EXHIBIT 10.2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
by and between
XXXXX-XXXXXX CORPORATION
Purchaser
and
XXXXXXXX XXXXXXX CORPORATION
(a Delaware corporation)
and
XXXXXXXX XXXXXXX CORPORATION
(an Ohio corporation)
Sellers
September 21, 1995
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE
1.1 Transfer of Shares. . . . . . . . . . . . . . . . . . . . . . 2
1.2 Consideration . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Contemplated Transfer of Retained Assets and Related
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Elimination of Intercompany Accounts. . . . . . . . . . . . . 4
ARTICLE II
CLOSING
2.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
3.1 Organization and Existence. . . . . . . . . . . . . . . . . . 4
3.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Authority and Approval. . . . . . . . . . . . . . . . . . . . 5
3.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Laws and Regulations; Litigation. . . . . . . . . . . . . . . 6
3.6 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . 7
3.8 No Adverse Changes. . . . . . . . . . . . . . . . . . . . . . 7
3.9 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.12 Intellectual Property . . . . . . . . . . . . . . . . . . . . 9
3.13 Fixed Assets. . . . . . . . . . . . . . . . . . . . . . . . . 9
3.14 Other Assets. . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Contracts and Agreements; Adverse Restrictions. . . . . . . . 10
3.16 Title and Liens . . . . . . . . . . . . . . . . . . . . . . . 11
3.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . 12
3.20 Copies Complete . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . 17
3.22 Accurate and Complete Records . . . . . . . . . . . . . . . . 17
3.23 Brokerage Arrangements. . . . . . . . . . . . . . . . . . . . 18
3.24 Environmental Matters . . . . . . . . . . . . . . . . . . . . 18
3.25 Financial Condition . . . . . . . . . . . . . . . . . . . . . 21
3.26 No Misleading Statements. . . . . . . . . . . . . . . . . . . 21
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
4.1 Organization and Existence. . . . . . . . . . . . . . . . . . 21
4.2 Authority and Approval. . . . . . . . . . . . . . . . . . . . 21
4.3 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.4 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.5 Funds Available . . . . . . . . . . . . . . . . . . . . . . . 22
4.6 Brokerage Arrangements. . . . . . . . . . . . . . . . . . . . 23
4.7 No Misleading Statements. . . . . . . . . . . . . . . . . . . 23
ARTICLE V
ADDITIONAL AGREEMENTS,
COVENANTS, RIGHTS AND OBLIGATIONS
5.1 Certain Changes . . . . . . . . . . . . . . . . . . . . . . . 23
5.2 Operations. . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.3 Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.4 Antitrust Notification; Other Reporting Requirements. . . . . 26
5.5 Best Business Efforts . . . . . . . . . . . . . . . . . . . . 26
5.6 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 26
5.7 Additional Disclosures and Information. . . . . . . . . . . . 27
5.8 Disclosure of Breach. . . . . . . . . . . . . . . . . . . . . 27
5.9 Notice of Failure of Condition. . . . . . . . . . . . . . . . 27
5.10 Interference with Relationships . . . . . . . . . . . . . . . 27
5.11 Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.12 Limited Use of Leased Space . . . . . . . . . . . . . . . . . 28
5.13 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 28
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ARTICLE VI
CONDITIONS TO CLOSING
6.1 Conditions to the Obligation of the Purchaser . . . . . . . . 28
6.2 Conditions to the Obligation of the Sellers . . . . . . . . . 34
6.3 Other Mutually Acceptable Arrangements. . . . . . . . . . . . 36
ARTICLE VII
TAX MATTERS
7.1 Liability for Taxes . . . . . . . . . . . . . . . . . . . . . 36
7.2 Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.3 Tax Proceedings . . . . . . . . . . . . . . . . . . . . . . . 40
7.4 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . 40
7.5 Cooperation and Exchange of Information . . . . . . . . . . . 40
7.6 Survival of Obligations . . . . . . . . . . . . . . . . . . . 41
7.7 Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.8 Tax Allocation Arrangements . . . . . . . . . . . . . . . . . 41
7.9 Loss Carryovers . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VIII
EMPLOYEES AND EMPLOYEE BENEFITS
8.1 Status of Employees . . . . . . . . . . . . . . . . . . . . . 42
8.2 Certain Benefits of Employees . . . . . . . . . . . . . . . . 42
ARTICLE IX
INVESTIGATION; LIMITATIONS
9.1 Scope of the Purchaser's Investigations and Waiver. . . . . . 44
9.2 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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ARTICLE X
TERMINATION
10.1 Events of Termination . . . . . . . . . . . . . . . . . . . . 45
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification of the Sellers. . . . . . . . . . . . . . . . 46
11.2 Indemnification of the Purchaser. . . . . . . . . . . . . . . 47
11.3 Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.4 Right to Contest and Defend . . . . . . . . . . . . . . . . . 48
11.5 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.6 Right to Participate. . . . . . . . . . . . . . . . . . . . . 49
11.7 Payment of Damages. . . . . . . . . . . . . . . . . . . . . . 49
11.8 Limitations on Indemnification. . . . . . . . . . . . . . . . 49
ARTICLE XII
MISCELLANEOUS
12.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.3 No Negotiations . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Governing Law and Jurisdiction. . . . . . . . . . . . . . . 51
12.5 Public Statements . . . . . . . . . . . . . . . . . . . . . 51
12.6 Form of Payment . . . . . . . . . . . . . . . . . . . . . . 52
12.7 Entire Agreement; Amendments and Waivers. . . . . . . . . . 52
12.8 Binding Effect and Assignment . . . . . . . . . . . . . . . 52
12.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . 52
12.10 Definition of "Material". . . . . . . . . . . . . . . . . . 53
12.11 Headings and Schedules. . . . . . . . . . . . . . . . . . . 53
12.12 Multiple Counterparts . . . . . . . . . . . . . . . . . . . 54
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LIST OF SCHEDULES
Schedule 1.3A - Contemplated Transfer of Assets and Related Matters -
List of Assets other than Retained Assets
Schedule 1.3B - Contemplated Transfer of Assets and Related Matters -
List of Liabilities other than Retained Liabilities
Schedule 1.3C - [Intentionally Omitted]
Schedule 1.3D - List of Schedule 1.3D Items
Schedule 3.1 - Organization and Existence
Schedule 3.2 - Capitalization
Schedule 3.4 - No Conflicts
Schedule 3.5 - Laws and Regulations; Litigation
Schedule 3.6 - No Default
Schedule 3.7 - Financial Statements
Schedule 3.8 - No Adverse Change
Schedule 3.9 - Liabilities
Schedule 3.10 - Taxes
Schedule 3.11 - Receivables
Schedule 3.12 - Intellectual Property
Schedule 3.13 - Fixed Assets
Schedule 3.14 - Other Assets
Schedule 3.15 - Contracts and Agreements
Schedule 3.16 - Encumbrances
Schedule 3.17 - Insurance
Schedule 3.18 - Personnel
Schedule 3.19 - Benefit Plans
Schedule 3.21 - Bank Accounts
Schedule 3.23 - Brokerage Arrangements
Schedule 3.24 - Environmental Matters
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Schedule 6.1(q) - Schedules Deliverable After Execution of Agreement
Schedule 6.1(r) - Environmental Remediation and Indemnification Agreement
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as of
the 21st day of September, 1995, by and between Xxxxxxxx Xxxxxxx Corporation, a
Delaware corporation ("Xxxxxxxx Xxxxxxx"), and Xxxxxxxx Xxxxxxx Corporation, an
Ohio corporation ("MKC") (Xxxxxxxx Xxxxxxx and MKC being referred to
individually as a "Seller" and collectively as the "Sellers"), and Xxxxx-Xxxxxx
Corporation, a California corporation (the "Purchaser").
W I T N E S E T H:
WHEREAS, Xxxxxxxx Xxxxxxx is the owner of all the issued and outstanding
shares of capital stock of MKC; MKC is the owner of all the issued and
outstanding capital stock of Xxxxxxxx Xxxxxxx Investments, Inc., a Nevada
corporation ("MKI"); MKI is the owner of all the issued and outstanding shares
of capital stock of MK Pacific, Inc., a Hawaii corporation ("MKP"); MKP is the
owner of all the issued and outstanding shares of capital stock of each of X.X.
Xxxxxx Construction Company, Inc., a Hawaii corporation ("Xxxxxx"), and E.E.
Black Limited, a Hawaii corporation ("E.E. Black"); and E.E. Black is the owner
of all the issued and outstanding shares of capital stock of each of Black
Construction Corporation, a Guam corporation ("Black Construction"), and Black
Micro Corporation, a Commonwealth of the Northern Mariana Islands corporation
("Black Micro") (MKI, MKP, Xxxxxx, X.X. Black, Black Construction and Black
Micro being each individually referred to as a "Company" and collectively
referred to as the "Companies"); and
WHEREAS, the Purchaser desires to acquire the shares of issued and
outstanding capital stock of each of the Companies as contemplated herein by
acquiring all the issued and outstanding shares of capital stock of MKI (the
"MKI Shares"), and the Sellers have agreed to sell the MKI Shares to the
Purchaser on the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 TRANSFER OF SHARES. Pursuant to the terms of this Agreement, on the
Effective Date (as hereinafter defined), MKC will sell, transfer, convey and
assign the MKI Shares and deliver to the Purchaser certificates representing the
MKI Shares, together with stock powers duly endorsed by MKC so that the MKI
Shares may be duly registered in the Purchaser's name.
1.2 CONSIDERATION. On the terms and subject to the conditions of this
Agreement, on the Effective Date, the Purchaser will purchase the MKI Shares in
exchange for $17,100,000.00 in cash ("Purchase Price").
1.3 CONTEMPLATED TRANSFER OF RETAINED ASSETS AND RELATED MATTERS. (a)
Prior to the Closing (as defined below), the Sellers shall cause (i) each of
MKI, MKP and E.E. Black (collectively, the "Designated Companies") to transfer
to MKC, by dividend or otherwise, the assets of each of the Designated Companies
(the "Retained Assets"), except for the assets listed on Schedule 1.3A which
shall include all small tools, office furniture, fixtures and equipment and any
other items categorized as minor equipment in the books and records of the
Designated Companies (except for mutually acceptable exclusions), and (ii) MKC
to assume all the liabilities, commitments and other obligations of each of the
Designated Companies of every type and description whether recorded or not
("Retained Liabilities), except for the intercompany accounts payable by any
Company to any other Company, MKC or Xxxxxxxx Xxxxxxx and the liabilities listed
on Schedule 1.3B. In addition, prior to the Closing, MKC shall transfer to its
payroll all employees of the Designated Companies.
(b) Prior to the Closing, the Sellers shall secure and deliver to the
Purchaser the written agreement of the Fidelity and Deposit Company of Maryland
("F&D") to release the Purchaser and E.E. Black from all liabilities arising out
of, or in any way relating to any performance, payment or material bond issued
by F&D prior to the Effective Date with respect to any E.E. Black project
(individually an "E.E. Black Project Bond" and collectively the "E.E. Black
Project Bonds").
(c) As promptly as practicable after the date of this Agreement, the
Seller shall secure and deliver to the Purchaser (i) written evidence of the
release of each of the Designated Companies from the obligation to pay, perform
or discharge each of the Retained Liabilities from the owner, lessor, joint
venture partner, bonding company, surety, or other entity or person entitled to
the benefits thereof, as the case
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may be, and (ii) written evidence that each E.E. Black Project Bond has been
cancelled and substituted with a new performance, payment or material bond, as
the case may be, that does not guarantee the performance by E.E. Black of any
obligations covered thereby.
(d) The Sellers desire to retain the sole authority to direct the
defense of the matters described on Schedule 1.3D (the "Schedule 1.3D Items")
involving Xxxxxx, Black Construction and Black Micro (an "Additional Designated
Company" or the "Additional Designated Companies"). Accordingly, for the
limited purpose of clause (e) of this Section 1.3 and for the limited purpose of
resolving the Schedule 1.3D Items, the Schedule 1.3D Items shall be deemed to be
Retained Liabilities. If requested by the Sellers after the Closing, the
Purchaser shall cause the officers and employees of the Additional Designated
Companies to cooperate with the Sellers in connection with the resolution of the
Schedule 1.3D Items, including, without limitation, providing reasonable access
to books and records of the Additional Designated Companies relating to the
Schedule 1.3D Items.
(e) The Sellers, jointly and severally, agree to protect, indemnify,
defend and hold harmless the Purchaser, E.E. Black and the Additional Designated
Companies from all damages (including, exemplary damages and penalties), losses,
deficiencies, costs, expenses, obligations, fines, expenditures, claims and
liabilities, including reasonable counsel fees and reasonable expenses of
investigating, defending and prosecuting litigation (collectively, the
"Damages"), suffered by E.E. Black, any Additional Designated Company or the
Purchaser as a result of, caused by, arising out of, or in any way relating to
any of the Retained Liabilities (including, without limitation, the E.E. Black
Project Bonds and the Schedule 1.3D Items). Notwithstanding any provision in
this Agreement to the contrary, the foregoing indemnity agreement shall neither
be subject to any time limit nor any limit on the amount of Damages recoverable
by E.E. Black, any Additional Designated Company or the Purchaser thereunder.
(f) For the purposes of this Agreement, the performance by the
Sellers of their obligations under this Section 1.3 shall not be considered a
material adverse change in the financial condition or results of operations of
E.E. Black, the Additional Designated Companies with respect to the Schedule
1.3D Items only, or the combined operations of the Companies, and none of the
representations, warranties or covenants of the Sellers set forth in this
Agreement shall relate to the Retained Assets and/or the Retained Liabilities.
Furthermore, neither the Retained Assets nor the Retained Liabilities need be
disclosed on any other schedule required to be delivered by the Sellers to the
Purchaser pursuant to this Agreement.
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1.4 ELIMINATION OF INTERCOMPANY ACCOUNTS. Immediately prior to the
Closing, the Sellers shall contribute all long-term debt payable by any Company
to the Sellers or any affiliate thereof and all other accounts payable by any
Company to the Sellers or any affiliate thereof to the capital of the
appropriate Company as additional paid in capital, and all other intercompany
accounts between the Sellers or any affiliate thereof on the one hand and any
Company on the other hand, shall be eliminated by contribution to capital or
dividend.
ARTICLE II
CLOSING
2.1 CLOSING. Subject to the satisfaction of the conditions to closing set
forth in Article VI, the closing (the "Closing") of the acquisition of the MKI
Shares shall be held at the offices of Xxxxxxxx Xxxxxxx at Xxxxxxxx Xxxxxxx
Xxxxx, Xxxxx, Xxxxx, 00000 commencing at 9:00 a.m., Boise, Idaho time, on the
earlier of September 22, 1995 or the first business day following the
satisfaction of the conditions set forth in Article VI, provided that the
parties may select such other place, date and time as may be mutually agreed
upon by them. The "Effective Date," as referred to herein, shall mean the date
of the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, hereby represent and warrant to the
Purchaser that as of (a) the date hereof (except in the case of any
representation and warranty that is expressly made subject to a schedule listed
in Schedule 6.1(q) hereof in which event such representation and warranty shall
be deemed to be made only as of the time the Purchaser accepts such schedule
pursuant to Section 6.1(q) hereof) and (b) as of the Effective Date:
3.1 ORGANIZATION AND EXISTENCE. Each Company is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction
indicated in Schedule 3.1. Each Company has full corporate power and authority
to own and hold the properties and assets it now owns and holds and to carry on
its businesses as and where such properties are now owned or held and such
business is now conducted. Each Company is duly licensed or qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the character of the properties and assets now owned or held by it or
the nature of the business now conducted by it requires it
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to be so licensed or qualified and where the failure so to qualify would not
reasonably be expected to affect materially and adversely the business,
operations, affairs, properties, assets or condition (financial or otherwise) of
such Company. Schedule 3.1 contains a list of each jurisdiction in which each
Company is duly licensed or qualified to do business as a foreign corporation.
Except as disclosed in Schedule 3.1, no Company has any direct or indirect
investment or interest in or control over any other corporation, partnership,
joint venture or other business entity other than another Company.
3.2 CAPITALIZATION. (a) The entire authorized capital stock of each
Company consists of the class or classes of capital stock listed in Schedule
3.2. Schedule 3.2 also sets forth the number of shares of each class of
authorized capital stock of each Company that is issued and outstanding. All
issued and outstanding shares of capital stock of each Company are fully paid
and nonassessable. The outstanding shares of capital stock of each Company are
owned beneficially and of record by the party indicated in Schedule 3.2, free
and clear of all liens, security interests, claims, charges, encumbrances,
rights, options to purchase, voting trusts or other voting agreements and calls
and commitments of every kind (collectively, the "Stock Encumbrances").
(b) There are no outstanding subscriptions, options, convertible
securities, warrants, calls or rights of any kind (issued or granted by, or
binding upon, the Sellers or any Company) to purchase or otherwise acquire any
security of or equity interest in any Company. Except as set forth in Schedule
3.2, MKC has full legal right to sell, assign and transfer the MKI Shares to the
Purchaser and will, upon delivery of the MKI Shares to the Purchaser pursuant to
the terms hereof, transfer to the Purchaser good and valid title to the MKI
Shares, free and clear of all Stock Encumbrances.
3.3 AUTHORITY AND APPROVAL. Each Seller has the corporate power and
authority to execute and deliver this Agreement and the other agreements and
documents contemplated to be delivered by it pursuant to Article VI hereof
("Seller Related Documents"), to consummate the transactions contemplated hereby
and thereby and to perform all the terms and conditions hereof and thereof to be
performed by it. The execution and delivery by each Seller of this Agreement
and the Seller Related Documents, the performance by each Seller of all the
terms and conditions hereof and thereof to be performed by it and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized and approved by the Board of Directors of each Seller and no approval
of the stockholders of either Seller is required in connection with the
consummation of the transactions contemplated hereby and thereby. This
Agreement constitutes and, upon execution and delivery, the Seller Related
Documents will constitute the valid and binding obligation of each Seller
enforceable in
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accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding at law or in equity).
3.4 NO CONFLICT. Except as set forth in Schedule 3.4, this Agreement and
the Seller Related Documents and the execution and delivery hereof and thereof
by each Seller do not and will not, and the fulfillment and compliance with the
terms and conditions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not, (a) conflict with any of, or require
the consent of any person or entity under, the terms, conditions or provisions
of the charter documents or bylaws or equivalent governing instruments of either
Seller or any Company, (b) violate any provision of, or require any consent,
authorization or approval under, any law or administrative regulation or any
judicial, administrative or arbitration order, award, judgment, writ, injunction
or decree applicable to either Seller that has not already been obtained under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 ("HSR Act"), (c) except
as set forth in Schedule 3.4, conflict with, result in a breach of, constitute a
default under (whether with notice or the lapse of time or both), or accelerate
or permit the acceleration of the performance required by, or require any
consent, authorization or approval under, any indenture, mortgage or lien, or
any agreement, contract, commitment or instrument to which either Seller or any
Company is a party or by which any of them is bound or to which any property of
either Seller or any Company is subject, or (d) result in the creation of any
Encumbrances (as defined below) on the assets of any Company under any such
indenture, mortgage, lien, lease, agreement or instrument.
3.5 LAWS AND REGULATIONS; LITIGATION. Except as set forth in Schedule 3.5
and except for those violations which would not reasonably be expected
materially and adversely to affect the businesses, operations, affairs,
properties, assets or condition (financial or otherwise) of a particular
Company, no Company is in violation of or in default under any law or
regulation, or under any order of any court or foreign, federal, state,
municipal, territorial or other governmental department, commission, board,
bureau, agency or instrumentality applicable to it; and, except to the extent
set forth in Schedule 3.9 and except for those claims, fines, actions, suits,
demands, investigations or proceedings which would not reasonably be expected
materially and adversely to affect the business, operations, affairs,
properties, assets or condition (financial or otherwise) of a particular
Company, there are no claims, fines, actions, suits, demands, investigations or
proceedings pending or, to the best knowledge of the Sellers, threatened against
or affecting any Company, at law or in equity, or before or by any foreign,
federal, state, municipal, territorial or other governmental department,
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commission, board, bureau, agency or instrumentality having jurisdiction over
any Company. Except as set forth in Schedule 3.9 or Schedule 3.12 and except
for such lack of compliance, violations or liabilities that would not reasonably
be expected materially and adversely to affect the businesses, operations,
affairs, properties, assets, or condition (financial or otherwise) of a
particular Company, each Company is in material compliance with all applicable
foreign, federal, state, territorial and local statutes, ordinances, permits,
permit applications, licenses, orders, approvals, variances, rules and
regulations expressly applicable to it.
3.6 NO DEFAULT. Except as set forth in Schedule 3.6, no Company is in
default under, and no condition exists that with notice or lapse of time or both
would constitute a default under, (a) any mortgage, loan agreement, indenture,
evidence of indebtedness or other instrument evidencing borrowed money to which
it or any of its properties is bound, (b) any judgment, order or injunction of
any court, arbitrator or governmental agency, or (c) any construction contract,
surety agreement or other agreement, except for such defaults and conditions
that, individually and in the aggregate, would not reasonably be expected
materially and adversely to affect the business, operations, affairs,
properties, assets or condition (financial or otherwise) of such Company.
3.7 FINANCIAL STATEMENTS. Attached as Schedule 3.7 is a copy of the
unaudited consolidating balance sheet of the Companies (the "Balance Sheet") as
at April 30, 1995 (the "Balance Sheet Date").
3.8 NO ADVERSE CHANGES. Except as disclosed in Schedule 3.8 and except on
account of matters that generally affect the economy or the industry in which
each Company is engaged, since the Balance Sheet Date there have been no
material adverse changes in (a) the financial condition of any Company from that
set forth in the Balance Sheet or (b) the business, operations, affairs,
properties, assets or condition (financial or otherwise) of any Company, in each
case other than changes in the ordinary course of business, consistent with past
practices. Except as disclosed in Schedule 3.8, since the Balance Sheet Date no
Company has declared, set aside or paid any dividends, or made any
distributions, in respect of its equity securities, or repurchased, redeemed or
otherwise acquired any such securities or transferred any cash to the Sellers
except in payment for services actually rendered to or in reimbursement for
expenses actually paid on behalf of such Company.
3.9 LIABILITIES. Except as set forth in Schedule 3.9 or as otherwise set
forth in the Balance Sheet, no Company has any obligation or liability material
to that Company (whether accrued, absolute, contingent, unliquidated or
otherwise, whether
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due or to become due), other than contractual liabilities incurred in the
ordinary course of business which are not required to be disclosed in the
Balance Sheet and other than liabilities which have arisen after the Balance
Sheet Date in the ordinary course of business, consistent with past practices.
3.10 TAXES. Except as otherwise expressly noted in this Section 3.10 or
set forth in Schedule 3.10: The operations of the Companies have been reflected
in the consolidated federal income tax returns of the affiliated group of
corporations having Xxxxxxxx Xxxxxxx as its common parent (the "Seller Group")
that have been filed or will be timely filed pursuant to the Internal Revenue
Code of 1986, as amended (the "Code"), for the taxable years ended on or before
December 31, 1994 during which Xxxxxxxx Xxxxxxx owned, directly or indirectly,
100% of the capital stock of any Company. Black Construction and Black Micro
are not included in the Seller Group but have filed separate tax returns in Guam
and the Commonwealth of the Northern Mariana Islands as the circumstances
require. Each Company and Xxxxxxxx Xxxxxxx have (or will have by the Closing)
caused to be duly filed in a timely manner (taking into account all extensions
of due dates) with the appropriate foreign, federal, state, local, territorial
and other governmental authorities all material returns, information returns or
statements, and reports with respect to Taxes (as defined in subsection (a) of
Section 7.1 hereof) which are required to be filed by or with respect to each
Company or with respect to any member of the Seller Group, to the extent any
Company could be liable for such Taxes, and have (or will have by the Closing)
caused to be paid or deposited or made adequate provision in accordance with
generally accepted accounting principles consistently applied for the payment of
all Taxes (including estimated Taxes) required with respect to the periods
covered by such returns, statements or reports or by any taxing authority.
Adequate provision has been made for all Taxes due with respect to each Company
and with respect to each member of the Seller Group, to the extent any Company
could be liable for such Taxes, for all periods through the Balance Sheet Date,
and adequate provision will be made for all such Taxes for the period between
the Balance Sheet Date and the Effective Date. Except as set forth in Schedule
3.10 and except for tax liens securing the payment of Taxes not yet due and
payable, (a) there are no tax liens upon any assets of any Company, (b) there
are no outstanding agreements or waivers by or with respect to any Company or
any member of the Seller Group extending the period for assessment or collection
of any Taxes for which any Company could be liable, (c) there is no pending
action, proceeding or investigation, and, to the best knowledge of the Sellers,
no action, proceeding or investigation has been threatened by any governmental
authority, for assessment or collection of Taxes with respect to any Company or
Taxes of any member of the Seller Group for which any Company could be held
liable, and (d) no claim for assessment or collection of Taxes has been asserted
and no actual or proposed assessment has been made against the
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Sellers or any Company with respect to the Taxes of any Company or Taxes of any
member of the Seller Group for which any Company could be held liable. No
consent or election under Section 341(f) of the Code has been filed by or for
any Company.
3.11 RECEIVABLES. Schedule 3.11 sets forth a list, as of the Balance Sheet
Date, of the accounts receivable (in the form of an aged account balance) and
notes receivable of each Company. Except to the extent of the reserve for bad
debts reflected on Schedule 3.11, such accounts and notes are collectible in the
amounts shown in Schedule 3.11. With respect to all accounts receivable and
notes receivable that have been created by each Company subsequent to the
Balance Sheet Date there is no pending contest to the amount or validity thereof
and, to the best knowledge of the Sellers, no reasonable basis exists for any
such contest.
3.12 INTELLECTUAL PROPERTY. All patents, trademarks, trade names, brand
names and copyrights (in each case, whether issued or pending), and all licenses
or rights in favor of each Company with respect to any of the foregoing, owned
or possessed by each Company (collectively, the "Intellectual Property
Interests") are in good standing and are free and clear of all Encumbrances.
Except with respect to Intellectual Property Interests listed on Schedule 3.12,
each of the Companies is entitled to own, possess and exploit all their
respective Intellectual Property Interests. To the best knowledge of the
Sellers, no Company infringes any patent, copyright or trademark rights of
others. To the best knowledge of the Sellers, all technical information
developed and belonging to each Company which has not been patented has been
kept confidential. Except as disclosed in Schedule 3.12, each Company has the
right to use, free and clear of claims or rights of others, all material trade
secrets, customer lists, processes, computer software, patents, copyrights and
trademarks required for, incident to or included in its products and activities
and its proposed products and activities, and, to the best of the Sellers'
knowledge, no present or past employee of any Company is using or has used any
confidential information, trade secrets or computer software required for its
products and activities in violation of the claims or rights of others.
3.13 FIXED ASSETS. Schedule 3.13 sets forth a list and summary description
of all fixed assets owned or leased by each Company as of the Balance Sheet
Date. All of the fixed assets of each Company are in good working order and
condition and fit for their intended purposes, subject to the need for normal
repair and maintenance. All leases of fixed assets are in full force and effect
and binding upon the parties thereto and none of the parties thereto is in
breach of any of the material provisions thereof. Schedule 3.13 also includes a
list of all leases under which each Company leases fixed assets, as of the
Balance Sheet Date. Except as indicated in Schedule 3.13, since the
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Balance Sheet Date, no Company has acquired or sold or otherwise disposed of any
such fixed assets.
3.14 OTHER ASSETS. Schedule 3.14 sets forth a list and summary description
of all properties and assets owned by each Company, as of the Balance Sheet
Date, other than those described in Schedules 3.11, 3.12 and 3.13. Schedule
3.14 also includes (a) a list of all title reports and title insurance policies
received or owned by each Company and (b) a list of each Company's leases,
including those covering vehicles. Except as indicated in Schedule 3.14 or in
the ordinary course of its business, since the Balance Sheet Date, no Company
has acquired or sold or otherwise disposed of any of such properties or assets.
Except as set forth in Schedule 3.14, since August 14, 1992, no Company has
conducted business operations that are materially different from those currently
conducted by it at the present time.
3.15 CONTRACTS AND AGREEMENTS; ADVERSE RESTRICTIONS. (a) Schedule 3.15
sets forth a list of all revenue producing contracts and agreements and all
other contracts and agreements under which any Company has an outstanding
liability or obligation to pay at least $50,000 (other than licenses and rights
included in Schedule 3.12, leases included in Schedule 3.13 or Schedule 3.14,
contracts and agreements included in Schedule 3.19, any individual customer
service agreement or purchase order which is subject to termination by a Company
without penalty upon 90 days' notice or less, and any agreement providing for
annual revenues to a Company of less than $1,000) to which any Company is a
party or by which it or any of its property is bound (including, but not limited
to, joint venture or partnership agreements, powers of attorney and other
similar instruments, tax allocation agreements or arrangements, bids for
contracts that have not been awarded, bonding and surety arrangements, contracts
with labor organizations, loan agreements, bonds and notes, mortgages, liens,
pledges or other security agreements). All such contracts and agreements
included in Schedule 3.15, as well as those included in Schedules 3.12, 3.13,
3.14 and 3.19, are in full force and effect and binding upon the parties
thereto, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar law affecting creditors' rights generally and
general principles of equity (whether applied in a proceeding in law or in
equity); and no Company that is a party to any such contract or agreement and,
to the best knowledge of the Sellers, no other party thereto is in breach of any
of the material provisions thereof and no event has occurred on the part of such
Company or, to the Sellers' best knowledge, on the part of any other party to
any such contract or agreement that with notice or lapse of time or both would
constitute such a breach.
(b) Except as specifically identified in Schedule 3.15, no Company is
a party to any contract, agreement or other commitment or instrument or subject
to any
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charter or other corporate restriction or subject to any restriction or
condition contained in any permit, license, judgment, order, writ, injunction,
decree or award which, singly or in the aggregate, materially and adversely
affects the business, operations, affairs, properties, assets or condition
(financial or otherwise) of such Company.
3.16 TITLE AND LIENS. (a) Each Company has good and marketable title to
all properties, contracts, assets and leasehold estates, real and personal,
owned and used in its respective businesses, including, without limitation,
those reflected in the schedules attached hereto, subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge, (collectively,
"Encumbrances"), except for (i) Encumbrances listed in Schedule 3.16, (ii) liens
for current Taxes and assessments that are not yet due and payable, and (iii)
mechanics', warehousemen's, landlord's and other similar statutory liens
securing the payment of amounts that are not yet due and payable.
(b) Without limiting the foregoing, the condition of title to or
interest in each Company's real property (including real property which is
leased, during the pendency of such lease) described in Schedule 3.14
(collectively, the "Real Property") is as follows: (i) with respect to Real
Property owned by any Company, except as set forth in Schedule 3.16 or in the
title insurance policy listed in Schedule 3.14 relating to any of the Real
Property, there are no leases, tenancy agreements, easements, covenants,
restrictions or any other instruments, agreements or arrangements which create
in or confer on any party other than such Company the right to occupy or possess
all or any portion of the Real Property or create in or confer on any such party
any right, title or interest in or to the Real Property or any portion thereof
or any interest therein; no party other than such Company occupies or possesses
the Real Property or any portion thereof; there is legal and adequate ingress
and egress between each tract of Real Property and an adjacent (or, if none, the
closest) public roadway; the Real Property is properly zoned in order to allow
its current use in such Company's businesses; and there are no claims or demands
pending or, to the best knowledge of the Sellers, threatened by any party
against the Real Property which, if valid, would create in, or confer on, any
party other than such Company, any right, title or interest in or to the Real
Property or any portion thereof and (ii) with respect to Real Property leased by
any Company, such lease has been validly executed and delivered by the Company
and, to the best knowledge of the Sellers, by the other party or parties thereto
and is a binding agreement; the Company is not and, to the best knowledge of the
Sellers, no other party to the lease is in material breach or default and no
event has occurred on the part of the Company or, to the best knowledge of the
Sellers, on the part of any other party which with notice or lapse or time,
would constitute such a breach or default or permit termination, modification or
acceleration under such lease; the Company has not repudiated and, to the best
knowledge of the Sellers, no other
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party to such lease has repudiated any provision thereof; and to the best
knowledge of the Sellers, there are no disputes, oral agreements or delayed
payment programs in effect as to such lease. Notwithstanding the foregoing, no
representation is made as to the condition of any landlord's title to real
property on which a Company owns a leasehold interest, or as to the priority of
any leasehold interest owned by a Company.
3.17 INSURANCE. Xxxxxxxx Xxxxxxx maintains such policies of workmen's
compensation, casualty, liability and other insurance on behalf of each Company
as it considers appropriate under the circumstances. Schedule 3.17 accurately
identifies the types and coverage amounts of such insurance coverage as of the
Effective Date.
3.18 PERSONNEL. Schedule 3.18 sets forth a list of all officers,
directors, employees, and consultants and agents with whom each Company has
agreements not terminable at the will of such Company (by type or
classification) and their respective rates of compensation (including the
portions thereof attributable to bonuses), including any other salary, bonus or
other payment arrangement made with any of them.
3.19 BENEFIT PLANS.
(a) Schedule 3.19 sets forth a list (copies or descriptions of which
have been delivered to the Purchaser) of all of the following agreements or
plans sponsored by each Company which are presently in effect or which have been
in effect at any time since August 14, 1992 (other than the E.E. Black Limited
Savings & Retirement Plan):
(i) "employee welfare benefit plans" and "employee pension benefit plans,"
as defined in Sections 3(1) and 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"); and
(ii) except for the E.E. Black Limited Savings & Retirement Plan, any other
pension, profit sharing, retirement, deferred compensation, stock
purchase, stock option, incentive, bonus, vacation, severance,
disability, health, hospitalization, medical, life insurance, vision,
dental, prescription drug, supplemental unemployment, layoff,
automobile, apprenticeship and training, day care, scholarship, group
legal benefit, fringe benefit, or other employee or former employee
benefit plan, program, policy, or arrangement, whether written or
unwritten, formal or informal (the plans, programs, policies, or
arrangements described in subparts (i) or (ii) are herein collectively
referred to as the "Company Plans").
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Except as set forth in Schedule 3.19, the Sellers have delivered to the
Purchaser a copy of all governmental filings, financial statements, and
actuarial reports, including but not limited to, the most recent financial
statements of each "Qualified Plan," as defined below, the most recent actuarial
report, if any, for each employee pension benefit plan and Internal Revenue
Service Forms 5500 for each Company Plan for which a Form 5500 has been required
since August 14, 1992. All financial statements and actuarial reports have been
prepared in accordance with generally accepted accounting principles and
actuarial principles, applied on a uniform and consistent basis.
(b) Schedule 3.19 identifies each of the Company Plans which purports
to satisfy the requirements of Section 401(a) of the Code ("Qualified Plans").
A copy of each Qualified Plan and the most recent determination by the Internal
Revenue Service with respect to each of the Qualified Plans has been delivered
to the Purchaser. All of such determination letters remain in effect and have
not been revoked. Except as listed on Schedule 3.19, no Qualified Plan has been
amended since the issuance of the most recent determination letter. Except as
listed on Schedule 3.19, no issue concerning qualification of any Qualified Plan
is pending before or, to the best knowledge of the Sellers, threatened by the
Internal Revenue Service. In all materials respects each Qualified Plan has
been administered according to its terms, except for those terms which are
inconsistent with the changes required by the Code and any regulations and
rulings promulgated thereunder for which changes are not yet required to be
made, in which case each Qualified Plan has been administered in accordance with
the provisions of the Code and such regulations and rulings, and no Company or
any fiduciary of any Qualified Plan has done anything which would adversely
affect the qualified status of any Qualified Plan or any related trust.
(c) Except as listed in Schedule 3.19, each Company is in material
compliance with the requirements prescribed by any and all statutes, orders,
governmental rules, and regulations applicable to the Company Plans and all
material reports and disclosures relating to the Company Plans required to be
filed with or furnished to governmental agencies, participants or beneficiaries
prior to the Effective Date have been or will be filed or furnished in a timely
manner and in accordance with applicable law.
(d) No termination or partial termination of any existing Qualified
Plan has occurred, nor has a notice of intent to terminate any existing
Qualified Plan been issued by a Company. The Pension Benefit Guaranty
Corporation (the "PBGC") has not instituted, and, to the best knowledge of the
Sellers, is not expected to institute, any proceedings to terminate any Company
Plan.
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(e) No Qualified Plan has suffered any "accumulated funding
deficiency" within the meaning of ERISA Section 302 and Section 412 of the Code
(which remains outstanding on the Effective Date), whether or not waived, and if
any Qualified Plan were terminated on the Effective Date, no Company would have
any material liability to any participants or beneficiaries as a result of the
termination except to the extent of funds set aside for such purpose or
reflected as reserved for such purpose in the Balance Sheet. Except as listed
in Schedule 3.19, each Company has made full and timely payment of, or has
accrued pending full and timely payment, all amounts which are required under
the terms of each Qualified Plan and in accordance with applicable laws to be
paid as a contribution to each Qualified Plan. Schedule 3.19 sets forth the
unfunded accrued liabilities of each "defined benefit plan," as defined in
Section 3(35) of ERISA, as of the date indicated by the actuaries for such Plan.
(f) Except as listed in Schedule 3.19, since August 14, 1992, no
Company has any past, present or future obligation or liability to contribute to
any "multiemployer plan," as defined in ERISA Section 4001(a)(3) (a
"Multiemployer Plan").
(g) Since August 14, 1992, no member of the Controlled Group (as
defined in paragraph (x) below) has completely or partially withdrawn from any
Multiemployer Plan within the meaning of the Multiemployer Pension Plan
Amendments Act of 1980.
(h) No Company has any material liability to the PBGC. Except as
listed in Schedule 3.19, with respect to any Qualified Plan or any Company, no
termination liability to the PBGC or material withdrawal liability to any
Multiemployer Plan has been or is expected to be incurred or would be incurred
if any Qualified Plan were terminated on the Effective Date or if any Company
were to withdraw from any Multiemployer Plan on the Effective Date. Except as
listed in Schedule 3.19, since August 14, 1992, there has been no "reportable
event," as defined in Section 4043(b) or 4043(c) of ERISA, with respect to any
Qualified Plan that is subject to Title IV of ERISA, for which notice has not
been waived.
(i) No Company is liable or has been advised that it is liable for
any funding taxes under Code Sections 413(b)(6) or 4971 on account of an
accumulated funding deficiency of any Multiemployer Plan to which any Company
has contributed or is required to contribute.
(j) No Company has made or is obligated to make any nondeductible
contributions to any Qualified Plan.
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(k) Except as listed in Schedule 3.19, no Qualified Plan is subject
to Title IV of ERISA.
(l) Except as listed in Schedule 3.19, no Company shall increase the
rate of compensation payable or to become payable to any of its officers,
directors, employees, consultants or agents, or make any commitment or incur any
liability to any labor union (not currently set forth in the collective
bargaining agreement), or pay or agree to pay any bonuses or severance pay other
than in accordance with currently established policies or agreements.
(m) The transaction contemplated by this Agreement along with any
amounts paid or payable by any Company or any member of the Controlled Group (as
defined in paragraph (x) below) has not resulted in and will not result in
payments to "disqualified individuals" (as defined in Section 280G(c) of the
Code) of any Company which, individually or in the aggregate, will constitute
"excess parachute payments" (as defined in Section 280G(b) of the Code)
resulting in the imposition of the excise tax under Section 4999 of the Code or
the disallowance of deductions under Section 280G of the Code.
(n) Except as listed in Schedule 3.15, no Company (i) is a party to
any collective bargaining agreement; (ii) is obligated to bargain with any other
labor organization, (iii) knows of any charges or threatened charges of unfair
labor practices, or (iv) has failed to materially comply with all applicable,
foreign, federal, territorial, state and local regulations respecting employment
and employment practices.
(o) Except as set forth in Schedule 3.19, no Company is liable for
any material unpaid wages, bonuses or commissions, or taxes, penalties,
assessments or forfeitures arising from any employment matter.
(p) No Company has committed any material violations of the Civil
Rights Act of 1964, as amended, the federal wage and hour laws, federal or state
income, unemployment or social security withholding laws or any laws of a
similar or comparable nature in Guam, the Federated States of Micronesia, the
Commonwealth of the Northern Mariana Islands, Palau and the Philippines.
(q) Each Company has complied in all material respects with
applicable workers compensation statutes.
(r) No Company or any other "disqualified person" or "party in
interest," as defined in Section 4975 of the Code and ERISA Section 3(14),
respectively,
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has engaged in any "prohibited transaction," as defined in Section 4975 of the
Code or ERISA Section 406 with respect to the Company Plans for which an
exemption does not exist, and all "fiduciaries," as defined in Section 3(21) of
ERISA, with respect to the Company Plans have complied in all material respects
with the requirements of Section 404(a) or (b) of ERISA. Neither any Company
nor any party in interest or disqualified person with respect to the Company
Plans has taken or omitted to take any action with respect to the Company Plans
which could lead to the imposition of a material excise tax under the Code or a
material fine under ERISA.
(s) Other than routine claims for benefits, there are no actions,
audits, investigations, suits, or claims pending, or, to the best knowledge of
the Sellers, threatened (collectively, the "Actions") against any of the Company
Plans or any fiduciary of any of the Company Plans (but such representation is
limited to Actions with respect to any fiduciary while acting on behalf of the
Company Plans) or against the assets of any of the Company Plans.
(t) Except as listed in Schedule 3.19, as of the Effective Date, the
consummation of the transactions contemplated hereby will not accelerate or
increase any liability under any Company Plan because of an acceleration or
increase of any of the rights or benefits to which employees may be entitled
thereunder.
(u) Unless otherwise expressly permitted or required by the terms of
this Agreement, from the date hereof until the Effective Date, no Company shall
amend any Company Plans, except to the extent necessary to maintain compliance
with the Code or ERISA or to obtain a favorable determination letter from the
IRS for any Qualified Plan, increase any benefits or rights under any Company
Plan, or adopt any new plan, program, policy, or arrangement which, if it
existed as of the Effective Date, would constitute a Company Plan.
(v) Except as listed in Schedule 3.19, or as required by law, no
Company has any obligation to any retired or former employee, or any current
employee upon retirement, under any Company Plan. As of the Effective Date,
except for professional fees, any applicable IRS user or filing fees and any
obligations arising under applicable laws of the Territory of Guam and
surrounding islands, any Company Plan can be terminated without resulting in
additional penalties, premiums, fees, or similar charges to the sponsoring
Company or to the Purchaser. To the extent such obligations exist, such
obligations are fully funded or adequately reserved for by each Company or
represent Retained Liabilities to be retained by the Sellers.
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(w) To the extent applicable, each Company has complied in all
material respect with the continuation coverage requirements of Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").
(x) Except as listed in Schedule 3.19, no other entity, which
together with any Company constitutes a single employer within the meaning of
Section 414 of the Code ("Controlled Group"), sponsors or maintains any employee
benefit plan within the meaning of Section 3(3) of ERISA, which under Title IV
of ERISA or any section of the Code or ERISA, would subject the Purchaser, any
Company, any Company Plan, the fiduciaries thereof, or their respective plan
assets, to any material taxes, liens, encumbrances, penalties, or any other
material liabilities.
(y) Neither the Company nor any member of its Controlled Group is a
"contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA to
which the requirements of Section 4043(b) of ERISA apply as of the Effective
Date with respect to the transactions contemplated by this Agreement.
3.20 COPIES COMPLETE. The certified copies of the charter documents,
bylaws and other governing documents, each as amended to date, of each Company
and the copies of all leases, instruments, agreements, bids, surety
arrangements, bonds, licenses, permits, certificates or other documents which
are recited herein as having been delivered to the Purchaser in connection with
the transactions contemplated hereby are true, correct and complete copies of
the originals thereof.
3.21 BANK ACCOUNTS. Schedule 3.21 contains a list of all bank accounts
maintained by each Company and the name of each person authorized to draw checks
on such accounts.
3.22 ACCURATE AND COMPLETE RECORDS. The books, ledgers, financial records
and other records of each Company for the period from August 14, 1992 to the
date hereof:
(a) are, or will be prior to the Effective Date, in the possession of
the appropriate Company;
(b) have been, in all material respects, maintained in accordance
with all applicable laws, rules and regulations and generally accepted standards
of practice; and
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(c) are accurate and complete and do not contain or reflect any
material discrepancies.
3.23 BROKERAGE ARRANGEMENTS. Except as set forth in Schedule 3.23, neither
any Company nor the Sellers have entered (directly or indirectly) into any
agreement with any person, firm or corporation that would obligate the Purchaser
or any Company to pay any commission, brokerage or "finder's fee" in connection
with the transactions contemplated herein.
3.24 ENVIRONMENTAL MATTERS. (a) Except as set forth in Schedule 3.24, (i)
each Company has obtained all Environmental Permits (as hereinafter defined)
that are required in connection with and are material to the business,
operations and properties of such Company, (ii) each Company has been, and each
Company is, in material compliance with all terms and conditions of all
applicable requirements of Environmental Law (as hereinafter defined) and
Environmental Permits, (iii) no Company has received written notice from a
governmental authority of any material violation, alleged material violation or
material liability arising under any requirements of Environmental Law or
Environmental Permits, (iv) no Environmental Claims (as hereinafter defined)
have ever been threatened or asserted or are presently pending against any
Company attributable to present or past operations on premises owned, leased or
operated by any Company, and (v) to the best knowledge of the Sellers, there is
no condition or set of facts or circumstances that could reasonably be expected
to give rise to an environmental lien or to an Environmental Claim against any
Company.
(b) Except as set forth in Schedule 3.24, no Company has disposed,
treated, or arranged for the disposal or treatment of any toxic or hazardous
waste, materials or substances at a site or location, or has leased, used,
operated or owned a site or location which (i) has been placed on the National
Priorities List or its state equivalent pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended ("CERCLA"),
or similar foreign, territorial or state law, (ii) the Environmental Protection
Agency or relevant foreign, territorial or state authority has proposed, or is
proposing, to place on the National Priorities List or foreign, territorial or
state equivalent, (iii) is subject to a lien, administrative order or other
demand either to take response or other action under CERCLA or other
Environmental Law, or to develop or implement a "Corrective Action Plan" or
"Compliance Plan," as each is defined in regulations promulgated pursuant to the
Resource Conservation and Recovery Act, as amended ("RCRA"), or to reimburse any
person who has taken response or other action in connection with that site, (iv)
is on any Comprehensive Environmental Response Compensation Liability
Information System List, (v) has been the site of any Release (as hereinafter
defined) from present or past operations of any
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Company (or any of its predecessors) which would be either reportable under any
requirements or Environmental Law or which has caused at such site or any third
party site any condition that has resulted in or could reasonably be expected to
result in a claim against any Company under Environmental Law, or (vi) to the
best knowledge of the Sellers, is located within one mile of a property
described in any of subclauses (i) through (iv) above.
(c) Except as set forth in Schedule 3.24 and to the best knowledge of the
Sellers after due inquiry, (i) no Company has ever owned or operated any
underground storage tanks (USTs) containing petroleum products or wastes or
other substances regulated by 40 CFR Part 280 or other applicable requirements
of Environmental Law, and has not owned or operated any real estate having any
USTs, (ii) there are no polychlorinated biphenyls or asbestos in or on premises
currently owned, leased or operated by any Company, and (iii) no entities or
sites owned or operated by third parties have been used by any Company in
connection with the treatment, storage, disposal or transportation of Hazardous
Substances (as hereinafter defined), except in compliance with applicable
Environmental Law and except for such violations that have been remedied.
(d) The plants, structures, equipment and other properties currently owned
or used by each Company are adequate and sufficient for the current operations
of such Company in conformance with all applicable requirements of Environmental
Law.
(e) "Environmental Claims," as referred to herein, shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations or other
adversarial proceedings relating to any Environmental Law or Environmental
Permit including, without limitation (i) any and all claims by governmental,
territorial or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other similar actions or damages pursuant to any
applicable Environmental Law and (ii) any and all claims by a third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to the environment. An "Environmental Claim"
includes, but is not limited to, a common law action, as well as a proceeding to
issue, modify, terminate or enforce the provisions of an Environmental Permit or
requirement of Environmental Law, or to adopt or amend a regulation to the
extent that such a proceeding attempts to redress violations or alleged
violations of the applicable permit, license, or regulation.
-19-
(f) "Environmental Law," as referred to herein, shall mean any federal,
state, territorial, local or foreign statute, law, rule, regulation, ordinance,
code, policy (compliance with which is required by law or if the failure to
comply therewith would be reasonably foreseeable to result in adverse
administrative action) or rule of common law in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment or Hazardous Substances, including, without limitation to the
extent applicable under the circumstances, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 ET SEQ.; the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 ET
SEQ.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 ET
SEQ.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.;
the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Section 136 ET SEQ.; the Safe Drinking
Water Act, 42 U.S.C. Section 300f ET SEQ.; the Toxic Substance Control Act,
15 U.S.C. Section 2601 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C. Section
2701 ET SEQ.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.
Section 5101 ET SEQ.; the Atomic Energy Act, as amended, 42 U.S.C. Section 2011
ET SEQ.; any laws regulating the use of biological agents or substances
including medical or infectious wastes; and the corresponding foreign,
territorial or state laws, regulations and local ordinances, which may be
applicable, as any such acts may be amended.
(g) "Environmental Permits" as referred to herein, shall mean all permits,
approvals, identification numbers, licenses and other authorizations required
under any applicable Environmental Law.
(h) "Hazardous Substances" as referred to herein, shall mean (i) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "hazardous air
pollutants," "pollutants," "contaminants," "toxic chemicals," "toxics,"
"hazardous chemicals," "extremely hazardous substances," "regulated substances"
or "pesticides" as defined as such in any applicable Environmental Law, (ii) any
radioactive materials, asbestos-containing materials; urea formaldehyde foam
insulation, and radon in harmful quantities or concentration that are regulated
by any governmental authority having jurisdiction in the location of such
materials and (iii) any other chemical, material or substances, exposure to
which is prohibited, limited or regulated by any governmental authority having
jurisdiction in the location of such substances on the basis of potential
hazards.
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(i) "Release," as referred to herein, shall mean any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration of any Hazardous Substance into the environment or into or
out of any property, including the movement of any Hazardous Substance through
or in the air, soil, surface water, groundwater or property.
3.25 FINANCIAL CONDITION. The sale of the MKI Shares is for reasonably
equivalent value. Neither of the Sellers is insolvent (that is, its debts do
not exceed its assets), nor will either of the Sellers become insolvent as a
result of the transactions contemplated by this Agreement. The Sellers do not
and will not have, after giving effect to the transactions contemplated by this
Agreement, an unreasonably small amount of capital to conduct their respective
businesses.
3. NO MISLEADING STATEMENTS. The representations and warranties of the
Sellers contained in this Agreement, the schedules hereto and all other
documents and information furnished to the Purchaser and its representatives
pursuant hereto are accurate in all material respects and do not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements made herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Sellers that as of the
date hereof and as of the Effective Date:
4.1 ORGANIZATION AND EXISTENCE. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California.
4.2 AUTHORITY AND APPROVAL. The Purchaser has the corporate power and
authority to execute and deliver this Agreement and the other agreements and
documents contemplated to be delivered by it pursuant to Article VI hereof
("Purchaser Related Document), and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the
Purchaser Related Documents by the Purchaser and the consummation of the
transactions contemplated hereby and thereby have been duly authorized and
approved by its Board of Directors. No other act, approval or proceedings on
the part of the Purchaser or the holders of any class of its equity securities
is required to authorize the execution and delivery of
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this Agreement and the Purchaser Related Documents by the Purchaser or
consummation of the transactions contemplated hereby or thereby. The Purchaser
is purchasing the MKI Shares for its own account for investment purposes and not
with a view toward, or for sale in connection with, any distribution or public
offering of the MKI Shares within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and the Purchaser is an "accredited investor,"
as such term is defined in Rule 501(a) promulgated under the Securities Act.
This Agreement constitutes and, upon execution and delivery, the Purchaser
Related Documents will constitute the legal, valid and binding obligations of
the Purchaser enforceable in accordance with their respective terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether applied in a proceeding
at law or in equity).
4.3 NO CONFLICT. This Agreement and the Purchaser Related Documents and
the execution and delivery hereof and thereof by the Purchaser do not and will
not, and the fulfillment and compliance with the terms and conditions hereof and
thereof and the consummation of the transactions contemplated hereby and thereby
will not, (a) conflict with any of, or require the consent of any person or
entity under, the terms, conditions or provisions of the charter documents or
bylaws or equivalent governing instruments of the Purchaser, (b) violate any
provision of, or require any consent, authorization or approval under, any law
or administrative regulation or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to the Purchaser
that has not already been obtained under the HSR Act, or (c) conflict with,
result in a breach of, constitute a default under (whether with notice or the
lapse of time or both), or accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval
under, any indenture, mortgage, lien, agreement, contract, commitment or
instrument to which the Purchaser is a party or by which it is bound.
4.4 LITIGATION. There are no actions, suits, proceedings or governmental
investigations or inquiries pending against the Purchaser or its properties,
assets, operations or business which might delay or prevent the consummation of
the transactions contemplated hereby.
4.5 FUNDS AVAILABLE. The Purchaser has sufficient cash, or firm
commitments from responsible lending institutions, available lines of credit or
other sources of available funds to enable it to make payment of any amounts to
be paid by it hereunder.
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4.6 BROKERAGE ARRANGEMENTS. The Purchaser has not entered (directly or
indirectly) into any agreement with any person, firm or corporation that would
obligate the Sellers to pay any commission, brokerage or "finder's fee" in
connection with the transactions contemplated herein.
4.7 NO MISLEADING STATEMENTS. The representations and warranties of the
Purchaser contained in this Agreement and all other documents and information
furnished to the Sellers and their representatives pursuant hereto are accurate
in all material respects and do not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
herein or therein not misleading.
ARTICLE V
ADDITIONAL AGREEMENTS,
COVENANTS, RIGHTS AND OBLIGATIONS
5.1 CERTAIN CHANGES. Without first obtaining the written consent of the
Purchaser, from the date hereof until the earlier of the Effective Date or the
termination of this Agreement, the Sellers, jointly and severally, covenant that
none of the Companies will:
(a) make any material change in the conduct of its businesses and
operations, or its financial reporting and accounting methods;
(b) other than in the ordinary course of business, enter into any material
contract or agreement or terminate or amend in any material respect,
or be in default in any material respect under any material contract
or agreement to which any Company is a party, including without
limitation any bid submitted by any Company, except for any defaults
which may occur during such time period which are cured by such
Company or the Sellers prior to the Effective Date;
(c) except as otherwise provided in Sections 1.4 and 3.8 hereof, declare,
set aside or pay any dividends, or make any distributions, in respect
of its equity securities, or repurchase, redeem or otherwise acquire
any such securities or transfer any cash to the Sellers;
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(d) merge into or with or consolidate with any other corporation or
acquire all or substantially all of the business or assets of any
corporation, person or other entity;
(e) make any change in its charter documents, bylaws or equivalent
governing instruments;
(f) other than in the ordinary course of business, purchase any securities
of any corporation, person or entity, except short term debt
securities of governmental entities and banks, or make any investment
in any corporation, partnership, joint venture or other business
enterprise;
(g) increase the indebtedness of, or incur any obligation or liability,
direct or indirect for any Company other than the incurrence of
liabilities pursuant to existing agreements in the ordinary course of
business consistent with past practices; provided, however, that in no
event will any Company incur any obligation or liability for funded
indebtedness;
(h) sell, lease or otherwise dispose of any of its assets other than the
sale of its assets in the ordinary course of business and as otherwise
contemplated by Section 1.3 hereof;
(i) purchase, lease or otherwise acquire any property of any kind
whatsoever other than in the ordinary course of business;
(j) allow or permit the expiration, termination or cancellation at any
time prior to the Closing of any of the insurance policies listed in
Schedule 3.17, unless it is replaced, with no loss of coverage, by a
comparable insurance policy;
(k) implement or adopt any change in its tax methods, principles or
elections; or
(l) commit to do any of the foregoing, except as contemplated by this
Agreement.
5.2 OPERATIONS. Unless the Purchaser shall otherwise first consent in
writing, from the date hereof until the earlier of the Effective Date or the
termination of this Agreement, the Sellers, jointly and severally, agree to
cause each Company to:
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(a) maintain its properties and facilities in as good working order and
condition as at present, ordinary wear and tear excepted;
(b) use its reasonable business efforts to maintain and preserve its
business organization intact, retain its present employees and
maintain its relationship with suppliers, customers and others having
business relations with it;
(c) advise the Purchaser promptly in writing of any material change in any
document, schedule or other information delivered pursuant to this
Agreement;
(d) file on a timely basis all notices, reports or other filings required
to be filed with or reported to any foreign, federal, state,
territorial, municipal or other governmental department, commission,
board, bureau, agency or any instrumentality of any of the foregoing
wherever located; and
(e) file on a timely basis all complete and correct applications or other
documents necessary to maintain, renew or extend any permit, license,
bond, surety, variance or any other approval required by any
governmental authority necessary or required for the continuing
operation of the businesses of each Company, whether or not such
approval would expire before or after the Effective Date.
5.3 ACCESS. Upon specific request made to either Xxxxx X. Xxxxxxxx of MKC
or Xxxxxxxx X. Xxxxxxxxx of Xxxxxxxx Xxxxxxx, the Sellers will afford to the
Purchaser and its authorized representatives reasonable access to each Company's
financial, title, tax, corporate and legal materials and operating data and
information available as of the date hereof and which becomes available to the
Sellers at any time prior to the Effective Date, and will furnish to the
Purchaser such other information as it may reasonably request, unless any such
access and disclosure would violate the terms of any agreement to which either
Seller or any Company is bound or any applicable law or regulation. The Sellers
will use their reasonable business efforts to secure all requisite consents for
the examination by the Purchaser and its representatives of all information
covered by confidentiality agreements. The Sellers will cause each Company to
allow the Purchaser access to and consultation with the lawyers, accountants,
and other professionals employed by or used by such Company for the purposes of
negotiating, preparing, executing and performing this Agreement. Any such
consultation shall occur under circumstances appropriate to maintain intact the
attorney-client privilege as to privileged communications and attorney work
product. Additionally, the Sellers will afford to the
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Purchaser and its authorized representatives reasonable access to the books and
records of the Sellers insofar as they relate to property, accounting and tax
matters of any Company. Until the Effective Date, the confidentiality of any
data or information so acquired shall be maintained by the Purchaser and its
representatives, except in those cases where, on the advice of counsel,
disclosure is required in governmental filings or judicial, administrative or
arbitration proceedings. Further, the Sellers will afford to the Purchaser and
its authorized representatives reasonable access from the date hereof until the
Effective Date, during normal business hours, to each Company's assets and
properties; provided that such access shall be at the sole cost, expense and
risk of the Purchaser. The Sellers acknowledge that the Purchaser has had
access and will continue to have access to the senior management of each Company
and that each of such members of senior management is entitled to reveal to the
Purchaser and its representatives information concerning any Company that may be
deemed confidential and proprietary.
5.4 ANTITRUST NOTIFICATION; OTHER REPORTING REQUIREMENTS. The Sellers and
the Purchaser previously filed with the Federal Trade Commission and the
Department of Justice the notification and report form required under the HSR
Act for the transactions contemplated hereby and received notice from the
Federal Trade Commission on August 11, 1995 of the early termination of the
waiting period provided for thereunder. The Sellers shall cause each Company
duly and timely to file all notices and reports required to be filed with all
foreign, federal, state, territorial, local and other governmental authorities
in contemplation of the consummation of the transactions described herein.
5.5 BEST BUSINESS EFFORTS. The Sellers and the Purchaser shall use their
best business efforts to (a) obtain all approvals and consents required by or
necessary for the transactions contemplated by this Agreement, and (b) ensure
that all of the conditions to the obligations of the Purchaser and the Sellers
contained in Sections 6.1 and 6.2, respectively, are satisfied timely.
5.6 CONFIDENTIALITY. After the Effective Date, the Sellers shall not,
directly or indirectly, use or provide to, or shall not permit any affiliate,
directly or indirectly, to use or provide to, any other person any nonpublic
information (excluding information provided to third parties prior to the
Effective Date pursuant to confidentiality agreements in existence on the date
of this Agreement) concerning the business or operations (financial or other) of
any Company, except as on the advice of counsel is required in governmental
filings or judicial, administrative or arbitration proceedings.
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5.7 ADDITIONAL DISCLOSURES AND INFORMATION. The Sellers shall give the
Purchaser prompt notice if at any time on or prior to the Effective Date there
is a change in any state of facts, or there is the occurrence, nonoccurrence or
existence of any event subsequent to the date of this Agreement, which change or
event is known to any executive officer of either Seller and which would make
any representation and warranty (including the information set forth in the
schedules) made by the Sellers to the Purchaser not true or correct in any
material respect, it being the intention of the parties to this Agreement that
the Sellers shall engage in a continuous disclosure process from the date of
this Agreement through the Effective Date.
5.8 DISCLOSURE OF BREACH. The Purchaser covenants and agrees that if, in
the course of its investigation of the businesses of the Companies, anything
comes to its attention that indicates there has been or there is or there could
become a breach of the Sellers' representations and warranties, covenants and
agreements contained in this Agreement, Purchaser will promptly notify the
Sellers of such matter and will give the Sellers a reasonable opportunity to
cure or correct any such breach.
5.9 NOTICE OF FAILURE OF CONDITION. Each party hereto will as promptly as
reasonably practicable notify each other party in writing of the occurrence of
any event of which it obtains knowledge which will result in the failure to
satisfy the conditions specified in Section 6.1 hereof, in the case of events
relating to the Sellers, and Section 6.2 hereof, in the case of events relating
to the Purchaser.
5.10 INTERFERENCE WITH RELATIONSHIPS. From the date hereof until the
Effective Date, the Purchaser will not take any action or engage in any practice
calculated or designed to impair the relationships of the Companies with their
customers, suppliers or others having business dealings with any of them.
5.11 TRANSFER. The Sellers have taken and will take all actions necessary
to comply with applicable requirements of Environmental Law concerning the
transfer of the MKI Shares, including without limitation the filing with
appropriate permitting agencies of any notices required in reference to the
change in ownership for the purpose of effecting the transfer or issuance of the
permits required under Environmental Law for the operation and the conduct of
the business of any Company. The Sellers shall assist the Purchaser in
effectuating the issuance or transfer, as promptly as is reasonably possible, of
all Environmental Permits required as of the Effective Date. The Sellers shall
notify the Purchaser of any notices or reports required from the Purchaser in
connection with the transfer or issuance of the required Environmental Permits,
and the Purchaser shall cooperate in providing promptly such notices or reports.
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5.12 LIMITED USE OF LEASED SPACE. From and after the Effective Date and
until the first to occur of March 31, 1996 or the termination of MKC's right to
occupy the space, MKC shall permit the Purchaser (a) to store the office
furniture and equipment owned by E.E. Black on the Effective Date at MKC's
leased premises in Honolulu and (b) to store construction equipment as space
permits at MKC's Xxxxxxxx Yard, in each case without a requirement for the
payment of rent by the Purchaser.
5.13 FURTHER ASSURANCES. Each of the Purchaser and the Sellers agrees that
it will execute and deliver, and cause to be executed and delivered, on and
after the Effective Date, all such instruments and will take all reasonable
actions as may be necessary to transfer the MKI shares to the Purchaser, on the
terms contained herein, and otherwise secure the benefits of this Agreement to
the Purchaser and the Sellers in accordance with the terms hereof. The Sellers
also agree, to the extent practicable under the circumstances, to cooperate with
the Purchaser after the Closing by permitting any resident management employee
or other designated person named in any contractor license of a Company in
Hawaii or elsewhere (an "RME") who is no longer an employee of such Company
after the Effective Date to continue to serve as the RME under such contractor's
license until the Purchaser can secure the substitution of another RME (which
the Purchaser undertakes to do promptly), all to the end that each Company can
continue to maintain its contractor licenses after the Closing without
interruption.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 CONDITIONS TO THE OBLIGATION OF THE PURCHASER. The obligation of the
Purchaser to proceed with the Closing contemplated hereby is subject to the
satisfaction on or prior to the Effective Date of all of the following
conditions, any one or more of which may be waived in writing, in whole or in
part, by the Purchaser:
(a) The Sellers shall have complied in all material respects with
each of their covenants and agreements contained herein and each of their
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the Effective Date and shall then be true and
correct in all material respects.
(b) The Purchaser shall have received a certificate, dated as of the
Effective Date, of an executive officer of each Seller certifying as to (i) the
matters specified in Section 6.1(a) hereof and (ii) the accuracy and
completeness of the list attached thereto, which shall be reasonably acceptable
to the Purchaser, setting forth
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all outstanding liabilities of each Company as of the Effective Date that are
not reflected in the Audited Statements (as defined below).
(c) The Purchaser shall have received from Xxxxxxxx X. Xxxxxxxxx,
Esq., Associate General Counsel of Xxxxxxxx Xxxxxxx, counsel to the Sellers, an
opinion dated the Effective Date, with such qualifications (including reliance
upon the opinions of other counsel) as are reasonably acceptable to the
Purchaser, to the effect that:
(i) each Seller and each Company is a corporation duly
incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation with the
corporate power and authority to own its respective assets
and to transact its respective businesses as now being
conducted; and each Company is duly licensed or qualified to
do business as a foreign corporation and is in good standing
in all jurisdictions in which the character of the
properties and assets now owned or held by it or the nature
of business now conducted by it requires it to be so
licensed or qualified where the failure so to qualify would
affect materially and adversely the business, financial
condition or results of operations of such Company;
(ii) each Seller has the corporate power to execute and deliver
this Agreement and the Seller Related Documents and to
consummate the transactions contemplated hereby and thereby;
all corporate acts and other proceedings required to be
taken by or on the part of each Seller to execute and
deliver this Agreement and the Seller Related Documents and
to consummate the transactions contemplated hereby and
thereby have been taken; and each of this Agreement and the
Seller Related Documents has been duly executed and
delivered by each Seller, and constitutes the valid and
binding obligation of each Seller enforceable in accordance
with its terms (except as otherwise limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally,
and except that such counsel need not express an opinion as
to whether any covenant contained in this Agreement or any
Seller Related Document is specifically enforceable);
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(iii) the authorized capital stock of each Company consists of the
class or classes of capital stock listed in Schedule 3.2,
and the shares of each class so indicated in Schedule 3.2 as
being issued and outstanding are issued and outstanding,
fully paid and nonassessable;
(iv) each Company is the record and, to such counsel's knowledge,
the beneficial owner of all of the issued and outstanding
shares of capital stock of each other Company so identified
on Schedule 3.2 as being owned by it, free and clear of all
Stock Encumbrances, and such shares constitute all the
issued and outstanding capital stock of each Company;
(v) except for such as have been obtained or made as the case
may be, no authorization, approval or consent of or
declaration or filing with any governmental authority or
regulatory body is necessary or required of either Seller or
any Company in connection with the execution and delivery of
this Agreement and the Seller Related Documents or the
performance by each Seller of its obligations hereunder and
thereunder;
(vi) the execution and delivery of this Agreement and the Seller
Related Documents by each Seller and the performance by each
Seller of its obligations hereunder and thereunder will not
violate any provision of any existing law or regulation
applicable to either Seller or any Company, or of any order,
judgment, award or decree, known to such counsel after due
inquiry, of any court, arbitrator or governmental authority
applicable to either Seller or any Company, the charter or
bylaws of, or any securities issued by, either Seller or any
Company, or any mortgage, indenture, lease, contract or
other agreement, instrument or undertaking, known to such
counsel after due inquiry, to which each Seller or any
Company is a party or by which either Seller or any Company
or any of its assets is bound, and will not result in, or
require, the creation or imposition of any Encumbrances on
any of the Companies' properties, assets or revenues
pursuant to the provisions of any such mortgage, indenture,
lease, contract or other agreement, instrument or
undertaking;
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(vii) none of the Companies is in default under any material
order, judgment, award or decree, known to such counsel
after due inquiry, of any court, arbitrator or governmental
authority binding upon or affecting any of them or by which
any of their assets may be bound or affected, and no such
order, judgment, award or decree materially adversely
affects the ability of any Company to carry on its
businesses as now conducted or the ability of the Sellers to
perform their obligations under this Agreement and the
Seller Related Documents; and
(viii) to the best knowledge of such counsel, no litigation,
investigation or administrative proceeding of or before any
court, arbitrator or governmental authority is pending or
threatened against either Seller or any Company (x) with
respect to this Agreement or the Seller Related Documents or
the transactions contemplated hereby and thereby or (y)
that, if adversely determined, would have a material adverse
effect on the business or financial condition of either
Seller or any Company.
(d) All filings with and consents of any governmental authority or
agency required for the consummation of the transactions contemplated in this
Agreement shall have been made and obtained, all waiting periods with respect to
filings made with governmental authorities in contemplation of the consummation
of the transactions described herein shall have expired or been terminated.
(e) The Sellers shall have delivered resignations, effective as of
the Effective Date, of all officers or directors of each of the Designated
Companies, Xxxxxx and Black Construction.
(f) The Sellers shall have, as of the Effective Date, caused each
Company to cancel the authority of each person who is listed in Schedule 3.21
hereto to draw checks on or withdraw funds from any of the bank accounts
maintained by any Company, except for any person designated by the Purchaser in
writing prior to the Closing, and shall provide to the Purchaser evidence of
said cancellation.
(g) No material adverse change in the business, operations, affairs,
properties, assets or condition (financial or otherwise) of any Company shall
have occurred, and no Company shall have suffered any material loss of or damage
to any of its properties or assets, whether or not covered by insurance, since
the Balance Sheet Date, which change, loss or damage materially and adversely
affects the business or
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financial condition of such Company, and the Purchaser shall have received a
certificate signed by the Sellers dated the Effective Date to such effect.
(h) All actions, proceedings, instruments and documents required to
carry out this Agreement or incidental hereto and all other related legal
matters shall have been approved by counsel to the Purchaser and such counsel
shall have been furnished with all such documents and instruments as it shall
have reasonably requested in connection with the transactions contemplated
herein.
(i) No suit, action or other proceeding brought by any third party
shall be pending in which there is sought any remedy to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions in
connection herewith.
(j) The Sellers shall have secured, from their workmen's
compensation, general liability and casualty insurance carriers that have issued
insurance contracts containing endorsements that require any of the insured
Companies to reimburse the carriers for losses paid within a deductible level in
excess of $10,000 ("Loss Deductibles"), agreements to eliminate the necessity
for the Purchaser or any Company to reimburse such carriers for Loss Deductibles
related to events arising on or before the Effective Date.
(k) The Purchaser shall have received from the Sellers the release
from F&D contemplated by subsection (b) of Section 1.3 hereof, in form and
substance reasonably acceptable to the Purchaser.
(l) Xxxxxxxx Xxxxxxx and the Purchaser shall have entered into a
mutually satisfactory agreement pursuant to which (i) Xxxxxxxx Xxxxxxx shall
release and agree to indemnify and hold harmless each Company from any
obligation to make payments in respect of any retroactive adjustment provision
of any insurance policy that relates to events occurring on or before the
Effective Date and (ii) each Company (x) shall waive any right to receive
reimbursement in respect of any retroactive adjustment provision of any
insurance policy that relates to events occurring on or before the Effective
Date and (y) shall authorize Xxxxxxxx Xxxxxxx to retain all such reimbursement
amounts to which such Company would otherwise be entitled for Xxxxxxxx Xxxxxxx'x
own account.
(m) The Purchaser shall have received an audited consolidated
statement of certain net assets to be sold and supplemental consolidating
information of the Companies as at April 30, 1995, that fairly present the
consolidated and consolidating financial position of the Companies on a basis of
accounting mutually
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agreeable to the Purchaser and the Sellers and that are accompanied by the
report of Deloitte & Touche LLP, independent auditors for the Sellers ("Audited
Statements"). The Audited Statements shall reflect no adverse change in the
financial condition of the Companies from that reflected in the Balance Sheet,
except as disclosed in Schedule 3.8.
(n) The Sellers shall have provided the Purchaser with a FIRPTA
certificate certifying that neither Seller is a "foreign person" within the
meaning of Treasury Regulation 1.1445-2(b).
(o) The Sellers and the Purchaser shall have entered into a mutually
satisfactory non-competition agreement pursuant to which the Sellers and their
affiliates shall agree for a period of three years after the Effective Date not
to engage in any aspect of the residential, commercial or heavy construction
business in the State of Hawaii (other than pursuant to (i) the construction
contracts that represent Retained Assets and (ii) construction contracts in the
mechanical and environmental markets) and in Guam, Palau, Yap, Saipan, Pohnei,
Kosrae, Chuuk and the other islands that comprise the Northern Mariana Islands,
the Federated States of Micronesia or Palau.
(p) Xxxxxx shall have purchased annuities for each of the vested
participants in the X.X. Xxxxxx Construction Co., Inc. Pension Plan in a manner
that will permit the termination of such plan in due course without the
incurrence of any additional liability by Xxxxxx, any other Company or the
Purchaser with respect to the vested participants in such plan.
(q) The Purchaser shall have given its written acknowledgement that
the schedules listed in Schedule 6.1(q) to be delivered by the Sellers to the
Purchaser after the execution of this Agreement and prior to the Effective Date
(i) have been received by the Purchaser and (ii) are in form and substance
acceptable to the Purchaser in its sole discretion.
(r) The Purchaser shall have received from Sellers an Environmental
Remediation and Indemnification Agreement in the form of Schedule 6.1(r).
(s) The Purchaser and Xxxxxxxx Xxxxxxx shall have entered into a
mutually satisfactory agreement pursuant to which Xxxxxxxx Xxxxxxx, on behalf of
itself and its affiliates, assigns to the Purchaser all its rights under the
Agreement to Vary Shareholders' Agreement and Plan of Restructuring and for the
Sale and Purchase of Shares in XxXxxxxxx Xxxxxx Investments Inc. dated 29 April
1992 between XxXxxxxxx Xxxxxx Holdings PTY Limited and Xxxxxxxx Xxxxxxx and
XxXxxxxxx Xxxxxx Corporation Limited to seek reimbursement or indemnification
for any Damages
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suffered or incurred by Xxxxxxxx Xxxxxxx or its successors as a result of any
breach of any warranty, covenant or undertaking by any other party to such
agreement, except to the extent such rights extend to the Designated Companies
and relate to Retained Assets or Retained Liabilities.
6.2 CONDITIONS TO THE OBLIGATION OF THE SELLERS. The obligation of the
Sellers to proceed with the Closing contemplated hereby is subject to the
satisfaction on or prior to the Effective Date of all of the following
conditions, any one or more of which may be waived in writing, in whole or in
part, by the Sellers:
(a) The Purchaser shall have complied in all material respects with
its covenants and agreements contained herein and each of its representations
and warranties contained in this Agreement shall be deemed to have been made
again at and as of the Effective Date and shall then be true and correct in all
material respects.
(b) The Sellers shall have received a certificate, dated the
Effective Date, of an executive officer of the Purchaser certifying as to the
matters specified in Section 6.2(a) hereof.
(c) The Sellers shall have received from Castle & Lax, counsel to the
Purchaser, an opinion dated the Effective Date, with such qualifications as are
reasonably acceptable to the Sellers, to the effect that:
(i) the Purchaser is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
California;
(ii) the Purchaser has the corporate power to execute and deliver
this Agreement and the Purchaser Related Documents and to
consummate the transactions contemplated hereby and thereby;
all corporate acts and other proceedings required to be
taken by or on the part of the Purchaser to authorize it to
execute and deliver this Agreement and the Purchaser Related
Documents and to consummate the transactions contemplated
hereby and thereby have been taken; and each of this
Agreement and the Purchaser Related Documents has been duly
executed and delivered by, and constitutes the valid and
binding obligation of, the Purchaser enforceable in
accordance with its terms (except as otherwise limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally, and except that such counsel need not express an
opinion as to
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whether any covenant contained in this Agreement or any
Purchaser Related Document is specifically enforceable);
(iii) except for such as have been obtained or made as the case
may be, no authorization, approval or consent of or
declaration or filing with any governmental authority or
regulatory body is necessary or required of the Purchaser in
connection with the execution and delivery of this Agreement
and the Purchaser Related Documents or the performance by
the Purchaser of its obligations hereunder and thereunder;
(iv) the execution and delivery of the Agreement and the
Purchaser Related Documents by the Purchaser and the
performance by the Purchaser of its obligations under this
Agreement and the Purchaser Related Documents will not
violate any provision of any existing law or regulation
applicable to the Purchaser, or of any order, judgment,
award or decree, known to such counsel after due inquiry, to
which the Purchaser is a party or by which either the
Purchaser or any of its assets is bound, and will not result
in, or require, the creation or imposition of any
Encumbrances on any of the Purchaser's properties, assets or
revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or
undertaking; and
(v) the Purchaser is not in default under any material order,
judgment, award or decree, known to such counsel after due
inquiry, of any court, arbitrator or governmental authority
binding upon or affecting it or by which any of its assets
may be bound or affected, and no such order, judgment, award
or decree materially adversely affects the ability of the
Purchaser to carry on its businesses as now conducted or the
ability to perform its obligations under this Agreement and
the Purchaser Related Documents.
(d) All filings with and consents of any governmental authority or
agency required for the consummation of the transactions contemplated in this
Agreement shall have been made and obtained, all waiting periods with respect to
filings made with governmental authorities in contemplation of the consummation
of the transactions described herein shall have expired or been terminated.
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(e) All actions, proceedings, instruments and documents required to
carry out this Agreement or incidental hereto and all other related legal
matters shall have been approved by counsel to the Sellers and such counsel
shall have been furnished with all such documents and instruments as it shall
have reasonably requested in connection with the transactions contemplated
herein.
(f) No suit, action or other proceeding brought by any third party
shall be pending in which there is sought any remedy to restrain, enjoin or
otherwise prevent the consummation of this Agreement or the transactions in
connection herewith.
(g) Xxxxxxxx Xxxxxxx and the Purchaser shall have entered into a
mutually satisfactory agreement pursuant to which (i) Xxxxxxxx Xxxxxxx shall
release and agree to indemnify and hold harmless each Company from any
obligation to make payments in respect of any retroactive adjustment provision
of any insurance policy that relates to events occurring on or before the
Effective Date and (ii) each Company (x) shall waive any right to receive
reimbursement in respect of any retroactive adjustment provision of any
insurance policy that relates to events occurring on or before the Effective
Date and (y) shall authorize Xxxxxxxx Xxxxxxx to retain all such reimbursement
amounts to which such Company would otherwise be entitled for Xxxxxxxx Xxxxxxx'x
own account.
(h) The requisite percentage of the lenders under Xxxxxxxx Xxxxxxx'x
credit facility shall have approved the transactions contemplated by this
Agreement.
6.3 OTHER MUTUALLY ACCEPTABLE ARRANGEMENTS. If the Sellers are unable to
satisfy, or secure the Purchaser's waiver of compliance with, each of the
conditions set forth in subsections (a) through (s) of Section 6.1 hereof, the
Purchaser and the Sellers agree to explore all practical alternatives that are
reasonably available before initiating steps to terminate the Agreement pursuant
to Article X hereof.
ARTICLE VII
TAX MATTERS
7.1 LIABILITY FOR TAXES. (a) For purposes of this Agreement, "Taxes"
means (i) all federal, foreign, state, territorial or local net or gross income,
gross receipts, sales, use, real property gains or transfer, ad valorem,
property, value-added, franchise, production, severance, windfall profit,
withholding, payroll, employment, excise or similar taxes, assessments, duties,
fees, levies or other governmental charges, together with any interest thereon,
any penalties, additions to tax or additional amounts with respect
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thereto and any interest in respect of such penalties, additions or additional
amounts, and (ii) liability for the payment of any consolidated or combined tax
(including, without limitation, any liability imposed pursuant to Treasury
Regulations Section 1.1502-6 as a result of being a member of the Seller Group),
together with any interest thereon, any penalties, additions to tax or
additional amounts with respect thereto and any interest in respect of such
penalties, additions or additional amounts,
of the type described in clause (i) above. "Unitary Return" shall mean any
return with respect to any Taxes, other than federal income Taxes, filed on a
consolidated, combined, or unitary basis by any group of corporations of which
any Company is a member.
(b) The Sellers shall be liable for, and shall indemnify and hold the
Purchaser and its affiliates harmless from, (i) any Taxes caused by or resulting
from the sale of the MKI Shares, (ii) any Taxes of the Sellers and its
affiliates (other than the Companies) imposed on any Company solely on the basis
of joint and several liability for such Taxes (including, without limitation,
any liability imposed pursuant to Treasury Regulations Section 1.1502-6 for
federal income Taxes incurred by any member of the Seller Group), (iii) any
Taxes (other than Taxes described in clauses (i) or (ii) above or Section 3.10
hereof) imposed on or incurred by any Company for any taxable period ending on
or before the Effective Date (or the portion, determined as described in
subsection (d) of this Section 7.1, of any such Taxes imposed on or incurred by
any Company for any taxable period beginning on or before and ending after the
Effective Date which is allocable to the portion of such period occurring on or
before the Effective Date (the "Pre-Effective Date Period")), excluding (x) any
such Taxes arising from any event occurring on the Effective Date, but after the
Closing, which is outside the ordinary course of the business of such
corporation and (y) any such Taxes caused by or resulting from any actual or
deemed election pursuant to Section 338 of the Code with regard to the purchase
of the MKI Shares and (iv) any attorneys' fees or other litigation costs
incurred by the Purchaser, any Company or any affiliate thereof in connection
with any payment from either Seller under subsection (b) of this Section 7.1.
(c) The Purchaser shall be liable for, and shall indemnify and hold
the Sellers and their affiliates harmless from, (i) any Taxes caused by or
resulting from any actual or deemed election pursuant to Section 338 of the Code
with regard to the purchase of the MKI Shares, (ii) any Taxes imposed on or
incurred by any Company for which the Sellers are not liable under subsection
(b) of this Section 7.1, and (iii) any attorneys' fees or other litigation costs
incurred by the Sellers and their affiliates in connection with any payment from
the Purchaser under subsection (c) of this Section 7.1 hereof.
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(d) Whenever it is necessary for purposes of subsection (b) or (c) of
this Section 7.1 to determine the portion of any Taxes imposed on or incurred by
any Company for a taxable period beginning on or before and ending after the
Effective Date which is allocable to the Pre-Effective Date Period, the
determination shall be made, in the case of property or ad valorem Taxes or
franchise Taxes (which are not measured by, or based upon, net income), on a per
diem basis and, in the case of other Taxes, by assuming that the Pre-Effective
Date Period constitutes a separate taxable period of such Company (and any tax
partnerships in which it has an interest) and by taking into account the actual
taxable events occurring during such period (except that exemptions, allowances
and deductions for a taxable period beginning on or before and ending after the
Effective Date that are calculated on an annual or periodic basis, such as the
deduction for depreciation, shall be apportioned to the Pre-Effective Date
Period ratably on a per diem basis.
(e) The Purchaser agrees to pay to the Sellers any refund received
(whether by payment, credit, offset or otherwise) after the Effective Date by
the Purchaser or its affiliates, including any Company, in respect of any Taxes
for which the Sellers are liable under subsection (b) of this Section 7.1, but
only to the extent such refund has not been reflected as a receivable on the
balance sheet of any Company as of the Effective Date and does not result from
the carryback of losses or credits from a taxable period of any Company ending
after the Effective Date. The Sellers agree to pay to the Purchaser any refund
received (whether by payment, credit, offset or otherwise) by any Seller or its
affiliates in respect of any Taxes for which the Purchaser is liable under
subsection (c) of this Section 7.1. The parties shall cooperate in order to
take all necessary steps to claim any such refund. Any such refund received by
a party or its affiliate for the account of the other party shall be paid to
such other party within 90 days after such refund is received.
(f) Within 120 days after Closing, the Sellers will provide to the
Purchaser a schedule which sets forth the following information: (i) the
adjustments to the basis of the stock of each Company other than MKI, for
federal income tax purposes for the tax years ended December 31, 1992 through
the date of Closing, (ii) a schedule of the book/tax differences in the basis of
assets and liabilities of each Company for federal, foreign or territorial
income tax purposes, as the case may be as of the date of Closing, (iii) the
changes in the earnings and profits of each Company for the tax years ended
December 31, 1992 through the date of Closing, (iv) all material consents and
elections with respect to Taxes of or with respect to each Company that have
been filed with any taxing authority, and (v) the amounts of the net operating
loss, net capital loss, foreign tax credit and tax credit carryforwards
allocable to each Company as of December 31, 1994. The Sellers shall provide
and deliver to the
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Purchaser a schedule no later than August 31, 1996 showing for the short tax
year 1995 any and all adjustments for net operating loss, capital losses or
alternative minimum tax credit allocable to the Companies arising from the short
period for year 1995.
7.2 RETURNS. (a) All returns or reports which relate to any Taxes of any
Company (and any tax partnerships in which (i) any Company owns an interest and
(ii) the Sellers or an affiliate of the Sellers has responsibility for preparing
and filing partnership returns or reports) shall be prepared and filed by the
party which is legally responsible therefor. All income and deductions of each
Company that is at present a member of the Seller Group for the period beginning
on January 1, 1995 and extending through the Effective Date will be included in
the consolidated federal income tax return of the Seller Group for the year
ending December 31, 1995 and will be reported on a basis consistent with
previously filed returns. The Sellers shall file all returns required to be
filed for the period beginning on January 1, 1995 and ending on the Effective
Date for each Company that at present is not a member of the Seller Group on a
basis consistent with previously filed returns. The Purchaser and its
affiliates, including each Company, shall cooperate with the Sellers and shall
make available all necessary records and timely take all action necessary to
allow the Sellers or its affiliates to prepare and file the returns or reports
which they are responsible for preparing and filing under subsection (a) of this
Section 7.2.
(b) Prior to the Closing, the Sellers will provide to the Purchaser a
schedule setting forth the open tax years in each jurisdiction in which any
returns relating to income Taxes are filed by or with respect to any Company.
Tax information including copies of (i) pro forma separate federal income tax
returns for the Companies as members of the Seller Group and (ii) state, local,
territorial and foreign tax returns of the Companies or, with respect to Unitary
Returns (as defined in subsection (a) of Section 7.1 hereof) and in lieu of
providing copies thereof, a schedule showing the modifications to the Companies'
federal taxable income and other relevant information sufficient to compute the
Companies' state taxable income for each of the taxable years ended August 14,
1992 through December 31, 1994, and the short period for year 1995 shall be
provided by the Sellers and delivered to Purchaser as soon as practicable but no
later than 120 days after the Closing Date. Such information shall include
copies of the tax workpapers used by the Sellers to prepare the Companies' tax
returns for year 1994, and the short period for year 1995.
7.3 TAX PROCEEDINGS. In the event the Purchaser or any of its affiliates
receives notice (the "Proceeding Notice") of any examination, claim, adjustment,
or other proceeding with respect to the liability of any Company for Taxes for
any period for which the Sellers are or may be liable under subsection (b) of
Section 7.1 hereof, the
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Purchaser shall notify the Sellers in writing thereof (the "Purchaser Notice")
no later than the earlier of (i) 30 days after the receipt by the Purchaser or
any of its affiliates of the Proceeding Notice or (ii) ten days prior to the
deadline for responding to the Proceeding Notice. As to any such Taxes for
which the Sellers are solely liable under subsection (b) of Section 7.1 hereof,
the Sellers shall be entitled at their expense to control or settle the contest
of such examination, claim, adjustment, or other proceeding, provided (a) they
notify the Purchaser in writing that they desire to do so no later than the
earlier of (i) 30 days after receipt of the Purchaser Notice or (ii) five days
prior to the deadline for responding to the Proceeding Notice and (b) the
Sellers may not, without the consent of the Purchaser, agree to any settlement
which could result in an increase in the amount of Taxes for which the Purchaser
is liable under subsection (c) of Section 7.1 hereof. The parties shall
cooperate with each other and with their respective affiliates, and will consult
with each other, in the negotiation and settlement of any proceeding described
in this Section 7.3. The Purchaser will provide, or cause to be provided, to
the Sellers necessary authorizations, including powers of attorney, to control
any proceedings which the Sellers are entitled to control pursuant to this
Section 7.3.
7.4 PAYMENT OF TAXES. All Taxes with respect to any Company shall be paid
by the party that is legally responsible therefor. Except as otherwise provided
in this Article VII, any amount to which a party is entitled under this Article
VII shall be promptly paid to such party by the party obligated to make such
payment following written notice to the party so obligated stating that the
Taxes to which such amount relates have been paid or incurred and providing
details supporting the calculation of such amount.
7.5 COOPERATION AND EXCHANGE OF INFORMATION. The Purchaser on the one
hand, and the Sellers on the other hand, will provide, or cause to be provided,
to the other party copies of all correspondence received from any taxing
authority by such party or any of its affiliates in connection with the
liability of any for Taxes for any period for which such other party is or may
be liable under subsection (b) or (c) of Section 7.1 hereof. The Sellers shall
assist the Purchaser in obtaining the consent of the partners in any tax
partnership in which any Company owns an interest to make (i) any elections in a
return of the tax partnership which the Purchaser deems necessary and (ii) an
allocation of tax partnership items in the manner described in subsection (d) of
Section 7.1 hereof. The parties will provide each other with such cooperation
and information as they may reasonably request of each other in preparing or
filing any return, amended return, or claim for refund, in determining a
liability or a right of refund, or in conducting any audit or other proceeding,
in respect of Taxes imposed on the parties or their respective affiliates. The
Purchaser on the one hand, and the Sellers
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on the other hand, and their affiliates will preserve and retain all returns,
schedules, work papers and all material records or other documents relating to
any such returns, claims, audits, or other proceedings until the expiration of
the statutory period of limitations (including extensions) of the taxable
periods to which such documents relate and until the final determination of any
payments which may be required with respect to such periods under this Agreement
and shall make such documents available at the then current administrative
headquarters of such party to the other party or any affiliate thereof, and
their respective officers, employees and agents, upon reasonable notice and at
reasonable times, it being understood that such representatives shall be
entitled to make copies of any such books and records relating to any Company as
they shall deem necessary. The Purchaser on the one hand, and the Sellers on
the other hand, further agree to permit representatives of the other party or
any affiliate thereof to meet with employees of such party on a mutually
convenient basis in order to enable such representatives to obtain additional
information and explanations of any documents provided pursuant to this Section
7.5. The Purchaser on the one hand, and the Sellers on the other hand, shall
make available to the representatives of the other party or any affiliate
thereof sufficient work space and facilities to perform the activities described
in the two preceding sentences. Any information obtained pursuant to this
Section 7.5 shall be kept confidential, except as may be otherwise necessary in
connection with the filing of returns or claims for refund or in conducting any
audit or other proceeding. Each party shall provide the cooperation and
information required by this Section 7.5 at its own expense.
7.6 SURVIVAL OF OBLIGATIONS. The obligations of the parties set forth in
this Article VII shall be unconditional and absolute and shall remain in effect
without limitation as to time.
7.7 CONFLICT. In the event of a conflict between the provisions of this
Article VII and any other provisions of this Agreement, the provisions of this
Article VII shall control. The provisions of Article XI shall not apply to any
Taxes for which any party is liable under this Article VII.
7.8 TAX ALLOCATION ARRANGEMENTS. Effective as of the Effective Date, all
liabilities and obligations between any Company on one hand and the Sellers or
their affiliates on the other hand under any tax allocation agreement or
arrangement in effect prior to the Effective Date shall be extinguished in full
(without the necessity of any payment with respect thereto) and any liabilities
or rights existing under any such agreement or arrangement shall terminate and
shall no longer be enforceable. The Sellers and their affiliates shall execute
any documents necessary to effectuate the provisions of this Section 7.8.
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7.9 LOSS CARRYOVERS. To the extent that the Purchaser determines that it
is unable to utilize any net operating loss carryovers and otherwise would elect
to treat the loss carryover as expiring under Treasury Regulation Section
1.1502-32(b)(4), the Purchaser shall jointly enter into an election with the
Sellers pursuant to Treasury Regulation Section 1.1502-20(g)(1) to reattribute
losses of E.E. Black to Xxxxxxxx Xxxxxxx. The amount of losses to be
reattributed shall not exceed the taxable loss that would be disallowed by
Treasury Regulation Section 1.1501-20(a)(1) and 1.1502-20(c) as determined by
the Sellers. The determination of the amount of losses to be reattributed shall
be made by August 31, 1996.
ARTICLE VIII
EMPLOYEES AND EMPLOYEE BENEFITS
8.1 STATUS OF EMPLOYEES. Except for such employees covered by employment
agreements listed in Schedule 3.18 or subject to collective bargaining
agreements listed in Schedule 3.15 or 3.19 and except for any obligations or
covenants of the Purchaser set forth in Section 8.2 hereof, (a) neither the
Purchaser nor any Company shall have any obligation to continue the employment
of any employee of any Company after the Effective Date, and (b) after the
Effective Date any continued employment of the employees of any Company shall be
on such terms and conditions and include such benefits as the Purchaser shall
deem appropriate in its sole and unlimited discretion (except for those benefits
arising under the 401(k) Plan of Black Construction Corporation ("401(k) Plan"),
the X.X. Xxxxxx Construction Company, Inc. Pension Plan ("Pension Plan") and the
plans referred to as items (a)(3) and (a)(4) on Schedule 3.19 (Guam Plans")).
8.2 CERTAIN BENEFITS OF EMPLOYEES. (a) Except for the 401(k) Plan, the
Pension Plan and the Guam Plans, which shall be continued after the Effective
Date, effective as of the Effective Date, participation by each Company under
all employee benefit plans, programs, practices or arrangements, whether written
or oral, sponsored by the Sellers ("Benefit Plans"), in which any of the
Companies has theretofore participated shall cease; and each participant who is
an employee of any Company immediately after the Effective Date and who was a
participant in any Benefit Plan immediately prior to the Effective Date shall be
entitled to the benefits due to such employee as a result of such termination as
provided in each Benefit Plan (but only if permitted by applicable law). Each
employee of any Company that participates in the employee benefit plans of the
Purchaser or any affiliate thereof shall be credited under such employee benefit
plans with the same amount of service for eligibility and vesting
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purposes credited to such employees as of the Effective Date under the employee
benefit plans in which they have theretofore participated, provided such
employee benefit plans are substantially similar to the employee benefit plans
of the Purchaser. To the extent required by law, the "group health plans"
providing medical coverage to the "covered employees" of the Companies prior to
the Effective Date will provide COBRA health care continuation coverage with
respect to individuals who are "qualified beneficiaries" and who have a
"qualifying event" on or prior to the Effective Date. The terms used in the
preceding sentence shall have those meanings set forth in Code Section 4980B.
Notwithstanding anything herein to the contrary, the Purchaser intends to
provide health care benefits and coverage to the employees of each Company
(other than the employees of Black Construction who are located in Guam) that
are substantially similar to the health care benefits and coverage that are
provided to the employees of the Purchaser immediately prior to the Effective
Date.
(b) Prior to the first anniversary of the Effective Date, the
Purchaser shall, at the sole cost and expense of the Sellers, cause Xxxxxx to
use its best efforts to obtain a favorable determination letter from the
Internal Revenue Service to the effect that the termination of the X. X. Xxxxxx
Construction Company, Inc. Pension Plan ("Pension Plan") does not affect the
qualification of the Pension Plan, and liquidate the trust and disburse Pension
Plan funds to the participants in accordance with the terms and provisions of
the Pension Plan. Nothing herein shall be construed to relieve the Sellers of
liability arising in connection with claims brought by participants in the
Pension Plan or its beneficiaries with respect to the operation or
administration of such plan prior to the Effective Date. The Purchaser shall
cooperate with the Sellers in all material respects regarding the filing of the
Pension Plan with the IRS and the PBGC. The Sellers shall have control over the
content of any such filings and shall select the advisors and other
professionals who will prepare and advise the Purchaser with respect to such
filings.
(c) The provisions of this Article VIII to the contrary
notwithstanding, the parties hereto may in the period between the date hereof
and the Effective Date mutually agree to handle the issues addressed therein in
some other manner and, in such event, any provisions agreed to by the parties
hereto in writing pursuant to subsection (c) of this Section 8.2 shall govern.
(d) Except with respect to liabilities under the 401(k) Plan, the
Pension Plan, the Guam Plans, the Employment Agreement dated as of November 8,
1992 between Xxxxxx and Xxxxxx X. Xxxxxxx, the Deferred Compensation Agreement
dated November 15, 1990 between Xxxxxx and Xxxxx X. Xxxxxx and all obligations
under the collective bargaining agreements listed in Schedule 3.15 or 3.19,
neither the Purchaser
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nor any Company or their respective affiliates shall have any liability or
obligation with respect to employment matters, any of the Benefit Plans, the
E.E. Black Limited Savings and Retirement Plan or any other liability, whether
contingent or otherwise, relating to or arising out of the employment of
employees or the engagement of independent contractors by any Company or the
Sellers or any of their respective affiliates for periods prior to and including
the Effective Date.
(e) The Purchaser and its affiliates will cooperate fully with the
Sellers and allow the Sellers access (in the same manner as set forth in Section
5.3 hereof) with respect to any and all matters relating to the E.E. Black
Limited Savings & Retirement Plan until the latter of (i) the receipt of any
voluntary closing agreement, the application for which is filed with the IRS
within 12 months of the Effective Date, or (ii) three years from the Effective
Date.
ARTICLE IX
INVESTIGATION; LIMITATIONS
9.1 SCOPE OF THE PURCHASER'S INVESTIGATIONS AND WAIVER. In determining
the Purchase Price to be paid for the MKI Shares, the Purchaser relied upon the
substance of the unaudited April 30, 1995 consolidating balance sheet of the
Companies, a copy of which is included in Schedule 3.7 hereof and the accuracy
of which is being confirmed by the audit provided for in subsection (m) of
Section 6.1 hereof, the express representations, warranties and conditions set
forth in this Agreement and an inspection of the construction equipment and
certain real property owned by the Companies. ACCORDINGLY, THE PURCHASER IS
WILLING TO DISCLAIM AND NEGATE AND DOES HEREBY DISCLAIM AND NEGATE ANY OTHER
EXPRESSED OR IMPLIED REPRESENTATION OR WARRANTY THAT IS NOT SET FORTH IN THIS
AGREEMENT, THE SELLER RELATED DOCUMENTS OR ANY OTHER AGREEMENT DELIVERED IN
CONNECTION HEREWITH RELATING TO THE ASSETS AND OPERATIONS OF EACH COMPANY.
9.2 SURVIVAL. The liability of the Sellers for the breach of the
representations and warranties of the Sellers set forth in Article III hereof
shall be limited to claims for which the Purchaser delivers written notice to
the Sellers on or before (a) the first anniversary date of the Effective Date in
the case of claims relating to Black Construction and Black Micro, (b) the
second anniversary date of the Effective Date in the case of Xxxxxx, MKI and MKP
and (c) the date upon which the assertion of a claim is barred by the statute of
limitations in the case of E.E. Black. The liability of the Purchaser for the
breach of the representations and warranties of the Purchaser set
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forth in Article IV hereof shall be limited to claims for which the Sellers
shall deliver written notice to the Purchaser on or before the second
anniversary date of the Effective Date.
ARTICLE X
TERMINATION
10.1 EVENTS OF TERMINATION. Subject to the terms of Section 6.3 hereof and
notwithstanding any other provision hereof, this Agreement shall terminate upon
the occurrence of any of the following events:
(a) The written consent of the Sellers and the Purchaser;
(b) By the Sellers in writing, without liability to the Sellers, if
Purchaser shall (i) fail to perform in any material respect its agreements
contained herein required to be performed by it on or prior to the Effective
Date, or (ii) materially breach any of its representations, warranties or
covenants contained herein, which failure or breach is not cured within ten days
after the Sellers shall have notified the Purchaser of their intent to terminate
this Agreement pursuant to subsection (b) of this Section 10.1;
(c) By the Purchaser in writing, without liability to the Purchaser, if
the Sellers shall (i) fail to perform in any material respect their agreements
contained herein required to be performed by them on or prior to the Effective
Date, or (ii) materially breach any of their representations, warranties or
covenants contained herein, which failure or breach is not cured within ten days
after the Purchaser has notified the Sellers of its intent to terminate this
Agreement pursuant to subsection (c) of this Section 10.1;
(d) By either the Sellers or the Purchaser in writing, without liability,
if there shall be any order, writ, injunction or decree of any court or
governmental or regulatory agency binding on the Purchaser or the Sellers, which
prohibits or restrains the Purchaser or the Sellers from consummating the
transactions contemplated hereby, provided that the Purchaser and the Sellers
shall have used their best efforts to have any such order, writ, injunction or
decree lifted and the same shall not have been lifted within 30 days after entry
by any such court or governmental or regulatory agency; or
(e) The written notice from the Purchaser to the Sellers or the Sellers to
the Purchaser if the Closing has not occurred, without fault on any party's
part, by October 31, 1995.
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10.2 EFFECT OF TERMINATION. The following provisions shall apply in the
event of a termination of this Agreement:
(a) If this Agreement is terminated by the Sellers or by the Purchaser as
permitted under Section 10.1 hereof and not as the result of the negligent or
willful failure of any party to perform its obligations hereunder, such
termination shall be without liability to any party to this Agreement or any
shareholder, director, officer, employee, agent or representative of such party.
(b) The Purchaser and the Sellers acknowledge that the MKI Shares are not
readily available in the open market and the assets of each Company are unique
and specifically identifiable. Accordingly, the Purchaser and the Sellers
further agree and stipulate that if the Closing does not occur because of the
willful failure of the Sellers, on the one hand, or the Purchaser, on the other
hand, to perform their respective obligations hereunder, (i) monetary damages
and any other remedy at law will not be adequate, (ii) the non-defaulting party
shall be entitled to specific performance as the remedy for such breach, (iii)
each party hereto agrees to waive any objection to the remedy of specific
performance, (iv) each party agrees that the granting of specific performance by
any court will not be deemed to be harsh or oppressive to the party who is
ordered specifically to perform its obligations under this Agreement, and (v) in
connection with any action for specific performance, the prevailing party shall
be entitled to reasonable attorneys' fees and other costs of prosecuting or
defending such action.
(c) The right to seek specific performance hereunder shall not preclude
any party to seek any other remedy at law or in equity.
ARTICLE XI
INDEMNIFICATION
11.1 INDEMNIFICATION OF THE SELLERS. The Purchaser, from and after the
Effective Date, shall protect, indemnify and hold the Sellers harmless from and
against any and all Damages suffered by the Sellers as a result of, caused by,
arising out of, or in any way relating to (a) any misrepresentation, breach of
warranty, or nonfulfillment of any agreement or covenant on the part of the
Purchaser under this Agreement, any Purchaser Related Document or any
misrepresentation in or omission from any list, schedule, certificate, or other
instrument furnished or to be furnished to the Sellers by the Purchaser pursuant
to the terms of this Agreement or (b) the performance (or lack of performance)
by any Company after the Effective Date of its obligations under any
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contract that was in existence prior to the Effective Date, other than any
contract representing part of the Retained Assets.
11.2 INDEMNIFICATION OF THE PURCHASER. Subject to the limitations set
forth in Section 9.2 hereof, the Sellers, jointly and severally, shall protect,
indemnify and hold the Purchaser and each Company harmless from and against any
and all Damages suffered by the Purchaser or any Company as a result of, caused
by, arising out of, or in any way relating to (a) any misrepresentation, breach
of warranty, or nonfulfillment of any agreement or covenant (including without
limitation Section 1.3 hereof) on the part of the Sellers under this Agreement,
any Seller Related Document or any misrepresentation in or omission from any
list, schedule, certificate, or other instrument furnished or to be furnished to
the Purchaser by the Sellers or any Company pursuant to the terms of this
Agreement or (b) the performance (or lack of performance) by any Company of any
contractual obligation that is performable by it on or prior to the Effective
Date, including without limitation any obligation arising from a contract
representing part of the Retained Assets.
11.3 DEMANDS. Each indemnified party hereunder agrees that promptly upon
its discovery of facts giving rise to a claim for indemnity under the provisions
of this Agreement, including receipt by it of notice of any demand, assertion,
claim, action or proceeding, judicial or otherwise, by any third party (such
discovery of facts or third-party action being collectively referred to herein
as a "Matter"), with respect to any Matter as to which it claims to be entitled
to indemnity under the provisions of this Agreement, it will give prompt notice
thereof in writing to the indemnifying party, together with a statement of such
information respecting any of the foregoing as it shall have. Such notice shall
include a formal demand for indemnification under this Agreement. The
indemnifying party shall not be obligated to indemnify the indemnified party
with respect to any Matter if the indemnified party knowingly failed to notify
the indemnifying party thereof in accordance with the provisions of this
Agreement in sufficient time to permit the indemnifying party or its counsel to
defend against such Matter and to make a timely response thereto including,
without limitation, any responsive motion or answer to a complaint, petition,
notice or other legal, equitable or administrative process relating to the
Matter, only insofar as such knowing failure to notify the indemnifying party
has actually resulted in prejudice or damage to the indemnifying party.
11.4 RIGHT TO CONTEST AND DEFEND. The indemnifying party shall be entitled
at its cost and expense to contest and defend by all appropriate legal
proceedings any Matter with respect to which it is called upon to indemnify the
indemnified party under the provisions of this Agreement; provided, that notice
of the intention so to contest
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shall be delivered by the indemnifying party to the indemnified party within 20
days from the date of receipt by the indemnifying party of notice by the
indemnified party of the assertion of the Matter. If the indemnifying party has
elected to assume the defense of any Matter, except as otherwise provided in
this Section 11.4, the indemnifying party will not be liable for any legal
expenses subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that if the indemnifying party fails to
notify the indemnified party of its intent to assume the defense of the Matter
within such 20-day period, the indemnified party may assume its own defense, and
the indemnifying party will be liable for any reasonable expenses thereof. Any
such contest may be conducted in the name and on behalf of the indemnifying
party or the indemnified party as may be appropriate. Such contest shall be
conducted by reputable counsel employed by the indemnifying party, but the
indemnified party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense. The indemnifying party shall have full authority to
determine all action to be taken with respect thereto; provided, however, that
the indemnifying party will not have the authority to subject the indemnified
party to any obligation whatsoever, other than the performance of purely
ministerial tasks or obligations not involving material expense. If the
indemnifying party does not elect to contest any particular Matter, the
indemnifying party shall be bound by the result obtained with respect thereto by
the indemnified party. At any time after the commencement of the defense of any
Matter, the indemnifying party may request the indemnified party to agree in
writing to the abandonment of such contest or to the payment or compromise by
the indemnified party of the asserted Matter, whereupon such action shall be
taken unless the indemnified party reasonably determines that the contest should
be continued, and so notifies the indemnifying party in writing within 15 days
of such request from the indemnifying party. If the indemnifying party
ultimately determines that the contest should be continued, all legal fees and
disbursements and other expenses associated with continuing the contest shall be
borne by the indemnifying party. If the indemnified party determines that the
contest should be continued, the indemnifying party shall be liable hereunder
only to the extent of the amount that the other party to the contested Matter
had agreed unconditionally to accept in payment or compromise as of the time the
indemnifying party made its request therefor to the indemnified party. The
indemnified party shall not settle any Matter for which it is seeking
indemnification without the prior written consent of the indemnifying party
(which consent shall not be unreasonably withheld).
11.5 COOPERATION. If requested by the indemnifying party, the indemnified
party agrees to cooperate, including, without limitation, providing reasonable
access to its books and records relating to the Matter, with the indemnifying
party and its counsel in contesting any Matter that the indemnifying party
elects to contest or, if appropriate,
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in making any counterclaim against the person asserting the Matter, or any
cross-complaint against any person, and the indemnifying party will reimburse
the indemnified party for any expenses incurred by it in so cooperating. At no
cost or expense to the indemnified party, the indemnifying party shall cooperate
with the indemnified party and its counsel in contesting any Matter with respect
to all reasonable requests for such cooperation.
11.6 RIGHT TO PARTICIPATE. The indemnified party agrees to afford the
indemnifying party and its counsel the opportunity to be present at, and to
participate in, conferences with all persons, including governmental
authorities, asserting any Matter against the indemnified party or conferences
with representatives of or counsel for such persons.
11.7 PAYMENT OF DAMAGES. The indemnifying party shall pay to the
indemnified party in immediately available funds any amounts to which the
indemnified party may become entitled by reason of the provisions of this
Agreement, such payment to be made within five days after any such amounts are
finally determined either by mutual agreement of the parties hereto or pursuant
to the final unappealable judgment of a court of competent jurisdiction. In
calculating any amount to be paid by an indemnifying party by reason of the
provisions of this Agreement, the amount shall be reduced by all tax benefits
and other reimbursements credited to or received by the other party related to
the Damages.
11.8 LIMITATIONS ON INDEMNIFICATION. The Sellers shall not be liable to
indemnify the Purchaser or any Company for Damages under Section 11.2 hereof
unless the aggregate amount of Damages for which the Sellers would, but for the
provisions of this Section 11.8, be liable exceeds, on an aggregate basis,
$25,000, and then only to the extent of any such excess and in no event shall
the total liability of the Sellers hereunder exceed $855,000 in the aggregate;
provided that notwithstanding the foregoing, the Sellers shall be fully liable
to indemnify the Purchaser and the Companies for Damages as a result of, caused
by, arising out of, or in any way relating to (a) any Taxes for which the
Sellers are liable under Article VII, (b) the breach by the Sellers of the
representations or covenants set forth in Sections 1.3(c), 1.3(d), 1.4, 3.10 and
3.23 hereof and (c) the agreement contemplated by subsection (l) of Section 6.1
hereof.
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ARTICLE XII
MISCELLANEOUS
12.1 EXPENSES. Regardless of whether the transactions contemplated hereby
are consummated, each party hereto shall pay its own expenses incident to this
Agreement and all action taken in preparation for carrying this Agreement into
effect. In addition to the foregoing, the Sellers agree to pay and bear (or to
reimburse any Company to the extent that any Company has paid) any expenses
arising out of the preparation and maintenance of any data rooms established in
connection with the offering for sale of the stock or assets of one or more of
the Companies, and all legal and accounting fees and expenses incurred in
connection with such offerings and in connection with the preparation,
negotiation and execution and consummation of this Agreement.
12.2 NOTICES. Any notice, request, instruction, correspondence or other
document to be given hereunder by either party to the other shall be in writing
and delivered personally or mailed by certified mail, postage prepaid and return
receipt requested, by telegram, telecopy, or by recognized courier service as
follows:
If to the Sellers, addressed to:
Xxxxxxxx Xxxxxxx Corporation
Xxxxxxxx Xxxxxxx Xxxxx
X. X. Xxx 00
Xxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
Telecopy: 000-000-0000
If to the Purchaser, addressed to:
Xxxxx-Xxxxxx Corporation
00000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Tutor
Telecopy: 000-000-0000
Any address or name specified above may be changed by a notice given by the
addressee to the other party in accordance with this Section 12.2. Any notice,
demand or other communication shall be deemed given and effective (a) as of the
date of
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delivery, if delivered by hand, (b) as of the next day, if delivered
by overnight courier, or (c) three days after deposit in the United States mail,
postage prepaid. The inability to deliver because of changed address of which
no notice was given, or the rejection or other refusal to accept any notice,
demand or other communication, shall be deemed to be the receipt of the notice,
demand or other communication as of the date of such inability to deliver or the
rejection or refusal to accept.
12.3 NO NEGOTIATIONS. Until the first to occur of the Closing or
termination of this Agreement pursuant to the provisions of Article X hereof,
the Sellers shall not permit any Company to merge or consolidate with, or
acquire a substantial portion of the assets of, any other corporation, business
or person. The Sellers shall use reasonable efforts to retrieve promptly all
materials delivered to prospective bidders for the purchase of the stock or
assets of any Company. Until the first to occur of the Closing or termination
of this Agreement pursuant to the provisions of Article X hereof, the Sellers
shall not initiate or participate in discussions with, or otherwise solicit
from, any corporation, business or person any proposals or offers relating to
the disposition of stock, assets or business of any Company, or the acquisition
of the MKI Shares, or the merger or consolidation of any Company with any other
corporation.
12.4 GOVERNING LAW AND JURISDICTION. (a) This Agreement shall be governed
and construed in accordance with the substantive laws of the State of California
without reference to principles of conflicts of law.
(b) Each of the Sellers and the Purchaser, by acceptance hereof, (i)
agrees that any legal action with respect to this Agreement shall be brought
exclusively in the courts of the State of California, County of Los Angeles,
(ii) accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of those courts, and (iii) irrevocably waives
any objection, including, without limitation, any objection to the laying of
venue or based on the grounds of FORUM NON CONVENIENS, which it may now or
hereafter have to the bringing of any legal action in that jurisdiction;
PROVIDED, HOWEVER, that each of the Sellers and the Purchaser may assert in a
legal action in any other jurisdiction or venue each defense, third-party claim
or similar claim that, if not so asserted in such legal action, may thereafter
not be asserted by such party in an original legal action in the courts referred
to in clause (i) above.
12.5 PUBLIC STATEMENTS. The parties hereto shall consult with each other
and no party shall issue any public announcement or statement with respect to
the transactions contemplated hereby without the consent of the other parties,
unless the party desiring to make such announcement or statement, after seeking
such consent
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from the other parties, obtains advice from legal counsel that a public
announcement or statement is required by applicable law.
12.6 FORM OF PAYMENT. All payments hereunder shall be made in United
States dollars and, unless the parties making and receiving such payments shall
agree otherwise or the provisions hereof provide otherwise, shall be made by
wire or interbank transfer of immediately available funds by 12:00 Noon, Boise,
Idaho time, on the date such payment is due to such account as the party
receiving payment may designate at least three business days prior to the
proposed date of payment.
12.7 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement, together
with schedules attached hereto, and any documents delivered pursuant hereto,
constitutes the entire agreement between the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties,
including, without limitation, that certain Letter of Intent, dated July 21,
1995, as amended, by and between the Purchaser and Xxxxxxxx Xxxxxxx, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by each party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (regardless of
whether similar), nor shall any such waiver constitute a continuing waiver
unless otherwise expressly provided.
12.8 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective permitted
successors and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned, by operation of law or
otherwise, by any party hereto without the prior written consent of the other
parties; provided that the Purchaser may assign all of its rights, privileges
and obligations hereunder to any direct or indirect wholly-owned subsidiary of
the Purchaser organized under the laws of any of the United States. No such
assignment shall relieve the Purchaser of any of its obligations under this
Agreement. Nothing in this Agreement, express or implied, is intended to confer
upon any person or entity other than the parties hereto and their respective
permitted successors and assigns, any rights, benefits or obligations hereunder.
12.9 SEVERABILITY. If any one or more of the provisions contained in this
Agreement or in any other document delivered pursuant hereto shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or
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unenforceability shall not affect any other provision of this Agreement or any
other such document. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its term to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
12.10 DEFINITION OF "MATERIAL". The misstatement or omission of an
item of data in or from a representation or warranty in a section of this
Agreement, or in or from any list, schedule, certificate or other instrument
furnished pursuant to the terms of this Agreement (or the failure to perform an
obligation set forth in a section of this Agreement), shall be considered
"material", "materially adverse" or other words and phrases of similar purport
if such misstatement or omission, when aggregated with all other misstatements
or omissions in or from the same section of this Agreement, or such list,
schedule, certificate or other instrument (or such failure, when aggregated with
all other failures under the same section), results in indemnifiable Damages
under Article XI hereof in excess of $25,000 without regard to the provisions of
Section 11.8 hereof.
12.11 HEADINGS AND SCHEDULES. The headings of the several Articles and
Sections herein are inserted for convenience of reference only and are not
intended to
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be a part of or to affect the meaning or interpretation of this Agreement. The
schedules referred to herein are attached hereto and incorporated herein by this
reference, and unless the context expressly requires otherwise, such schedules
are incorporated in the definition of "Agreement."
12.12 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
EXECUTED as of the date first set forth above.
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"XXXXXXXXX"
XXXXX-XXXXXX CORPORATION
/s/ Xxxxxx X. Tutor
By:
---------------------------
Xxxxxx X. Tutor
President
"SELLERS"
XXXXXXXX XXXXXXX
CORPORATION (a Delaware corporation)
/s/ Xxxxx X. Xxxxxxx
By:
---------------------------
Authorized Officer
and
XXXXXXXX XXXXXXX
CORPORATION (an Ohio corporation)
/s/ Xxxxx X. Xxxxxxx
By:
---------------------------
Authorized Officer
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SCHEDULES AND EXHIBITS
THE REGISTRANT AGREES TO PROVIDE TO THE
SECURITIES AND EXCHANGE COMMISSION, UPON REQUEST,
WITH COPIES OF THE SCHEDULES AND EXHIBITS HERETO
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