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EXHIBIT 10.1.1
ASSET PURCHASE AGREEMENT
This AGREEMENT, dated May 31, 1996 and effective as of 11:59 p.m., New
York time, on May 30, 1996, is entered into by and between BRUNSWICK
CORPORATION, a Delaware corporation ("Brunswick"), and FM Precision Golf
Manufacturing Corp., a Delaware corporation ("Buyer").
IT IS AGREED as follows:
Section 1. Definitions. The following terms have the following
meanings when used herein:
1.1 "Agreement" means this Asset Purchase Agreement, including all
schedules and exhibits hereto, as it may be amended from time to time in
accordance with its terms.
1.2 "Balance Sheet" means the balance sheet reflecting the Golf Assets and
Golf Liabilities as of December 31, 1995 attached hereto as Exhibit A.
1.3 "Brunswick" and "Buyer" have the meanings specified above.
1.4 "Closing Date" and "Closing" mean the date, time, and place for
closing the transactions described in Section 2.3 and the closing therein
referred to.
1.5 "Excluded Assets" means:
(a) all assets related to state, local and federal taxes including
income, sales or use and franchise taxes, and all prepaid
insurance, prepaid advertising and other prepaid expenses;
(b) any cash or cash equivalents (including letters of credit),
intracompany and intercompany payable and receivable balances
(between Brunswick and its divisions and affiliates),
advances, insurance policy coverages and other services
furnished to or for the benefit of the Golf Business by
Brunswick;
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(c) all names, trade names and trademarks containing the name
"Brunswick" or any derivation thereof whether in English or
any other language; and
(d) any claims, demands, causes of action, judgments and pending
litigation which relate to any Excluded Liabilities and which
are related to the Golf Business and as to which Brunswick is
a claimant, plaintiff, judgment creditor or beneficiary.
1.6 "Excluded Liabilities" means:
(a) any intercompany payable balances owing to Brunswick or any
of its subsidiaries or affiliates, from the Golf Business;
(b) the employee pension and welfare benefit obligations
retained by Brunswick pursuant to Section 5 hereof;
(c) the liabilities and obligations relating to environmental
matters retained by Brunswick pursuant to Section 6.5
hereof;
(d) any liability related to the matters set forth on Schedule
4.9;
(e) all product liability claims for which Brunswick is
responsible under Section 6.3;
(f) all liabilities and obligations of any nature arising out
of occurrences or circumstances prior to the Closing Date,
except Golf Liabilities; and
(g) all liabilities and obligations
(i) relating to any Excluded Asset; or
(ii) relating to any item listed on any Schedule identified
therein by a single asterisk (*) as not being included
as a Golf Liability.
1.7 "Golf Assets" means only the following properties and assets (except
the Excluded Assets) of Brunswick existing on the Closing Date:
(a) all assets reflected on the Balance Sheet and supplies owned
by Brunswick on the date of the Balance Sheet or acquired by
Brunswick between the date of the Balance Sheet and the
Closing Date pertaining to the Golf Business (except inventory
and supplies or other assets disposed
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of or used in the ordinary course of business since the date
of the Balance Sheet);
(b) the accounts (including the following Brunswick bank
accounts pertaining solely to the Golf Business: Fleet
Bank Bank Card Account No. 0000000, Fleet Bank Collection
Lock Box Account No. 0000000 (Lock Box No. 30050), and Bank
of Boston, Payroll Account No. 00000000) and notes
receivable of Brunswick pertaining to the Golf Business
existing on the Closing Date;
(c) finished goods, work-in-process, and raw materials
inventory pertaining to the Golf Business;
(d) sales order files, engineering order files, purchase order
files, manufacturing records, customer lists and business
files pertaining to the Golf Business;
(e) Golf Intangible Assets;
(f) all right and interest of Brunswick to or in all of its
agreements, options, contracts, distributor agreements, sales
representative agreements, leases, license agreements,
instruments, purchase orders, sales orders, and bids,
pertaining to the Golf Business, other than insurance
contracts;
(g) all computer programs and like property, and all records
thereof, pertaining to the Golf Business which are owned by
Brunswick;
(h) all machinery, equipment, tooling, dies and castings
pertaining to the Golf Business;
(i) the real property and improvements owned on the date of this
Agreement by Brunswick in Torrington, Connecticut pertaining
to the Golf Business (the "Owned Premises");
(j) any claims, demands, causes of action, judgments and pending
litigation which do not relate to any Excluded Liabilities and
which are related to the Golf Business and as to which
Brunswick is or may be claimant, plaintiff, judgment creditor
or beneficiary; and
(k) goodwill, going concern value or any other intangible asset
not listed above pertaining to the Golf Business.
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1.8 "Golf Business" means the golf shaft manufacturing, marketing and
distribution business of Brunswick, which has an operations facility in
Torrington, Connecticut.
1.9 "Golf Intangible Assets" means those trade names, trade secrets,
know-how, copyrights, service marks, trademarks, patents or applications
therefore owned by Brunswick relating solely to the Golf Business (other than
any name or xxxx which includes as a part thereof "Brunswick" or any derivation
thereof) (each of which is listed on Schedule 4.8 (other than unregistered
copyrights)), and such rights as Brunswick may have to xxx for past infringement
thereof, and those licenses listed on Schedule 4.8 each of which grants to
Brunswick a license to use intellectual property rights owned by a third party
solely in the Golf Business.
1.10 "Golf Liabilities" means only the following liabilities of Brunswick
relating to the Golf Business existing on the Closing Date (except the Excluded
Liabilities):
(a) the obligations of Brunswick relating to events and
circumstances taking place on and after the Closing Date,
or accruing or becoming payable during the period beginning
on the Closing Date, and in each case arising under the
agreements, options, contracts, distributor agreements,
sales representative agreements, leases, license
agreements, instruments, purchase orders, sales orders, and
commitments (including outstanding bids) ("Contracts") set
forth on Schedule 4.6 pertaining to the Golf Business which
are to be assigned to Buyer by Brunswick pursuant to this
Agreement ("Contract Obligations");
(b) other current liabilities (except liability for any income,
sales, use and franchise taxes and insurance) incurred by
Brunswick in the ordinary course of the Golf Business and
existing at the Closing Date;
(c) additional current liabilities (except liability for any
income, sales, use and franchise taxes and insurance)
relating to events and circumstances taking place on and
after the Closing Date, or accruing or becoming payable
during the period beginning on the Closing Date, and in
each case arising under the agreements, options, contracts,
distributor
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agreements, sales representative agreements, leases, license
agreements, instruments, purchase orders, and commitments
(including outstanding bids) (collectively with the Contracts,
"Golf Contracts") entered into by Brunswick prior to the
Closing Date in the ordinary course of the Golf Business of a
kind not required to be reflected on Schedule 4.6, which are
to be assigned to Buyer by Brunswick pursuant to this
Agreement (collectively with the Contract Obligations,
"Contractual Obligations");
(d) any sales, use, transfer or other tax or recording cost or
other similar tax resulting from the sale or transfer of the
Golf Assets or the assumption of the Golf Liabilities
hereunder;
(e) warranty claims for defective products of the Golf Business
manufactured by Brunswick prior to the Closing Date, but
excluding any of such claims which were asserted prior to the
Closing;
(f) the employee pension and welfare benefit obligations
assumed by Buyer pursuant to Section 5 hereof;
(g) all vacation, termination and severance pay and accrued
sickness benefits for all employees of the Golf Business who
are employed by Brunswick on the Closing Date and who are
employed by Buyer immediately thereafter;
(h) all product liability claims for which Buyer is liable
under Section 8.3;
(i) all real estate, personal property and ad valorem taxes
relating to the Golf Assets which have been accrued but are
not payable prior to the Closing Date, or which accrue after
the Closing Date; and
(j) the liabilities and obligations relating to environmental
matters assumed by Buyer pursuant to Section 6.5 hereof.
1.11 "Permitted Encumbrances" means any of the following:
(a) liens in connection with the Golf Business securing taxes,
assessments, fees or other governmental charges or levies, or
securing the claims of materialmen, mechanics, carriers,
warehousemen, landlords and other similar persons;
(b) liens incurred or deposits made in the ordinary course of
the Golf Business (i) in connection with workers'
compensation, unemployment insurance, social security and
other similar laws or (ii) to secure the
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performance of bids, tenders, sales, contracts, public or
statutory obligations not incurred in connection with the
borrowing of money, the obtaining of advances or the payment
of the purchase price of property or services; and
(c) reservations, exceptions, easements, leases and other similar
title exceptions or encumbrances affecting real property
(including, without limitation, all matters set forth on
Schedule B of the Commitment (as hereafter defined)), provided
they do not in the aggregate materially interfere with the use
of such property in the ordinary course of the Golf Business.
1.12 "To Brunswick's knowledge," "To the best of Brunswick's knowledge"
and similar phrases only mean what those persons listed on Schedule 1.12 know or
should have known in the reasonable performance of their job responsibilities.
Section 2. Purchase Price; Closing; Transactions at Closing.
2.1 Purchase Price. The total purchase price for the Golf Assets shall be
$6,000,000 in cash, plus the assumption of the Golf Liabilities pursuant to
Section 2.3.2, subject to adjustment as provided in Section 2.6.3.
2.2 Closing Date. The Closing hereunder shall take place at the office of
Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00
a.m. Chicago time, on May 31, 1996, or at such other place or time as Brunswick
and Buyer may agree.
2.3 Transactions at Closing. At the Closing, and on the basis of the
representations, warranties, covenants and agreements made herein and in the
exhibits and schedules hereto and in the certificates and other instruments
delivered pursuant hereto, and subject to the terms and conditions hereof:
2.3.1 Transfer of Assets. Brunswick shall transfer and convey to
Buyer, and give possession to Buyer (where the context so permits) of, all of
the Golf Assets, delivering to
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Buyer bills of sale and assignments and documents of conveyance each duly
executed and acknowledged by Brunswick, and such other good and sufficient
instruments of transfer and conveyance as shall be effective to vest in Buyer
good and valid title to all of the Golf Assets, free and clear of all liens
(except for tax liens for taxes not yet due and payable), encumbrances, charges,
imperfections of title, restrictions, equities and claims of every kind, except
for Permitted Encumbrances and as set forth on Schedule 4.3. The Owned Premises
shall be conveyed by Brunswick to Buyer at the Closing by Special Warranty Deed
in statutory form and Brunswick shall also make the deliveries required by
Section 2.3.3. In addition, Brunswick shall cause to be delivered the opinion
required by Section 7.2.
2.3.2 Payment. In consideration for the transfer of the Golf Assets,
Buyer shall pay to Brunswick $6,000,000 by wire transfer of immediately
available funds directly to Brunswick Corporation's Account No. 05-00259 at The
First National Bank of Chicago, Chicago, Illinois (ABA No. 0710-00013), and
shall deliver to Brunswick an instrument or instruments, acceptable to counsel
for Brunswick, whereby Buyer assumes the Golf Liabilities. In addition, Buyer
shall cause to be delivered the opinion required by Section 7.1.
2.3.3 Real Estate Provisions.
(a) Brunswick has provided to Buyer or provided Buyer an
opportunity to review a copy of each of the documents
referenced in this Section 2.3.3:
(i) All existing and proposed easements, covenants,
restrictions, agreements, options, contracts and other
documents which affect the Owned Premises, are known to
Brunswick and are not disclosed by the Commitment (as
hereafter defined), including
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service, maintenance, utility and operating agreements
affecting the Owned Premises and any agreements relating
to the sale, leasing, or management of the Owned
Premises;
(ii) A preliminary owner's title report and owner's title
insurance commitment for the Owned Premises (the
"Commitment") issued by a financially responsible title
insurance company ("Title Company") authorized to issue
title insurance in the State of Connecticut, and
reasonably acceptable to Buyer;
(iii) A current ALTA survey of the Owned Premises certified to
Buyer, the Title Company and Star Bank, N.A.;
(iv) All existing and currently relevant reports in
Brunswick's possession or control relating to the soil,
seismological, geological, and drainage conditions and
the flood characteristics of the Owned Premises;
(v) All environmental assessments or impact reports in
Brunswick's possession or control relating to the Owned
Premises that are currently relevant to the Owned
Premises, and all approvals, conditions, orders, or
declarations issued by any governmental authority
relating to it that are currently relevant to the Owned
Premises; and
(vi) All building plans and drawings, any warranties
affecting the Owned Premises, any structural,
mechanical, engineering or
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other reports, and any other information in Brunswick's
possession or control related to the improvements located on
the Owned Premises.
(b) In addition to the warranty deed referred to in Section 2.3.1
above, Brunswick shall deliver to Buyer at the Closing an
affidavit in form satisfactory to Buyer that Brunswick is not
a "foreign person" within the meaning of Section 1445(f)(3) of
the Internal Revenue Code of 1986, as amended (the "Code").
(c) Brunswick at its own expense shall cause the Title Company
to deliver to Buyer at the Closing a 1992 ALTA Owner's
Policy of Title Insurance or an unconditional marked-up
commitment for the same, in the amount of $200,000,
together in either case with such endorsements as Buyer may
request, showing fee title to the Owned Premises vested in
Buyer subject only to the Permitted Encumbrances (the
"Title Policy"). The Title Policy shall contain the
following endorsements: (i) a statement deleting all
standard printed exceptions; (ii) an access endorsement,
insuring, among other matters, that the Owned Premises and
all entrances, exits, driveways and access roads adjoin a
public road or highway; (iii) an ALTA 3.1 zoning
endorsement, if available; and (iv) affirmative insurance
of the state of facts revealed by the current ALTA survey
described in Section 2.3.3(a)(iii). At the Closing,
Brunswick shall sign and deliver to Buyer and the Title
Company an affidavit with respect to
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off-record title matters in the form promulgated by the
Connecticut Bar Association.
2.4 Consistent Treatment. The parties hereto agree to (a) allocate the
purchase price among the Golf Assets and the covenant not to compete set forth
in Section 10 in accordance with Section 1060 of the Code and Schedule 2.4, (b)
treat and report the transactions contemplated by this Agreement in all respects
consistently for purposes of any federal, state or local tax, and (c) not take
any action inconsistent with such obligation.
2.5 Procedures for Assets Not Transferable. If any of the contracts or
agreements or any other property or rights included in the Golf Assets is not
assignable or transferable either by virtue of the provisions thereof or under
applicable law without the consent of some party, this Agreement and the related
instruments of transfer shall not constitute an assignment or transfer thereof
and Buyer shall not assume Brunswick's obligations with respect thereto, but
Brunswick shall use all commercially reasonable efforts to obtain such consent
as soon as possible after the Closing Date or otherwise obtain for Buyer the
practical benefit of such property or rights, and Buyer shall use all
commercially reasonable efforts to assist in that endeavor. In the event that
any purchase order included in the Golf Assets is not assigned by Brunswick,
Buyer agrees to purchase from Brunswick at the contract price all property
thereunder which Brunswick is obligated to purchase, and Brunswick agrees to
sell the same to Buyer at such price. In the event that any sales order included
in the Golf Assets is not assigned by Brunswick, Buyer agrees to sell to
Brunswick any products required to complete such contracts at the same price
provided for therein and otherwise to complete such contracts on behalf of
Brunswick, and Brunswick agrees to purchase the same from Buyer at such price.
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Buyer shall provide all services and bear all costs necessary to complete such
contracts, and Brunswick shall hold for Buyer's account and promptly remit to
Buyer all amounts received with respect to such contracts. If Brunswick fails to
comply with the provisions of this Section 2.5, Buyer on 30 days advance written
notice to Brunswick may undertake to complete such contracts and collect amounts
due thereunder in the name of Brunswick. Notwithstanding the foregoing, the
parties agree that (a) all consents required to be obtained by Brunswick shall
be obtained solely at Brunswick's expense, and (b) no obligation is hereunder
imposed on Buyer to incur any expense in assisting Brunswick in obtaining any
consents as to which Brunswick has indicated it will not reimburse Buyer.
2.6 Purchase Price Adjustment.
2.6.1 Closing Balance Sheet. As soon as practicable, but within 45
days after the Closing Date, a balance sheet of the Golf Assets and Golf
Liabilities as of the close of business on the Closing Date (the "Closing
Balance Sheet") shall be prepared by Brunswick. The Closing Balance Sheet shall
be prepared on a basis consistent with the preparation of the Balance Sheet,
except that the Closing Balance Sheet shall include within "account payable" the
amount of $87,000 relating to an agreement between Buyer and Brunswick with
respect to the NAPCO plater. The Closing Balance Sheet prepared by Brunswick
shall then be audited by Xxxxxx Xxxxxxxx LLP, Brunswick's independent public
accountants, solely for purposes of determining whether the Closing Balance
Sheet has been prepared on a basis consistent with the preparation of the
Balance Sheet and to give effect to the physical inventories taken by Brunswick
shortly prior to the Closing Date. The cost of the audit shall be borne by
Brunswick. Inventory values shall be based on the physical inventories taken by
Brunswick in
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April 1996 and shall be on the cost (computed on a last-in first-out basis)
method of accounting.
2.6.2 Resolution of Disputes. Buyer and its accountants shall be
entitled to observe and consult with Brunswick and its accountants during the
preparation of the Closing Balance Sheet. Xxxxxx Xxxxxxxx LLP shall make its
workpapers available to Buyer and its accountants at the time of the delivery of
the Closing Balance Sheet to Buyer. Buyer may propose any adjustments to the
Closing Balance Sheet required such that the Closing Balance Sheet shall have
been prepared on a basis consistent with the preparation of the Balance Sheet,
provided that the aggregate amount of such adjustments exceeds $5,000 and that
Buyer shall notify Brunswick in writing of the proposed adjustments, specifying
the amount thereof and setting forth, in reasonable detail, the basis for each
such adjustment, within 20 days of Buyer's receipt of the Closing Balance Sheet.
In the event of a dispute with respect to a proposed adjustment, Buyer and
Brunswick shall attempt to reconcile their differences, and any resolution by
them as to any disputed amounts shall be final, binding and conclusive on the
parties. If the Buyer and Brunswick are unable to reach a resolution of such
dispute(s) within 20 days, Buyer or Brunswick may submit the items remaining in
dispute for resolution to an independent accounting firm of national reputation
mutually appointed by Buyer and Brunswick, or if the parties are unable to agree
upon such accounting firm, then Price Waterhouse LLP shall be selected (such
accounting firm being herein referred to as the "Independent Accounting Firm").
The Independent Accounting Firm shall, within 20 days after submission,
determine and report to the parties upon such disputed items, and such report
shall be final, binding and conclusive on the parties hereto. The unsuccessful
party shall pay
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the fees and charges of the Independent Accounting Firm; provided, however, that
if more than one dispute is raised, the party whose claims, in amount of
dollars, was the most unsuccessful shall be deemed the unsuccessful party.
2.6.3 Additional Payment. If the net book value of the Golf Assets
transferred to Buyer, less the Golf Liabilities assumed by Buyer, as such
amounts are shown in the Closing Balance Sheet is less than $16,272,929,
Brunswick shall refund to Buyer the difference between those two amounts on a
dollar-for-dollar basis. If the net book value of such assets less such
liabilities shown on the Closing Balance Sheet is more than $16,272,929, Buyer
shall pay Brunswick the difference between such amounts on a dollar-for-dollar
basis. Any amount due under this Section 2.6.3 shall be paid within five
business days of the completion of the Closing Balance Sheet and the resolution
of all disputes with respect thereto. Either of such payments shall bear
interest at the prime rate charged by the First National Bank of Chicago from
the Closing Date to the date of payment.
Section 3. Representations, Warranties, Agreements and Covenants of
Buyer. Buyer represents and warrants to, and agrees with, Brunswick as
follows:
3.1 Organization. Buyer is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware and is duly
qualified to do business in Connecticut.
3.2 Authority. Buyer has full corporate power and authority to execute,
deliver and perform this Agreement and all of the other agreements and documents
executed in connection herewith (including a document pursuant to which Buyer
assumes the Golf Liabilities) (all other agreements and documents executed in
connection herewith are herein referred to as the
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"Related Agreements"), and the execution and delivery of this Agreement and the
Related Agreements and the performance of all obligations hereunder and
thereunder have been duly authorized by Buyer and such execution and delivery
does not require the consent, approval or authorization of any person, public
authority or entity; and neither the execution and delivery nor the performance
of this Agreement or the Related Agreements will violate the Certificate of
Incorporation or the By-Laws of Buyer, or any indenture, loan agreement,
contract or instrument to which Buyer is a party or by which it is bound or any
applicable law, rule, regulation, judgment, order, writ, injunction or decree of
any court or government or governmental instrumentality. This Agreement has been
duly executed and delivered by Buyer and constitutes, and each Related
Agreement, when duly executed and delivered by Buyer will constitute, the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms except as enforcement thereof may be limited by bankruptcy,
insolvency and other laws affecting the enforcement of creditors' rights
generally.
3.3 Consents. Except as shown on Schedule 3.3, no notice to, filing with,
authorization of, exemption by, or consent of, any person, entity or public or
governmental authority is required for Buyer to consummate the transactions
contemplated hereby.
3.4 Litigation. Except as disclosed in Schedule 3.4, there is no
litigation, proceeding or claim pending or threatened relating to Buyer's
ability to purchase or operate the Golf Business or assume the Golf Liabilities
related thereto.
Section 4. Representations, Warranties, Agreements and Covenants of
Brunswick. Brunswick represents and warrants to, and agrees with, Buyer as
follows:
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4.1 Organization. Brunswick is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware duly qualified
to transact business as a foreign corporation in Connecticut. Brunswick has the
full power and authority (corporate and otherwise) to engage in the business in
which it is now engaged. The Golf Assets do not include any shares or other
equity interests of any corporation, limited liability company, or partnership.
4.2 Authority. Brunswick has full corporate power and authority to
execute, deliver and perform this Agreement and all Related Agreements, and the
execution and delivery of this Agreement and the Related Agreements and the
performance of all obligations hereunder and thereunder have been duly
authorized by Brunswick and such execution and delivery does not require the
consent, approval or authorization of any person, public authority or other
entity. The signing, delivery and performance of this Agreement and the Related
Agreements by Brunswick is not prohibited or limited by, and will not result in
the breach of or a default under, any provision of the Certificate of
Incorporation or By-Laws of Brunswick or of any agreement, franchise, permit or
instrument binding on Brunswick or any of the Golf Assets, or of any applicable
law, rule, regulation, judgment, order, writ, injunction or decree of any court
or government or governmental instrumentality, and will not result in the
creation or imposition of any lien, encumbrance, equity, restriction or charge
on any of the Golf Assets. This Agreement has been duly executed and delivered
by Brunswick and constitutes, and each Related Agreement, when duly executed and
delivered by Brunswick will constitute, the legal, valid and binding obligation
of Brunswick, enforceable against Brunswick in accordance with its terms except
as enforcement thereof may be limited by bankruptcy, insolvency and other
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laws affecting the enforcement of creditors' rights generally. Schedule 4.2 is a
true and correct list of all persons whose consents are needed to transfer the
Golf Assets to Buyer, except for any consents from purchasers of Golf Business
products whose consent is required as a result of a purchase order. Brunswick
shall use commercially reasonable efforts to obtain the consents of the persons
listed on Schedule 4.2 and the consents of such purchasers of Golf Business
products as Buyer requests.
4.3 Title. Brunswick has good and valid title to all Golf Assets; and
except for Permitted Encumbrances and as set forth on Schedule 4.3, none of such
property is held by Brunswick under any lease or conditional sales contract, or
is subject to any security agreement, lien (except for tax liens for taxes not
yet due and payable), encumbrance, charge, equity or claim. Upon delivery to
Buyer of the bills of sale and assignments referred to in Section 2.3.1, Buyer
will receive good and valid title to all of the Golf Assets, free and clear of
all liens (except for tax liens for taxes not yet due and payable),
encumbrances, charges, imperfections of title, restrictions, equities and claims
of every kind, except for Permitted Encumbrances and as set forth on Schedule
4.3. Brunswick has no knowledge of any pending or contemplated proceeding for
the review or adjustment of the real estate tax assessment of the Owned
Premises. Brunswick has not filed an appeal or protest for the real estate tax
assessment of the Owned Premises for the current tax period. Brunswick has not
received notice of any pending condemnation action against the Owned Premises or
any part thereof, nor does Brunswick have knowledge of any such condemnation
actions being threatened or contemplated. Brunswick has not received any notice
of existing actions, suits, proceedings, judgments, orders, decrees, defaults,
delinquencies, or deficiencies pending or outstanding
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against the Owned Premises or Brunswick which would affect Brunswick's ability
to perform its obligations under this Agreement and the Related Agreements, or
Brunswick's use and occupancy of the Owned Premises. Except as noted above, to
the best of Brunswick's knowledge, no such matters are threatened. Other than in
connection with Brunswick's agreement pursuant to Section 6.5.1, there are no
agreements with governmental authorities, agencies, utilities, or
quasi-governmental entities which affect the Owned Premises. Other than in
connection with Brunswick's agreement pursuant to Section 6.5.1, Brunswick knows
of no facts or conditions which would prevent Buyer from operating the Owned
Premises after the Closing in substantially the same manner as Brunswick
operated the Owned Premises immediately prior to the Closing. There are not, and
at the Closing there will not be, any tenants or lessees on or of the Owned
Premises or any part thereof arising through or under Brunswick. To the best of
Brunswick's knowledge, the documents submitted or to be submitted to Buyer
pursuant to this Agreement and the Related Agreements include, and will include
when submitted, all Contract Obligations to which Brunswick or its agents are
party which affect the Owned Premises. No agreement exists which provides for
the management of the Owned Premises by any person other than Brunswick.
Brunswick is not a "foreign person" within the meaning of Section 1445(f)(3) of
the Code. To the best of Brunswick's knowledge, there are no private or public
cemeteries or graveyards, Native American burial grounds, Native American
artifacts or other archaeological significant artifacts, and no endangered
species or endangered or protected plants, located on, under or about the Owned
Premises. No part of the Owned Premises has been listed or designated as an
historical landmark or
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historically significant site. The only interest in real property owned or used
by Brunswick in connection with the Golf Business is the Owned Premises.
4.4 Financial Statements. The balance sheet as of, and statement of income
for the year ended, December 31, 1995, of the Golf Business, a copy of which is
attached hereto as Exhibit B, has been prepared from the books and records of
Brunswick and fairly present the financial position, assets and liabilities of
the Golf Business at such date and the results of its operations for such year
and are in accordance with the books and records of Brunswick, which books and
records are correct and complete. There are no attorneys' letters to auditors
relating to the Golf Business.
4.5 Inventories. All inventories of Brunswick reflected in the Balance
Sheet were in existence on December 31, 1995 and the amounts thereof so shown
reflect, and the amounts on the Closing Balance Sheet shall reflect valuations
on the cost (computed on a last-in first-out basis) method of accounting, and
none of the inventories of the Golf Business subsequent to December 31, 1995 has
been stolen or otherwise unlawfully or improperly removed or diverted.
4.6 Certain Contracts. Schedule 4.6 is a full and complete list (subject,
in the case of clauses (a), (b), (g), (i) and (l) below, to the dollar amount
indicated therein, and in the case of clause (f), the time limitations indicated
therein) of all agreements, options, contracts, leases and instruments (but
excluding (x) contracts and agreements made in connection with Brunswick's sale
of the Golf Business that do not constitute Golf Assets, (y) employment
agreements for employment at will, and (z) purchase orders, sales orders,
service orders (other than as described in clause (g)) accounts payable and
accounts receivable made in the ordinary
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course of the Golf Business) to which Brunswick is a party or by which Brunswick
or the Golf Assets are bound, and which relate to the Golf Business, including
without limitation (a) each contract for the disposition, sale, lease (where
Brunswick is lessor) or otherwise, of equipment, goods, materials, research and
development, supplies, studies, capital assets, or for the performance of
services, in any case involving more than $1,000, (b) contracts for the joint
performance of work or services, and all other joint venture, partnership or
other similar agreements, (c) notes, mortgages, deeds of trust, loan agreements,
security agreements, guarantees, debentures, indentures, credit agreements,
warehousing agreements, repurchase agreements and other evidences of
indebtedness other than endorsements for collection or deposit in the ordinary
course of business, (d) licenses, sublicenses, royalty agreements and any other
contract to which Brunswick is a party, or otherwise subject, relating to
technical assistance, proprietary rights, confidentiality, non-disclosure, or
non-use and related to the Golf Business, (e) deeds (other than those relating
to Brunswick's acquisition of the Owned Premises) or contracts relating to the
Owned Premises, (f) leases, whether as lessor or lessee, with respect to
individual items of personal property which are not terminable without penalty
in 30 days, (g) contracts for the purchase of any equipment, capital assets or
services, except individual service orders made in the ordinary and usual course
of the Golf Business involving less than $1,000, provided, however, that if the
aggregate of such individual service orders from one party exceeds $50,000, such
information shall be included on Schedule 4.6, (h) contracts containing
covenants limiting the freedom of Brunswick to compete in the Golf Business or
to engage in the Golf Business in any geographic area, but excluding this
Agreement and any agreements with distributors or sales representatives, (i)
each other written
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or oral agreement of Brunswick made in the ordinary course of the Golf Business
to be assumed by Buyer which involves future payments by or to Brunswick after
the Closing Date of more than $1,000, (j) all agreements with distributors or
sales representatives for the Golf Business, (k) letters of credit related to
the Golf Business, and (l) each other contract related to the Golf Business not
made in the ordinary course of the Golf Business which involves future payments
by or to Brunswick of more than $1,000 or is not to terminate or is not
terminable without penalty to Buyer prior to 30 days from the Closing Date, and
which is to be performed at or after the Closing Date. Schedule 4.6 also lists
each outstanding proposal of Brunswick related to the Golf Business that
involves total payments to Brunswick in excess of $1,000 and is subject to
acceptance by third parties or could otherwise become a new sales contract.
Brunswick has made available to Buyer for its review and examination, written
summaries of all oral contracts referred to in this Section 4.6 and has provided
to Buyer or made available to Buyer for its review and examination true and
correct copies of all of such written contracts referred to in this Section 4.6
and all notices received by Brunswick pursuant to such contracts. Each of such
contracts is a legal, binding and enforceable obligation of or against Brunswick
except as enforcement thereof may be limited by bankruptcy, insolvency and other
laws affecting the enforcement of creditors' rights generally. Brunswick has
made available to Buyer true and correct copies of its standard invoice terms,
standard purchase order terms, all product warranties and any correspondence in
its possession from customers of the Golf Business relating to cancellations of
orders or complaints about quality or service. Schedule 4.6 also contains a true
and correct listing, by year, of the aggregate dollar value of (a) all
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warranty expense of the Golf Business for each of the past five years, and (b)
all product liability claims asserted against the Golf Business for each of the
past five years.
4.7 Fixed Assets. Schedule 4.7 is a full and complete list of the fixed
assets of Brunswick reflected on the Balance Sheet, showing cost, and net book
value, as of the date of the Balance Sheet; a list of all other Golf Assets
(other than goodwill, inventory, and trade accounts receivable) reflected on the
Balance Sheet at an amount exceeding $50,000; and a list of all fixed assets of
Brunswick related to the Golf Business acquired or disposed of by Brunswick
between December 31, 1995 and April 26, 1996. Except for the Excluded Assets,
corporate administrative services (including, but not limited to, legal,
accounting, tax, risk management, financial planning, benefit administration and
similar support services) and as otherwise set forth on Schedule 4.7, the Golf
Assets constitute all of the assets necessary to conduct the Golf Business in
the manner that the Golf Business was conducted by Brunswick prior to the date
hereof.
4.8 Intangible Rights. Schedule 4.8 is a full and complete list of all of
Brunswick's trade names, registered copyrights, service marks, trademarks,
patents or applications therefor and all licenses and other rights related
thereto which are used solely in the Golf Business, except for any name or xxxx
containing the name "Brunswick" or any derivation thereof whether in English or
another language. To the best of Brunswick's knowledge, Brunswick owns or
possesses adequate licenses or other rights to use the Golf Intangible Assets,
and the same are sufficient to conduct the Golf Business as it has been and is
now being conducted. To the best knowledge of Brunswick, the operations of the
Golf Business do not conflict with or
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infringe, and no one has asserted in writing to Brunswick that such operations
conflict with or infringe, any trade name, copyright, service xxxx, trademark or
patent or any other similar right ("Intangible Rights") owned, possessed or used
by any third party. To the best knowledge of Brunswick, there are no third
parties whose operations conflict with or infringe, nor has anyone asserted in
writing that such operations conflict with or infringe, any Golf Intangible
Assets. The Golf Intangible Assets are owned free and clear of all encumbrances
or have been duly licensed for use by Brunswick. Except as set forth on said
Schedule 4.8, to the best knowledge of Brunswick, there are no facts which would
reasonably serve as a basis of any claim that Brunswick does not have the
unrestricted right to use, free of any rights or claims of others, all Golf
Intangible Assets in the development, provision, use, sale or other disposition
of any or all products or services presently being or contemplated to be, used,
furnished or sold in the Golf Business.
On the Closing Date all the Golf Intangible Assets shall have been duly
transferred to Buyer, so as to vest in Buyer all right, title and interest
therein, and Brunswick shall, at its sole expense, make, execute and deliver
recordable assignments to effect and evidence such transfers as may be
reasonably requested by Buyer.
4.9 Litigation. Except with respect to any environmental matters (which
matters are the subject of Section 4.13), Schedule 4.9 is a true and complete
list and brief description of all litigation, proceedings and claims affecting
the Golf Business (by or against Brunswick or any predecessor) pending or, to
the knowledge of Brunswick, threatened against Brunswick, and the litigation
described on Schedule 4.9 does not constitute a Golf Liability. Except with
respect to any environmental matters (which matters are the subject of Section
4.13) and as set forth in Schedule 4.9, and whether or not covered by insurance,
there is no action, proceeding,
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suit or appeal or, to the best knowledge of Brunswick, claim, dispute,
investigation or inquiry, at law or in equity, involving Brunswick with respect
to the Golf Business, or involving any of the Golf Assets or Golf Liabilities,
and to the best knowledge of Brunswick, none has been threatened against
Brunswick. Except with respect to any environmental matters (which matters are
the subject of Section 4.13), Brunswick, with respect to the Golf Business, is
not subject to any order, writ, injunction or decree of any court, agency,
authority, arbitration panel or other tribunal.
4.10 Employee Benefits. Schedule 4.10 is a list of all employee contracts
(other than oral agreements for employment at will), benefit plans, and
arrangements pertaining to the Golf Business (including all collective
bargaining, employment, compensation, pension, retirement, consulting,
severance, separation, incentive, hospitalization, vacation, sickness,
insurance, welfare, profit sharing and bonus plans and agreements but excluding
any agreements relating to retention bonuses to be paid to certain officers and
employees of the Golf Business by Brunswick) under which Brunswick has any
obligation. Brunswick has furnished to Buyer or provided Buyer with an
opportunity to review copies of instruments evidencing all such contracts,
benefit plans and arrangements and (a) all determination letters, audit reports
and other correspondence with any governmental body or officer concerning such
contracts, benefit plans and arrangements, (b) all benefit plan financial
statements, forms 5500 and actuarial reports, (c) any documents evidencing any
transactions between a benefit plan and any other person (other than the payment
of benefits, cash contributions and the purchase of professional services in the
ordinary course and the purchase and sale of investments in the
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ordinary course) and (d) information as to the amount of any allocable unfunded
vested benefits in any employee benefit plan.
4.11 Defaults. Except as listed on Schedule 4.11, Brunswick has performed
in all respects, or is now performing in all respects, the obligations of, and
is not in default (and would not by the lapse of time and/or the giving of
notice be in default), nor has it received notice of default or notice of
termination, in respect of any contract listed on any schedule to this
Agreement. Except as set forth in Schedule 4.11 (or as shown on Schedule 4.19
with respect to receivables), to the best knowledge of Brunswick, no party with
whom Brunswick has a contract listed on any schedule to this Agreement is in
payment or other monetary default, or to the best knowledge of Brunswick, any
other default, thereunder or has breached any terms or provisions thereof. To
the best knowledge of Brunswick, there are no facts or circumstances which make
a default under, or termination or suspension of, any of the contracts referred
to in Section 4.6 likely to occur subsequent to the date hereof, nor has any
third party raised any claim, dispute or controversy with respect to such
contracts.
4.12 Material Adverse Change. Except as set forth on Schedule 4.12 or as
specifically disclosed and identified as such on the exhibits or schedules to
this Agreement, there has not been since December 31, 1995 (a) any change which,
individually or in the aggregate, has had a material adverse effect on the
business, condition (financial or otherwise), assets, liabilities or obligations
of the Golf Business, other than such changes as may affect in general the
industry in which the Golf Business participates, or (b) any damage, destruction
or loss (including, without limitation, by reason of revocation of license or
right to do business, total or partial termination, suspension, default or
modification of contracts, governmental
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restriction, regulation, investigation or inquiry), whether or not covered by
insurance, materially and adversely affecting the business, condition (financial
or otherwise), assets or properties of Brunswick related to the Golf Business,
or (c) any entering into by Brunswick with respect to the Golf Business of any
transaction or contract, except in the ordinary and usual course of the Golf
Business, nor any waiver by Brunswick with respect to the Golf Business of any
right of substantial value or cancellation of any material debts or claims or
voluntarily suffering of any extraordinary losses, or (d) any amendment or
supplement to, or extension of, any employee profit-sharing, pension, bonus
(other than certain retention bonuses to be paid to certain officers and
employees of the Golf Business by Brunswick), incentive, retirement, medical
reimbursement, life insurance, deferred compensation or any other employee
benefit plan or arrangement to which employees in the Golf Business participate,
or (e) any material problems experienced by Brunswick with respect to the Golf
Business in employee relations, including, without limitation, strikes,
shutdowns, slowdowns, work stoppages or resignations of key employees in the
Golf Business, or (f) payment or prepayment of any material obligation or
liability (fixed, contingent or otherwise), or discharge or satisfaction of any
material lien or encumbrance, or settlement of any material liability, dispute,
proceeding, suit or appeal, pending or threatened against Brunswick with respect
to the Golf Business or the Golf Assets, except for current liabilities included
in the balance sheet attached hereto as Exhibit B, current liabilities incurred
since December 31, 1995 in the ordinary and usual course of the Golf Business,
and the settlement of the lawsuit between Brunswick and NAPCO, Inc. (which
settlement is subject to the approval of the United States Bankruptcy Court for
the District of Connecticut), or (g) except for individual expenditures
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and commitments made in the ordinary and usual course of the Golf Business, any
expenditure made by Brunswick for the purchase, acquisition, construction or
improvement of a capital asset which is a Golf Asset, or (h) any entering into
by Brunswick of any agreement or commitment, whether in writing or otherwise, to
take any action described in this Section 4.12.
4.13 Environmental Matters. Except as set forth in Schedule 4.13, to the
best of Brunswick's knowledge, the Golf Business has obtained all permits,
licenses and other authorizations which are required for the operation of the
Golf Business under applicable federal, state and local laws relating to
pollution or protection of the environment, including laws relating to
emissions, discharges, releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
(including without limitation ambient air, surface water, ground water or land),
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes
("Environmental Laws"). Except as set forth in Schedule 4.13, to the best of
Brunswick's knowledge, the Golf Business is in compliance in all respects with
all terms and conditions of such permits, licenses, decrees, judgments, orders
and authorizations. Except as set forth in Schedule 4.13, to the best of
Brunswick's knowledge, the Golf Business is in compliance in all material
respects with all federal, state and local Environmental Laws, whether or not
those require permits, licenses or other authorizations. Except as set forth in
Schedule 4.13, to the best of Brunswick's knowledge there are no hazardous
substances located in, on or under the Owned Premises. Brunswick has disclosed
to its contractor, GZA GeoEnvironmental, Inc.,
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the existence of all known hazardous substances located in, on or under the
Owned Premises so that the environmental investigations performed by it can
address fully the conditions on the Owned Premises. Except as set forth in
Schedule 4.13, to the best of Brunswick's knowledge, Brunswick, with respect to
the Golf Business, has not received notice of, any claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge or release into the
environment, of any pollutant, contaminant, chemical, or industrial toxic or
hazardous substance or waste which could reasonably be expected to have a
material adverse effect on the Golf Assets or on the financial condition,
business or results of operations of the Golf Business. Except as set forth in
Schedule 4.13, there is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice or demand letter, notice of violation,
investigation or proceeding pending or, to the best of Brunswick's knowledge,
threatened against Brunswick with respect to the Golf Business relating in any
way to those laws or any regulation, code, plan, order, decree, judgment or
injunction promulgated or approved thereunder.
4.14 Guarantees. Except as otherwise noted on Schedule 4.14, none of the
Golf Liabilities is guaranteed by any person, firm, association or corporation.
Schedule 4.14 is a correct and complete list of all guarantees by, or other
contingent obligations (excluding contingencies related to defaults under
contractual commitments and noncompliance under laws) of, Brunswick with respect
to the Golf Business showing the parties and amounts involved and the expiration
dates thereof.
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4.15 Compensation. The attached Schedule 4.15 constitutes a full and
complete list of each officer, employee or consultant of the Golf Business
(other than Xxxxx Xxxxxx) whose total compensation from Brunswick (excluding any
retention bonuses to be paid to certain officers and employees of the Golf
Business by Brunswick) on an annualized basis exceeds $25,000, specifying their
names and job designations, the total amount paid or payable (excluding any
retention bonuses to be paid to certain officers and employees of the Golf
Business by Brunswick), the basis of such compensation, whether fixed or
commission or a combination thereof, and their current rate of pay. Except as
otherwise disclosed on Schedule 4.15, since December 31, 1995, there has been no
change in compensation, by means of wages, salaries, bonuses, gratuities or
otherwise, to any such officer, employee or consultant of the Golf Business, or
any change in compensation, other than in the ordinary and usual course of
business, to officers and employees for reimbursable business expenses.
4.16 Labor. There are no labor controversies pending or, to the best
knowledge of Brunswick, threatened against Brunswick which could reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the Golf Business.
4.17 Compliance with Laws. To Brunswick's knowledge, except as disclosed
on Schedule 4.17 and excluding any violations that have previously been
resolved, the Golf Business has been conducted in all material respects in
accordance with all applicable laws, rules, regulations, orders and other
requirements of governmental authorities, including, without limitation, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), all laws,
regulations and orders relating to antitrust or trade regulation, employment
practices and procedures, and the health and safety of employees, but excluding
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any Environmental Laws, compliance with which is the subject of Section 4.13.
Brunswick has not received any notice of alleged violations of the foregoing,
except as set forth in Schedule 4.17 or which have previously been resolved. In
particular, and without limiting the foregoing, to Brunswick's knowledge,
neither Brunswick, nor any officer, agent, employee, or other person associated
with or acting on behalf of Brunswick has, directly or indirectly, used any
corporate funds of the Golf Business for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from Golf Business funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
established or maintained any unlawful or unrecorded fund of corporate monies or
other assets of the Golf Business; made any false or fictitious entry on the
books or records of the Golf Business; made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment of a similar or comparable nature,
whether lawful or not, to any person or entity, private or public, regardless of
form, whether in money, property, or services, to obtain favorable treatment in
securing business or to obtain special concessions for the Golf Business, or to
pay for favorable treatment for business secured or for special concessions
already obtained for the Golf Business. Brunswick has furnished to Buyer or made
available to Buyer for its review copies of any and all occupational safety and
health survey information that has been prepared regarding the Owned Premises
and that is currently relevant to the Owned Premises, including, without
limitation, lead studies, particulate studies and noise studies.
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4.18 Schedules. The Schedules to this Agreement set forth all the
information concerning the Golf Business and Brunswick required in this Section
4. To the extent a statement in this Section 4 is untrue or omits to state a
material fact necessary to make such statement not misleading, the Schedules set
forth the statements necessary to make the statements in this Section 4 true and
not misleading. All information and statements set forth in the Schedules shall
be deemed to supersede and correct the statements made in this Section 4 and to
be additional representations and warranties of Brunswick.
4.19 Receivables. Schedule 4.19 sets forth a list, as of May 8, 1996, of
all trade receivables of Brunswick for sales, advances made or services rendered
in connection with the Golf Business and any other amounts in excess of $5,000
each owing to Brunswick from any person in connection with the Golf Business and
all such receivables arose in the ordinary course of the Golf Business. Except
as set forth in Schedule 4.19, such receivables are neither subject to any
offset nor counterclaim by such obligors nor any encumbrance.
4.20 Insurance. Except as set forth on Schedule 4.20, Brunswick has not
received any notices of any pending or threatened termination, nonrenewal or
material premium increases with respect to any insurance policies maintained by
Brunswick on its properties used in the Golf Business or on the Golf Business or
against liabilities incurred in the Golf Business. Except as described on
Schedule 4.20, there are no outstanding requirements or recommendations made by
or on behalf of any insurance company that issued a policy with respect to any
of the properties used in the Golf Business nor any operations or liabilities of
the Golf Business requiring or recommending any equipment or facilities to be
installed or in
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connection with any of the properties used in the Golf Business or any
operations or liabilities of the Golf Business.
4.21 Customers, Suppliers. Schedule 4.21 is a full and complete list of
(a) all customers of the Golf Business who accounted for more than five percent
of revenues in 1995 and (b) the ten largest (by dollar amount of material
supplied) suppliers that supplied material to the Golf Business in the ordinary
course of business of the Golf Business in 1995 .
4.22 Securities. Schedule 4.22 lists all the securities in the bank or
broker-dealer accounts in which Brunswick has deposited money or securities
which relate to the Golf Business, showing the name of the persons holding such
accounts, the type of account and the balance therein as of a stated date not
more than ten days before the date hereof.
4.23 Regulation. Schedule 4.23 lists all the governmental permits,
licenses and registrations held by Brunswick relating exclusively to the Golf
Business, which, except as otherwise described on Schedule 4.23, are all of the
governmental permits that Brunswick needs to carry on the Golf Business as
currently conducted without violating any law. Brunswick has not received
notice, nor does it have reason to believe, that any governmental body or
officer intends to cancel or terminate any governmental permit or that valid
grounds for such cancellation or termination currently exist.
4.24 "As is, Where is". Except as otherwise expressly provided in this
Section 4, Brunswick is making no representation or warranty as to the Owned
Premises, the Golf Assets or the Golf Business and Buyer acknowledges and agrees
that except as otherwise provided herein Brunswick is selling and conveying the
Golf Assets and the Golf Business on an "as is, where is" basis with all faults.
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Section 5. Employees' Pension and Other Benefit Plans.
5.1 Employees. The Buyer will offer employment as of the Closing Date to
all employees of the Golf Business who are actively employed on the Closing
Date, except for those listed on Schedule 5.1. Each employee of the Golf
Business who is on an approved leave of absence (including absences as a result
of workers' compensation injuries) on the Closing Date will be offered
employment by Buyer upon the termination of such leave of absence, provided the
leave of absence was the type of leave which would have entitled such employee
to resume active employment under the terms of the leave of absence policies of
the Golf Business at the date such leave of absence commenced. If upon
termination of an absence due to workers' compensation injuries an employee is
only permitted to do modified duty work, the Buyer will offer such modified duty
work to such employee to the extent such modified duty work is available.
5.2 Pension Plans. Employees of the Golf Business participate in the
following pension plans (the "Pension Plans"):
Brunswick Pension Plan for Salaried Employees
Brunswick Pension Plan for Hourly Wage Employees at the Torrington,
Connecticut Plant
Brunswick will continue to administer the Pension Plans following the Closing
Date. Participants in the Pension Plans will accrue no additional service or
benefits after the Closing Date, and participants in the Pension Plans will
receive benefits pursuant to the provisions of the Pension Plans. All
participants in the Pension Plans will be fully vested in all benefits accrued
through the Closing Date. Buyer will have no responsibility or liability with
respect to the Pension Plans.
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5.3 Other Benefit Plans. Buyer's and Brunswick's obligations and
liabilities under certain other employee benefit plans of the Golf Business
are as follows:
5.3.1 Medical Plan Claims. After the Closing Date the employees of
the Golf Business will no longer be covered by Brunswick's present medical
benefit plans. Brunswick shall retain liability for all medical claims of
employees of the Golf Business for expenses incurred prior to the Closing Date
as well as hospital expense claims arising from continuous hospitalization
periods which began prior to the Closing Date. Buyer shall provide medical
insurance coverage as of the Closing Date, with immediate eligibility without
regard for any pre-existing conditions, for all employees of the Golf Business
who were covered by Brunswick's medical benefit plans on the Closing Date and
who become employees of the Buyer on or after such date. Brunswick will comply
with applicable provisions of COBRA (Sections 601 through 607 of ERISA and
Section 4980B of the Code).
5.3.2 Disability Plan Claims. The employees of the Golf Business
will not be covered by Brunswick's present disability benefit plan after the
Closing Date. Any employee of the Golf Business or dependent of such employee
who is receiving disability plan benefits immediately prior to the Closing Date
and continues to receive benefits on and after the Closing Date and any employee
of the Golf Business and any dependent of such an employee who has filed for
disability plan claims but is in the waiting period for benefits as of the
Closing Date will be the responsibility of Brunswick for all benefit-related
expenses for as long as such employee continues to qualify for disability
benefits under the current plan provisions, as amended from time to time. A list
of those employees of the Golf Business who are
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receiving, have filed for or have qualified for disability plan benefits as of
the date of this Agreement is attached as Schedule 5.3.2.
5.3.3 Life Insurance Plan Claims. Life insurance claims, if any, for
employees of the Golf Business will be decided based on the provisions of the
applicable life insurance plans and the provisions of the master contract of the
insurer. In all cases, the language of the insurer's policy will govern.
5.4 Employee Records. Brunswick shall make available to the Buyer all
personnel records, including, but not limited to, names, Social Security
numbers, performance ratings and evaluations, dates of hire by Brunswick or any
affiliate of Brunswick, dates of birth, number of hours worked each calendar
year, and salary histories, for all of Brunswick's employees to be employed by
the Buyer from and after the Closing Date.
5.5 Termination and Severance Pay. Buyer will be responsible for any
accrued vacation and sickness benefits accrued as of the Closing Date and
reflected on the Closing Balance Sheet with respect to employees of the Golf
Business who become employed by Buyer on or immediately after the Closing Date.
Buyer shall also be responsible for all termination and severance pay for
employees of the Golf Business who are employed by Brunswick on the Closing Date
and who are employed by Buyer immediately thereafter, provided any such
termination or severance pay results from the transaction contemplated by this
Agreement or from any action taken by the Buyer or the employee on or after the
Closing Date.
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Section 6. Prorated Taxes, Brokerage Fees, Product Liability Claims,
Expenses, Environmental Matters and Cost of Asbestos and Noise Studies.
6.1 Proration of Taxes. All real estate, personal property and ad valorem
taxes relating to the Golf Assets which shall have accrued and become payable
prior to the Closing Date shall be paid by Brunswick. All such taxes which shall
be accrued but unpaid or which have been paid in advance shall be properly
reflected on the Closing Balance Sheet. In connection with such proration of
taxes, in the event that actual tax figures are not available at the Closing
Date, the taxes reflected on the Closing Balance Sheet shall be based upon the
actual taxes for the preceding year for which actual tax amounts are available
and such taxes shall be reprorated upon request of either party made within 60
days of the date that the actual amounts become available, provided that the
actual amount is at least 5% more or 5% less than the amount on which the
original proration was based.
6.2 Brokerage Fees. Brunswick and Buyer each represent, covenant, warrant
and agree with the other that it has not engaged any broker or any other person
who would be entitled to any brokerage fee or commission in respect of the
execution of this Agreement or the consummation of the transactions contemplated
hereby, except in the case of (i) Brunswick, for NationsBanc Capital Markets,
Inc., whose fees will be paid by Brunswick and (ii) Buyer, for Merbanco
Incorporated and Xxxxxxxx Xxxxxxx & Company, each of whose fees will be paid by
Buyer.
6.3 Product Liability. Brunswick agrees with Buyer that Brunswick is
solely responsible for any and all claims for injury (including death) or claims
for damage (other than warranty claims which Buyer has assumed pursuant to
Section 2.3.2), direct or consequential,
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resulting from or connected with finished products or services manufactured or
sold by the Golf Business, provided that such claims relate to injury or damage
occurring prior to the Closing Date (whether or not known to Brunswick on the
Closing Date), and Buyer shall have no liability for such claims. Buyer agrees
with Brunswick that Buyer is solely responsible for any and all claims for
injury (including death) or claims for damage (other than warranty claims which
Buyer has assumed pursuant to this Agreement), direct or consequential,
resulting from or connected with products or services manufactured or sold by
the Golf Business, provided that such claims relate to injury or damages
occurring on or after the Closing Date, and Brunswick shall have no liability
for such claims.
6.4 Expenses. Except as otherwise agreed to in this Agreement, each party
shall bear its own expenses with respect to the transactions contemplated by
this Agreement.
6.5 Environmental Matters. Brunswick's and Buyer's obligations and
liabilities with respect to environmental matters relating to the Golf
Business are as follows:
6.5.1 Brunswick's Obligations. (a) Brunswick agrees with Buyer that
Brunswick will submit Property Transfer Program-Form III and sign Section C
thereof as the Certifying Party under the Connecticut Transfer Act (Connecticut
General Statutes Section 22a-134 et. seq.) (the "Transfer Act") in connection
with the transfer and sale of the Owned Premises to Buyer in accordance with
this Agreement. Brunswick agrees to commence investigation and remediation of
the Owned Premises as required under the Transfer Act without undue delay, and
to use reasonable efforts to cause such investigation and remediation to occur
in such a manner so as to minimize the disruption of the Buyer's business. If,
during the course of any investigation or remediation of the Owned Premises
undertaken by Brunswick pursuant to the
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Transfer Act, Brunswick discovers previously unknown hazardous substances that
were present in, on or under the Owned Premises on the Closing Date and that
require remediation under the Transfer Act, Brunswick shall be solely
responsible for remediation of those hazardous substances in accordance with the
Transfer Act.
(b) Brunswick further agrees with Buyer that Brunswick is solely liable
for any and all liabilities (including all costs of required remediation of
environmental pollution), any and all claims for injury (including death) or
claims for damage, direct or consequential, to property or any person or entity,
resulting from the release by Brunswick or any prior owner of the Owned Premises
of any hazardous substance located in, on or under, or emanating from, the Owned
Premises if (i) such release occurs prior to the Closing Date, (ii) such release
is known to Brunswick as of the date of this Agreement or is discovered during
any investigation or remediation of the Owned Premises undertaken by Brunswick
pursuant to the Transfer Act and is required to be remediated by the Transfer
Act, and (iii) the claim relating to such release is made on or before the date
that is 25 years after the date of this Agreement, and Buyer shall have no
liability therefor; provided however, that Brunswick shall be solely
responsible, without regard to knowledge and without regard to the 25 year
period, for all such liabilities and claims resulting from any release by
Brunswick or any prior owner of the Owned Premises of any material that reaches
any location outside the Owned Premises prior to the Closing Date regardless of
whether the claims are made before or after the Closing Date.
(c) Brunswick also agrees with Buyer that Brunswick is solely responsible
(as between Brunswick and Buyer) for any and all claims for injury (including
death) or claims for damages to any property or person or entity (but excluding
claims for lost profits or consequential
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damages) resulting from the acts of Brunswick's employees or agents or any
persons hired by Brunswick in performing any investigation or remediation of the
Owned Premises under the provisions of the Transfer Act or any other remediation
program undertaken by Brunswick with respect to the Owned Premises.
(d) Brunswick represents that to the extent required by any Environmental
Law it has reported to the appropriate government agency all violations of
Environmental Laws by the Golf Business that are both known to Brunswick and
that occurred prior to the Closing. If Brunswick discovers its violation of any
Environmental Law during any investigation or remediation of the Owned Premises
undertaken by it pursuant to the Transfer Act, and Brunswick is required by law
to report said violation to a government agency, Brunswick will report the
violation in a timely manner. Brunswick also represents that the increased cost
(immediately after the Closing as compared to immediately prior to the Closing)
of transporting metal hydroxide sludge generated at the Owned Premises without
drying it (assuming the volume of such sludge does not change after the date of
this Agreement) will be no more than $15,000 per year.
(e) Brunswick agrees that if Brunswick knows, or discovers during any
investigation or remediation of the Owned Premises undertaken by it pursuant to
the Transfer Act, that it has violated any Environmental Law, Brunswick shall be
liable for any fines, penalties, assessments or other enforcement actions taken
by any governmental agency against Brunswick or Buyer for Brunswick's violation.
(f) Brunswick has submitted an application for a permit to the Connecticut
Department of Environmental Protection, and is obtaining any necessary local
approvals, relating to the
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discharge of heat treating quench water containing a mixture of potassium
nitrate, sodium nitrate and sodium nitrite salts from the Owned Premises as of
the Closing Date. Until the earliest of (i) such time as the permit relating to
such application is issued, (ii) the 150th day after the Closing Date or (iii)
the date that process modifications are implemented as described in the next
sentence, Brunswick agrees that it is solely responsible for all costs
associated with storing and transporting such quench water from on-site holding
tanks to an off-site disposal facility that has appropriate permits for the
disposal of such quench water. In the event that such a permit is not issued by
the Connecticut Department of Environmental Protection (i) within three months
after the date of this Agreement, but is issued within five months of the date
of this Agreement, Brunswick will reimburse the Buyer for any costs reasonably
incurred by the Buyer in attempting to implement any process modification
required in order to ensure that the treatment of such quench water and any
discharges thereof comply with all Environmental Laws in effect at the time of
the implementation of such solution, and (ii) within five months after the date
of this Agreement, Brunswick will be solely responsible for the cost of such
process modification; provided, however, that in no event shall Brunswick's
expenses relating to the obligations set forth in clauses (i) and (ii) above
exceed $150,000.
(g) Brunswick shall insure that all contractors hired by it to conduct
environmental investigations and remedial action at the Owned Premises possess
insurance to cover liabilities that may be incurred in the course of
investigation and remediation. Brunswick shall require that all such remediation
contractors obtain the following insurance coverage: (i) Comprehensive General
Liability ("CGL") in an amount not less than $5 million (including contractual
liability and completed operations hazards), (ii) Consultants Environmental
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Liability in an amount not less than $1 million (including errors and omissions
("E and O") and contractor's pollution liability), (iii) Automobile Liability in
an amount not less than $1 million, and (iv) Workers Compensation Insurance as
required by statute. Buyer shall be named as additional-insured on any such
contractor's CGL, Consultants Environmental Liability and Automobile Liability
policies, and evidence of such shall be provided to Buyer. Any such contractors
must agree to continue coverage under claims made policies for a period of at
least two years following completion of their work.
6.5.2 Buyer's Obligations. (a) Buyer agrees with Brunswick that
Brunswick (including its employees and agents and any persons hired by Brunswick
to perform environmental investigation or remediation work on the Owned
Premises) shall have all necessary and appropriate access rights to the Owned
Premises for purposes of performing any investigation and remediation of the
Owned Premises under the provisions of the Transfer Act, or any other
investigation or remediation program undertaken by Brunswick with respect to the
Owned Premises), until such time as Brunswick shall have completed any such
investigation or remediation programs.
(b) Buyer also agrees with Brunswick that Buyer shall not impede
Brunswick's investigation and remediation of the Owned Premises under the
provisions of the Transfer Act, or any other investigation or remediation
program undertaken by Brunswick with respect to the Owned Premises, subject to
Brunswick's obligation to use reasonable efforts to cause such program to occur
in such a manner so as to minimize the description of the Buyer's business.
Without Brunswick's prior written consent, Buyer shall not initiate any contacts
or discussions with any government or governmental authority (including, without
limitation, the
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Connecticut Department of Environmental Protection, but excluding courts) for
the purpose of relating environmental matters pertaining to Brunswick's
ownership or operation of the Golf Business, or Brunswick's investigation or
remediation of the Owned Premises under the provisions of the Transfer Act, or
any other investigation or remediation program undertaken by Brunswick with
respect to the Owned Premises, unless such contacts are required by law. The
provisions of this subparagraph (b) do not limit Buyer's ability to participate
fully in any and all public proceedings under the Transfer Act. The provisions
of this subparagraph (b) do not in any way limit Buyer's ability to pursue any
environmental permits, licenses, registrations or any other effort by Buyer to
ensure that Buyer is in compliance with all applicable environmental, health and
safety laws.
(c) Buyer further agrees with Brunswick that Buyer is solely liable
for any and all liabilities, any and all claims for injury (including death) or
claims for damage, direct or consequential, to property or any person or entity,
resulting from the release of any hazardous substance located in, on or under,
or emanating from, the Owned Premises (i) if such release occurs on or after the
Closing Date (provided, however, that if such release (x) constitutes a
continuing post-closing release of a substance that was known by Brunswick on
the Closing Date to be present at the site of such release and (y) is produced
by the operating processes of the Golf Business facilities conducted in the same
manner as conducted prior to the Closing Date, which source was not known on the
Closing Date, then Buyer shall only be responsible for the incremental liability
caused by such releases occurring on or after the Closing Date, so that
Brunswick shall be in no better or worse position than it would have been in had
no such post-Closing releases taken place), (ii) if such release occurs prior to
the
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Closing Date and the claim relating to such release is made after the date that
is 25 years after the date of this Agreement or (iii) if such release is not
known to Brunswick as of the date of this Agreement, and in any such case
Brunswick shall have no liability therefor.
6.5.3 Gasoline Seepage. Brunswick and Buyer agree to use
commercially reasonable efforts after the Closing Date to jointly address the
issue of the possible seepage of gasoline on or under the Owned Premises from a
location outside the Owned Premises. Nothing in Section 6.5.2(b) shall limit
Buyer's ability to initiate contacts with any government or governmental
authority with respect to such issue.
6.5.4. Release. When used in this Section 6.5, the term "release"
refers to the initial release of any hazardous substance on, into or under the
Owned Premises or off-site. Any further movement of the hazardous substance,
regardless of whether that further movement occurs prior to Closing or at any
time after Closing and before the completion of remediation of that hazardous
substance under the Transfer Act, is considered to be a release as if it had
occurred on the date of the initial release.
Section 7. Opinions.
7.1 Opinion of Counsel to Buyer. Brunswick shall receive from Xxxxxxx X.
Xxxxxx, counsel to Buyer, an opinion dated the date hereof and in form and
substance satisfactory to Brunswick to the effect that:
(a) Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware;
(b) Buyer has full corporate power and authority to execute,
deliver and perform this Agreement and the bills of sale and
other instruments of transfer contemplated by this Agreement;
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(c) this Agreement and the bills of sale and other instruments
of transfer contemplated by this Agreement, have been duly
authorized, executed and delivered by Buyer and, except for
the provisions of Section 8 of this Agreement, constitute
valid and legally binding obligations of Buyer enforceable
in accordance with their respective terms except as
enforcement thereof may be limited by bankruptcy,
insolvency and other laws affecting the enforcement of
creditors' rights generally; and
(d) neither the execution and delivery nor the performance by
Buyer of this Agreement, each Related Agreement or such
instrument will violate or breach or conflict with or
constitute a default under the Certificate of Incorporation
or By-Laws of Buyer or any indenture, loan agreement,
contract or instrument known to such counsel to which it is
a party or by which it is bound or any applicable law,
rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court asserting
jurisdiction over Buyer which is known to such counsel.
7.2 Opinion of General Counsel of Brunswick. Buyer shall receive from the
General Counsel of Brunswick an opinion dated the date hereof and in form and
substance satisfactory to Buyer to the effect that:
(a) Brunswick is a corporation duly organized and validly existing
under the laws of the State of Delaware;
(b) Brunswick has full corporate power and authority to own and maintain
the Golf Assets and to transact the Golf Business and to execute,
deliver and perform this Agreement and the bills of sale and other
instruments of transfer provided for in this Agreement;
(c) this Agreement and the bills of sales and other instruments of
transfer provided for in this Agreement, have been duly
authorized, executed and delivered by Brunswick and, except for
the provision of Section 8 of this Agreement, constitute the
valid and legally binding obligations of Brunswick enforceable in
accordance with their respective terms except as enforcement
thereof may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally and,
based solely on such counsel's review of a lien search attached
to such opinion as an exhibit, such bills of sales and other
instruments of transfer are sufficient in form and substance to
vest in Buyer title to the Golf Assets (other than the Owned
Premises) free and clear of all liens, encumbrances, charges,
imperfections of title, restrictions, equities and claims of
record, and, to the knowledge of such counsel, without
independent
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investigation, all other liens, encumbrances, charges, imperfections
of title, restrictions, equities and claims of every kind, except
Permitted Encumbrances and those set forth on Schedule 4.3 to this
Agreement;
(d) neither the execution and delivery nor the performance of this
Agreement and the bills of sale and instruments of transfer by
Brunswick will violate or breach or conflict with or constitute
a default under the Certificate of Incorporation or By-Laws of
Brunswick, or any indenture, loan agreement, contract or
instrument known to such counsel to which Brunswick is a party or
by which it is bound, or any applicable law, rule, regulation,
judgment, order or decree of any government, governmental
instrumentality or court asserting jurisdiction over Brunswick
which is known to such counsel; and
(e) to the knowledge of such counsel, except as set forth in Schedule
4.9, there is no proceeding, action, claim, dispute, suit, appeal or
investigation, at law or in equity, pending or overtly threatened
against Brunswick with respect to the Golf Business, or involving a
Golf Asset or a Golf Liability before any court, agency, authority,
arbitration panel or other tribunal having jurisdiction over
Brunswick or its assets.
Section 8. Non-competition. Brunswick, in order to induce Buyer to enter
into this Agreement, expressly covenants and agrees that for a period of two
years from and after the Closing Date, Brunswick will not directly or
indirectly, own, manage, operate, join, control, or participate in or be
connected with any business, individual, partnership, firm or corporation, which
is at the time engaged, wholly or partly, in the Golf Business engaged in by
Brunswick on the Closing Date, provided that Brunswick or any of its affiliates
may acquire a business that otherwise would violate the foregoing restrictions
as long as no more than 25% of the annual sales of the acquired business is in
businesses which violate the foregoing restrictions. If more than 25% of the
annual sales of the acquired business is in businesses which violate the
foregoing restrictions, Brunswick or its affiliate may acquire such business as
long as it uses commercially reasonable efforts to divest itself of the
competing operations within eighteen months after such acquisition. It shall not
be a violation of any of the
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foregoing restrictions for a member of the board of directors of Brunswick to,
directly or indirectly, own, manage, operate, join, control, or participate in
or be connected with any business, individual, partnership, firm or corporation,
which is at the time engaged, wholly or partly, in the Golf Business engaged in
by Brunswick on the Closing Date.
Brunswick may own an aggregate of not more than five percent of the
outstanding stock of any class of any corporation engaged in any such business,
if such stock is listed on a national securities exchange or regularly traded in
the over-the-counter market by a member of a national securities exchange,
without violating the provisions of this Section, provided Brunswick does not
have the power to control or direct the management or affairs of such
corporation and is not otherwise associated with it. Brunswick expressly
covenants and agrees that the remedy at law for any breach of this Section 8
will be inadequate and that, in addition to any other remedies Buyer may have,
Buyer shall be entitled to temporary and permanent injunctive relief without the
necessity of proving actual damage or posting any bond. To the extent that any
part of this provision may be invalid, illegal or unenforceable for any reason,
it is intended that such part shall be enforceable to the extent that a court of
competent jurisdiction shall determine that such part if more limited in scope
would have been enforceable and such part shall be deemed to have been so
written and the remaining parts shall as written be effective and enforceable in
all events.
Section 9. Post Closing Covenants of Buyer.
9.1 Liabilities. Buyer agrees to keep a list describing in detail the Golf
Liabilities paid by Buyer and to retain all documentation supporting actual
payment of each Golf Liability. Buyer will submit such list and such
documentation to Brunswick within 30 days after the end
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of each calendar quarter until all such Golf Liabilities have been paid,
satisfied or discharged by Buyer. After all the Golf Liabilities have been paid,
satisfied or discharged and after the list and documentation regarding the
actual payment of each Golf Liability have been submitted to Brunswick, Buyer
shall no longer be required to keep such list and documentation.
9.2 Availability of Records. To the extent not located at the Owned
Premises, Brunswick shall, on or immediately prior to the Closing Date, have
delivered to Buyer all of the tangible Golf Assets. After the Closing, Buyer
shall make available to Brunswick as reasonably requested by Brunswick or any
taxing authority all information, records or documents relating to the Golf
Assets for all periods prior to Closing and shall preserve all such information,
records and documents until the later of (i) seven years after the Closing or
(ii) the expiration of all statutes of limitation for taxes for periods prior to
the Closing or extensions thereof applicable to Brunswick for tax information,
records or documents. Buyer shall also make available to Brunswick, as
reasonably requested by Brunswick, personnel responsible for preparing or
maintaining information, records and documents, both in connection with tax
matters as well as litigation and potential litigation, including without
limitation, claims for workers' compensation, product liability, general
insurance liability and automobile insurance liability. Any of such assistance
shall be at the sole cost and expense of Brunswick. Prior to destroying any
records or documents related to the Golf Business for all periods prior to the
Closing Date, Buyer shall notify Brunswick of its intent to destroy such records
or documents, and Buyer will, at the sole cost and expense of Brunswick, deliver
such records and documents to Brunswick and permit Brunswick to retain any and
all such records or documents. With respect to any claims which are Brunswick's
responsibility under Section
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8.3, Buyer shall, at the sole cost and expense of Brunswick, render all
reasonable assistance which Brunswick may request in defending such claim and
shall make available to Brunswick technical personnel most knowledgeable about
the product in question.
9.3 Use of Trade or Service Marks. Buyer shall not use or permit
distributors of Golf products to use the name "Brunswick" or any derivation
thereof whether in English or any other language, or corporate, trade or service
marks owned or used by Brunswick or its affiliates, unless such marks or names
are included in the Golf Assets or unless such use is permitted in writing by
Brunswick, except that (i) for twelve months after the Closing Date Buyer may
use all inventory produced prior to the Closing Date which are included in the
Golf Assets and which contain the name "Brunswick," (ii) for twelve months after
the Closing Date Buyer may use the name "Brunswick" on all inventory finished
during the first eight weeks after the Closing Date, and (iii) for six months
after the Closing Date Buyer may use all printed material and boxes which are
included in the Golf Assets and which contain the name "Brunswick". After the
relevant twelve month and six month periods referred to in the previous sentence
Buyer will place a sticker over the name "Brunswick" or otherwise remove the
name "Brunswick" from such material, boxes and inventory. The parties agree that
such use by Buyer of the name "Brunswick" on printed material, boxes and
products does not constitute representing the golf products sold by Buyer as
being Brunswick products. All products of the Golf Business manufactured by
Buyer after the Closing Date shall bear a new code identification which
indicates the products were manufactured by Buyer.
9.4 W-2 Forms for Employees and 1099 Forms for Other Payees. During the 90
days following the Closing Date, Buyer shall prepare for Brunswick such W-2
forms, payroll tax
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reports and forms, and 1099 forms for the employees and other payees of the Golf
Business at such times as Brunswick requests without cost or expense to
Brunswick. Buyer will provide W-2 information on Brunswick's employees to
Brunswick and to Brunswick's insurance company to enable Brunswick to comply
with workers' compensation laws.
Section 10. Indemnification, Survival and Termination.
10.1 Indemnification by Brunswick. Brunswick agrees to indemnify and hold
harmless Buyer and its affiliates at all times against and in respect of all
losses, liabilities, claims, damages, costs and expenses (including reasonable
attorneys' fees and expenses) insofar (and only insofar) as such losses,
liabilities, claims, damages, costs and expenses (including reasonable
attorneys' fees and expenses) exceed in the aggregate $300,000 (Buyer and its
affiliates shall not be entitled to indemnification for the first $300,000 of
such losses, liabilities, claims, damages, costs and expenses) and are caused by
any (a) Excluded Liabilities, (b) Golf Liability which is of a kind required to
be disclosed on a balance sheet and is of an amount in excess of the amount, if
any, reflected on the Closing Balance Sheet, provided that if such amount was
correct in accordance with the facts and circumstances as in existence as of the
Closing Date, no liability on the part of Brunswick with respect to such Golf
Liability shall exist, and (c) breach of the representations, warranties,
covenants and agreements of Brunswick set forth in this Agreement, provided that
the aggregate liability of Brunswick under this Section 10 shall not exceed
$3,000,000 except as otherwise provided in the next sentence. The foregoing
$300,000 aggregate threshold and the $3,000,000 aggregate liability limit shall
have no application to, and Brunswick hereby agrees to indemnify and hold
harmless Buyer and its affiliates at all times against any loss, liability,
claim, damage, cost or
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expense (including reasonable attorneys' fees and expenses) incurred by Buyer or
its affiliates with respect to (i) Excluded Liabilities, (ii) any payment
required by Brunswick under Section 2.6, (iii) any breach by Brunswick of its
representations contained in the first two sentences of Section 4.3, (iv) any
claims which are Brunswick's responsibility under Section 5.2, 6.2 or 6.3, (v)
any matters which are Brunswick's responsibility under Section 6.5, and (vi) any
Golf Liability which is of a kind required to be disclosed on a balance sheet
and is of an amount in excess of the amount, if any, reflected on the Closing
Balance Sheet; provided that if such amount was correct in accordance with the
facts and circumstances as in existence as of the Closing Date, no liability on
the part of Brunswick with respect to such Golf Liability shall exist.
No right of Buyer for indemnification hereunder shall be affected by any
examination made for or on behalf of Buyer (including any examination of the
Golf Business or Brunswick) or Brunswick, the knowledge of any of Buyer's,
Brunswick's or the Golf Business' officers, directors, shareholders, employees
or agents, or the acceptance by Buyer or Brunswick of any certificate or
opinion; provided, however, that Buyer hereby waives any right to
indemnification hereunder with respect to any representation if Xxxxxxx X.
Xxxxxxxx, Xxxxxxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxx or
Xxxxxxx X. Xxxxxxx had knowledge of each and every fact necessary to prove that
such representation was inaccurate and had not given written notice of such
knowledge to Brunswick prior to the Closing.
Buyer shall promptly notify Brunswick in writing of all matters of which
it has notice which may give rise to the right to indemnification hereunder, but
the failure so to notify shall not relieve Brunswick from any liability
Brunswick may have except to the extent such failure
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materially prejudices Brunswick. Brunswick shall have the right with the consent
of Buyer, which shall not be unreasonably withheld, to settle all indemnifiable
matters related to claims by third parties which are susceptible to being
settled, and to defend (without the consent of Buyer) through counsel of its own
choosing, at its own expense, any action which may be brought by a third party
in connection therewith, provided, however, that Buyer shall have the right to
have its counsel participate fully in such defense, but the fees and expenses of
such counsel shall be at the expense of Buyer unless (a) Brunswick and Buyer
shall have mutually agreed to the retention of such counsel or (b) the
defendants in or targets of any such action or proceeding (including any
impleaded parties) include both Brunswick and Buyer and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. Buyer and Brunswick shall keep each other
informed of all settlement negotiations with third parties and of the progress
of any litigation with third parties. Buyer and Brunswick shall permit each
other reasonable access to books and records and otherwise cooperate with all
reasonable requests of each other in connection with any matter or claim for
indemnification.
10.2 Indemnification by Buyer. Buyer agrees to indemnify and hold harmless
Brunswick at all times against and in respect of all losses, liabilities,
claims, damages costs and expenses (including reasonable attorneys' fees and
expenses) insofar (and only insofar) as such losses, liabilities, claims,
damages, costs and expenses (including reasonable attorneys' fees and expenses)
are caused by any breach of the representations, warranties, covenants and
agreements of Buyer set forth in this Agreement.
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Brunswick shall promptly notify Buyer in writing of all matters of which
it has notice which may give rise to the right to indemnification hereunder, but
the failure so to notify shall not relieve Buyer from any liability Buyer may
have except to the extent such failure materially prejudices Buyer. Buyer shall
have the right with the consent of Brunswick, which shall not be unreasonably
withheld, to settle all indemnifiable matters related to claims by third parties
which are susceptible to being settled, and to defend (without the consent of
Brunswick) through counsel of its own choosing, at its own expense, any action
which may be brought by a third party in connection therewith, provided,
however, that Brunswick shall have the right to have its counsel participate
fully in such defense, but the fees and expenses of such counsel shall be at the
expense of Brunswick unless (a) Buyer and Brunswick shall have mutually agreed
to the retention of such counsel or (b) the named parties to any such action or
proceeding (including any impleaded parties) include both Brunswick and Buyer
and the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. Buyer
and Brunswick shall keep each other informed of all settlement negotiations with
third parties and of the progress of any litigation with third parties. Buyer
and Brunswick shall permit each other reasonable access to books and records and
otherwise cooperate with all reasonable requests of each other in connection
with any matter or claim for indemnification.
10.3 Survival. The representations, warranties, and agreements in Sections
3 and 4 that are given in this Agreement shall survive the Closing for a period
of eighteen months, and no claim may be made based upon an alleged breach of any
of such representations, warranties, and agreements, whether for indemnification
in respect thereof or otherwise, unless
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written notice of such claim, in reasonable detail, is given to Buyer, or to
Brunswick, as the case may be, within the applicable eighteen month period.
Brunswick's and Buyer's agreements in Sections 2, 5 and 6 shall survive the
Closing in perpetuity, and claims for alleged breaches of such sections may be
made at any time. Brunswick's and Buyer's agreements in Sections 8 and 9 shall
survive the Closing for the periods stated in such sections, and claims for
alleged breaches of such sections may be made during such periods.
Section 11. Miscellaneous.
11.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that no assignment shall be made on or prior to the Closing
Date, except that Buyer may assign its rights hereunder to a wholly-owned
subsidiary or subsidiaries; provided that Buyer shall remain responsible for all
of its obligations under this Agreement.
11.2 No Press Release Without Consent. No press release related to this
Agreement or the transactions contemplated herein, or other announcement to the
employees, customers or suppliers of the Golf Business will be issued without
the joint approval of Brunswick and Buyer, except any public disclosure which
Brunswick or Buyer in its good faith judgment believes is required by law or by
any stock exchange on which its securities are listed (in which case the party
making the disclosure will consult with the other party prior to making any such
disclosure). Brunswick and Buyer will cooperate to prepare a joint press release
to be issued on the Closing Date or upon the request of Brunswick, at the time
of the signing of this Agreement.
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11.3 Severability. Each of the provisions contained in this Agreement
shall be severable, and the unenforceability of one shall not affect the
enforceability of any others or of the remainder of this Agreement.
11.4 Entire Agreement. This Agreement may not be amended, supplemented or
otherwise modified except by an instrument in writing signed by all of the
parties hereto. This Agreement contains the entire agreement of the parties
hereto with respect to the transactions covered hereby, superseding all
negotiations, prior discussions and preliminary agreements made prior to the
date hereof and is not intended to confer upon any other person any rights or
remedies hereunder.
11.5 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and their respective affiliates and no provision
of this Agreement shall be deemed to confer upon third parties any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
11.6 Waiver. The failure of any party to enforce any condition or part of
this Agreement at any time shall not be construed as a waiver of that condition
or part, nor shall it forfeit any rights to future enforcement thereof.
11.7 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Illinois without
regard to the conflicts of laws provisions thereof.
11.8 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
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11.9 Counterparts. More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original.
11.10 Choice of Forum. Buyer and Brunswick agree that any suit, action or
proceeding brought by either party against the other party to this Agreement in
connection with or arising out of this Agreement shall be brought solely in the
Federal Courts of the Northern District of Illinois, or if such court lacks
jurisdiction, in the Circuit Court for Lake County, Illinois.
11.11 Further Documents. Brunswick and Buyer will, at the request of the
other party, execute and deliver to such other party all such further
instruments, assignments, assurances and other documents as such other party may
reasonably request in connection with the carrying out of this Agreement.
11.12 Further Assurances. Brunswick and Buyer hereby agree to take
all such acts and do all such things as may be reasonably required to give
effect to the transactions contemplated by this Agreement.
11.13 Construction. The language in all parts of this Agreement shall be
construed, in all cases, according to its fair meaning. The parties acknowledge
that each party and its counsel have reviewed and revised this Agreement and
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.
11.14 Notices. All communications, notices and consents provided for
herein shall be in writing and be given in person or by means of telex, telecopy
or other wire transmission (with request for assurance of receipt in a manner
typical with respect to communications of
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that type) or by mail, and shall become effective (a) on delivery if given in
person, (b) on the date of transmission if sent by telex, telecopy or other wire
transmission, or (c) four business days after being deposited in the mails, with
proper postage for first-class registered or certified air mail, prepaid.
Notices shall be addressed as follows:
If to Buyer, to:
Merbanco, Incorporated
X.X. Xxx 00000
0000 Xxxx Xxxx Xxxxx Xxxxx
Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxxx, Xxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Fax: 000-000-0000
If to Brunswick, to:
Brunswick Corporation
0 X. Xxxxx Xx.
Xxxx Xxxxxx, XX 00000-0000
Attn: General Counsel
Fax: 000-000-0000
with a copy to:
Xxxx X. Xxxxxx
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
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provided, however, that if either party shall have designated a different
address by notice to the other, then to the last address so designated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers as of the date first above written.
BRUNSWICK CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxxxxx, Xx.
------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxxx, Xx.
Title: Vice President
FM PRECISION GOLF MANUFACTURING CORP.
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Chairman
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