based on written
notice, threatened litigation and claims relating to any infringement by Xxxx of
any patent, copyright, trademark, trade name, know how, trade secret or other
proprietary right of any other person in connection with the conduct of the
Business listed on SCHEDULE 3.15(B) for products shipped prior to the Closing
Date;
(k) fees and expenses incurred by the Sellers in connection with
negotiating, preparing, closing and carrying out this Agreement and the
transactions contemplated by this Agreement, including the fees, expenses,
disbursements and expenses for the Sellers' attorneys, accountants, investment
bankers and consultants;
(l) liabilities relating to or arising with respect to any of the
Excluded Assets; and
(m) liabilities relating to or arising with respect to the
Environmental Claims listed on SCHEDULE 3.17(A) and SCHEDULE 3.17(F).
1.6 PURCHASE PRICE. The purchase price for the Acquired Assets shall be
an amount equal to the sum of (i) Fourteen Million Dollars ($14,000,000) for
plant property, equipment and construction in progress, (ii) the "stipulated
loss value" as of the Closing for two electric melt furnaces which are currently
leased by Xxxx from Fujilease Corporation (which in no event shall exceed Two
Million Five Hundred Thousand Dollars ($2,500,000)), and (iii) Two Million Two
Hundred Thirty-Seven Thousand Dollars ($2,237,000) for the adjusted working
capital of EMI Company (the predecessor of Xxxx) as of January 31, 1999 (the
"INITIAL PURCHASE PRICE"), plus or minus the Working Capital Adjustment (as
described in Section 1.8(a)(i)) (the "PURCHASE PRICE").
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1.7 PAYMENT OF PURCHASE PRICE.
(a) At the Closing, the Buyer shall pay to Xxxx an amount equal
to the Initial Purchase Price by wire transfer of immediately available funds to
such account as Sellers shall designate.
(b) After the Closing, the Buyer or Xxxx, as appropriate, shall
make the payment, if any, required by Section 1.8.
1.8 POST-CLOSING ADJUSTMENT. A post-closing adjustment to the
Initial Purchase Price shall be made as follows.
(a) Within sixty (60) days after the Closing Date, the Buyer and
the Sellers, together with their respective accountants, shall prepare (i) an
unaudited balance sheet of the Business as of the Closing Date reflecting the
total Acquired Assets and Assumed Liabilities of the Business and excluding the
Excluded Assets and the Excluded Liabilities (the "CLOSING BALANCE SHEET") and
(ii) the Working Capital Adjustment (as hereinafter defined). The Buyer shall
undertake reasonable efforts to cause the EMI Division monthly reporting package
for the current month through the Closing Date to be delivered to Hitachi
promptly after the Closing. The Closing Balance Sheet shall be prepared in
accordance with generally accepted accounting principles (subject to normal
year-end adjustments consistent with prior periods) on a basis consistent with
the balance sheet of the Business as of March 31, 1999 (the "BALANCE SHEET").
The Working Capital Adjustment shall become final for all purposes of this
Agreement unless the Buyer and the Sellers are unable to agree on the Working
Capital Adjustment, in which case the Buyer and the Sellers agree that a
mutually acceptable independent accounting firm of nationally recognized
standing (the "INDEPENDENT ACCOUNTANT") shall make the final determination of
the Working Capital Adjustment. The determination by the Independent Accountant
of the Working Capital Adjustment shall be binding on the Buyer and the Sellers.
The date on which the Working Capital Adjustment is finally determined pursuant
to this Section 1.8(a) shall hereinafter be referred to as the "WORKING CAPITAL
SETTLEMENT DATE". The Buyer and the Sellers shall each bear the costs of their
and their respective accountants' preparation of the Closing Balance Sheet, and
each of such parties shall pay 50% of the Independent Accountant's fees and
expenses in connection with this Section 1.8.
(i) "WORKING CAPITAL ADJUSTMENT" shall mean the result
(which may be positive or negative) obtained by subtracting Two Million
Two Hundred Thirty-Seven Thousand Dollars ($2,237,000) from the Closing
Date Working Capital (as hereinafter defined).
(ii) "CLOSING DATE WORKING CAPITAL" shall mean (1) the
amount of the current assets of the Business as of the Closing Date
(consisting of trade accounts receivable (other than accounts
receivables from Hitachi), inventories, prepaid expenses, marketable
securities and prepaid pension obligations) less (2) the amount of the
current liabilities of the Business as of the Closing Date (consisting
of accounts payable and accrued liabilities (other than workers'
compensation liabilities and accrued interest obligations, but including
post-retirement life insurance
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and long-term pension liabilities)) derived, in each case, from the
Closing Balance Sheet. In no event shall the current assets of the
Business as of the Closing Date or the current liabilities of the
Business as of the Closing Date include any Excluded Asset or Excluded
Liability, respectively. The Sellers and the Buyer agree that the
Closing Date Working Capital shall be prepared on a basis consistent
with the adjusted working capital of EMI Company as of January 31, 1999,
which was Two Million Two Hundred Thirty-Seven Thousand Dollars
($2,237,000) as shown on Schedule 1.8.
(b) If the Working Capital Adjustment is positive, the Buyer
shall, within three (3) business days of the Working Capital Settlement Date,
pay to Xxxx by wire transfer of immediately available funds the absolute amount
of the Working Capital Adjustment. If the Working Capital Adjustment is
negative, Xxxx shall, within three (3) business days of the Working Capital
Settlement Date, pay to the Buyer by wire transfer of immediately available
funds the absolute amount of the Working Capital Adjustment.
1.9 ALLOCATION. The Buyer and the Sellers shall mutually agree upon the
allocation of the Purchase Price and Assumed Liabilities to the Acquired Assets
no later than ninety (90) days after the Working Capital Settlement Date (the
"ALLOCATION"). The Buyer and the Sellers acknowledge that the Allocation shall
be determined pursuant to arm's length bargaining between the parties regarding
the fair market values of the Acquired Assets in accordance with Section 1060 of
the Internal Revenue Code of 1986, as amended (the "CODE"). The parties shall
report the sale and purchase of the Acquired Assets on all tax returns and tax
forms (including, without limitation, Form 8594 of the Internal Revenue Service)
in a manner consistent with such Allocation and shall not, in connection with
the filing of such returns or forms, make any Allocation of the Purchase Price
and Assumed Liabilities which is inconsistent with the Allocation. The parties
agree to consult with one another with respect to any tax audit, controversy or
litigation relating to the Allocation. If the Buyer and the Sellers cannot agree
on an Allocation, then the Allocation shall be referred to the Independent
Accountant which shall be directed to resolve the Allocation within thirty (30)
days thereafter, and whose decision shall be final and binding on both parties.
The Buyer, on the one hand, and the Sellers, on the other hand, shall each be
responsible for one-half of the fees and expenses of the Independent Accountant
in connection with such determination.
II. CLOSING
2.1 CLOSING DATE. The closing of the transactions contemplated by this
Agreement (the "CLOSING") is anticipated to occur on or about May 17, 1999 or
such earlier or later date as the parties may mutually agree (the "CLOSING
DATE") at such place as the parties shall mutually agree.
2.2 DELIVERIES AT THE CLOSING. At the Closing:
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(a) Xxxx shall deliver to the Buyer an Assignment Agreement
relating to the Acquired Assets in a form reasonably acceptable to the parties,
Xxxx or Hitachi, as the case may be, shall deliver to the Buyer the various
agreements, opinions, certificates and other documents and instruments referred
to in Section 6.2, and the Sellers shall deliver to the Buyer such other
documents as the Buyer or its counsel may reasonably request to demonstrate
satisfaction of the conditions and compliance with the agreements set forth in
this Agreement.
(b) The Buyer shall deliver to the Sellers (i) an Assumption
Agreement relating to the Assumed Liabilities in a form reasonably acceptable to
the parties, (ii) the various other agreements, opinions, certificates and other
documents and instruments referred to in Section 6.1, and (iii) such other
documents as the Sellers or their counsel may reasonably request to demonstrate
satisfaction of the conditions and compliance with the agreements set forth in
this Agreement.
2.3 THIRD-PARTY CONSENTS. To the extent that Xxxx'x rights under any
agreement, contract, commitment, lease, permits or other asset to be assigned to
the Buyer under this Agreement may not be assigned without the consent of
another person which has not been obtained, this Agreement shall not constitute
an agreement to assign the same if an attempted assignment would constitute a
breach thereof or be unlawful, and Xxxx shall use all reasonable efforts to
obtain any such required consent(s) as promptly as possible. If any such consent
shall not be obtained or if any attempted assignment would be ineffective or
would impair the Buyer's rights under the asset in question so that the Buyer
would not in effect acquire the benefit of all such rights, Xxxx, to the maximum
extent permitted by law and the asset, shall act after the Closing as the
Buyer's agent in order to obtain for it the benefits thereunder and shall
cooperate, to the maximum extent permitted by law and the asset, with the Buyer
in any other reasonable arrangement designed to provide such benefits to the
Buyer. Nothing in this Section 2.3 shall be deemed a waiver by the Buyer of its
right to have received on or before the Closing an effective assignment of all
of the Acquired Assets nor shall this Section 2.3 be deemed to constitute an
agreement to exclude from the Acquired Assets any assets described under Section
1.2.
III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Ward represents and warrants to the Buyer as follows:
3.1 ORGANIZATION. Each Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Pennsylvania
(in the case of Xxxx) and the State of New York (in the case of Hitachi) and has
the corporate power and authority to carry on its business as now being
conducted and to own and operate the properties and assets now owned and being
operated by it. Each Seller has delivered to the Buyer complete and correct
copies of such Seller's Certificate of Incorporation and By-Laws, in each case,
as amended and in effect on the date hereof. Neither Seller is in violation of
any of the provisions of its Certificate of Incorporation or By-Laws.
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3.2 QUALIFICATIONS. Xxxx is duly licensed or qualified to do business
relating to the Business and is in good standing in the Commonwealth of
Pennsylvania.
3.3 AUTHORITY AND ENFORCEABILITY. Each Seller has the corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement and the
other agreements and documents to be executed and delivered by each Seller
pursuant to the provisions of this Agreement have been duly authorized by all
necessary corporate action on the part of each Seller. This Agreement has been
duly executed and delivered on behalf of each Seller and is a legal, valid and
binding obligation of each Seller enforceable against such Seller in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights.
3.4 THIRD-PARTY CONSENTS. Except for the expiration or early termination
of the applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), and except as set forth on
SCHEDULE 3.4, no consent, authorization or approval of, and no filing with, any
third parties to any material contract to which it is a party or by which it may
be bound or any governmental authority is required for the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.
3.5 NO CONFLICT OR VIOLATION. Except as set forth on SCHEDULE 3.5,
neither the execution, delivery or performance of this Agreement nor the
consummation of any of the transactions provided for in this Agreement (i) will
violate or conflict with the Certificate of Incorporation or By-Laws of either
Seller, (ii) will result in a breach of or default by either Seller under any
provision of any material contract or agreement of any kind to which such Seller
is a party or by which such Seller is bound or to which any property or asset of
such Seller is subject, (iii) is prohibited by, or requires either Seller to
obtain or make any consent, authorization, approval, registration or filing
under, any statute, law, ordinance, regulation, rule, judgment, decree or order
of any court or governmental agency, board, bureau, body, department or
authority, or of any other person, or (iv) will result in the creation or
imposition of any lien, claim, charge, restriction, equity or encumbrance of any
kind whatsoever upon, or give to any other person any interest or right
(including any right of termination or cancellation) in or with respect to, any
of the properties, assets, agreements or contracts of the Business.
3.6 FINANCIAL STATEMENTS.
(a) Xxxx has delivered to the Buyer copies of the unaudited
balance sheets of EMI Company as of March 31, 1998 and 1999 and related
statements of income for the fiscal years ended on those dates, as routinely
prepared based on unaudited monthly statements as prepared by EMI Company for
review by Hitachi's auditors in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding years
(subject to normal year-end adjustments consistent with prior periods).
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(b) The Sellers have prepared the financial budget for April 1,
1999 through March 31, 2000 described on SCHEDULE 3.6 in a manner consistent
with that of the preceding financial budgets.
(c) Inventories reflected on the balance sheets represent only
good and serviceable items priced at the lower of cost (first in, first out
method) or market values with adequate provision for obsolescence, shrinkage,
excess quantities, defective materials and deterioration. Except for the reserve
for obsolete inventory set forth on the Balance Sheet and the Closing Balance
Sheet, all inventory has been acquired or produced in the ordinary course of
business and consists of good and serviceable items.
(d) Accounts receivable are reflected on the balance sheets with
provision for an adequate reserve for uncollectible amounts, based on known
facts and past collection patterns.
3.7 NO UNDISCLOSED LIABILITIES, ETC. As of the date of this Agreement,
the Business has no material liabilities or obligations of any kind, whether
absolute, accrued, asserted or unasserted, contingent or otherwise, other than
those which affect generally the industry in which the Business operates, except
liabilities, obligations or contingencies (i) which are accrued or reserved
against on the Balance Sheet, (ii) which were incurred after the date of such
Balance Sheet in the ordinary course of business and consistent with past
practice which, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect (for purposes of this Agreement, a "MATERIAL
ADVERSE EFFECT" is defined as any event, occurrence, fact, condition, change or
effect that is materially adverse to the business, operations, results of
operations, condition (financial or otherwise), properties (including intangible
properties), assets (including intangible assets) or liabilities of the
Business, which shall include any consequence of any event, occurrence, fact,
condition, change or effect that exceeds $100,000), or (iii) which arise under
this Agreement or the transactions contemplated hereby or are described on
SCHEDULE 3.7 or are otherwise expressly disclosed in this Agreement or any
Schedule or Exhibit hereto.
3.8 ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 3.8,
since January 31, 1999, Xxxx has conducted the Business only in the ordinary
course consistent with prior practice and has not, on behalf of, in connection
with or relating to the Business or the Acquired Assets:
(a) suffered any Material Adverse Effect;
(b) entered into, amended or terminated any Material Contract;
(c) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due (except obligations or
liabilities incurred in connection with the ordinary course of business
consistent with prior practice), which, in any case or in the aggregate, could
have a Material Adverse Effect;
(d) discharged or satisfied any material lien other than those
then required to be discharged or satisfied, or paid any material obligation or
liability, absolute, accrued, contingent or
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otherwise, whether due or to become due, other than current liabilities shown on
the Balance Sheet and current liabilities incurred since the date thereof in the
ordinary course of business consistent with prior practice;
(e) mortgaged, pledged or subjected to any charge, lien, claim or
encumbrance or agreed to mortgage, pledge or subject to any charge, lien, claim
or encumbrance, any of its material properties or assets (other than Permitted
Encumbrances and those encumbrances permitted by Section 3.9(a));
(f) sold, transferred, leased to others or otherwise disposed of
any of the Acquired Assets, except for inventory sold in the ordinary course of
business, or canceled or compromised any debt or claim, or waived or released
any right of substantial value;
(g) received any notice of termination of any contract, lease or
other agreement or suffered any damage, destruction or loss (whether or not
covered by insurance) which, in any case or in the aggregate, has had a Material
Adverse Effect;
(h) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any intellectual property,
or modified any existing rights with respect thereto;
(i) granted any increase in the compensation (including bonus
payments) of any officer or employee other than in the ordinary course of
business consistent with past practice;
(j) encountered any labor union organizing activity, had any
actual or, to the knowledge of Xxxx, threatened employee strikes, work
stoppages, slowdowns or lockouts, or had any material adverse change in its
relations with its employees, agents, customers or suppliers;
(k) lost any major customer or major supplier or had any material
order canceled or knows of any threatened cancellation of any material order;
(l) made any material change in its practices with respect to
collection of receivables, payment of accounts payable or purchase and sale of
inventory;
(m) made any capital expenditures or capital additions or
improvements in excess of an aggregate of $100,000, except as set forth on the
Balance Sheet ;
(n) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body relating to the
Business or the Acquired Assets other than in the ordinary course of business
consistent with past practices, but not in any case involving amounts in excess
of $50,000;
12
(o) paid or agreed to pay any brokerage or finder's fee in
connection with, or incurred any severance pay obligations by reason of, this
Agreement or the transactions contemplated hereby; or
(p) taken any action or omitted to take any action that would
result in the occurrence of any of the foregoing.
3.9 ACQUIRED ASSETS.
(a) Xxxx has good and marketable title to all of its properties
and assets (other than real property), including, without limitation, all those
used solely in the Business and those reflected on the balance sheets of the
Business referred to in Section 3.6 (except as sold or otherwise disposed of in
the ordinary course of business), subject to no mortgage, pledge, conditional
sales contract, lien, security interest, right of possession in favor of any
third party, claim or other encumbrance, except (i) the lien of current taxes
not yet due and payable, (ii) imperfections of title and encumbrances, if any,
which do not materially detract from the value of the property subject thereto
and do not materially impair the use of the property subject thereto or
materially impair the operations of the Business as presently conducted and
(iii) as set forth on SCHEDULE 3.9.
(b) The Acquired Assets, taken as a whole, constitute
substantially all the properties and assets relating to or used or held for use
in connection with the Business during the past twelve months (except inventory
sold, cash disposed of, accounts receivable collected, prepaid expenses
realized, contracts fully performed, properties or assets replaced by equivalent
or superior properties or assets, in each case in the ordinary course of
business, employees not hired by the Buyer, and the Excluded Assets). Except for
the Excluded Assets, there are no material assets or properties used in the
operation of the Business and owned by any person other than Xxxx that will not
be leased or licensed to the Buyer under valid, current leases or license
arrangements. The Acquired Assets are in all material respects adequate for the
purposes for which such assets are currently used or are held for use (or, in
the case of Acquired Assets not currently in use, for the purposes for which
they were being used immediately prior to the discontinuance of their use), and
are in normal operating condition (subject to normal wear and tear), as is,
where is. Xxxx has not received any notice of a violation (which is not cured)
of any applicable material regulation or building, zoning or other law with
respect to any of the Acquired Assets.
3.10 REAL PROPERTY.
(a) SCHEDULE 3.10 sets forth all real estate owned by Xxxx that
is used or held for use in connection with the Business (the "OWNED REAL
PROPERTY"). Xxxx has good, valid and marketable fee simple title to the Owned
Real Property, subject only to (i) all applicable zoning and building laws,
restrictions, regulations and ordinances, (ii) easements and rights of public
utilities, (iii) the state of facts shown on any surveys of the Owned Real
Property, (iv) the lien of current taxes not yet due and payable, (v) any
easements, restrictions, covenants and other encumbrances not specifically set
forth in this Section 3.10(a) which do not materially impair the use of the
property subject thereto or materially impair the
13
operations of the Business as presently conducted and (vi) as set forth on
SCHEDULE 3.10 (collectively, the "PERMITTED ENCUMBRANCES"). There are no
outstanding options or rights of first refusal to purchase the Owned Real
Property or any portion thereof or interest therein.
(b) Except as set forth on SCHEDULE 3.10 and except for Permitted
Encumbrances, there is no easement, right-of-way agreement, license, sublease,
occupancy agreement, or like instrument with respect to any Owned Real Property.
(c) The Owned Real Property constitutes all of the interests in
real property held for use solely in connection with, necessary for the conduct
of, or otherwise material to the Business as presently conducted.
3.11 LEASED PERSONAL PROPERTY. SCHEDULE 3.11 sets forth a correct and
complete list of all leases and other agreements under which Xxxx leases, holds
or operates any tools, furniture, machinery, equipment, vehicles or other
personal property owned by any other person for use in the Business, the absence
of which would have a Material Adverse Effect. Xxxx has delivered to the Buyer
complete and correct copies of all such leases and agreements. Each such lease
is legal, valid, binding, enforceable, and in full force and effect against
Xxxx, except as may be limited by bankruptcy, insolvency, reorganization or
other laws or equitable principles relating to or affecting the enforcement of
creditors' rights. Xxxx is not in default, violation or breach in any respect
under any such lease and no event has occurred and is continuing that
constitutes or, with notice or the passage of time or both, would constitute a
default, violation or breach under any such lease.
3.12 TAX MATTERS. The term "TAXES" means all net income, capital gains,
gross income, gross receipts, sales, use, transfer, ad valorem, franchise,
profits, license, capital, withholding, payroll, employment, excise, goods and
services, severance, stamp, occupation, premium, property, assessments, or other
governmental charges of any kind whatsoever, together with any interest, fines
and any penalties, additions to tax or additional amounts incurred or accrued
under applicable federal, state, local or foreign tax law or assessed, charged
or imposed by any governmental authority, domestic or foreign, other than
Transfer Taxes, provided that any interest, penalties, additions to tax or
additional amounts that relate to Taxes for any taxable period (including any
portion of any taxable period ending on or before the Closing Date) shall be
deemed to be Taxes for such period, regardless of when such items are incurred,
accrued, assessed or charged. For the purposes of this Section 3.12, Xxxx shall
be deemed to include any predecessor of Xxxx or any person or entity from which
Xxxx incurs a liability for Taxes as a result of joint and several liability,
transferee liability, or otherwise.
Except as set forth on SCHEDULE 3.12:
(a) There are no existing liens for Taxes upon, pending against
or, to the best knowledge of Xxxx, threatened against the Business or any of the
Acquired Assets.
14
(b) Xxxx has, with respect to the Business, (i) withheld all
required amounts from its employees, agents, contractors and nonresidents and
remitted such amounts to the proper agencies; (ii) paid all employer
contributions and premiums and (iii) filed all federal, state, local and foreign
returns and reports with respect to employee income tax withholding, and social
security and unemployment taxes and premiums, all in material compliance with
the withholding tax provisions of the Code or any prior provision of the Code
and other applicable laws.
(c) No portion of the cost of any of the Acquired Assets was
financed directly or indirectly from the proceeds of any tax exempt state or
local government obligation described in Code Section 103(a).
(d) Xxxx is not a foreign person within the meaning of Code
Section 1445.
3.13 CONTRACTS. Except as set forth on SCHEDULE 3.13 (the "MATERIAL
CONTRACTS"):
(a) Xxxx does not have any contracts, commitments, arrangements
or understandings that relate to the Business which may involve the expenditure
or receipt by the EMI Division of more than $100,000 for any individual
contract, commitment, arrangement or understanding or which was not entered into
in the ordinary course of business. Except as contemplated by this Agreement and
except as such rights may be assigned to the Buyer pursuant to the terms and
conditions of this Agreement, the legal enforceability after the Closing of the
rights of Xxxx under any of its contracts that relate to the Business will not
be affected in any manner by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby;
(b) Xxxx has no sales or purchase commitments that relate to the
Business which are in excess of the normal, ordinary and usual capacity or
requirements of its business or which are not terminable on thirty (30) days'
notice and without liability, penalty or premium; and
(c) Xxxx is not a party to or bound by (i) any outstanding
contract with officers or employees of the Business that is not cancelable by
Xxxx on notice of not longer than thirty (30) days and without liability,
penalty or premium, or (ii) any agreements that relate to the Business that
contain any severance or termination pay, liabilities or obligations.
Except as set forth on SCHEDULE 3.13, Xxxx is not a party with
any governmental authority to any material contract that relates to the
Business. Each Material Contract to which Xxxx is a party is in full force and
effect and is valid and enforceable against Xxxx in accordance with its terms,
assuming the due authorization, execution and delivery thereof by each of the
other parties thereto. Xxxx is not in default in the observance or the
performance of any material term or obligation to be performed by it under any
Material Contract to which it is a party. To the best of Xxxx'x knowledge, no
other person is in default in the observance or the performance of any term or
obligation to be performed by it under any Material Contract. Xxxx has delivered
to the Buyer true and complete copies of all Material Contracts.
15
3.14 LITIGATION OR PROCEEDINGS.
(a) Except as set forth on SCHEDULE 3.14 and SCHEDULE 3.15(B),
there are no actions, suits, proceedings or investigations, either at law or in
equity, or before any commission or other administrative authority in any United
States or foreign jurisdiction, of any kind now pending or, to the best of
Xxxx'x knowledge, threatened in any manner against Xxxx or the EMI Division
regarding the Business, nor has there been any such action, suit, proceeding or
investigation pending against Xxxx or the EMI Division during the two-year
period prior to the Closing Date. There are presently no outstanding judgments,
decrees or orders of any court or any governmental body or authority against or
affecting the Business or the Acquired Assets.
(b) Except as set forth on SCHEDULE 3.14, there are no actions,
suits, proceedings or investigations, either at law or in equity, or before any
commission or other administrative authority in any United States or foreign
jurisdiction, of any kind now pending or, to the best of Xxxx'x knowledge,
threatened in any manner, or any circumstances which should or could reasonably
form the basis of any such action, suit, proceeding or investigation, involving
Xxxx or any of the properties or assets of the Business that (i) questions the
validity of this Agreement or (ii) seeks to delay, prohibit or restrict in any
manner any action taken or contemplated to be taken by Xxxx under this
Agreement.
3.15 INTELLECTUAL PROPERTY.
(a) Except as set forth on SCHEDULE 3.15(A), Xxxx does not own
any patent, copyright, registered trademark or trade name, nor has any license
to use any patent, copyright, trademark or trade name been issued to it, nor
does Xxxx use any patent, copyright, registered trademark or trade name in
connection with the conduct of the Business. Xxxx either owns or licenses each
of the patents, copyrights, registered trademarks and trade names listed on
SCHEDULE 3.15(A), and Xxxx has the exclusive right to use all such patents,
copyrights, registered trademarks and trade names in the Business.
(b) Immediately after the Closing, the Buyer will own or license
each of the patents, copyrights, registered trademarks and trade names listed on
SCHEDULE 3.15(A) free and clear of all liens, claims, charges or encumbrances,
and on the same terms and conditions as in effect prior to the Closing.
(c) Except as set forth on SCHEDULE 3.15(B), Xxxx does not know
of any claim, or any basis of any claim, that it has infringed any patent,
copyright, trademark, trade name, knowhow, trade secret or other proprietary
right of any other person in connection with the conduct of the Business.
3.16 COMPLIANCE WITH LAWS. Xxxx has not received any notice that the
Business is not in compliance (which non-compliance has not been cured) in all
material respects with all federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, permits, judgments, orders or decrees of any
governmental authority having jurisdiction over the Business.
16
3.17 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 3.17(A), the Business has
complied in all material respects with and is presently complying in all
material respects with all Environmental Laws.
(b) SCHEDULE 3.17(B) sets forth all permits, licenses, approvals
and authorizations required, as of the Closing Date, under Environmental Laws
for the operation of the Business (collectively, the "ENVIRONMENTAL PERMITS"),
and all such Environmental Permits are in full force and effect.
(c) (i) The Business has all Environmental Permits required under
all Environmental Laws for the Business, (ii) the Business is in compliance with
all material terms and conditions of the Environmental Permits, and (iii) there
is no pending or, to the knowledge of Xxxx, threatened action by any
governmental authority or other person to revoke, suspend, rescind, modify or
initiate any legal proceeding related to any such Environmental Permits.
(d) All Environmental Permits are in the possession of Xxxx and
will be transferred to the Buyer as of the Closing Date, in accordance with all
such Environmental Permits and Environmental Laws.
(e) Except as set forth on SCHEDULE 3.17(E), no person has
alleged any violation by Xxxx of any Environmental Permits or any applicable
Environmental Laws relating to the conduct of the Business or the use, ownership
or transfer of the Owned or Leased Real Property or other property, and Xxxx is
unaware of any such violations.
(f) Except as set forth on SCHEDULE 3.17(F), there has been and
currently is no Release or threatened Release of any Hazardous Substance (as
such terms are hereinafter defined) at or into the environment from, on, in,
under, to or at any of the properties where the Business has been or is
conducted (the "PROPERTIES"), or any other properties where Hazardous Substances
were transported or Released by the Business (the "OFF-SITE PROPERTIES"),
including, without limitation, Releases from underground storage tanks.
(g) Except as set forth on SCHEDULE 3.17(A) and SCHEDULE 3.17(F),
the Properties are not subject to any pending or, to Xxxx'x knowledge,
threatened Environmental Claim, and, to Xxxx'x knowledge, there are no
conditions or occurrences at the Properties which could form the basis for an
Environmental Claim against Xxxx relating to the properties or the conduct of
the Business.
(h) Except as set forth on SCHEDULE 3.17(A) and SCHEDULE 3.17(F),
to Xxxx'x knowledge, no Hazardous Substance has been used, stored, manufactured,
treated, processed or transported to or from the Properties except as necessary
to the conduct of the Business and in compliance in all material respects with
Environmental Laws.
17
"ENVIRONMENTAL CLAIM" shall mean any investigation, claim, notice
of violation, allegation, demand, suit, action, criminal or civil prosecution,
injunction, proceeding, penalty, fine, restriction, lien, encumbrance, judgment,
decree, order or agreement from, by or with any governmental authority or
private party concerning any Environmental Laws or any Release of any Hazardous
Substance into the environment or on the Properties or Off-site Properties.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, state or
local statute, law, regulation, rule, standard, judgment, order, consent decree,
Environmental Permits, or other legal requirement or common law, in force or
effect as of the Closing Date, pertaining to (i) the protection of health,
safety or the environment, (ii) the conservation, management, or use of natural
resources or wildlife, (iii) the management, use, generation, transportation,
shipment, treatment, storage, disposal, Release, threatened Release, abatement,
removal, remediation or handling of, or exposure to, Hazardous Substances, (iv)
the regulation of storage tanks, or otherwise relating to pollution (including
any release to air, land, surface water, and groundwater). Environmental Laws
shall include, without limitation, any of the following statutes, or analogous
state statutes, or any implementing regulations: the Comprehensive Environmental
Response, Compensation and Liability Act, the Solid Waste Disposal Act, the
Federal Water Pollution Control Act, the Clean Air Act, the Emergency Planning
and Community Right to Know Act, and the Toxic Substances Control Act.
"HAZARDOUS SUBSTANCE" shall mean any substance, chemical,
compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant,
or material which is (i) regulated, defined or designated as hazardous,
extremely or imminently hazardous, dangerous, carcinogenic or toxic, pursuant to
Environmental Laws; (ii) subject to investigation, monitoring, reporting or
remediation or other obligation by any government authority (local, state,
municipal, territorial or federal); (iii) asbestos, polychlorinated biphenyls
and petroleum and petroleum products (including crude oil or any fraction
thereof); (iv) waste, including, without limitation, solid waste; and (v)
natural gas, synthetic gas and any mixtures thereof.
"RELEASE" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing into the environment or onto the Properties or Off-site Properties
(including, without limitation, the abandonment or discarding of barrels,
containers, and other closed receptacles containing any Hazardous Substance or
pollutant or contaminant).
3.18 GOVERNMENTAL AUTHORIZATIONS AND REGULATIONS. Xxxx has all licenses,
franchises, permits and other governmental authorizations necessary to the
conduct of the Business, the absence of which would have a Material Adverse
Effect, and Xxxx is in substantial compliance with all such licenses,
franchises, permits and other governmental authorizations. Such licenses,
franchises, permits and other governmental authorizations are valid, and Xxxx
has not received any notice that any governmental authority intends to cancel,
terminate or not renew any such license, franchise, permit or other governmental
authorization.
18
3.19 EMPLOYEE BENEFIT PLANS AND OTHER ARRANGEMENTS.
(a) BENEFIT PLANS. Except as set forth on SCHEDULE 3.19, Xxxx
does not sponsor, maintain, support, and is not otherwise a party to, or has any
liability under, any plan, program, fund, arrangement or contractual
undertaking, whether for the benefit of a single individual or for more than one
individual, and whether or not funded, which is (i) an employee pension benefit
plan (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), (ii) an employee welfare benefit plan (as
defined in Section 3(1) of ERISA) or (iii) any other incentive or compensatory
arrangement (not including base pay or commissions) for employees, their
dependents and/or their beneficiaries. Each plan, fund or arrangement described
in the preceding sentence is a "BENEFIT PLAN," and each Benefit Plan which is an
employee pension benefit plan as defined in Section 3(2) of ERISA is a "PENSION
PLAN." Except as set forth on SCHEDULE 3.19, none of the Benefit Plans is
maintained pursuant to the provisions of any collective bargaining agreement.
(b) COMPLIANCE. Each Benefit Plan substantially complies with the
applicable requirements of ERISA and the Code, and Xxxx has not violated ERISA
in any material respect with respect to the filing of applicable reports,
documents, and notices with the Secretary of Labor or the Secretary of the
Treasury or the furnishing of such documents to participants or beneficiaries
with respect to any Benefit Plan in a manner which would cause a Material
Adverse Effect on Xxxx.
(c) PROHIBITED TRANSACTIONS. Xxxx has not engaged in any
transaction with respect to the assets of any Benefit Plan by reason of which
Xxxx or any of its employees or directors is or could be subject to (i) the
excise taxes imposed by Section 4975(a) of the Code or (ii) civil liability
under Section 502(i) of ERISA.
(d) CONTRIBUTIONS. Contributions to each Pension Plan (including
all employer contributions and employee salary reduction contributions) which
are due and required to be paid or which are accrued for all periods prior to
the Closing Date have been timely paid to each Pension Plan or accrued on the
Closing Balance Sheet.
(e) TAX QUALIFICATION. Each Pension Plan which is intended to be
qualified under Code Section 401(a) has received a favorable determination
letter from the Internal Revenue Service, and nothing has occurred since the
date of such letter which would cause the disqualification of any such plan.
(f) FUNDING. The present value of all actuarial accrued
liabilities under the Benefit Plans which are subject to Title IV of ERISA, as
set forth in the latest actuarial valuation for such plans, does not exceed the
actuarial value of assets of such plans by more than $760,000 in the aggregate.
(g) DOCUMENTS. With respect to each Benefit Plan maintained in
connection with the conduct of the Business, Xxxx has made available to the
Buyer correct and complete copies of the plan document and summary plan
descriptions, the most recent determination letters, the most recent Form 5500
19
annual report, and all related trust agreements, insurance contracts, and other
funding arrangements which implement such plan.
(h) ERISA TITLE IV CONSIDERATIONS. "ERISA AFFILIATE" means each
entity which is treated as a single employer with Xxxx for purposes of Code
Section 414. With respect to each Benefit Plan that Xxxx or any ERISA Affiliate
maintains or has maintained during the prior six years or to which any of them
contributes or has been required to contribute during the prior six years, (i)
neither Xxxx nor any ERISA Affiliate has incurred any liability to the PBGC
(other than PBGC premium payments) or otherwise under Title IV of ERISA
(including any withdrawal liability), (ii) there has been no "reportable event"
(within the meaning of Section 4043 of ERISA) or any event requiring disclosure
under Sections 4062(e), 4063(a) or 4041(c) of ERISA, and (iii) there has been no
event or condition which presents a material risk of termination of such plan by
the PBGC, which, with respect to clauses (i), (ii) and (iii) above, would cause
a Material Adverse Effect.
(i) MULTIEMPLOYER PLANS. Xxxx is not now, and has not in the past
been, a party to a "multiemployer plan" within the meaning of Section 3(37) of
ERISA. There are no circumstances pursuant to which Xxxx would be liable as a
result of any ERISA Affiliate being a party to a multiemployer plan.
(j) COBRA. Xxxx is in substantial compliance with the
requirements of Code Section 4980(B) ("COBRA"), which requires the continuation
of benefit coverage upon the happening of certain events. No Benefit Plan
provides post-employment welfare benefits to any employee, former employee or
dependent except as required by COBRA or except as otherwise set forth on
SCHEDULE 3.19.
(k) SEVERANCE. No severance payments, bonus payments or any other
compensatory payments will be triggered by the execution, delivery or
consummation of this Agreement.
(l) CLAIMS LIABILITY. No action, suit, proceeding, hearing or, to
the knowledge of Xxxx, investigation with respect to any Benefit Plan is
pending.
3.20 CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 3.20, no
officer, director, employee or affiliate of Xxxx transacts any business, either
directly or indirectly, with the Business nor owns or has any interest, directly
or indirectly, in whole or in part, in any Acquired Asset.
3.21 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Xxxx nor any
director, officer, agent, employee or other person associated with or acting on
behalf of Xxxx has used any corporate funds for any unlawful contribution, gift,
entertainment or other expense relating to political activity or made any direct
or indirect unlawful payment to any United States or foreign government official
or employee from corporate funds or violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977 or paid or made any bribe, rebate,
payoff, influence payment, kickback, or other unlawful payment.
20
3.22 ACCOUNTING PRACTICES. Xxxx makes and keeps accurate books and
records reflecting the assets and liabilities of the Business and maintains
internal accounting controls that provide reasonable assurance that (i)
transactions are executed with management's authorization, (ii) transactions are
recorded as necessary to permit preparation of the financial statements of the
Business and to maintain accountability for the assets and liabilities of the
Business, (iii) access to the assets of the Business is permitted only in
accordance with management's authorization and (iv) the reported accountability
of the assets and liabilities of the Business is compared with existing assets
and liabilities at reasonable intervals.
3.23 INSURANCE. Xxxx currently maintains, and has at all times prior to
the date of this Agreement maintained, liability, casualty, property loss and
other insurance coverages upon the Acquired Assets and with respect to the
operation of the Business in such amounts, of such kinds and with such carriers
as are generally deemed appropriate and sufficient for companies of similar size
to the Business and engaged in similar types of business and operations in
similar locations as the Business. With respect to the Acquired Assets and the
operation of the Business, in the two years prior to the date of this Agreement,
Xxxx has not been refused any insurance nor has their coverage been limited by
any insurance company to which they have applied for insurance or with which
they have carried insurance.
3.24 PRODUCT WARRANTIES. Except as set forth on SCHEDULE 3.24, (i) there
is no unexpired, expressed product warranty with respect to any product
manufactured or sold in connection with the Business; (ii) Xxxx has not received
any notice of any claim based on any expressed product warranty; and (iii) Xxxx
has not received any notice of any claim (actual or threatened) based on any
product warranty relating to the Business.
3.25 CERTAIN DISCLOSURES. SCHEDULE 3.25 contains a list of all
non-expatriate officers and other executive employees of the Sellers employed in
connection with the Business, including the title, duties and annual salary or
rate of compensation for each such officer and executive employee.
3.26 BROKERS. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Sellers directly
with the Buyer and without the intervention of any other person and in such
manner as not to give rise to any valid claim against any of the parties for any
finder's fee, brokerage commission or like payment.
3.27 CUSTOMERS AND SUPPLIERS. SCHEDULE 3.27 contains a list of those
entities that were the ten largest customers of the Business in terms of dollar
amount of sales during the Business' fiscal year ended March 31, 1999 and during
the period from March 31, 1999 through the date hereof, together with a
statement for each such customer during each such period of the dollar amount of
such sales. Since March 31, 1999, there has been no material adverse change in
the relationship between Xxxx and each customer listed on SCHEDULE 3.27 or
between Xxxx and any of the ten largest suppliers of the Business.
3.28 YEAR 2000 ISSUES. Except as set forth on SCHEDULE 3.28, Xxxx has
(i) undertaken a review and assessment of all areas with the business and
operations of the Business that could be adversely
21
affected by the potential problem caused by computer applications being unable
to properly perform date sensitive functions on or after January 1, 2000 due to
an inability to distinguish the Year 2000 from the Year 1900 (the "YEAR 2000
ISSUE"), (ii) developed a plan and time line for addressing the Year 2000 Issue
on a timely basis and (iii) to date, implemented such plan substantially in
accordance with the timetable. Except as listed on SCHEDULE 3.28, Xxxx
reasonably anticipates that all computer applications that are material to the
Business and the performance of Xxxx'x obligations hereunder will on a timely
basis be able to perform properly date sensitive functions for all dates before
and after January 1, 2000, except to the extent the Buyer is responsible for
implementing the compliance plan after the Closing.
3.29 EMPLOYMENT MATTERS.
(a) SCHEDULE 3.29(A) lists the name and current base salary or
wage rates and rates of other compensation for each non-expatriate person
actively employed by the Business.
(b) With respect to the employees of the Business, except as
disclosed on SCHEDULE 3.29(B), (i) Xxxx is not a party to any collective
bargaining agreement; (ii) there is no unfair labor practice charge or complaint
pending or, to the knowledge of Xxxx, threatened against Xxxx; (iii) there is no
labor strike, slowdown, work stoppage, or lockout in effect or, to the knowledge
of Xxxx, threatened against Xxxx; and (iv) no action, suit or complaint, by or
before any court, governmental, or administrative agency or commission brought
by or on behalf of any employees of the Business, former employee, retiree or
labor organization is pending or, to the knowledge of Xxxx, threatened.
IV. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers as follows:
4.1 CORPORATE ORGANIZATION. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to own its property and to carry on
its business as now being conducted. The Buyer has delivered to the Sellers
complete and correct copies of the Buyer's Certificate of Incorporation and
By-Laws, in each case, as amended and in effect on the date hereof. The Buyer is
not in violation of any of the provisions of its Certificate of Incorporation or
By-Laws.
4.2 AUTHORIZATION OF AGREEMENT; NO VIOLATION. The Buyer has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder. The Buyer or its subsidiary designated pursuant to
Section 9.9 (if any) will have, on or prior to the Closing Date, the power to
own and operate the Business following its acquisition thereof. As of the
Closing Date, the Buyer or its subsidiary designated pursuant to Section 9.9 (if
any) will be duly qualified to do business in, and will be in good standing in,
the Commonwealth of Pennsylvania. The execution, delivery and performance of
this
22
Agreement and the other agreements and documents to be executed and delivered by
the Buyer pursuant to the provisions of this Agreement have been duly authorized
by all necessary corporate action on the part of the Buyer. This Agreement has
been duly executed and delivered on behalf of the Buyer and is a legal, valid
and binding obligation of the Buyer enforceable against the Buyer in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights. Neither the
execution, delivery or performance of this Agreement by the Buyer nor the
consummation of any of the transactions provided for in this Agreement (i) will
violate or conflict with any provision of the Certificate of Incorporation or
By-Laws of the Buyer, (ii) will result in any breach of or default by the Buyer
under any provision of any material contract or agreement of any kind to which
the Buyer is a party or by which the Buyer is bound or to which the properties
or assets of the Buyer are subject, (iii) is prohibited by, or requires the
Buyer to obtain or make any consent, authorization, approval, registration or
filing under, any statute, law, ordinance, regulation, rule, judgment, decree or
order of any court or governmental agency, board, bureau, body, department or
authority, or of any other person, or (iv) will result in the creation or
imposition of any lien, claim, charge, restriction, equity or encumbrance of any
kind whatsoever upon, or give to any other person any interest or right
(including any right of termination or cancellation) in or with respect to, any
of the properties, assets, agreements or contracts of the Business.
4.3 LITIGATION. There are no actions, suits, proceedings or
investigations, either at law or in equity, or before any commission or other
administrative authority in any United States or foreign jurisdiction, of any
kind now pending or, to the best of the Buyer's knowledge, threatened or
proposed in any manner, or any circumstances which should or could reasonably
form the basis of any such action, suit, proceeding or investigation, involving
the Buyer or any of its properties or assets that (i) questions the validity of
this Agreement, (ii) seeks to delay, prohibit or restrict in any manner any
action taken or contemplated to be taken by the Buyer under this Agreement, or
(iii) would materially adversely affect the ability of the Buyer to conduct the
Business after the Closing Date on substantially the same basis as the Business
is currently being conducted.
4.4 THIRD-PARTY CONSENTS. Except for the expiration or early termination
of the applicable waiting period under the HSR Act, and except as set forth on
SCHEDULE 4.4, no consent, authorization or approval of, and no filing with, any
third parties to any material contract to which it is a party or by which it may
be bound or any governmental authority is required for the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.
4.5 BROKERS. Except as set forth on SCHEDULE 4.5, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried on by the Buyer directly with the Sellers and without the intervention
of any other person and in such manner as not to give rise to any valid claim
against any of the parties for a finder's fee, brokerage commission or like
payment.
4.6 FINANCING. Subject to the satisfaction of the conditions in Section
6.2, the Buyer shall have sufficient funds to pay the Purchase Price at the
Closing.
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V. COVENANTS
5.1 ACCESS, INFORMATION AND DOCUMENTS. Pending the Closing, the Sellers
will give to the Buyer and to its agents and representatives (including, but not
limited to, accountants, lawyers and appraisers) full and complete access during
normal working hours to any and all of the properties, assets, books, records
and other documents of the Business to enable the Buyer to make such examination
of the properties, assets, books, records and other documents of the Business as
the Buyer may determine, and the Sellers will furnish to the Buyer such
information and copies of such documents and records as the Buyer shall
reasonably request, but the Buyer shall not have access to the Tax Materials;
PROVIDED that the Sellers will be reasonably responsive to requests of the Buyer
for access to the Tax Materials on a need to know basis. As part of such
examination, the Buyer may make such inquiries of such persons having business
relationships with the Sellers in connection with the Business (including, but
not limited to, suppliers, licensees, distributors and customers) as the Buyer
shall reasonably determine and the Sellers shall cooperate fully with the Buyer
in connection therewith. Notwithstanding the foregoing, the Buyer may not
conduct any physically intrusive testing on the Owned Real Property prior to the
Closing.
5.2 CONDUCT OF BUSINESS PENDING CLOSING. From the date hereof until the
Closing, except as consented to by the Buyer in writing, Xxxx will:
(a) continue to maintain itself at all times as a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation;
(b) carry on the operations of the Business in a good and
diligent manner on an arm's-length basis and substantially in the manner carried
on as of the date hereof and not engage in any activity or transaction or make
any commitment to purchase or spend in connection with the Business other than
in the ordinary course of business as heretofore conducted; provided, however,
without the written consent of the Buyer, Xxxx will not make any commitment to
purchase or spend in connection with the Business involving $100,000 or more;
(c) continue to carry all of the existing insurance of the
Business;
(d) use commercially reasonable efforts to preserve the
organization of the Business intact, to keep available to the Buyer the services
of the employees and independent contractors of the Business and to preserve for
the Buyer Xxxx'x relationships with suppliers, licensees, distributors and
customers and others having business relationships with it in connection with
the Business;
(e) maintain the facilities, machinery and equipment of the
Business in operating condition and repair, subject only to ordinary wear and
tear;
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(f) continue to maintain and keep accurate books and records
reflecting the assets and liabilities of the Business;
(g) not take any action which would be prohibited by Section 3.8;
and
(h) without limiting the foregoing, consult with the Buyer
regarding all significant developments, transactions and proposals relating to
the Business or the Acquired Assets.
5.3 CONSENTS AND APPROVALS. Xxxx shall use commercially reasonable
efforts to obtain prior to the Closing all consents, authorizations and
approvals under all statutes, laws, ordinances, regulations, rules, judgments,
decrees and orders of any court or governmental agency, board, bureau, body,
department or authority or of any other person required to be obtained by it in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby.
5.4 NO SOLICITATION OF OFFERS. Between the date of this Agreement and
the Closing or earlier termination of this Agreement, the Sellers shall, and
shall cause their employees and representatives to, deal exclusively with the
Buyer in connection with the sale of the Business. Neither Seller nor any
employee or representative of either Seller shall directly or indirectly,
without the Buyer's prior written consent, solicit, encourage or initiate any
offer or proposal from, or engage in any discussions with, or provide any
information to, any person other than the Buyer and its affiliates, employees
and representatives, concerning any transaction involving the sale of any assets
of the EMI Division (other than sales of its products in the ordinary course of
business), or a merger, consolidation, liquidation, recapitalization or similar
transaction involving the EMI Division (collectively, "ACQUISITION
TRANSACTIONS"), nor shall either Seller or any employee or representative accept
any proposal with respect to any Acquisition Transaction.
5.5 CONFIDENTIAL INFORMATION. Unless and until the Closing has been
consummated, the terms and conditions of the Confidentiality Agreement dated as
of October 23, 1998 among Truck Components Inc., Gunite and Hitachi shall
continue as provided therein. An executed copy of such agreement is attached
hereto as EXHIBIT 5.5. From the date of this Agreement and continuing after the
Closing Date, the Sellers shall hold and shall cause their counsel, accountants,
financial advisors, appraisers and investment bankers to hold in confidence any
confidential data or information with respect to the Business or the Buyer,
except to the extent necessary to comply with any court order or any applicable
law, rule or regulation.
5.6 PRESS RELEASES AND PUBLIC STATEMENTS. Except as required by
applicable law, no party hereto shall give notice to third parties or otherwise
make any public statement or releases concerning this Agreement or the
transactions contemplated hereby except for such written information as shall
have been approved in writing as to form and content by the other party, which
approval shall not be unreasonably withheld.
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5.7 OTHER TAX PAYMENTS.
(a) The Buyer shall pay when due all transfer, realty transfer,
stock transfer, sales, use, stamp, documentary, recording and other similar
taxes and fees, including any penalties and interest, arising out of or in
connection with the consummation of the transactions contemplated by this
Agreement (the "TRANSFER TAXES"). Xxxx shall file all necessary documentation
and returns with respect to Transfer Taxes required by law to be filed by Xxxx.
The Buyer, as appropriate, will join in the execution of any such documentation
and returns.
(b) Where property taxes (including, with respect to real
property and without limitation, any water or sewer charges, and other taxes or
charges incident to the use of the Owned Real Property) applicable to any of the
Acquired Assets are attributable to any taxable period that includes but does
not end on the Closing Date, the amount of such taxes that are attributable to
the Pre-Closing Period shall be the amount of such taxes for the entire taxable
period, multiplied by a fraction the numerator of which is the number of
calendar days in the Pre-Closing Period and the denominator of which is the
entire number of calendar days in such taxable period, and the remainder of such
taxes for the taxable period shall be attributable to the Post-Closing Period.
The Buyer shall be responsible for the portion of such taxes attributable to the
Post-Closing Period, and Xxxx shall be responsible for the portion of such taxes
attributable to the Pre-Closing Period. "Pre-Closing Period" shall mean the
portion of the taxable period ending on the Closing Date. "Post-Closing Period"
means the portion of the taxable period beginning after the Closing Date.
(c) After the Closing, Xxxx and the Buyer shall each, and shall
cause their respective subsidiaries and affiliates to, provide the other party
with such cooperation and assistance as any of them may reasonably request of
another in respect of taxes of the Business; the preparation of any tax return,
including amended tax returns or claims for refund in respect of the Business;
or the participation in or conduct of any audit or other examination by any
taxing authority or judicial or administrative proceeding relating to the
liability for taxes of the Business. Such cooperation and information shall
include making employees available on a mutually convenient basis to provide
explanations of any documents or information provided. The party requesting
assistance shall reimburse the other party for reasonable out-of-pocket expenses
(other than salaries or wages of any employees of the parties) incurred in
providing such assistance. Except as may be required in connection with an audit
or examination proceeding or determination relating to taxes, any information
obtained pursuant to this Section 5.7(c) shall be kept confidential by the
parties hereto. Any errors in calculations or apportionments shall be corrected
or adjusted as soon as practicable after the Closing.
5.8 HSR ACT NOTIFICATION AND REPORT FORM. The Sellers and the Buyer
shall each, as soon as practicable, take all reasonable actions necessary to
comply promptly with all legal requirements which may be imposed on them with
respect to the consummation of the transactions contemplated in this Agreement.
The Sellers and the Buyer have filed the required Notification and Report Forms
under the HSR Act with the Federal Trade Commission and the Antitrust Division
of the Department of Justice, and
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each shall use its commercially reasonable efforts to respond as promptly as
practicable to all inquiries received from the Federal Trade Commission, the
Antitrust Division of the Department of Justice or any other governmental
authority for additional information or documentation. The Sellers will, and
will cause each of their affiliates to, coordinate and cooperate with the Buyer
in exchanging such information and supplying such assistance as may be
reasonably requested by the Buyer in connection with such filings and other
actions contemplated by this Section 5.8. The HSR Act application fee has been
paid by the Buyer.
5.9 THE BUYER'S OBLIGATION WITH RESPECT TO THE EMPLOYEES OF THE
BUSINESS.
(a) On the Closing Date, the Buyer shall offer employment to each
person actively employed by the Business (other than those to be covered by the
Service Agreement (as defined in Section 6.1(f))) (the "BUSINESS EMPLOYEES"),
except as may be otherwise required by the collective bargaining agreement with
the United Steel Workers of America identified on SCHEDULE 3.29(B), at the same
base salary and at rates of other compensation substantially the same as the
rates applicable to such employees immediately prior to the Closing Date. At the
Closing, Xxxx shall provide the Buyer with a list of all Business Employees as
of the Closing Date, which shall be attached as SCHEDULE 5.9. Within ninety (90)
days of the Closing Date, the Buyer shall not cause an employment loss, as
defined in the Workers Adjustment and Retraining Notification Act, as amended
(the "WARN ACT"), in sufficient numbers such that the notice requirement of the
WARN Act is applicable. Xxxx shall terminate the employment of all Business
Employees as of the Closing Date. The Buyer and the Sellers agree to cooperate
in jointly notifying the Business Employees of the termination of their
employment by Xxxx and the offer of employment by the Buyer. Nothing in this
Section 5.9 shall confer any rights upon any person or entity other than the
parties to this Agreement and their respective successors and permitted assigns.
Other than as specifically provided for, this provision shall in no way affect
the Buyer's ability to operate the Business in the future as it deems fit.
(b) The Buyer shall:
(i) credit periods of service prior to the Closing for
purposes of determining seniority, eligibility, vesting and benefit
entitlement under all benefit plans, programs and policies maintained by
the Buyer after the Closing;
(ii) cause each Business Employee hired by the Buyer (and
his or her eligible dependents) to be covered immediately following the
Closing by a group health plan that provides health benefits (within the
meaning of Section 5000(b)(1) of the Code) that (i) does not limit or
exclude coverage on the basis of any preexisting condition of such
Business Employee or dependent, and (ii) that provides each such
Business Employee full credit, for the year during which the Closing
occurs, with any deductible already incurred by the Business Employee
under the EMI Division's group health plan and with any other
out-of-pocket expenses that count against any maximum out-of-pocket
expense provision of the EMI Division's or the Buyer's group health plan
or medical plan;
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(iii) offer or provide COBRA coverage to any Business
Employee or any other former Business Employee or any of their
dependents who are entitled to be offered or provided such coverage and
have incurred a "qualifying event" on or prior to the Closing Date
pursuant to Part 6 of Subtitle B of Title I of ERISA;
(iv) assume the EMI Division's obligation to provide any
Business Employee or former Business Employee with post-termination life
insurance benefits; and
(v) as of the Closing, assume sponsorship of the EMI
Company Hourly 401(k) Savings Plan and the EMI Company Salaried
Retirement Savings Plan and be responsible for satisfying all
liabilities arising thereunder (and in connection with such assumption,
Xxxx shall take such action as may be necessary to assign the trust
agreement under such plans to the Buyer).
(c) With respect to the collective bargaining agreement with the
United Steel Workers of America identified on SCHEDULE 3.29(B), the Buyer agrees
that it shall (i) recognize the union that is a party to that agreement and (ii)
accept the terms of that agreement, including, without limitation, wages and
benefits; PROVIDED, HOWEVER, that the "spring back bonus" provision contained in
such agreement shall be modified to the Buyer's reasonable satisfaction prior to
the Closing.
(d) The Sellers shall have the right to retain complete copies of
all personnel records of the Business Employees.
5.10 POST-CLOSING TRANSITION MATTERS.
(a) Effective as of the Closing, (i) Xxxx shall retain certain
job work from Mitsubishi consisting of the front and rear knuckle and damper
fork parts described on SCHEDULE 1.3(K) and (ii) the Buyer agrees that it shall
manufacture and supply Xxxx with its requirements for the manufacturing of such
parts for Mitsubishi through July 1999 at the prices and in the quantities set
forth on SCHEDULE 5.10(A). The Sellers shall remove the equipment related to
this job work held for sale or transfer and referred to in Section 1.3(c) upon
the Sellers' request or the Buyer's completion of the work, whichever is sooner.
(b) Effective as of the Closing, the Buyer agrees that it shall
continue to supply customers (other than Palmar, Inc. and Manac, Inc., whom it
shall continue to supply from the Closing Date until December 31, 1999 or March
31, 2000, as the case may be, at the prices and in the quantities set forth in
the sales agreements referred to in Section 1.2(f)) of Xxxx for commercially
reasonable periods, with customary quantities and at commercially reasonable
prices and terms and agrees that it will not terminate any existing customer
relationship of Xxxx on less than three (3) months' notice.
(c) Effective as of the Closing, the Buyer agrees that it shall
service warranty claims for products sold and delivered by Xxxx prior to the
Closing. Xxxx agrees that it shall reimburse the Buyer for the cost of such
warranty claims.
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(d) The Buyer shall not be liable for its failure to perform or
for delay in performing any of its obligations under this Section 5.10 to the
extent and for so long as such performance is delayed or prevented by fire,
flood, wind, earthquake, war embargo, strikes, explosions, riots or other such
catastrophic events or uncontrollable acts, or by laws, rules, or regulations of
any governmental authority; PROVIDED that the Buyer takes commercially
reasonable steps to mitigate the effects of such events and recommences
performance after the termination of the effects of such events. Notwithstanding
any other provision to the contrary, the Buyer shall not be liable to any party
or any respective affiliate or related party for incidental, punitive or
consequential damages under this Section 5.10. Nothing in this Section 5.10
shall confer any rights upon any person or entity other than the parties to this
Agreement.
(e) For a period not to exceed three months after the Closing
Date, the Buyer shall permit the Treasurer and Corporate Controller of Xxxx to
remain on the premises of the EMI Division for the purpose of performing orderly
transition tasks on behalf of the Sellers, including, but not limited to,
closing the Closing Date financial results of the EMI Division and implementing
various tax reporting, financial reporting and other matters relating to the EMI
Division.
VI. CONDITIONS TO CLOSING
6.1 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligation of the
Sellers to consummate the transactions contemplated by this Agreement at the
Closing is subject to the satisfaction, on or prior to the Closing, of each of
the following conditions, the failure of any one of which shall excuse the
Sellers from consummating such transactions unless any such conditions are
waived by the Sellers in writing:
(a) BUYER'S PERFORMANCE. The representations and warranties of
the Buyer contained in this Agreement (i) shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at and as of
the date hereof and (ii) shall be repeated and shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) on and as of
the Closing Date with the same effect as though made at and as of such time. The
Buyer shall have duly performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by it prior to or on the Closing Date.
(b) OPINION OF COUNSEL. The Sellers shall have received an
opinion, dated the Closing Date, of Winston & Xxxxxx, counsel for the Buyer, in
form and substance satisfactory to Xxxxxx, Xxxxx & Bockius LLP, counsel for the
Sellers, to the effect that:
29
(i) the Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power and authority to carry on its business as
now being conducted;
(ii) this Agreement has been duly authorized, executed and
delivered by Buyer and is a valid and binding obligation of the Buyer
enforceable against it in accordance with its terms, except (a) as the
same may be limited by bankruptcy, insolvency, reorganization or other
laws or equitable principles relating to or affecting the enforcement of
creditors' rights, (b) that the granting of specific performance is
subject to the discretion of a court of equity and (c) insofar as
indemnification and contribution provisions may be limited by applicable
law;
(iii) the execution and delivery of this Agreement by the
Buyer and the consummation of the transactions provided for in this
Agreement will not violate or conflict with any provision of the
Certificate of Incorporation or By-laws of the Buyer or, to the best of
the knowledge of such counsel, result in any breach of any contract or
agreement to which the Buyer is a party or by which the Buyer is bound
or to which the properties or assets of it are subject;
(iv) no authorization, approval or consent of, or any
action by, any United States federal or state court or regulatory
authority or by any court or regulatory authority of any foreign
jurisdiction that has not been obtained or taken is required for the
execution, delivery or performance of this Agreement by the Buyer; and
(v) such counsel knows of no litigation, proceeding or
investigation pending, threatened or proposed in any manner involving
the Buyer or any of their properties or assets or which questions the
validity of this Agreement or any action taken or to be taken by the
Buyer under this Agreement.
(c) CONSENTS AND APPROVALS. The Buyer shall have obtained all
consents, authorization and approvals under all statutes, laws, ordinances,
regulations, rules, judgments, decrees and orders of any court or governmental
agency, board, bureau, body, department or authority or of any other person
required to be obtained by the Buyer in connection with the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.
(d) LITIGATION. No suit, action or other proceeding shall be
pending or threatened before any court or governmental agency seeking to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
(e) HSR ACT. The applicable waiting period under the HSR Act and
the rules and regulations promulgated thereunder shall have expired or been
terminated.
30
(f) SERVICE AGREEMENT. HM Management Services, Inc. shall have
entered into a service agreement with the Buyer (the "SERVICE AGREEMENT") for
the management services of certain employees of Xxxx in the form of EXHIBIT
6.1(F).
(g) SECRETARY'S CERTIFICATE. The Sellers shall have received a
certificate of the Secretary of the Buyer dated the Closing Date and attaching
copies (certified by the Secretary of State of Delaware, as appropriate), of the
Certificate of Incorporation, By-Laws, good standing certificate and resolutions
of the Buyer, certifying as to the incumbency of the officers of the Buyer and
representing and warranting that the conditions precedent set forth in Sections
6.1(a), (c) and (d) have been satisfied.
(h) The Sellers shall have received a certificate of the Buyer,
signed by an officer of the Buyer, stating that all of the inventory included in
the Acquired Assets is being purchased by the Buyer for purposes of resale.
6.2 CONDITIONS TO OBLIGATIONS OF THE BUYER. The obligation of the Buyer
to consummate the transactions contemplated by this Agreement at the Closing is
subject to the satisfaction, on or prior to the Closing, of each of the
following conditions, the failure of any one of which shall excuse the Buyer
from consummating such transactions unless any such conditions are waived by the
Buyer in writing:
(a) SELLERS' PERFORMANCE. The representations and warranties of
the Sellers contained in this Agreement (i) shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) at and as of
the date hereof, and (ii) shall be repeated and shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) on and as of
the Closing Date with the same effect as though made on and as of the Closing
Date. The Sellers shall have duly performed and complied in all material
respects with all agreements and conditions required by this Agreement to be
performed or complied with by them prior to or on the Closing Date.
(b) OPINION OF COUNSEL. The Buyer shall have received an opinion,
dated the Closing Date, of Xxxxxx, Xxxxx & Bockius LLP, counsel for the Sellers,
in form and substance satisfactory to Winston & Xxxxxx, counsel for the Buyer,
to the effect that:
(i) each Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation and has the corporate power and authority to carry on its
business as now being conducted and, in the case of Xxxx, to own and
operate the property and assets now owned and being operated by it in
connection with the Business;
(ii) this Agreement has been duly executed and delivered
by each Seller and is a valid and binding obligation of each Seller
enforceable against each Seller in accordance
31
with its terms, except (a) as the same may be limited by bankruptcy,
insolvency, reorganization or other laws or equitable principles
relating to or affecting the enforcement of creditors' rights, (b) that
the granting of specific performance is subject to the discretion of a
court of equity and (c) insofar as indemnification and contribution
provisions may be limited by applicable law;
(iii) execution and delivery of this Agreement by each
Seller and the consummation of the transactions provided for in this
Agreement will not violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of either Seller or, to the best
of the knowledge of such counsel, result in any breach of any contract
or agreement to which either Seller is a party or by which either Seller
is bound or, in the case of Xxxx, to which the properties or assets of
the Business are subject;
(iv) no authorization, approval or consent of, or any
action by, any United States federal or state court or regulatory
authority or by any court or regulatory authority of any foreign
jurisdiction that has not been obtained or taken is required for the
execution, delivery or performance of this Agreement by either Seller;
and
(v) such counsel knows of no litigation, proceeding or
investigation pending, threatened or proposed in any manner involving
either Seller or any of their properties or assets or which questions
the validity of this Agreement or any action taken or to be taken by
either Seller under this Agreement.
(c) NO MATERIAL ADVERSE EFFECT. On the Closing Date, the assets,
properties and operations of the Business shall not have been or then be
materially and adversely affected in any way as a result of any casualty or
disaster, accident, labor dispute, exercise of the power of eminent domain or
other governmental act or any other fortuitous event, act of God or the public
enemy, nor shall have there occurred any event that has a Material Adverse
Effect.
(d) LITIGATION. No suit, action or other proceeding shall be
pending or threatened before any court or governmental agency seeking to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
(e) CONSENTS AND APPROVALS. The Sellers shall have obtained all
consents, authorization and approvals under all statutes, laws, ordinances,
regulations, rules, judgments, decrees and orders of any court or governmental
agency, board, bureau, body, department or authority or of any other person
required to be obtained by them in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, including those set forth on SCHEDULE 6.2(E).
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(f) SECRETARY'S CERTIFICATE. The Buyer shall have received a
certificate of the Secretary of each Seller dated the Closing Date and attaching
copies (certified by the Secretary of State of the state of its incorporation,
as appropriate), of the Certificate of Incorporation, By-Laws, good standing
certificate and resolutions of such Seller certifying as to the incumbency of
the officers of such Seller and representing and warranting that the conditions
precedent set forth in Sections 6.2(a), (c) (in the case of Xxxx), (d) and (e)
have been satisfied.
(g) HSR ACT. The applicable waiting period under the HSR Act and
the rules and regulations promulgated thereunder shall have expired or been
terminated.
(h) NON-COMPETITION AGREEMENT. The Sellers shall have entered
into a non-competition agreement with the Buyer in the form of EXHIBIT 6.2(H).
(i) SERVICE AGREEMENT. HM Management Services, Inc. shall have
entered into the Service Agreement for the management services of certain
employees of Xxxx in the form of EXHIBIT 6.1(F).
(j) COLLECTIVE BARGAINING AGREEMENT. The "spring back bonus"
provision of the collective bargaining agreement with the United Steel Workers
of America shall have been modified to the Buyer's reasonable satisfaction.
(k) TRANSFER DOCUMENTS. The Sellers shall have delivered to the
Buyer at the Closing all documents, certificates and agreements necessary to
transfer to the Buyer good and marketable title to the Acquired Assets, free and
clear of any and all liens, claims, charges or encumbrances other than Permitted
Encumbrances, including, without limitation, a special warranty deed, dated as
of the Closing Date, for the conveyance of each parcel of Owned Real Property,
together with any necessary transfer declarations or other filings.
(l) REAL ESTATE. The Buyer shall have received at its expense
from a nationally recognized title insurance company (the "TITLE COMPANY")
reasonably satisfactory to the Buyer a fee owner's title insurance policy issued
to the Buyer with respect to each parcel of Owned Real Property, in each case in
form and substance reasonably satisfactory to the Buyer, together with
endorsements reasonably requested by the Buyer, in an amount determined by the
Buyer, insuring the Buyer and issued as of the Closing Date by the Title
Company, showing the Buyer to have a fee simple title to each parcel of Owned
Real Property, subject only to Permitted Encumbrances. The Sellers shall have
delivered to the Title Company any reasonably required affidavits or indemnities
required by the Title Company in connection with the delivery of the owner's
title policies.
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VII. TERMINATION
7.1 TERMINATION. This Agreement may be terminated as follows:
(a) TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time prior to the Closing by mutual consent of the Buyer and
the Sellers.
(b) TERMINATION BY THE BUYER. The Buyer may, without liability to
the Sellers, terminate this Agreement by notice to the Sellers (i) at any time
prior to the Closing if a default shall be made by the Sellers in the observance
or in the due and timely performance of any of the material terms hereof to be
performed by the Sellers that cannot be cured or remedied to the reasonable
satisfaction of the Buyer at or prior to the Closing, (ii) at any time prior to
the Closing if there has been a material breach of any representation or
warranty of the Sellers set forth in this Agreement, (iii) at any time prior to
the Closing if any non-appealable preliminary or permanent injunction or other
legal restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, or (iv) if for any reason the
Closing shall not have occurred on or before June 15, 1999, so long as the
applicable waiting period under the HSR Act has expired, or such later date that
is thirty (30) days after the applicable waiting period under the HSR Act has
expired.
(c) TERMINATION BY THE SELLERS. The Sellers may, without
liability to the Buyer, terminate this Agreement by notice to the Buyer (i) at
any time prior to the Closing if a default shall be made by the Buyer in the
observance or in the due and timely performance of any of the material terms
hereof to be performed by the Buyer that cannot be cured or remedied to the
reasonable satisfaction of the Sellers at or prior to the Closing, (ii) at any
time prior to the Closing if there has been a material breach of any
representation or warranty of the Buyer set forth in this Agreement, (iii) at
any time prior to the Closing if any non-appealable preliminary or permanent
injunction or other legal restraint or prohibition preventing the consummation
of the transactions contemplated by this Agreement shall be in effect, or (iv)
if for any reason the Closing shall not have occurred on or before June 15,
1999, so long as the applicable waiting period under the HSR Act has expired, or
such later date that is thirty (30) days after the applicable waiting period
under the HSR Act has expired.
7.2 EFFECT OF TERMINATION. Termination of this Agreement pursuant to
this Article VII shall terminate all obligations of the parties hereto;
PROVIDED, HOWEVER, that termination pursuant to Section 7.1(b)(i) or (ii) or
7.1(c)(i) or (ii) shall not relieve the defaulting or breaching party hereunder
from any liability to the other party hereto resulting from the default or
breach hereunder of such defaulting or breaching party occurring prior to the
date of termination. If this Agreement is terminated pursuant to the provisions
of this Article VII, the provisions set forth in Sections 7.2, 9.1 and 9.7 shall
survive such termination.
VIII. SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by Xxxx or the Buyer in this Agreement shall survive for
eighteen (18) months after the Closing Date,
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except (i) with respect to the representations and warranties made by Xxxx
pursuant to Sections 3.1, 3.2, 3.3 and 3.9(a), which shall survive indefinitely,
and with respect to the representations and warranties made by the Buyer
pursuant to Sections 4.1 and 4.2, which shall survive indefinitely, (ii) with
respect to the representations and warranties made by Xxxx pursuant to Section
3.12, which shall survive until the expiration of the applicable statute of
limitations (including any extension thereof), (iii) with respect to the
representations and warranties made by Xxxx with respect to environmental
matters relating to the Properties pursuant to Section 3.17, which shall survive
for thirty (30) months after the Closing Date, and (iv) with respect to the
representations and warranties made by Xxxx with respect to environmental
matters relating to the Off-site Properties pursuant to Section 3.17, which
shall survive for a period of forty-eight (48) months after the Closing Date
(the "OFF-SITE ENVIRONMENTAL REPRESENTATIONS"); PROVIDED that such termination
shall not affect the rights of a party in respect of any claim made by such
party in a writing received by the other party prior to the expiration of any
such period.
8.2 INDEMNIFICATION.
(a) BY THE SELLERS. The Sellers, jointly and severally, covenant
and agree to defend, indemnify and hold harmless the Buyer and each of its
affiliates, directors, officers, agents and employees ("REPRESENTATIVES") from
and against, and pay or reimburse promptly the Buyer for, any and all claims,
liabilities, obligations, losses, fines, costs, royalties, proceedings,
deficiencies, orders, directives or damages (whether absolute, accrued,
conditional or otherwise and whether or not resulting from third party claims),
including out-of-pocket expenses and reasonable attorneys' fees incurred in the
investigation or defense of any of the same or in asserting any of their rights
hereunder (collectively, "LOSSES"), resulting from or arising out of:
(i) any Excluded Asset or Excluded Liability;
(ii) any misrepresentation in or breach of any representation or
warranty of Xxxx set forth in this Agreement; and
(iii) breach of any covenant, agreement or other obligation of
the Sellers set forth in this Agreement.
Notwithstanding the foregoing, (1) the Sellers shall not have any
obligation to indemnify or to reimburse the Buyer under Section 8.2(a)(ii)
except to the extent such obligation (calculated for these purposes net of
insurance proceeds) exceeds in the aggregate $150,000, in which event the
Sellers shall reimburse the Buyer for all Losses exceeding $150,000, subject to
the limitations set forth herein, and (2) the Sellers' aggregate indemnification
obligation to the Buyer with respect to any claims made under Section 8.2(a)(ii)
(excluding claims arising out of the Off-site Environmental Representations)
shall be $2,000,000. The Sellers' indemnification obligation to the Buyer for
claims arising under Sections 8.2(a)(i) and (a)(iii) (calculated for these
purposes net of insurance proceeds) shall not be subject to the limitations
described in clauses (1) and (2) above, notwithstanding that the Buyer's rights
to indemnification could also be claimed
35
under Section 8.2(a)(ii). The Sellers' indemnification obligation to the Buyer
for claims arising out of the Off-site Environmental Representations (calculated
for these purposes net of insurance proceeds) shall not be subject to the
limitations described in clause (2) above, notwithstanding that the Buyer's
right to indemnification could also be claimed under Section 8.2(a)(ii).
(b) Notwithstanding the foregoing, no amounts of indemnity shall
be payable with respect to (1) any Losses resulting from any misrepresentation
in or breach of any representation or warranty of Xxxx set forth in this
Agreement that either Seller can show was actually known to the Buyer or any of
its representatives on or prior to the Closing, (2) any Losses as to which the
Buyer had actual knowledge of and a reasonable opportunity to mitigate its
Losses, but failed to mitigate such Losses, or (3) any Losses, to the extent
such Losses arise from the actions of the Buyer and as to which the Buyer had
knowledge, or reasonably should have known, that such actions would create such
Losses, except and to the extent where the Buyer is mitigating its Losses. To
the extent permitted by law, the Buyer and the Sellers hereby acknowledge and
agree that, from and after the Closing, their sole remedy with respect to any
and all claims arising under this Agreement shall be pursuant to the
indemnification provisions set forth in this Article VIII.
(c) Prior to any proposed sale, distribution or liquidation of
all or substantially all of their assets, the Sellers will notify the Buyer in
writing thereof (if not previously so notified) and, if requested by the Buyer,
shall arrange alternative means of providing for the indemnification obligations
of the Sellers set forth in this Section 8.2, in each case in an amount and upon
terms and conditions reasonably satisfactory to the Buyer.
(d) BY THE BUYER. The Buyer will indemnify and hold harmless the
Sellers and each of their Representatives from and against, and pay or reimburse
promptly the Sellers for, any and all Losses resulting from or arising out of:
(i) any Acquired Asset or Assumed Liability;
(ii) any misrepresentation in or breach of any representation or
warranty of the Buyer set forth in this Agreement; and
(iii) breach of any covenant, agreement or other obligation of
the Buyer set forth in this Agreement.
(e) 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)
the
36
Indemnifying Party acknowledges its obligation to indemnify the Indemnified
Party in writing, (ii) the counsel for the Indemnifying Party who shall conduct
the defense of such claim or litigation shall be reasonably satisfactory to the
Indemnified Party, (iii) the Indemnified Party may participate in such defense
at such Indemnified Party's expense and (iv) the omission by 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 omission results in a failure of actual notice to the Indemnifying Party
and such Indemnifying Party is materially prejudiced as a result of such 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 Indemnifying Party does not
accept the defense of any matter as above provided, the Indemnified Party shall
have the full right to defend, at the Indemnifying Party's cost, 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 Indemnifying Party and the Indemnified
Party shall cooperate in the defense of any claim or litigation subject to this
Section 8.2(e) and the records of each shall be available to the other with
respect to such defense.
(f) If the Indemnifying Party makes any payment pursuant to this
Section 8.2, or otherwise by reason of the transactions contemplated by this
Agreement or the other documents executed hereunder under any theory of
recovery, the Indemnifying Party shall succeed, to the extent of such payment
and to the extent permitted by law, to any rights and remedies of the
Indemnified Party to recoup amounts paid from third parties with respect to the
matters giving rise to indemnification hereunder.
IX. OTHER PROVISIONS
9.1 EXPENSES. The Sellers and the Buyer shall bear their respective
expenses, costs and fees (including attorneys', auditors' and financing
commitment fees) in connection with the transactions contemplated hereby,
including the preparation, execution and delivery of this Agreement and
compliance herewith, whether or not the transactions contemplated hereby shall
be consummated.
9.2 SEVERABILITY. If any provision of this Agreement, including any
phrase, sentence, clause, Section or subsection is inoperative or unenforceable
for any reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to any extent whatsoever.
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9.3 NOTICES.
(a) 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 (i) delivered
personally, (ii) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (iii) sent by next-day or overnight mail or
delivery or (iv) sent by telecopy or telegram and, in any such case, addressed
as follows:
if to the Buyer, to:
Gunite Corporation
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
if to the Sellers, to:
Hitachi Metals America, Ltd.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Vice President and Controller
Phone: (000) 000-0000
Fax: (000) 000-0000
38
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
(b) All such notices, requests, demands, waivers and other
communications shall be deemed to have been received (i) if by personal
delivery, on the day after such delivery, (ii) if by certified or registered
mail, on the seventh business day after the mailing thereof, (iii) if by
next-day or overnight mail or delivery, on the day delivered, and (iv) 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.
9.4 HEADINGS. The headings contained in this Agreement are for purposes
of convenience only and shall not affect the meaning or interpretation of this
Agreement.
9.5 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto), when executed and delivered, constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
9.6 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.
9.7 GOVERNING LAW AND CHOICE OF FORUM. THIS AGREEMENT SHALL BE GOVERNED
IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE
INTERNAL LAWS OF THE STATE OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS RULES THEREOF. ANY AND ALL LITIGATION CONCERNING ANY DISPUTE
ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE FILED AND MAINTAINED
ONLY IN A STATE OR FEDERAL COURT SITTING IN THE STATE OF PENNSYLVANIA. THE BUYER
AND THE SELLERS HEREBY IRREVOCABLY CONSENT TO THE JURISDICTION OF SUCH COURTS
AND AGREE TO MAINTAIN AT ALL TIMES A CURRENT ADDRESS IN THE STATE OF
PENNSYLVANIA FOR SERVICE OF PROCESS, AND AGREE THAT THE MAILING OF SUCH SERVICE
OF PROCESS TO SUCH ADDRESS BY U.S. MAIL, POSTAGE PREPAID, SHALL CONSTITUTE
EFFECTIVE SERVICE OF PROCESS IN ANY SUCH PROCEEDING.
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9.8 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.
9.9 ASSIGNMENT. This Agreement shall not be assignable or otherwise
transferable by any party hereto without the prior written consent of the other
parties hereto; PROVIDED that the Buyer may assign this Agreement or any part
thereof to any subsidiary of the Buyer; PROVIDED, FURTHER, that no assignment to
any such subsidiary shall in any way affect the Buyer's obligations or
liabilities under this Agreement (it being understood and agreed that in the
event such subsidiary shall fail to perform any of its obligations under this
Agreement after such designation, the Sellers shall be entitled to seek such
performance from the Buyer without the necessity of pursuing any remedies
against such subsidiary other than making demand on such subsidiary for such
performance).
9.10 NO THIRD PARTY BENEFICIARIES. Except as provided in Article VIII
with respect to indemnification of Indemnified Parties hereunder, 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.
9.11 AMENDMENT; WAIVERS; REMEDIES. No amendment or modification 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 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 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 are not
exclusive 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.
9.12 CERTAIN DEFINITIONS. For purposes of this Agreement, "to the
knowledge of Xxxx", "to Xxxx'x knowledge", "to the best knowledge of Xxxx" or
"to the best of Xxxx'x knowledge" and words of similar import shall mean the
knowledge of Xxxx and the EMI Division.
[signature page follows]
40
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
GUNITE CORPORATION
By:________________________________
Name: Xxxxxx X. Xxxx
Title: President
GUNITE ACQUISITION CORP.
By:________________________________
Name: Xxxxxx X. Xxxx
Title: President
HITACHI METALS AMERICA, LTD.
By:_________________________________
Name: Xxxxxxxx Xxxxx
Title: President and Chief
Executive Officer
XXXX MANUFACTURING, INC.
By:_________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
41
