ASSET PURCHASE AGREEMENT
Dated as of March 22, 1999
For the Purchase
of
Substantially all of the Assets of
IMPERIAL FABRICATING COMPANY
OF TENNESSEE, INC.
and
FLEET DESIGN, INC.
by
JOHNSTOWN AMERICA INDUSTRIES. INC.
and its Subsidiary
IMPERIAL GROUP ACQUISITION, L.P.
collectively as
BUYER
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TABLE OF CONTENTS
Article I. DEFINITIONS.....................................................................2
Section 1.01 Definitions..................................................................2
Article II. PURCHASE AND SALE OF ASSETS....................................................2
Section 2.01 Sale of Assets...............................................................2
Section 2.02 Purchase of Assets...........................................................2
Section 2.03 Assets to be Acquired........................................................2
Section 2.04 Excluded Assets..............................................................4
Section 2.05 Assumption of Liabilities....................................................4
Section 2.06 Excluded Liabilities.........................................................5
Article III. PURCHASE PRICE................................................................6
Section 3.01 Purchase Price for Assets....................................................6
Section 3.02 Payment of the Purchase Price................................................7
Section 3.03 Payment and Deposits to Escrow Accounts......................................7
Section 3.04 Earn-Out Payments............................................................8
Section 3.05 Payment of Certain Indebtedness at Closing...................................8
Section 3.06 Payment of Balance of Purchase Price.........................................8
Article IV. PURCHASE PRICE ALLOCATIONS AND ADJUSTMENTS.....................................9
Section 4.01 Allocation of Purchase Price.................................................9
Section 4.02 Closing Balance Sheet........................................................9
Section 4.03 Procedure for Post Closing Purchase Price Adjustment.........................9
Section 4.04 Payment of Post Closing Purchase Price Adjustment...........................10
Article V. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER...............................10
Section 5.01 Conditions Precedent to the Obligations of Buyer............................10
Section 5.02 Acquisition of Industrial Realty Partners Real Estate.......................10
Section 5.03 Employment Agreements.......................................................11
Section 5.04 Delivery of Exhibits and Schedules..........................................11
Section 5.05 Receipt of Consents and Approvals...........................................11
Section 5.06 Xxxx Xxxxx Xxxxxx Approval..................................................11
Section 5.07 Opinion of the Sellers' Counsel.............................................11
Section 5.08 Correctness of the Sellers' Representations and Warranties..................11
Section 5.09 Absence of Legal Restraints.................................................12
Section 5.10 Absence of Bankruptcy Proceedings...........................................12
Section 5.11 Corporate Authorization and Approval by the Companies and Shareholder.......12
Section 5.12 Payment of the Closing Indebtedness.........................................12
Section 5.13 No Material Adverse Effect..................................................12
Section 5.14 Secretary's Certificate.....................................................13
Section 5.15 Non-Competition Agreements..................................................13
Section 5.16 Receipt of Financing........................................................13
Section 5.17 Escrow Agreements...........................................................13
Section 5.18 Real Estate Leases..........................................................13
Section 5.19 Execution of Design/Build Agreement and Lease/Tennessee.....................13
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Section 5.20 Execution of Design/Build Agreement and Lease/Texas.........................13
Section 5.21 FIRPTA Certificates.........................................................13
Section 5.22 Other Material Documents....................................................13
Article VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS.......................13
Section 6.01 Conditions Precedent to the Obligations of the Sellers......................14
Section 6.02 Acquisition of Industrial Realty Partners Real Estate.......................14
Section 6.03 Employment Agreements.......................................................14
Section 6.04 Non-Competition Agreements..................................................14
Section 6.05 Delivery of Exhibits and Schedules..........................................14
Section 6.06 Xxxx Xxxxx Xxxxxx Approval..................................................14
Section 6.07 Opinion of Buyer's Counsel..................................................14
Section 6.08 Correctness of Buyer's Representations and Warranties.......................14
Section 6.09 Absence of Legal Restraints.................................................14
Section 6.10 Absence of Bankruptcy Proceedings...........................................15
Section 6.11 Corporate Authorization and Approval by Buyer...............................15
Section 6.12 Secretary's Certificate.....................................................15
Section 6.13 Escrow Agreements...........................................................15
Section 6.14 Execution of Design/Build Agreement and Lease/Tennessee.....................16
Section 6.15 Execution of Design/Build Agreement and Lease/Texas.........................16
Section 6.16 Real Estate Leases..........................................................16
Article VII. CLOSING.....................................................................16
Section 7.01 Closing.....................................................................16
Article VIII. REPRESENTATIONS AND WARRANTIES OF THE SELLERS..............................16
Section 8.01 Organization and Qualification of the Shareholder...........................16
Section 8.02 Organization and Qualification of the Companies.............................17
Section 8.03 Ownership and Status of the Companies' and the Shareholder's Capital Stock..18
Section 8.04 Power to Approve Sale of Assets of the Companies............................18
Section 8.05 Conflicts With Law or Other Agreements; Required Filings and Consents.......18
Section 8.06 Litigation and Judgments....................................................19
Section 8.07 Brokers.....................................................................20
Section 8.08 Control of Related Businesses...............................................20
Section 8.09 Authorization and Binding Effect............................................20
Section 8.10 Corporate Records of Stock Ownership........................................20
Section 8.11 Subsidiaries, Affiliates and Joint Ventures.................................21
Section 8.12 Insider Transactions........................................................21
Section 8.13 Licenses, Permits and Eligibility...........................................21
Section 8.14 Personal Property of the Companies..........................................22
Section 8.15 Accounts Receivable.........................................................23
Section 8.16 Tradenames and Intellectual Property Rights.................................23
Section 8.17 Title to Included Real Property............................................23
Section 8.18 Condition of Property.......................................................24
Section 8.19 Land Use Regulation.........................................................24
Section 8.20 Reports, Contracts and Other Documents......................................25
Section 8.21 Use Permits and Other Approvals.............................................25
Section 8.22 Environmental Matters.......................................................25
Section 8.23 Prior Financial Statements..................................................27
Section 8.24 Employment Matters..........................................................28
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Section 8.25 Contracts of the Companies..................................................30
Section 8.26 Inventories.................................................................31
Section 8.27 Absence of Certain Changes, Events and Conditions...........................31
Section 8.28 Taxes.......................................................................33
Section 8.29 Accounting Practices........................................................34
Section 8.30 Product Warranties..........................................................35
Section 8.31 Customers and Suppliers.....................................................35
Section 8.32 Year 2000 Issue.............................................................35
Article IX. SECURITY REPRESENTATIONS OF THE SELLERS......................................35
Section 9.01 Security Representations of Sellers.........................................35
Article X. REPRESENTATIONS AND WARRANTIES OF JAII AND JAII ACQUISITION SUB................38
Section 10.01 JAII and JAII Acquisition Sub.............................................38
Section 10.02 Brokers...................................................................39
Section 10.03 Authorization.............................................................39
Section 10.04 Power to Approve Purchase of the Assets and the Acquired Business.........39
Section 10.05 Conflicts With Law or Other Agreements; Required Filings and Consents.....39
Section 10.06 Required Filings and Consents.............................................40
Section 10.07 Litigation and Judgments..................................................40
Section 10.08 Validity of Shares........................................................40
Section 10.09 Full Disclosure...........................................................41
Article XI. ADDITIONAL AGREEMENTS........................................................41
Section 11.01 Conduct of Business by the Companies Pending the Closing..................41
Section 11.02 Access to Information.....................................................42
Section 11.03 Notification of Certain Matters...........................................42
Section 11.04 Further Action; Reasonable Efforts........................................42
Section 11.05 No Shop...................................................................42
Section 11.06 Xxxx Xxxxx Xxxxxx Act Matters.............................................43
Section 11.07 Payment of Broker's Fees and Expenses.....................................43
Section 11.08 Consents and Approvals....................................................43
Section 11.09 Cooperation with Respect to Financing.....................................43
Section 11.10 Change of Corporate Names.................................................43
Article XII. INDEMNIFICATION.............................................................44
Section 12.01 Survival of Representations and Warranties................................44
Section 12.02 Indemnification by the Sellers............................................44
Section 12.03 Indemnification by JAII and JAII Acquisition Sub..........................45
Section 12.04 Conditions of Indemnification.............................................46
Section 12.05 Limitations on Indemnification............................................49
Article XIII. TERMINATION, AMENDMENT AND WAIVER..........................................50
Section 13.01 Termination...............................................................50
Section 13.02 Effect of Termination.....................................................51
Section 13.03 Amendment.................................................................52
Section 13.04 Waiver....................................................................52
Article XIV. GENERAL PROVISIONS..........................................................53
Section 14.01 Notices...................................................................53
Section 14.02 Parties in Interest.......................................................54
Section 14.03 Governing Law.............................................................54
Section 14.04 Headings..................................................................54
Section 14.05 Counterparts..............................................................54
Section 14.06 Expenses..................................................................54
Section 14.07 Entire Agreement, Assignment..............................................55
Section 14.08 Time......................................................................55
Section 14.09 Reformation and Severability..............................................55
Section 14.10 Preparation and Filing of Tax Returns.....................................55
Section 14.11 News Releases.............................................................56
Section 14.12 Access to Books and Records...............................................56
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of this the 22nd day
of March, 1999 by and among IMPERIAL FABRICATING COMPANY OF TENNESSEE, INC., a
Tennessee corporation (herein "IFC"), and FLEET DESIGN, INC., a Tennessee
corporation (herein "FDI"), (collectively referred to herein as the
"Companies"), IMPERIAL GROUP, INC., a Tennessee corporation (herein the
"Shareholder") and Xxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx, the Shareholders of
Imperial Group, Inc. (the "Imperial Shareholders") (IFC, FDI, the Shareholder
and the Imperial Shareholders are collectively referred to herein as the
"Sellers") and JOHNSTOWN AMERICA INDUSTRIES, INC. ("JAII"), a Delaware
corporation, and IMPERIAL GROUP ACQUISITION, L.P. ("JAII Acquisition Sub"), a
Delaware limited partnership (JAII and JAII Acquisition Sub are herein
collectively referred to as the "Buyer").
WITNESSETH:
WHEREAS, IFC is engaged in the business of metal fabrications,
stampings, and assemblies of parts for the truck and transit bus industry; and
WHEREAS, FDI is engaged in the business of chrome plating and polishing
of component parts for the truck and transit bus industry; and
WHEREAS, IFC and FDI are wholly-owned qualifying Subchapter S
subsidiaries of the Shareholder;
WHEREAS, the Imperial Shareholders are the owners of all the issued and
outstanding shares of capital stock of the Shareholder; and
WHEREAS, the Companies desire to sell substantially all of the Assets
(as herein defined) used in connection with their respective manufacturing
operations and businesses (referred to collectively herein as the "Acquired
Business") to Buyer and Buyer desires to purchase the Assets and the Acquired
Business on the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Sellers and Buyer covenant, represent, warrant and agree as follows:
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ARTICLE I.
DEFINITIONS
SECTION 1.01 DEFINITIONS.
As used in this Agreement the capitalized terms set forth herein shall
have the meanings indicated in EXHIBIT A, unless the context or use indicates
another or different meaning.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
SECTION 2.01 SALE OF ASSETS.
Subject to the terms and conditions of this Agreement, the Companies
covenant and agree to sell, assign, transfer, convey and deliver to Buyer (or
cause to be sold, assigned, transferred, conveyed and delivered to Buyer) at
the Closing, the Assets and the Acquired Business, as described in SECTION
2.03 hereof, in the manner and for the consideration set forth in ARTICLE III.
SECTION 2.02 PURCHASE OF ASSETS.
Subject to the terms and conditions of this Agreement, Buyer covenants
and agrees to purchase from the Companies at the Closing the Assets and the
Acquired Business, as described in SECTION 2.03 hereof, in the manner and for
the consideration set forth in ARTICLE III.
SECTION 2.03 ASSETS TO BE ACQUIRED.
The Companies shall, at the Closing, effective as of 12:01 a.m., local
time, on the Closing Date, by special warranty deed, bills of sale and other
appropriate documents of transfer reasonably satisfactory to Buyer and the
Sellers, (the "Transfer Documents") transfer to Buyer, free and clear of any
claim, suit, proceedings, restriction, limitation, security interest, pledge,
lien or encumbrance of any kind or nature whatsoever, except those, if any,
which are set forth on SECTION 2.03 SCHEDULE (A), all right, title and
interest of the Companies in and to the properties, assets and rights of every
nature, kind and description, tangible and intangible (including goodwill),
whether real, personal or mixed, whether accrued, contingent or otherwise and
whether now existing or hereinafter acquired (other than the Excluded Assets
as herein defined) relating to or used or held for use in connection with the
Acquired Business as the same may exist on the Closing Date (collectively, the
"Assets"), including without limitation all those items in the following
categories:
(a) all machinery, equipment, furniture, furnishings, automobiles, trucks,
vehicles, tools, dies, molds and parts and similar property (including,
but not limited to, any of the foregoing purchased subject to any
conditional sales or title retention agreement in favor of any other
Person);
(b) all inventories of raw materials, work in process, finished products,
goods, spare parts, replacement and component parts, and office and
other supplies (collectively, the "Inventories"), including Inventories
held at any location controlled by the Companies and Inventories
previously purchased and in transit to the Companies at such locations;
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(c) all rights in and to products sold or leased (including, but not limited
to, products hereafter returned or repossessed and unpaid sellers'
rights of rescission, replevin, reclamation and rights to stoppage in
transit);
(d) all rights (including, but not limited to, any and all Intellectual
Property rights) in and to the products sold or leased and in and to any
products or other Intellectual Property rights under research or
development prior to or on the Closing Date;
(e) the right to the corporate names "Imperial Fabricating Company of
Tennessee, Inc.", "Fleet Design, Inc.", "Imperial Group, Inc." and such
other names used by the Companies and the Shareholder as set forth on
SECTION 2.03(E) SCHEDULE (A); provided, however, Buyer, with Sellers'
cooperation, shall be responsible to secure its right to these corporate
names by the filing of appropriate name reservations or other corporate
filings, as appropriate and necessary, with the respective state
offices, as required by the applicable state law;
(f) all of the rights of the Companies under all contracts, arrangements,
licenses, leases (real and personal) and other agreements (the "Assumed
Contracts") including, without limitation, any right to receive payment
for products sold or services rendered, and to receive goods and
services, pursuant to such agreements and to assert claims and take
other rightful actions in respect of breaches, defaults and other
violations of such contracts, arrangements, licenses, leases and other
agreements and otherwise, but, only to the extent Buyer assumes the
Companies' obligations under such contracts, agreements, licenses,
leases and other agreements pursuant to SECTION 2.05;
(g) all credits, prepaid expenses, deferred charges, advance payments,
security deposits, prepaid items and retroactive insurance adjustments
for workers' compensation claims;
(h) all notes and accounts receivable held by the Companies and all notes,
bonds and other evidences of indebtedness of and rights to receive
payments (including the benefits and proceeds of all insurance policies)
from any Person held by the Companies, except for cash and cash
equivalents, intracompany and affiliate transactions and accounts, cash
surrender value of life insurance, and investment securities as set
forth on SECTION 2.03(H) SCHEDULE (A);
(i) all Intellectual Property owned by the Companies or licensed to the
Companies and all rights thereunder or in respect thereof relating to or
used or held for use in connection with the Acquired Business,
including, but not limited to, rights to xxx for and remedies against
past, present and future infringements thereof, and rights of priority
and protection of interests therein under the laws of any jurisdiction
worldwide and all tangible embodiments thereof;
(j) all books, records, manuals and other materials (in any form or medium),
including, without limitation, all records and materials maintained at
the headquarters of the Companies, advertising matter, catalogues, price
lists, correspondence, mailing lists, lists of customers,
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distribution lists, photographs, production data, sales and promotional
materials and records, purchasing materials and records, personnel
records, manufacturing and quality control records and procedures,
blueprints, research and development files, records, data and laboratory
books, Intellectual Property disclosures, media materials and plates,
accounting records, sales order files and litigation files;
(k) to the extent their transfer is permitted by law, all Governmental
Approvals, including all applications therefor;
(l) all real property, as set forth in SECTION 2.03(L) SCHEDULE (A) and all
licenses, permits, approvals and qualifications relating to any real
property issued to the Companies by any Governmental Authority (herein
the "Included Real Property");
(m) all rights to causes of action, lawsuits, judgments, claims and demands
of any nature available to or being pursued by the Companies with
respect to the Acquired Business or the ownership, use, function or
value of any Asset, whether arising by way of counterclaim or otherwise;
and
(n) all guarantees, warranties, indemnities and similar rights in favor of
the Companies with respect to any Asset.
SECTION 2.04 EXCLUDED ASSETS.
The Assets shall not include (a) Cash or Cash Equivalents of the
Companies; (b) the real property set forth on SECTION 2.04 SCHEDULE (A) (the
"Excluded Real Property"); (c) all life insurance policies owned by the
Companies as set forth on SECTION 2.04 SCHEDULE (A); (d) all investment
securities and the other assets set forth on SECTION 2.04 SCHEDULE (A) and (e)
the other assets set forth on SECTION 2.04 SCHEDULE (A) (herein collectively the
"Excluded Assets"). The Excluded Assets shall be the only Assets of the
Companies excluded from transfer to Buyer hereunder.
SECTION 2.05 ASSUMPTION OF LIABILITIES.
(a) Subject to the terms and conditions set forth herein, at the Closing,
Buyer shall assume and agree to pay, honor and discharge when due all of
the following liabilities relating to the Assets and, except as provided
in SECTION 2.06 existing at or arising on or after the Closing Date
(collectively, the "Assumed Liabilities"):
(i) any and all liabilities, obligations and commitments relating
exclusively to the Acquired Business or the Assets that are (x)
reflected on the December Balance Sheet (as herein defined), or (y)
incurred after the date of the December Balance Sheet in the ordinary
course of business consistent with prior practice and in accordance
with the terms of this Agreement;
(ii) any and all liabilities, obligations and commitments (x) arising out of
the agreements, contracts and commitments set forth on SECTION
2.05(A)(II) SCHEDULE (A) but not including
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any obligation or liability for any breach thereof occurring prior to
the Closing Date or (y) listed on SECTION 2.05(A)(II) SCHEDULE (B);
(iii) all obligations of the Companies pursuant to all outstanding quotes,
blanket purchase orders and monthly releases by and between the
Companies and PACCAR as of the Closing Date, incurred in the ordinary
course of business and consistent with the Companies' policies;
(iv) all obligations of the Companies, from and after the Closing, with
respect to the leases of real property set forth on SECTION 2.05(A)(IV)
SCHEDULE (A) (the "Included Leased Property");
(v) liabilities with respect to all litigation and claims which are
specifically reserved for on the Closing Balance Sheet, but only to the
extent of the reserve designated as the Litigation Reserve as set forth
on the Closing Balance Sheet;
(vi) liabilities with respect to all product liability, product recalls,
warranty claims, defective material claims and merchandise returns, but
only to the extent of the reserve designated as the Warranty Reserve as
set forth on the Closing Balance Sheet; and
(vii) liabilities for Taxes relating to or arising out of the Acquired
Business accruing with respect to any time period occurring, at or
prior to Closing, but only to the extent of the reserve reserve
designated as the Tax Reserve as set forth on the Closing Balance
Sheet.
(b) At the Closing, Buyer shall assume the Assumed Liabilities relating to
the Acquired Business by executing and delivering to the Sellers an
assumption agreement in a form reasonably satisfactory to the Sellers
(the "ASSUMPTION AGREEMENT") and attached hereto as SECTION 2.05(B)
SCHEDULE(A).
SECTION 2.06 EXCLUDED LIABILITIES.
Except for the Liabilities assumed by Buyer as set forth in SECTION 2.05
or as set forth in SECTION 2.05(B) SCHEDULE (A), and regardless of any
disclosure to Buyer, Buyer shall not assume any liabilities, obligations or
commitments of any Seller relating to or arising out of the operation of the
Acquired Business or the ownership of the Assets prior to the Closing (the
"Excluded Liabilities"), other than the Assumed Liabilities. Specifically the
Excluded Liabilities include, but are not limited to:
(a) liabilities with respect to all litigation and claims (exclusive of
claims under SECTION 2.06(B)) which are not specifically reserved for on
the Closing Balance Sheet in the Litigation Reserve or which is in
excess of the Litigation Reserve as set forth on the Closing Balance
Sheet, to the extent of such excess;
(b) liabilities with respect to all product liability, product recalls,
warranty claims, defective material claims and merchendise returns,
which are not specifically reserved for in the
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Warranty Reserve on the Closing Balance Sheet or which are in excess of
the Warranty Reserve as set forth on the Closing Balance Sheet, to the
extent of such excess;
(c) liabilities for Taxes relating to or arising out of the Acquired
Business accruing with respect to any time period occurring, at or prior
to Closing which are not specifically reserved for in the Tax Reserve on
the Closing Balance Sheet or which are in excess of the Tax Reserve as
set forth on the Closing Balance Sheet, to the extent of such excess;
(d) liabilities for Third Party and Governmental Environmental Liabilities
and Costs;
(e) liabilities for intercompany accounts payable which do not represent
trade accounts payable;
(f) liabilities, obligations and commitments of the Sellers required by GAAP
to be included in the December Balance Sheet but which are not included
in the December Balance Sheet;
(g) liabilities, obligations and commitments of the Sellers incurred after
the date of the December Balance Sheet which are not in the ordinary
course of business consistent with past practices of the Companies; and
(h) liabilities and obligations of the Companies resulting from the failure
of the Companies to comply in all material respects with all federal,
state, local and foreign statutues, laws, ordinances, regulations, rules
and permits, judgments, orders or decrees (except to the extent such
liabilities and obligations are reserved for in the Litigation Reserve
as set forth on Closing Balance Sheet) applicable to the Acquired
Business or the Assets and commitments of the Sellers.
ARTICLE III.
PURCHASE PRICE
SECTION 3.01 PURCHASE PRICE FOR ASSETS.
(a) The Purchase Price. The Purchase Price for the Assets and the Acquired
Business shall be an amount equal to (i) the sum of (A) $56,000,000 in
cash, minus the amount of Indebtedness as set forth on SECTION 3.05
SCHEDULE (A) (the "Closing Indebtedness") of the Companies which remains
outstanding, if any, after giving effect to the payment by Sellers of
the Closing Indebtedness on the Closing Date, (the "Cash Component");
and (B) the Stock Component (as herein defined); and (C) the Earn-Out
Payments (as herein defined); and (D) the Post Closing Purchase Price
Adjustment (as herein defined) and (ii) the Assumed Liabilities
(such aggregate amount is referred to herein as the "Purchase Price").
(b) Form of Purchase Price Paid at Closing. The Purchase Price to be paid at
Closing shall consist of (i) a payment of (A) the Cash Component plus
(B) that number of shares of JAII's common stock, $.01 par value per
share (the "JAII Common Stock"), equal in value to $2.5 million (the
"Stock Component") plus the assumption of the Assumed Liabilities. For
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purposes of determining the number of shares of JAII Common Stock that
shall be delivered to the Companies at Closing, $2.5 million shall be
divided by the average of the closing price of a share of JAII Common
Stock for each of the ten trading days immediately prior to the date of
the public announcement of JAII of the acquisition of the Assets and the
Acquired Business (the "JAII Average Closing Price"). The Stock
Component of the Purchase Price will consist of shares of JAII Common
Stock that have not been registered under the Securities Act of 1933, as
amended (the "Securities Act").
SECTION 3.02 PAYMENT OF THE PURCHASE PRICE.
At Closing, Buyer shall deliver to the Companies the Cash Component and
the Stock Component, minus any cash or shares of JAII Common Stock delivered to
the Escrow Agents pursuant to SECTION 3.03 below.
SECTION 3.03 PAYMENT AND DEPOSITS TO ESCROW ACCOUNTS.
(a) Deposit of Indemnification Escrow.
At Closing, Buyer shall deliver to an escrow agent (which shall be a
national bank or trust company) mutually agreeable to the parties and
willing to serve, subject to the terms of the Indemnification Escrow
Agreement (as herein defined), as escrow agent for the benefit of Buyer
and the Sellers (the "Indemnification Escrow Agent") an amount equal to
$3.0 million (otherwise deliverable to the Companies pursuant to SECTION
3.01(B) above) consisting of (i) cash, (ii) shares of JAII Common Stock
(based on the JAII Average Closing Price) or (iii) any combination
thereof (the "Indemnification Escrow Amount"). The form of the Escrow
Indemnification Amount shall be at the sole election of the Companies.
The Indemnification Escrow Amount shall be administered and disbursed by
the Indemnification Escrow Agent pursuant to the terms and conditions of
an escrow agreement (the "Indemnificaton Escrow Agreement")
substantially in the form attached hereto as SECTION 3.03(A) SCHEDULE
(A). All cash required to be paid to the Indemnification Escrow Agent
pursuant to this Section shall be made by wire transfer of immmediately
available funds to the Indemnification Escrow Agent's account as
designated by the escrow agent.
(b) Deposit of Tennessee Plant Escrow.
At Closing, Buyer shall deliver to an escrow agent (which shall be a
national bank or trust company) mutually agreeable to the parties and
willing to serve, subject to the terms of the Tennessee Plant Escrow
Agreement (as herein defined), as escrow agent for the benefit of Buyer
and the Sellers (the "Tennessee Plant Escrow Agent") an amount equal to
five million dollars ($5,000,000.00) in cash (otherwise deliverable to
the Companies pursuant to SECTION 3.01(B) above) (the "Tennessee Plant
Escrow Amount"). The Tennessee Plant Escrow Amount shall be administered
and disbursed by the Tennessee Plant Escrow Agent pursuant to the terms
and conditions of an escrow agreement (the "Tennessee Plant Escrow
Agreement") substantially in the form attached hereto as SECTION 3.03(B)
SCHEDULE (A). All cash required to be paid to the Tennessee Plant Escrow
Agent pursuant to this Section shall
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be made by wire transfer of immediately available funds to the Tennessee
Plant Escrow Agent's account as designated by the escrow agent.
(c) Deposit of Texas Plant Escrow.
At Closing, Buyer shall deliver to an escrow agent (which shall be a
national bank or trust company) mutually agreeable to the parties and
willing to serve, subject to the terms of the Texas Plant Escrow
Agreement (as herein defined), as escrow agent for the benefit of Buyer
and the Sellers (the "Texas Plant Escrow Agent") an amount equal to two
million dollars ($2,000,000.00) in cash (otherwise deliverable to the
Companies pursuant to SECTION 3.01(B) above) (the "Texas Plant Escrow
Amount"). The Texas Plant Escrow Amount shall be administered and
disbursed by the Texas Plant Escrow Agent pursuant to the terms and
conditions of an escrow agreement (the "Texas Plant Escrow Agreement")
substantially in the form attached hereto as SECTION 3.03(C) SCHEDULE
(A) . All cash required to be paid to the Texas Plant Escrow Agent
pursuant to this Section shall be made by wire transfer of immediately
available funds to the Texas Plant Escrow Agent's account as designated
by the escrow agent.
SECTION 3.04 EARN-OUT PAYMENTS.
As part of the Purchase Price, the Companies shall be entitled to
receive earn-out payments from Buyer following the Closing (the "Earn-Out
Payments"). The Earn-Out Payments shall become due and payable to the Companies
following the Closing in accordance with and subject to the terms of SECTION
3.04 SCHEDULE (A) hereto.
SECTION 3.05 PAYMENT OF CERTAIN INDEBTEDNESS AT CLOSING.
On the Closing Date, the Sellers shall cause the Companies to pay, from
the Purchase Price, in full all Indebtedness of the Companies (including
interest, fees, penalties and other related amounts) as of the Closing Date as
set forth on SECTION 3.05 SCHEDULE (A) (the "Closing Indebtedness") and the
Sellers shall cause the bankers of the Companies to deliver releases with
respect thereto. SECTION 3.05 SCHEDULE (A) provides a complete and accurate
description of the Closing Indebtedness.
SECTION 3.06 PAYMENT OF BALANCE OF PURCHASE PRICE.
The balance of the Cash Component of the Purchase Price due at Closing
pursuant to SECTION 3.01(A), after the payments and deposits required by SECTION
3.03 and SECTION 3.05, shall be made by wire transfer of immediately available
funds to the accounts designated by the Companies.
ARTICLE IV.
PURCHASE PRICE ALLOCATIONS AND ADJUSTMENTS
SECTION 4.01 ALLOCATION OF PURCHASE PRICE.
Buyer and the Companies agree that for federal income tax purposes they
will each treat and report the transactions consummated pursuant to this
Agreement as an "Asset Acquisition" pursuant to the Internal Revenue Code of
1986, as amended.
8
SECTION 4.02 CLOSING BALANCE SHEET.
Within sixty (60) days following the Closing, the Companies shall cause
the Companies' accounting firm, Bumpus, Hall, Xxxxx, Xxxxxxxx & Xxxxx, P.C., to
prepare at the Companies' sole expense a combined Closing Balance Sheet for the
Assets and the Acquired Business, prepared in accordance with GAAP, except as
set forth herein, and on a basis consistent with the calculation of the Average
Working Capital (as herein defined) in accordance with the accounting practices
of the Companies applied on a consistent basis as reflected in the Companies'
prior financial statements and shall deliver to Buyer, the Closing Balance Sheet
as of the Closing Date (the "Closing Balance Sheet"). The Closing Balance Sheet
shall be adjusted to exclude from the Closing Balance Sheet all of the Excluded
Assets and Excluded Liabilities and shall reflect the payments at Closing of the
Closing Indebtedness. The Closing Balance Sheet shall be accompanied by a
calculation of the Post Closing Purchase Price Adjustment, certified by the
Companies' accountants as being calculated consistently with the provisions of
this Section. The Post Closing Purchase Price Adjustment shall mean an amount
equal to the difference between the Closing Date Working Capital (as herein
defined), as of the Closing Date, and the Average Working Capital (as herein
defined and calculated in accordance with SECTION 4.02 SCHEDULE (A)). The
amount, if any, by which the Closing Date Working Capital exceeds the Average
Working Capital shall be an increase in the Purchase Price and the amount, if
any, by which the Closing Date Working Capital is less than the Average Working
Capital shall be a reduction in the Purchase Price. The Closing Balance Sheet
shall include specific reserves designated respectively the Litigation Reserve,
the Warranty Reserve and the Tax Reserve to reserve specifically for such
matters. If no reserve is set up for one of the named reserves, then no reserve
shall exist for such matters.
SECTION 4.03 PROCEDURE FOR POST CLOSING PURCHASE PRICE ADJUSTMENT.
Buyer, shall within thirty (30) days after receipt of the Closing
Balance Sheet and the calculation of the Post Closing Purchase Price Adjustment,
notify the Sellers in writing, that Buyer either: (a) accepts the calculation of
the Post Closing Purchase Price Adjustment as calculated in accordance with
SECTION 4.02, or (b) disagrees with the calculation of the Post Closing Purchase
Price Adjustment, and, Buyer shall specify in detail any items which Buyer
disputes, including the dollar amounts in dispute, the basis for the
disagreement and Buyer's calculation of the disputed item. If the Sellers and
Buyer cannot agree upon any disputed items within thirty (30) days after receipt
by the Sellers of SECTION 4.03 SCHEDULE (A), then such disagreement shall be
submitted to KPMG Peat Marwick LLP (the "Independent Accountant") for
resolution. The Sellers and Buyer shall each prepare a written submission for
delivery to the other party and the Independent Accountant setting forth the
items which remain in dispute and the position of such party with respect to the
disputed item. The determination by the Independent Accountant shall be final
and binding on the parties hereto and judgment on such determination may be
entered in any court having jurisdiction. In the event the Independent
Accountant accepts Buyer's calculation of the Post Closing Purchase Price
Adjustment, then the Sellers shall be solely responsible for all of the costs
and expenses of the Independent Accountant. In the event the Independent
Accountant accepts the Sellers' calculation of the Post Closing Purchase Price
Adjustment, then Buyer shall be solely responsible for all of the costs and
expenses of the Independent Accountant. In the event the
9
Independent Accountant accepts neither Buyer's nor the Sellers' calculation of
the Post Closing Purchase Price Adjustment, then the fees and expenses of the
Independent Accountant shall be shared equally by the Sellers and Buyer. The
Sellers shall bear, and be solely responsible for, all of the costs and expenses
incurred by them in connection with the preparation of the Closing Balance
Sheet. The Sellers and Buyer shall each bear, and be responsible for, the costs
and expenses incurred by each of them (including the fees and expenses of their
respective accounting firms) in connection with their review of the Closing
Balance Sheet and the Post Closing Purchase Price Adjustment.
SECTION 4.04 PAYMENT OF POST CLOSING PURCHASE PRICE ADJUSTMENT.
Any reduction in the Purchase Price, as a result of the Post Closing
Purchase Price Adjustment, shall be paid within ten (10) days to Buyer by the
Companies, by cashier's check or wire transfer to an account designated by
Buyer. Any increase in the Purchase Price, as a result of Post Closing Purchase
Price Adjustment, shall be paid within ten (10) days to the Sellers by Buyer by
cashier's check or wire transfer to an account designated by the Sellers.
ARTICLE V.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
SECTION 5.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER.
The obligations of Buyer to effect the Closing, to purchase the Assets
and the Acquired Business and to perform its obligations hereunder are and shall
be subject, at the discretion of Buyer, to the prior fulfillment of each of the
following conditions set forth in this ARTICLE V.
SECTION 5.02 ACQUISITION OF INDUSTRIAL REALTY PARTNERS REAL ESTATE.
The purchase by Buyer, at Closing, of the real estate described in
SECTION 5.02 SCHEDULE (A) by execution and delivery by Buyer and Industrial
Realty Partners of the Real Estate Purchase Agreement attached hereto as SECTION
5.02 SCHEDULE (B) and the consummation of the purchase of the Industrial Realty
Partners Property in accordance with the Real Estate Purchase Agreement.
SECTION 5.03 EMPLOYMENT AGREEMENTS.
The execution and delivery at Closing of the employment agreements for
the individuals set forth in SECTION 5.03 SCHEDULE (A) and in substantially the
form of the Employment Agreements attached as Section 5.03 Schedule (b). This
SECTION 5.03 does not constitute an offer of employment to such key employees
and is not intended to confer upon any person other than Buyer and the Sellers
any rights or remedies under this Agreement.
SECTION 5.04 DELIVERY OF EXHIBITS AND SCHEDULES.
The delivery to Buyer of all of the Exhibits and Schedules required by
this Agreement to be delivered by the Sellers, updated through the Closing Date,
provided, however, that Buyer shall not be obligated to assume any liability or
obligation disclosed in such updated Schedules and shall not be obligated to
close if such updated Schedules disclose any matter which creates a Material
Adverse Effect.
10
SECTION 5.05 RECEIPT OF CONSENTS AND APPROVALS.
Receipt by, and if necessary, pursuant to a Governmental Requirement,
transfer to Buyer, in form and substance reasonably satisfactory to Buyer's
counsel, of all required governmental and third party permits, licenses,
consents, estoppel certificates, approvals, authorizations, or waivers required
to be obtained by Buyer or the Sellers in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby or to continue the operation of the Acquired
Business as conducted by the Companies on the date of this Agreement, or, to
maintain in full force and effect the material licenses, franchises, leases or
other material agreements of the Companies, as set forth on SECTION 5.05
SCHEDULE (A).
SECTION 5.06 XXXX XXXXX XXXXXX APPROVAL.
If required, all applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated and the
Companies and the Buyer shall have received all authorizations, consents, and
approvals of the government and governmental agencies required under the HSR
Act.
SECTION 5.07 OPINION OF THE SELLERS' COUNSEL.
Receipt by Buyer of the opinion of the Sellers' counsel substantially in
the form of SECTION 5.07 SCHEDULE (A) attached hereto.
SECTION 5.08 CORRECTNESS OF THE SELLERS' REPRESENTATIONS AND WARRANTIES.
Except for changes expressly permitted or contemplated hereby or
consented to by Buyer, and except for matters waived or consented to by Buyer
pursuant to SECTION 13.04, each of the representations and warranties of the
Sellers set forth in ARTICLE VIII, shall be true and correct on and as of the
Closing Date with the same effect as if made at such time; and the Sellers shall
have in all material respects performed and complied with each of the
agreements, covenants, terms and conditions hereof applicable to the Sellers.
SECTION 5.09 ABSENCE OF LEGAL RESTRAINTS.
There shall have been no order or preliminary or permanent injunction
entered in any action or proceeding before any court or governmental,
administrative or regulatory authority or agency, or no other action taken, or
statute, rule, regulation, legislation, interpretation, judgment or order
proposed, enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to Buyer, or the Sellers, by any legislative body, court, government
or governmental, administrative or regulatory authority or agency which shall
have remained in effect and which shall have had the effect of: (i) making
illegal, delaying or otherwise directly or indirectly restraining or prohibiting
the purchase of the Assets and the Acquired Business by Buyer as contemplated
hereby, or the consummation of the transactions hereunder; or, (ii) prohibiting
or limiting the ownership or operation by Buyer of the Assets and Acquired
Business, or compelling the Companies to dispose of or hold separate all or any
portion of the Acquired Business or Assets of the Companies as a result of the
transactions hereunder. There shall not be pending or threatened before any
court or governmental, administrative or regulatory authority or agency any
action or proceeding instituted
11
by any governmental, administrative or regulatory authority which seeks to have
any of the effects specified in this Section.
SECTION 5.10 ABSENCE OF BANKRUPTCY PROCEEDINGS.
No proceeding shall have been instituted or consented to by or against
the Companies, Buyer or the Shareholder seeking to adjudicate them as bankrupt
or insolvent, or seeking liquidation, winding-up, reorganization, arrangement,
adjustment, protection, relief, or composition of their debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for the Companies, Buyer or the
Shareholder or any substantial part of their respective properties (each such
action being a "Bankruptcy Proceeding"), and the Sellers shall not have taken
any corporate action to authorize any Bankruptcy Proceeding.
SECTION 5.11 CORPORATE AUTHORIZATION AND APPROVAL BY THE COMPANIES AND
SHAREHOLDER.
Receipt by Buyer, at or before Closing, of copies of (i) resolutions of
the Board of Directors of the Shareholder and of the Companies and (ii) approval
of the Shareholder, certified by the respective Secretaries of the Shareholder
and the Companies, authorizing the transactions contemplated by this Agreement,
including, without limitation, the sale of the Assets and the Acquired Business,
and the execution and delivery of this Agreement and all documents related
hereto by an authorized officer of the Companies. The authorizations of the
Shareholder and the Companies shall be attached hereto as SECTION 5.11 SCHEDULE
(A) and (B) RESPECTIVELY.
SECTION 5.12 PAYMENT OF THE CLOSING INDEBTEDNESS.
The payment at Closing, by the Companies, in full and complete
discharge, of the Closing Indebtedness set forth on SECTION 3.05 SCHEDULE (A).
SECTION 5.13 NO MATERIAL ADVERSE EFFECT.
Since the date of this Agreement, there shall have occurred no Material
Adverse Effect.
SECTION 5.14 SECRETARY'S CERTIFICATE.
Receipt by Buyer of a certificate of the Secretary of the Companies
attached hereto as SECTION 5.14 SCHEDULE (A) dated the Closing Date and
attaching copies (certified by the Secretary of State of Tennessee, as
appropriate), of the Articles of Incorporation, By-Laws, certificate of
existence and resolutions of the Companies, certifying as to the incumbency of
the officers of the Companies and representing and warranting that the
conditions set forth in SECTION 5.05 and SECTION 5.08 have been satisfied.
SECTION 5.15 NON-COMPETITION AGREEMENTS.
Each Seller shall have entered into non-competition agreements with
Buyer in the form of SECTION 5.15 SCHEDULE (A) and, subject to the occurrence of
the Closing, such non-competition agreements being in full force and effect as
of the Closing Date.
12
SECTION 5.16 RECEIPT OF FINANCING.
Buyer shall have received the proceeds of its bank financing.
SECTION 5.17 ESCROW AGREEMENTS.
The Sellers shall have entered into the Escrow Agreements set forth in
SECTION 3.03 and, subject to the occurrence of the Closing, such Escrow
Agreements shall be in full force and effect as of the Closing Date.
SECTION 5.18 REAL ESTATE LEASES.
The lessors of the Included Leased Property shall have executed and
delivered to Buyer at Closing the leases and/or assignments of the Included
Leased Property leases as set forth on SECTION 5.18 SCHEDULE (A).
SECTION 5.19 EXECUTION OF DESIGN/BUILD AGREEMENT AND LEASE/TENNESSEE.
The execution and delivery by CHI NU, L.L.C. of the Design/Build and
Lease Agreements for the construction of a new Tennessee facility in
substantially the form attached hereto as SECTION 5.19 SCHEDULES (A) AND (B).
SECTION 5.20 EXECUTION OF DESIGN/BUILD AGREEMENT AND LEASE/TEXAS.
The execution and delivery by Industrial Realty Partners of the
Design/Build and Lease Agreements for the construction of a new Texas facility
in substantially the form attached hereto as SECTION 5.20 SCHEDULES (A) AND (B).
SECTION 5.21 FIRPTA CERTIFICATES.
Delivery to Buyer of an executed certificate of non-foreign status for
each Company.
SECTION 5.22 OTHER MATERIAL DOCUMENTS.
Delivery to Buyer of such other material documents executed and
delivered by the Companies as reasonably requested by Buyer.
ARTICLE VI.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS
SECTION 6.01 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to effect the Closing, to sell the Assets
and the Acquired Business and to perform their obligations hereunder are and
shall be subject, at the discretion of the Sellers, to the prior fulfillment of
each of the following conditions set forth in this ARTICLE VI.
SECTION 6.02 ACQUISITION OF INDUSTRIAL REALTY PARTNERS REAL ESTATE.
The purchase by Buyer, at Closing, of the real estate described in
SECTION 5.02 SCHEDULE (A) by execution and delivery by Buyer and Industrial
Realty Partners of the Real Estate Purchase Agreement attached hereto as SECTION
5.02 SCHEDULE (B) and the consummation of the purchase of the Industrial Realty
Partners Property in accordance with the Real Estate Purchase Agreement.
13
SECTION 6.03 EMPLOYMENT AGREEMENTS.
The execution and delivery at Closing by Buyer of the employment
agreements for the individuals set forth in SECTION 5.03 SCHEDULE (A) and in
substantially the form of the Employment Agreements attached as SECTION 5.03
SCHEDULE (B).
SECTION 6.04 NON-COMPETITION AGREEMENTS.
Buyer shall have entered into non-competition agreements with each
Seller in the form of SECTION 5.15 SCHEDULE (A) (or Buyer shall have waived the
requirement for non-competition agreements from each Seller at Closing and
otherwise provided for the medical coverages set forth therein) and, subject to
the occurrence of the Closing, such non-competition agreements being in full
force and effect as of the Closing Date.
SECTION 6.05 DELIVERY OF EXHIBITS AND SCHEDULES.
The delivery to the Sellers of all of the Exhibits and Schedules
required by this Agreement to be delivered by Buyer, updated through the Closing
Date.
SECTION 6.06 XXXX XXXXX XXXXXX APPROVAL.
If required, all applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated and the
Companies and Buyer shall have received all authorizations, consents, and
approvals of the government and governmental agencies required under the HSR
Act.
SECTION 6.07 OPINION OF BUYER'S COUNSEL.
Receipt by the Sellers of the opinion of Buyer's counsel substantially
in the form of SECTION 6.07 SCHEDULE (A) attached hereto.
SECTION 6.08 CORRECTNESS OF BUYER'S REPRESENTATIONS AND WARRANTIES.
Except for changes expressly permitted or contemplated hereby or
consented to by the Sellers, and except for matters waived or consented to by
the Sellers pursuant to SECTION 13.04, each of the representations and
warranties of Buyer set forth in ARTICLE X hereof shall be true and correct on
and as of the Closing Date with the same effect as if made at such time; and
Buyer shall have, in all material respects, performed and complied with each of
the agreements, covenants, terms and conditions hereof applicable to Buyer.
SECTION 6.09 ABSENCE OF LEGAL RESTRAINTS.
There shall have been no order or preliminary or permanent injunction
entered in any action or proceeding before any court or governmental,
administrative or regulatory authority or agency, or no other action taken, or
statute, rule, regulation, legislation, interpretation, judgment or order
proposed enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to Buyer or the Sellers by any legislative body, court, government or
governmental, administrative or regulatory authority or agency which shall have
remained in effect and which shall have had the effect of: (i) making illegal,
delaying or otherwise directly or indirectly restraining or prohibiting the
purchase of the Assets and the Acquired Business by Buyer as contemplated
hereby, or the
14
consummation of the transactions hereunder; or, (ii) prohibiting or limiting the
ownership or operation by Buyer of the Assets and Acquired Business, or
compelling the Companies to dispose of or hold separate all or any portion of
the Acquired Business or Assets of the Companies as a result of the transactions
hereunder. There shall not be pending or threatened before any court or
governmental, administrative or regulatory authority or agency any action or
proceeding instituted by any governmental, administrative or regulatory
authority which seeks to have any of the effects specified in this Section.
SECTION 6.10 ABSENCE OF BANKRUPTCY PROCEEDINGS.
No proceeding shall have been instituted against Buyer, the Companies or
the Shareholder seeking to adjudicate any of them as bankrupt or insolvent, or
seeking liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief, or composition of their debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for Buyer, the Companies or the Shareholder
or any substantial part of their respective properties (each such action being a
"Bankruptcy Proceeding") and neither Buyer nor the Sellers shall have taken any
corporate action to authorize any Bankruptcy Proceeding.
SECTION 6.11 CORPORATE AUTHORIZATION AND APPROVAL BY BUYER.
Receipt by the Sellers, at or before Closing, of copies of resolutions
of the Board of Directors of Buyer, certified by the Secretary of Buyer,
authorizing the transactions contemplated by this Agreement, including, without
limitation, the purchase of the Assets and the Acquired Business, and the
execution and delivery of this Agreement and all documents related hereto by an
authorized officer of Buyer. The authorizations of Buyer shall be attached
hereto as SECTION 6.11 SCHEDULE (A).
SECTION 6.12 SECRETARY'S CERTIFICATE.
Receipt by Sellers of a certificate of the Secretary of Buyer, in the
form attached hereto as SECTION 6.12 SCHEDULE (A) dated the Closing Date and
attaching copies (certified by the Secretary of State of Delaware, as
appropriate), of the Articles of Incorporation, Certificate of Limited
Partneship, By-Laws, Limited Partnership agreement, certificate of existence and
resolutions of Buyer, certifying as to the incumbency of the officers of Buyer
and representing and warranting that the conditions set forth in SECTION 6.08
and SECTION 6.09 have been satisfied.
SECTION 6.13 ESCROW AGREEMENTS.
Buyer shall have entered into the Escrow Agreements set forth in SECTION
3.03 and, subject to the occurrence of the Closing, such Escrow Agreements shall
be in full force and effect as of the Closing Date.
SECTION 6.14 EXECUTION OF DESIGN/BUILD AGREEMENT AND LEASE/TENNESSEE.
The execution and delivery by Buyer of the Design/Build and Lease
Agreements for the construction of a new Tennessee facility in substantially the
form attached hereto as SECTION 5.19 SCHEDULES (A) AND (B).
SECTION 6.15 EXECUTION OF DESIGN/BUILD AGREEMENT AND LEASE/TEXAS.
15
The execution and delivery by Buyer of the Design/Build and Lease
Agreements for the construction of a new Texas facility in substantially the
form attached hereto as SECTION 5.20 SCHEDULES (A) AND (B).
SECTION 6.16 REAL ESTATE LEASES.
Buyer shall have executed and delivered to the Sellers at Closing the
leases and/or assignments of the Included Leased Property as set forth on
SECTION 5.18 SCHEDULE (A).
ARTICLE VII.
CLOSING
SECTION 7.01 CLOSING.
The closing hereunder (the "Closing") shall take place at the offices of
Xxxxx, Tarrant & Xxxxx, 0000 Xxxxxxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xx. 000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xx. on April 26, 1999 or at such other place and time and
date as may be agreed to by the Sellers and Buyer.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller, jointly and severally, represents and warrants to Buyer, as
of the date hereof and on the Closing Date, that all of the representations and
warranties contained in this Article are true and correct and agrees as follows:
SECTION 8.01 ORGANIZATION AND QUALIFICATION OF THE SHAREHOLDER.
(a) The Shareholder--Organization.
The Shareholder is a corporation duly organized, validly existing under
the laws of the State of Tennessee, and has the full corporate power and
authority to own, lease and operate its properties and carry on its
business in all respects as presently owned or conducted. The
Shareholder is duly qualified or licensed as a foreign corporation to do
business in each jurisdiction where its ownership or leasing of property
or the conduct of its business requires such qualification. Attached
hereto as SECTION 8.01(A) SCHEDULE (A) and SECTION 8.01(A) SCHEDULE (B)
are (i) a true and complete copy of the Articles of Incorporation of the
Shareholder, as amended and in effect as of the date of this Agreement,
certified by the Secretary of State of the State of Tennessee; and, (ii)
a true and complete copy of the ByLaws of the Shareholder, as amended
and in effect as of the date of this Agreement, certified by the
Secretary of the Shareholder. The Shareholder is not in violation of any
of the provisions of its Articles of Incorporation or By-Laws.
(b) The Shareholder--Evidence of Good Standing and Existence.
The Shareholder is a corporation in good standing under the laws of the
State of Tennessee and in each foreign jurisdiction where its ownership
or leasing of property or the conduct of
16
its business requires qualification or licensing as a foreign
corporation. Attached hereto as SECTION 8.01(B) SCHEDULE (A) and SECTION
8.01(B) SCHEDULE (B) are: (i) a copy of a certificate of good standing
from the Secretary of State of the State of Tennessee evidencing the due
organization, valid existence and good standing of the Shareholder in
the State of Tennessee; and, (ii) a certificate from the applicable
Secretary of State evidencing the due organization, valid existence and
good standing of the Shareholder in each foreign jurisdiction where its
ownership or leasing of property or the conduct of its business requires
qualification or licensing as a foreign corporation.
SECTION 8.02 ORGANIZATION AND QUALIFICATION OF THE COMPANIES.
(a) The Companies--Organization.
Each of the Companies is a corporation duly organized, validly existing
under the laws of the State of Tennessee, and has the full corporate
power and authority to own, lease and operate its properties and carry
on its business in all respects as presently owned or conducted. Each of
the Companies is duly qualified or licensed as a foreign corporation to
do business, in each jurisdiction where its ownership or leasing of
property or the conduct of its business requires such qualification.
Attached hereto as SECTION 8.02(A) SCHEDULE (A) and SECTION 8.02(A)
SCHEDULE (B) are (i) a true and complete copy of the Articles of
Incorporation of each of the Companies, as amended and in effect as of
the date of this Agreement, certified by the Secretary of State of the
State of Tennessee; and, (ii) a true and complete copy of the respective
By-Laws of each of the Companies, as amended and in effect as of the
date of this Agreement, certified by the respective Secretary of each of
the Companies.
(b) The Companies--Evidence of Good Standing and Existence.
Each of the Companies is a corporation in good standing under the laws
of the State of Tennessee and in each foreign jurisdiction where its
ownership or leasing of property or the conduct of its business requires
qualification or licensing as a foreign corporation. Attached hereto as
SECTION 8.02(B) SCHEDULE (A) and SECTION 8.02(B) SCHEDULE (B) are: (i) a
copy of a certificate of good standing from the Secretary of State of
the State of Tennessee evidencing the due organization, valid existence
and good standing of each of the Companies in the State of Tennessee;
and, (ii) . a certificate from the applicable Secretary of State
evidencing the due organization, valid existence and good standing of
each of the Companies in each foreign jurisdiction where its ownership
or leasing of property or the conduct of its business requires
qualification or licensing as a foreign corporation.
SECTION 8.03 OWNERSHIP AND STATUS OF THE COMPANIES' AND THE SHAREHOLDER'S
CAPITAL STOCK.
(a) Shareholder as Owner of the Companies.
The Shareholder is the record, beneficial and legal owner of all of the
issued and outstanding shares of all classes of stock of each of the
Companies, free and clear of all Liens, except for the Liens set forth
on SECTION 8.03(A) SCHEDULE (A) all of which will be released at or
before the Closing Date.
17
(b) Imperial Shareholders.
The Imperial Shareholders are the record, beneficial and legal owners of
all of the issued and outstanding shares of stock of all classes of
stock of Imperial Group, Inc. free and clear of all Liens, except for
the Liens set forth on SECTION 8.03(B) SCHEDULE (A).
SECTION 8.04 POWER OF THE SHAREHOLDER AND THE IMPERIAL SHAREHOLDERS TO APPROVE
SALE OF ASSETS OF THE COMPANIES.
The Shareholder and the Imperial Shareholders have the full power, legal
capacity and authority to execute and deliver this Agreement and each other
document to which the Shareholder or the Imperial Shareholders are a party and
to perform the Shareholder's or the Imperial Shareholders' obligations in this
Agreement and in all other documents to which the Shareholder or the Imperial
Shareholders are a party. This Agreement constitutes, and each such other
document when executed and delivered by the Shareholder and the Imperial
Shareholders will constitute, the legal, valid and binding obligation of the
Shareholder and the Imperial Shareholders, enforceable against the Shareholder
and the Imperial Shareholders in accordance with its terms, except as that
enforceability may be: (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law). The Shareholder and the Imperial Shareholders have obtained,
in accordance with all applicable state corporate law, its charter and by-laws,
if applicable, all approvals and have taken or will take as of the Closing Date
all actions necessary for the authorization, execution, delivery and performance
by the Shareholder and the Imperial Shareholders of this Agreement and the other
documents to which the Shareholder and the Imperial Shareholders are a party,
including, but not limited, to the sale of the Assets and the Acquired Business
and the transactions contemplated herein.
SECTION 8.05 CONFLICTS WITH LAW OR OTHER AGREEMENTS; REQUIRED FILINGS AND
CONSENTS.
(a) Conflicts.
The execution and delivery of this Agreement and each other document to
which the Sellers are a party do not, and the performance of this
Agreement and each other document (including, without limitation, the
consummation of the transactions contemplated hereunder) will not: (i)
violate any provision of the Articles of Incorporation or By-Laws of the
Companies and the Shareholder; (ii) conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to the Sellers or
by which their properties are bound or affected; or (iii) except as set
forth in SECTION 8.05(A) SCHEDULE (A) result in any breach of or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets
of the Sellers pursuant to any agreement, note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, insurance policy
or other instrument or obligation to which the Sellers are a party, or
by which the Sellers, or any of their properties are bound or
18
affected; or, (iv) result in the creation of or impositions of any Lien
on the shares of stock of the Companies or any asset of the Shareholder.
(b) Required Filings and Consents.
Except as may be required by the HSR Act or set forth in SECTION 8.05(B)
SCHEDULE (A) the execution and delivery of this Agreement by the Sellers
do not, and the performance of this Agreement by the Sellers (including,
without limitation, the consummation of the transactions contemplated
hereunder) will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or
regulatory authority, domestic or foreign, on the part of the Sellers.
(c) Public Reporting Obligations.
Neither the Shareholder nor the Companies has presently and has not had
in the past any obligation to file annual reports or other documents
under the Securities Exchange Act of 1934, as amended, and no such
reports have been filed.
SECTION 8.06 LITIGATION AND JUDGMENTS.
(a) Litigation.
Except as set forth on SECTION 8.06(A) SCHEDULE (A) there is no legal
proceeding (or governmental investigation) pending before any court or
governmental body, or any other duly constituted tribunal, or threatened
or in prospect, against or related to the Sellers, or any of the
business or properties thereof. The Sellers are not in default with
respect to any judgment, order, writ, injunction, decree or assessment
against it by any court, federal regulatory agency, state attorney
general, public service commission, governmental agency, department or
instrumentality. Neither the Sellers nor any of its respective
directors, officers, or to the best knowledge of the Sellers, their
agents, or employees is in violation of or charged, or threatened with
any violation of, or under investigation with respect to any violation
of, any provision of any federal, state, or local law or administrative
rule or regulation relating to any aspect of the business or property of
the Sellers (including, without limitation, any laws, rules, or
regulations relating to political contributions or other questionable
payments) which give rise to any liability on the part of Buyer
following the Closing or have a Material Adverse Effect. In addition,
SECTION 8.06(A) SCHEDULE (B) sets forth, as of the Closing Date, a list
of all claims pending or threatened against the Sellers by any Person.
(b) No Orders, Judgments or Decrees.
Except as set forth on SECTION 8.06(B) SCHEDULE (A), the Sellers are not
subject to any order, judgment or decree, or any other legal
restriction, which adversely affects the Assets or the Acquired Business
or which would prevent or hinder the transactions contemplated by this
Agreement.
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SECTION 8.07 BROKERS.
The Sellers have employed Xxxxxxx Xxxxx to serve as a Business Advisor
with respect to this transaction and the Sellers' obligation with respect to
Xxxxxxx Xxxxx'x employment is as set forth in SECTION 8.07 SCHEDULE (A). The
Xxxxxxx Xxxxx fees and expenses shall be paid by the Companies. Except with
respect to Xxxxxxx Xxxxx, the Sellers have not directly or indirectly in
connection with this Agreement or the transactions contemplated hereby (a)
employed any broker, finder or agent, or (b) agreed to pay or incurred any
obligation to pay any broker's or finder's fee, any sales commission or any
similar form of compensation.
SECTION 8.08 CONTROL OF RELATED BUSINESSES.
The Sellers are not, alone or with one or more other Persons, the
controlling Affiliate of any Entity, business or trade that (a) is engaged in
any line of business which is the same as or similar to any line of business in
which the Companies are engaged, or (b) is engaged in any transaction with the
Companies, except as set forth in SECTION 8.08 SCHEDULE (A).
SECTION 8.09 AUTHORIZATION AND BINDING EFFECT.
Each of the Companies has the full power and authority to execute and
deliver this Agreement, the other agreement(s) contemplated hereby to which each
of the Companies is a party and to perform each of the Companies' respective
obligations in this Agreement and in each document to which each of the
Companies is a party. This Agreement constitutes and each such other document
when executed and delivered by each of the Companies, will constitute the legal,
valid and binding obligation of each of the Companies enforceable in accordance
with its terms, except as that enforceability may be: (i) limited by any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (ii) subject to
general principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law). The Companies have obtained, in
accordance with all applicable state corporate law, their respective charters
and by-laws, all approvals and have taken or will take as of the Closing Date
all actions necessary for the authorization, execution, delivery and performance
by the Companies of this Agreement and the other documents to which the
Companies are a party, including, but not limited, to the sale of the Assets and
the Acquired Business and the transactions contemplated herein.
SECTION 8.10 CORPORATE RECORDS OF STOCK OWNERSHIP.
The stock transfer books, minute books and stock ledgers of each the
Companies and the Shareholder, copies of which have been delivered to Buyer, are
true, complete, accurate and up to date, and contain all necessary signatures,
and set forth all of the shares issued, transferred and surrendered. No transfer
has been made without surrender of the proper certificate, duly endorsed, and
all certificates so surrendered have been duly canceled.
SECTION 8.11 SUBSIDIARIES, AFFILIATES AND JOINT VENTURES.
(a) No Subsidiaries.
The Companies do not directly or indirectly own securities or other
ownership interests of any corporation or other entity having ordinary
voting power to elect a majority of the board
20
of directors of such corporation or other entity or other persons
performing similar functions. The Companies own certain investment
securities set forth on SECTION 2.04 SCHEDULE (A).
(b) Joint Ventures and Partnerships.
Except as set forth on SECTION 8.11(B) SCHEDULE (A) neither of the
Companies is a general or limited partner of, or a party to any joint
venture with, any other entity, and neither of the Companies, directly
or indirectly, owns any interest in any other corporation, partnership,
joint venture or other business association or entity.
SECTION 8.12 INSIDER TRANSACTIONS.
(a) Company Obligations.
Except as set forth in SECTION 8.12(A) SCHEDULE (A), neither of
the Companies is indebted to any other Seller, or any director,
officer, employee or agent of any other Seller, or any Affiliate
of a Seller, except for amounts due as normal salary, wages, or
reimbursement of ordinary business expenses, and no director,
officer, employee or agent of either of the Companies is indebted
to the Companies except for ordinary business expense advances.
(b) Shareholder Obligations.
Except as set forth in SECTION 8.12(B) SCHEDULE (A), the
Shareholder and the Imperial Shareholders do not have any direct
or indirect indebtedness to the Companies or any direct or
indirect interest in any property used by, or relating to, the
Companies, except through the ownership of the capital stock of
the Companies or the Shareholder.
(c) Powers of Attorney.
Set forth on SECTION 8.12(C) SCHEDULE (A) are the names of all
persons holding powers of attorney from the Companies and copies
of such powers of attorney.
SECTION 8.13 LICENSES, PERMITS AND ELIGIBILITY.
Each of the Companies has obtained all material permits, licenses and other
authorizations that are required under federal, state and local laws necessary
for the lawful conduct of the business of the Acquired Business. Attached as
SECTION 8.13 SCHEDULE (A) is a list of all material licenses, permits and
authorizations held by the Companies and except as noted on SECTION 8.13
SCHEDULE (A), such permits are in full force and effect and are transferable to
Buyer.
SECTION 8.14 PERSONAL PROPERTY OF THE COMPANIES.
(a) Title to Tangible Personal Property.
Except as set forth in SECTION 8.14(A) SCHEDULE (A), each of the
Companies have and at the Closing, will have good, indefeasible,
marketable and merchantable title, free and clear of all Liens,
to all tangible personal property, (including, but not limited
to, all equipment, furniture, fixtures, inventory, supplies,
accounts receivable and other
21
intangible personal properties) reflected in the December Balance
Sheet or acquired since the date of the December Balance Sheet,
other than any personal property disposed of in the ordinary
course of business since the date of the December Balance Sheet
and all fully depreciated items of tangible personal property
(herein the "Tangible Personal Property"). Except as set forth on
SECTION 8.14(A) SCHEDULE (B) the Tangible Personal Property
constitutes all of the Tangible Personal Property used by the
Companies for the operation of the Acquired Business as currently
conducted by the Companies, except for the Excluded Assets.
(b) Owned Tangible Personal Property.
Attached hereto as SECTION 8.14(B) SCHEDULE (A) is a true and
complete list of all personal property owned by the Companies.
(c) Leased Tangible Personal Property.
Attached hereto as SECTION 8.14(C) SCHEDULE (A) is a true and
complete list of all leases and other agreements under which the
Companies lease, hold or operate any tools, furniture, machinery,
equipment, vehicles or other Tangible Personal Property owned by
any other person for use in the Acquired Business. Copies of all
leases for the Tangible Personal Property set forth on SECTION
8.14(C) SCHEDULE (A) have been delivered to Buyer. Except as set
forth on SECTION 8.14(C) SCHEDULE (A), all such leases and
agreements are in full force and effect. Neither of the Companies
nor, to the best knowledge of the Sellers, any other party is in
default, violation or breach under any such lease and, to the
best knowledge of the Sellers, no event has occurred and is
continuing which constitutes or, with notice or the passage of
time or both, would constitute a default, violation or breach
under any such lease, except as set forth on SECTION 8.14(C)
SCHEDULE (A).
(d) Operating Condition.
Except as set forth on SECTION 8.14(D) SCHEDULE (A), all of the
Assets constituting Tangible Personal Property owned or leased by
the Companies are in good operating condition and repair,
ordinary wear and tear excepted, and all machinery, equipment and
motor vehicles owned or used by the Companies are in such
condition and repair as is suitable for the operation of the
Acquired Business, except for repairs and replacements required
in the ordinary course of business.
SECTION 8.15 ACCOUNTS RECEIVABLE.
The accounts recievable included in the December Balance Sheet (as
herein defined) constitute all of the accounts receivable of the Acquired
Business as of the December Balance Sheet Date (as herein defined). Except as
set forth on SECTION 8.15 SCHEDULE (A), each of the Companies is the true and
lawful owner of its accounts receivable and has good and clear title to each
account, free and clear of all Liens, with the absolute right to transfer any
interest therein. To the best of the Companies' knowledge and except as set
forth on SECTION 8.15 SCHEDULE (A), each account receivable is as set forth on
the December Balance Sheet and will be as set forth on the Closing
22
Balance Sheet: (i) a valid obligation of the account debtor, enforceable in
accordance with its terms, and is not subject to any set-offs, adverse claims,
assessments, defaults, prepayments, defenses, and conditions precedent, (ii) a
true and correct statement of the account of actual services performed for and
accepted by such account debtor, (iii) collectible in full through the exercise
of usual and customary collection practices in the industry, subject to the
reserves as set forth on the applicable balance sheet, and (iv) the reserve for
allowance of doubtful accounts as set forth on the applicable balance sheet is
and will be adequate and in accordance with generally accepted accounting
principles.
SECTION 8.16 TRADENAMES AND INTELLECTUAL PROPERTY RIGHTS.
Attached hereto as SECTION 8.16 SCHEDULE (A) is a list of each trade
name or other corporate name used by the Companies and a list of all other
patents, copyrights, registrations or applications with respect thereto,
licenses (including software licenses) or other rights with respect thereto
owned or used by the Companies in the conduct of the Acquired Business. Except
as set forth in SECTION 8.16 SCHEDULE (A), the Companies own valid title to the
Companies Intellectual Property, free and clear of all Liens. The Companies have
not granted any license to any other Person with respect to the Companies'
Intellectual Property. Except as set forth in SECTION 8.16 SCHEDULE (A), the
Companies are not aware of any third parties using, infringing or
misappropriating any of the Companies' Intellectual Property or any marks or
names that are confusingly similar thereto. Except as set forth in SECTION 8.16
SCHEDULE (A), with respect to the Acquired Business as conducted (a) no products
made, sold or distributed by the Companies or service provided by the Companies
violate any license or infringe any intellectual property rights of any third
party, and (b) there are no pending claims or demands by any third party to the
contrary.
SECTION 8.17 TITLE TO INCLUDED REAL PROPERTY.
All of the buildings, offices and other improvements located upon any
Included Real Property and Included Leased Property (collectively referred to
herein as the Included Property) are in good repair, ordinary wear and tear
excepted. Attached hereto as SECTION 8.17 SCHEDULE (A) is a list of title
commitments and/or title reports, as requested by Buyer, issued within thirty
(30) days prior to the date hereof with respect to Included Property and a list
of each appraisal with respect to such parcels of real estate, copies of which
have been delivered to Buyer, as requested by Buyer.
Except as set forth on SECTION 8.17 SCHEDULE (B) and except for
Permitted Liens, the Companies have good, valid and marketable fee simple title
to the Included Real Property, free and clear of all Liens. At Closing, the
Companies shall have good, valid and marketable fee simple title to the Included
Real Property indicated on SECTION 8.17 SCHEDULE (A). There are no outstanding
options or rights of first refusal to purchase the Included Real Property, or
any portion thereof or interest therein.
The Companies have delivered to Buyer correct and complete copies of all
leases with respect to the Included Leased Property indicated on SECTION
2.05(A)(IV) SCHEDULE (A). Each of the Included Leased Property leases is legal,
valid, binding, enforceable in accordance with its terms and in full force and
effect, except as may be limited by bankruptcy, insolvency, reorganization and
23
similar Applicable Laws affecting creditors generally and by the availability of
equitable remedies. Neither of the Companies nor any other party is in default,
violation or breach in any respect under any of the Included Leased Property
leases, and no event has occurred and is continuing that constitutes or, with
notice or the passage of time or both, would constitute a default, material
violation or material breach in any respect undersuch leases. Each of the
Included Leased Property leases grants the tenant under such lease the exclusive
right to use and occupy the demised premises thereunder. At Closing, the
Companies shall have good and valid title to the leasehold estate under each of
the Included Leased Property leases free and clear of all Liens. Each Company
enjoys peaceful and undisturbed possession under its respective Included Leased
Property leases.
The Included Property constitutes all the fee and leasehold interests in
real property held for use in connection with or used by the Companies in the
Acquired Business, except for the Excluded Real Property. The Included Property,
is, in the opinion of the Sellers, all of the real property interests necessary
for the conduct of, or otherwise material to the Acquired Business as conducted
on the date hereof.
SECTION 8.18 CONDITION OF PROPERTY.
Except as set forth on SECTION 8.18 SCHEDULE (A), there are now, and at
the Closing Date there will be, no material physical or mechanical defects of
the Included Property, including, without limitation, the plumbing, heating, air
conditioning, ventilating and electrical systems, and all such items are in good
operating condition and repair, ordinary wear and tear excepted. The use and
operation of the Included Property in the conduct of the Acquired Business does
not violate in any material respect any instrument of record or agreement
affecting the Included Property. Except as set forth in SECTION 8.22, there is
no material violation by the Sellers of any covenant, condition, restriction,
easement ordinance, code or regulation or order of any Governmental Authority
having jurisdiction over such property or, to the best knowledge of the Sellers,
of any other Person entitled to enforce the same affecting the Included Property
or the use or occupancy thereof. No damage or destruction has occurred with
respect to any of the Included Property since the December Balance Sheet Date
that would, individually or in the aggregate, have a Material Adverse Effect.
SECTION 8.19 LAND USE REGULATION.
Except as set forth on SECTION 8.19 SCHEDULE (A), there are no
condemnation, zoning or other land use regulation proceedings, either instituted
or to the best of the Sellers' knowledge, planned to be instituted, which could
detrimentally affect the use or operation of the Included Property for its
intended purpose or the value of the Included Property, nor have Sellers
received notice of any special assessment proceedings affecting the Included
Property nor are the Sellers aware of any contemplated zoning hearing or
proceeding with respect to any of the Included Property. To the best of the
Sellers' knowledge, the Included Property is in full compliance with all
applicable building, zoning, subdivision and other land use and similar
Applicable Laws affecting the Included Property (collectively, the "Real
Property Laws"), and the Companies have received no notice of violation or
claimed violation of any Real Property Law. There is no pending or, to the best
knowledge of the Sellers, anticipated change in any Real Property Law that will
have or result in a Material Adverse Effect upon the ownership, alteration, use,
occupancy or operation of the Included Property or any
24
portion thereof. No current use by the Companies of the Included Property is
dependent on a nonconforming use or other Governmental Approval the absence of
which would materially limit the use of such properties or assets held for use
in connection with, necessary for the conduct of, or otherwise material to, the
Acquired Business.
SECTION 8.20 REPORTS, CONTRACTS AND OTHER DOCUMENTS.
The mechanical and structural plans and specifications, certificates of
occupancy, and warranties, relating to or affecting the Included Real Property,
delivered to Buyer pursuant to this Agreement or in connection with the
execution hereof are and at the time of Closing will be true and correct copies,
and, at the time of Closing, the certificates of occupancy and the warranties
will be in full force and effect in accordance with the provisions thereof.
SECTION 8.21 USE PERMITS AND OTHER APPROVALS.
The Sellers have obtained all licenses, permits, approvals, easements
and rights of way required from all governmental authorities having jurisdiction
over the Included Real Property or from private parties for the normal use and
operation of the Included Real Property to ensure free and unimpeded vehicular
and pedestrian ingress to and egress from the Included Real Property and as
required to permit the normal intended usage of the Included Real Property by
the tenants thereof, their invitees and customers. The Sellers have materially
complied with all such licenses and permits and have not received any notice
that any such licenses or permits will not be renewed upon expiration, or of any
material conditions which will be imposed in order to receive any such renewal.
SECTION 8.22 ENVIRONMENTAL MATTERS.
(a) Permits.
All Environmental Permits currently held by the Companies are
identified in SECTION 8.22(A) SCHEDULE (A), and the Companies
currently hold, all such Environmental Permits necessary to the
conduct of the Acquired Business, and all such Environmental
Permits shall be validly transferred to Buyer on the Closing
Date, except as set forth on SECTION 8.22(A) SCHEDULE (A). The
Companies have not been notified by any relevant Governmental
Authority that any Environmental Permit will be modified,
suspended, canceled or revoked, or cannot be renewed in the
ordinary course of business.
(b) No Violation.
Except as set forth on SECTION 8.22(B) SCHEDULE (A), each of the
Companies has complied and is in compliance in all material
respects with all Environmental Permits and all applicable
Environmental Laws pertaining to the Included Property (and the
use, ownership or transferability thereof) and the Acquired
Business. Except as set forth on SECTION 8.22(B) SCHEDULE (A), no
Person has alleged any violation by or liability of the Companies
of or pursuant to any Environmental Permits or any applicable
Environmental Law relating to the conduct of the Acquired
Business or the use, ownership or transferability of the Included
Property.
25
(c) No Actions.
Except as set forth in SECTION 8.22(C) SCHEDULE (A), the
Companies have not caused or taken any action that has resulted
or may result in, or has been or is subject to, any liability or
obligation relating to (i) the environmental conditions on,
under, or about any Included Property, the Assets or other
properties or assets owned, leased or used or held for use by the
Companies in connection with, necessary for the conduct of, or
otherwise material to, and to be transferred or transferred to
Buyer as part of the Acquired Business, or (ii) the past or
present use, management, handling, transport, treatment,
generation, storage, arrangement for disposal or treatment or
Release or threatened Release of any Hazardous Substances, except
for any such liabilities and obligations that, individually and
in the aggregate, are not material to the Acquired Business and
have not had or resulted in, and will not have or result in, a
Material Adverse Effect.
(d) Other. Except as set forth in SECTION 8.22(D) SCHEDULE (A):
(i) None of current or past operations, or any by-product
thereof, and none of the currently owned property or assets of
the Companies used in the Acquired Business and to be transferred
to Buyer as part of the Assets or the Acquired Business,
including without limitation the Assets and the Included
Property, is related to or subject to any investigation or
evaluation by any Governmental Authority or other Person, as to
whether any Remedial Action is needed to respond to a Release or
threatened Release of any Hazardous Substances.
(ii) Neither Company is subject to any outstanding order,
judgment, injunction, decree or writ from, or contractual of
other obligation to or with, any Governmental Authority or other
Person in respect of which Buyer may be required to incur any
Third Party and Governmental Environmental Liabilities and Costs
arising from the Release or threatened Release of a Hazardous
Substance.
(iii) None of the Included Property is, and the Companies, have
not transported or arranged for transportation (directly or
indirectly) of any Hazardous Substances relating to the Assets or
the Included Property to any location that is, listed or proposed
for listing under CERCLA, or on any similar state list, or the
subject of federal, state or local enforcement actions or
investigations or Remedial Action.
(iv) No work, repair, construction or capital expenditure is
required or planned in respect of the Assets pursuant to or to
comply with any Environmental Law, nor has either of the
Companies received any notice of any such requirement, except for
such work, repair, construction or capital expenditure as is not
material to the Acquired Business and is in the ordinary course
of business.
26
(v) The Companies have disclosed and made available to Buyer all
information, including without limitation all studies, analyses
and test results, in the possession, custody or control of either
Company relating to (i) the environmental conditions on, under or
about the Included Property, (ii) the compliance of the Included
Property and the Acquired Business with applicable Environmental
Laws and Environmental Permits and (iii) Hazardous Substances
used, managed, handled, transported, treated, generated, stored,
arranged for disposal or treatment, Released or threatened to be
Released by either Company or any other Person at any time on any
Included Property, or otherwise in connection with the use or
operation of the Assets used in or held for use in connection
with the Acquired Business, including, without limitations, to
any location other than the Included Property.
SECTION 8.23 PRIOR FINANCIAL STATEMENTS.
(a) The Companies have delivered to Buyer copies of the following
financial statements:
(i) the audited combined balance sheet of the Companies as at
December 31, 1996, 1997 and December 31, 1998 and related
statements of income and retained earnings and changes in
financial position for the fiscal years ended on those dates,
together with supporting schedules and certificates of Bumpus,
Hall, Xxxxx Xxxxxxxx & Xxxxx, certified public accountants, that
such financial statements present fairly the financial positions
of the Companies as at the respective dates of said balance
sheets and results of operations and changes in financial
positions of the Companies for the respective periods then ended
in conformity with generally accepted accounting principles
applied on a basis consistent with that of preceding periods (the
December Balance Sheet of the Companies as at December 31, 1998
are referred to as the "December Balance Sheet" and December 31,
1998 is refered to as the "December Balance Sheet Date"); and
(ii) the unaudited combined balance sheet of the Companies as at
February 28, 1998 and 1999 and related statements of income and
retained earnings and changes in financial position for the
two-month periods ended on those dates, together with supporting
schedules, certified by the Chief Executive Officer and Chief
Financial Officer of the Companies.
Except as set forth in the notes thereto, all of such financial
statements present fairly the financial position of the Companies as at
the respective dates of said balance sheets and results of operations
and changes in financial position of the Companies for the respective
periods then ended in conformity with generally accepted accounting
principles applied on a basis consistent with that of the preceding
periods (subject, in the case of such balance sheets as at February 28,
1998 and 1999 and such related statements of income and retained
earnings and changes in financial position for the two-month periods
ended on those dates, to normal year-end adjustments consistent with
prior periods). Except as set forth on SECTION 8.23(A) SCHEDULE (A), no
uncollectible accounts receivable are reflected on any of said
27
balance sheets without provision for an adequate reserve for
uncollectible amounts; inventories reflected on the balance sheets
represent only good and serviceable items priced at the lower of cost
(first in, first out method) or market values with adequate provision
for obsolescence, shrinkage, excess quantities, defective materials and
deterioration.
(b) The Companies have prepared the financial projections and data for 1999
through 2002 attached hereto as SECTION 8.23(B) SCHEDULE (A) (the
"PROJECTIONS") in good faith and the Sellers believe the Projections
reflect a reasonable estimate of the performance of the Companies for
the periods presented; but such Projections are not a representation or
guarantee of future results.
(c) The balance sheets included in the financial statements delivered
pursuant to this SECTION 8.23 include material assets and liabilities
not intended to constitute a part of the Acquired Business or the Assets
after giving effect to the transactions contemplated hereby. The
material assets and liabilites not intended to constitue a part of the
Acquired Business or the Assets which are included in the balance sheets
included in such finanacial statements are identified by category of
asset or liability, as applicable, on SECTION 8.23(C) SCHEDULE (A).
The statements of income and retained earnings and statements of cash
flows included in the financial statements delivered pursuant to this
SECTION 8.23 do not reflect the operations of any entity or business not
intended to constitute a part of the Acquired Business, after giving
effect to the transactions contemplated hereby, except for the results
of operations resulting from the inclusion of the assets and liabilities
set forth on SECTION 8.23(C) SCHEDULE (A) in the operations of the
Companies and the results of operations resulting from the subsidiary
relationship with the Shareholder and the ownership of real property
used in the operation of the business by affiliated entities, and
reflect all costs that historically have been incurred by the Acquired
Business (other than the Excluded Liabilities).
SECTION 8.24 EMPLOYMENT MATTERS.
(a) Employee Census.
Attached hereto as SECTION 8.24(A) SCHEDULE (A) is a list, as of
the date of Closing, of the names and current compensation of all
of the officers and employees of the Companies, the date of each
such individual's first date of employment with the Companies,
the position held by each such individual, such individual's
status as a salaried or hourly employee or commissioned agent,
and the date of the last change in compensation for each such
individual.
No personnel otherwise employed by the Company and listed on
SECTION 8.24(A) SCHEDULE (A) is required or necessary for the
operation of the Acquired Business. Except as set forth on
SECTION 8.24(A) SCHEDULE (A) the Companies do not employ any
agents or independent contractors receiving regular compensation.
28
(b) Wages and Benefits.
Except as set forth on SECTION 8.24(B) SCHEDULE (A) attached
hereto, no bonuses, additional compensation or other forms of
compensation or benefits (including, but not limited to, accrued
vacation pay, sick pay or other such benefits) are payable by the
Companies with respect to periods ending on or prior to the
Closing Date.
(c) Employee Benefit Plans.
Attached hereto as SECTION 8.24(C) SCHEDULE (A) is a true and
complete list and description of (with complete copies delivered
to Buyer): (i) all employee benefit plans (within the meaning of
Section 3(3) of ERISA) maintained or contributed to by any of the
Companies or any of their respective ERISA Affiliates or with
respect to which the Companies or any of their ERISA Affiliates
have any liability; and (ii) each employee benefit plan for which
the Companies or any of their respective ERISA Affiliates could
incur liability under Section 4069 of ERISA, in the event such
plan were terminated, or under Section 4212(c) of ERISA, or in
respect of which the Companies or any of their respective ERISA
Affiliates remains secondarily liable under Section 4204 of ERISA
(herein referred to each individually as a "Plan" and
collectively, the "Plans"). Except as contemplated herein, the
Companies have no express commitment: (i) to create, incur
liability with respect to or cause to exist any other employee
benefit plan, program or arrangement; (ii) to enter into any
material contract or agreement to provide compensation or
benefits to any individual; or (iii) to modify or terminate any
Plan, other than with respect to a modification or termination
required by ERISA or the Code.
(d) Qualification of Plans.
Except as set forth on SECTION 8.24(D) SCHEDULE (A) each Plan
that is intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the IRS after
1985 providing that it is so qualified and each trust established
in connection with any Plan that is intended to be exempt from
federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS after 1985 providing
that it is so exempt and no fact or event has occurred since the
date of such determination letter that could adversely affect the
qualified status of any such Plan or the exempt status of any
such trust. None of the Plans is subject to the laws of any
jurisdiction outside of the United States.
(e) Prohibited Transactions.
There has been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to
any Plan. No complete or partial termination has occurred within
the five years preceding the date hereof with respect to any
Plan. None of the assets of the Companies is, or is expected to
be, the subject of any lien arising under Section 302(f) of ERISA
or Section 412(n) of the Code. The Companies have not been, nor
are expected to be, required to post any security under Section
307 of ERISA or Section 401(a)(29) of the Code.
(f) Compliance with Law.
29
Each Plan is now and has been operated in all respects in
accordance with the requirements of all applicable laws
(including, without limitation, ERISA and the Code) and with the
requirements of the terms of such Plan. All employer
contributions, premiums, payments or amounts required to be made,
paid or accrued with respect to any Plan have been made, paid or
accrued on or before their due dates.
(g) Multiemployer Plans.
Except as specified on SECTION 8.24(G) SCHEDULE (A), no Plan is a
"multiemployer plan" as defined in ERISA, and neither the
Companies nor any of their ERISA Affiliates has or could have a
withdrawal liability with respect to a multiemployer plan.
SECTION 8.25 CONTRACTS OF THE COMPANIES.
(a) Insurance.
A list of all insurance policies of the Companies (copies of
which have been supplied to Buyer), is set forth on SECTION
8.25(A) SCHEDULE (A) are in full force and effect and all
premiums due and payable thereon have been paid. The Companies
have delivered to Buyer complete and correct copies of all such
policies together with all riders and amendments thereto. The
Companies have complied in all material respects with the terms
and provisions of such policies. The insurance coverage provided
by such policies is adequate and customary for the Acquired
Business. The Companies will maintain all insurance policies in
force, and will pay all premiums due with respect to such
policies through the Closing Date. There are no circumstances
existing which would enable such insurers to avoid liability
under the policies issued by them. There are no pending claims
against such insurance policies of the Companies as to which the
insurers have denied liability. There exist no claims under such
insurance policies that have not been properly filed by the
Companies. No insurance company has canceled any policy with the
Company during the past 18 months.
(b) Agreements Restricting Competition.
Attached hereto as SECTION 8.25(B) SCHEDULE (A) is a list of all
contracts, agreements or understandings to which either of the
Companies is a party or is in any way bound (or which would bind
Buyer as a result of the transactions contemplated in this
Agreement) in any way restricting or purporting to restrict
competition, whether with specified persons or in specified areas
or otherwise.
(c) Other Contracts and Agreements.
Attached hereto as SECTION 8.25(C) SCHEDULE (A) is a list of all
material agreements, contracts, leases, licenses, commitments and
other instruments and arrangements (whether written or oral) by
which (i) any of the Assets are bound or affected or (ii) to
which the Sellers are a party or by which they are bound in
connection with the
30
Acquired Business or the Assets (the "Contracts"). Complete and
accurate copies of all such Contracts have been delivered to
Buyer. Except as set forth in SECTION 8.25(C) SCHEDULE (A), no
consent of any third party is required under any Contract as a
result of or in connection with, and the enforceability of any
Contract will not be affected in any manner by, the execution,
delivery and performance of this Agreement. Each of the Contracts
is in full force and effect and constitutes a legal, valid and
binding obligation of the respective parties thereto, and except
as set forth on SECTION 8.25(C) SCHEDULE (B), the Companies are
not in default or breach of (with or without the giving of notice
or the passage of time) any such agreement or instrument.
SECTION 8.26 INVENTORIES.
Except for the reserve for obsolete inventory set forth on the December
Balance Sheet or to be included in the Closing Balance Sheet, all Inventories of
the Companies are determined in accordance with GAAP and are merchantable and
saleable or usable in the ordinary course of business of the Acquired Business
(including sale to the after parts market) and do not include obsolete or
discontinued items.
SECTION 8.27 ABSENCE OF CERTAIN CHANGES, EVENTS AND CONDITIONS.
Except as set forth in SECTION 8.27 SCHEDULE (A), since the December
Balance Sheet Date, the Companies have conducted the Acquired Business only in
the ordinary course consistent with prior practice and have not, on behalf of,
in connection with or relating to the Acquired Business or the Assets:
(a) suffered any Material Adverse Effect;
(b) entered into, amended or terminated any material contract
(including, without limitation, purchase orders and supplier
contracts);
(c) declared or paid any dividend, distribution or payments to
the Companies' Shareholder or its Affiliates (other than salary
and benefits paid to Shareholder, the Imperial Shareholders or
their Affiliates who are employees of the Companies and rent paid
to the Imperial Shareholders or their Affiliates, each consistent
with past practice);
(d) incurred any obligation or liability, absolute, accrued,
contingent or otherwise, whether due or to become due, except
current liabilities for trade or business obligations incurred in
connection with the purchase of goods or services in the ordinary
course of business consistent with prior practice, none of which
liabilities, in any case or in the aggregate, could have a
Material Adverse Effect;
(e) discharged or satisfied any Lien other than those then
required to be discharged or satisfied, or paid any obligation or
liability, absolute, accrued, continent or otherwise, whether due
or to become due, other than current liabilities shown on the
December
31
Balance Sheet and current liabilities incurred since the date
thereof in the ordinary course of business consistent with prior
practice;
(f) mortgaged, pledged or subjected to Lien, any property,
business or assets, tangible or intangible, held in connection
with the Acquired Business;
(g) sold, transferred, leased to others or otherwise disposed of
any of the Assets, except for inventory sold in the ordinary
course of business, or canceled or compromised any debt or claim,
or waived or released any right of substantial value;
(h) received any notice of termination of any contract, lease or
other agreement or suffered any damage, destruction or loss
(whether or not covered by insurance) which, in any case or in
the aggregate, has had a Material Adverse Effect;
(i) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any
Intellectual Property, or modified any existing rights with
respect thereto;
(j) granted any increase in the compensation (including bonus
payments) of any officer or employee other than in the ordinary
course of business consistent with past practice;
(k) encountered any labor union organizing activity, had any
actual or threatened employee strikes, work stoppages, slowdowns
or lockouts, or had any material change in its relations with its
employees, agents, customers or suppliers;
(l) lost any major customer or major supplier or had any material
order canceled or knows of any threatened cancellation of any
material order;
(m) made any change in its practices with respect to the
collection of receivables, payment of accounts payable or
purchase and sale of inventory;
(n) made any capital expenditures or capital additions or
improvements in excess of an aggregate of $100,000;
(o) instituted, settled or agreed to settle any litigation,
action or proceeding before any court or governmental body
relating to the Acquired Business or the Assets other than in the
ordinary course of business consistent with past practices but
not in any case involving amounts in excess of $25,000.00;
(p) paid or agreed to pay any legal, accounting, brokerage,
finder's fee, Taxes or other expense in connection with, or
incurred any severance pay obligations by reason of, this
Agreement or the transactions contemplated hereby; or
32
(q) taken any action or omitted to take any action that would
result in the occurrence of any of the foregoing.
SECTION 8.28 TAXES.
Each of the following representations and warranties in this SECTION
8.28 is qualified to the extent set forth in SECTION 8.28 SCHEDULE (A).
(a) Qualifying Subchapter S Subsidiaries and Payment of Taxes.
Each of the Companies is, a Qualifying Subchapter S Subsidiary
under Section 1361(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"), and is not required to file a federal income
tax return. All state tax returns required to be filed with
respect to any Tax for which the Companies are liable have been
duly and timely filed with the appropriate Taxing Authority, each
Tax shown to be payable on each such Return has been paid, and
adequate reserves have been established on the consolidated books
of the Companies and the Shareholder for all Taxes for which any
of the Companies is liable, but the payment of which is not yet
due. Each of the Companies has timely filed true, correct and
complete declarations of estimated Tax in each jurisdiction in
which any such declaration is required to be filed by it. No Liens
for Taxes exist upon the Assets of the Companies, except Liens for
Taxes which are not yet due. No Litigation with respect to any Tax
for which the Companies is asserted to be liable is pending or, to
the knowledge of the Companies, threatened. There are no requests
for rulings or determinations in respect of any Taxes pending
between the Companies and any Taxing Authority. No extension of
any period during which any Tax may be assessed or collected and
for which the Companies are or may be liable has been granted to
any Taxing Authority. The Companies are not a party to any tax
allocation or sharing agreement. All amounts required to be
withheld by any of the Companies or paid to governmental agencies
for income, social security, unemployment insurance, sales,
excise, use and other Taxes have been collected or withheld and
paid to the proper Taxing Authority. The Companies have made all
deposits required by law to be made with respect to employees'
withholding and other employment taxes.
(b) Filing of Returns and Payment of Taxes.
All federal, state and local income and other tax returns
(including, without limitation, any and all returns or
declarations in respect of income, estimated real property,
personal property, sales, use, payroll, privilege and other taxes
or impositions) of the Companies required to be filed on or
before the date hereof have been filed; and all taxes shown on
said returns or on any assessments received by the Companies to
be due and payable on or before the date hereof, have been paid.
All taxes and assessments required to have been withheld or
collected by the Companies have been duly withheld and collected,
and have been duly paid over to the proper governmental
authorities, all as and to the extent prescribed by law. The
Companies
33
have not been advised of any deficiency claimed or proposed to be
claimed against or relating to the Companies by any taxing
authority which has not been paid, settled or adequately reserved
for by the Companies; and there are no matters under discussion
with any taxing authority which might result in the assessment of
additional amounts against or relating to the Companies, or any
of the assets of the Companies. There are no agreements, waivers
or other arrangements providing for an extension of time with
respect to the filing of any returns or the assessment of any tax
or deficiency against or relating to the Companies.
(c) Reserves for Taxes.
The Companies have sufficient reserves for the payment of all
unpaid federal, state and local taxes through the Closing Date
and for all periods prior thereto, including, without limitation,
all taxes, if any, imposed after such date but in respect of any
period or periods prior to the Closing Date. The Shareholder has
furnished Buyer with true and correct copies of all federal,
state and local tax returns of or in respect of the Companies and
the Shareholder as actually filed for the three tax years prior
to Closing.
(d) Other Tax Matters.
There were no existing liens for Taxes upon any of the Assets.
SECTION 8.29 ACCOUNTING PRACTICES.
The Companies make and keep accurate books and records reflecting its
assets and liabilities and maintains internal accounting controls that provide
reasonable assurance that (i) transactions are executed with management's
authorization, (ii) transactions are recorded as necessary to permit preparation
of the Companies' financial statements and to maintain accountability for the
assets and liabilities of the Companies, (iii) access to the assets of the
Companies is permitted only in accordance with management's authorization and
(iv) the reported accountability of the assets and liabilities of the
Companiesare compared with existing assets and liabilities at reasonable
intervals.
Section 8.30 Product Warranties.
Except as set forth in SECTION 8.30 SCHEDULE (A), as applicable: (i) the
Companies have no unexpired, expressed product warranty with respect to any
product that they manufacture or sell or that they have heretofore manufactured
or sold; and (ii) the Companies have not received any notice of any claim
(actual or threatened) based on any expressed product warranty; and (iii) the
Companies do not know or have any reasonable ground to know of any claim (actual
or threatened) based on any product warranty of which the Companies have
received notice.
SECTION 8.31 CUSTOMERS AND SUPPLIERS.
SECTION 8.31 SCHEDULE (A) contains a list of those entities that were
the ten largest customers of each of the Companies in terms of approximate
dollar amount of sales during the fiscal year ended December 31, 1998 with a
statement for each such customer during each such period of the dollar amount of
such sales. Except as set forth in SECTION 8.31 SCHEDULE (B), since the December
Balance Sheet Date, the Sellers have not received any oral or written notice
from a customer or vendor of an
34
adverse change in the relationship between the Companies and each customer
listed on SECTION 8.31 SCHEDULE (A) or between the Companies and any of their
ten largest suppliers.
SECTION 8.32 YEAR 2000 ISSUE.
Except as listed on SECTION 8.32 SCHEDULE (A), the Sellers reasonably
anticipate that all computer applications that are material to the Acquired
Business and included among the Assets will on a timely basis be able to perform
properly date sensitive functions for all dates before and after January 1,
2000.
ARTICLE IX.
SECURITY REPRESENTATIONS OF THE SELLERS
SECTION 9.01 SECURITY REPRESENTATIONS OF SELLERS.
Each Seller hereby represents and warrants to Buyer as follows:
(a) The Seller has received and carefully reviewed the materials identified
on SECTION 9.01 SCHEDULE (A);
(b) The Seller has had an opportunity to ask questions of and receive
answers from JAII concerning JAII and all such questions, if any, have
been answered to the full satisfaction of the Seller; the Seller has
received all the information he or she considers necessary or
appropriate for deciding whether to enter into this Agreement and
acquire the JAII Common Stock;
(c) The Seller has such knowledge and expertise in financial and business
matters that he or she is capable of evaluating the merits and risks
involved in an investment in the JAII Common Stock;
(d) Except as set forth in this Agreement, no representations or warranties
have been made to the Seller by JAII, or any agent, employee or
Affiliate of JAII; and in entering into this transaction the Seller is
not relying upon any information other than that identified on SECTION
9.01 SCHEDULE (A), any document filed by JAII with the SEC, this
Agreement and the results of independent investigations, if any, by the
Seller;
(e) The Seller is acquiring the JAII Common Stock for investment purposes
only, solely for the account of the Seller (and not as a nominee or
agent), and not with a view towards the resale or distribution of any
part thereof, and the Seller has no present intention of selling,
granting any participation in, or otherwise distributing the same;
(f) The Seller is familiar with Rule 144 of the Securities Act and
understands the resale limitations imposed thereby; the Seller
understands that (i) the JAII Common Stock has not been registered under
the Securities Act or the securities laws of any state, and the issuance
of such JAII Common Stock is based upon an exemption from such
registration requirements for non-public offerings pursuant to the
Securities Act and applicable state securities laws; (ii) the JAII
Common Stock is and will be "restricted securities" as said term is
defined in
35
Rule 144 of the Securities Act; (iii) the JAII Common Stock may not be
sold or otherwise transferred unless it has been first registered under
the Securities Act and all applicable state securities laws, or unless
exemptions from such registration provisions are available with respect
to said resale or transfer; (iv) JAII is under no obligation to register
the JAII Common Stock under the Securities Act or any state securities
laws, or to take any action to make any exemption from any such
registration provisions available; (v) the certificates for the JAII
Common Stock will bear a legend to the effect that the transfer of the
securities represented thereby is subject to the provisions hereof; and
(vi) stop transfer instructions will be placed with the transfer agent,
if any, for the JAII Common Stock;
(g) The Seller will not sell or otherwise transfer any of the JAII Common
Stock unless and until (i) said JAII Common Stock shall have first been
registered under the Securities Act and all applicable state securities
laws; or (ii) if required by JAII in light of the circumstances
surrounding the proposed sale or transfer the Seller shall have first
delivered to JAII a written opinion of counsel (which counsel and
opinion, in form and substance, shall be reasonably satisfactory to
JAII), to the effect that the proposed sale or transfer is exempt from
the registration provisions of the Securities Act and, if the JAII
Common Stock is not then listed on a national exchange, all applicable
state securities laws;
(h) The Seller has been advised that as of the date of this Agreement he or
she may be deemed an "Affiliate" of the Companies, as that term is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules
and regulations promulgated by the SEC under the Securities Act and the
JAII Common Stock received by the Seller may be sold only (i) pursuant
to an effective registration statement under the Securities Act, (ii) in
conformity with the volume and other limitations of Rules 144 and 145
promulgated by the SEC under the Securities Act, or (iii) in reliance
upon an exemption from registration available under the Securities Act;
and the Seller will not sell or otherwise transfer any of the JAII
Common Stock in violation of the Securities Act or the rules and
regulations promulgated by the SEC thereunder;
(i) It is understood that the certificates evidencing the JAII Common Stock
may bear the following legends or a combination thereof:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY STATE SECURITIES LAWS. NEITHER SUCH
SHARES NOR ANY PORTION THEREOF OR INTEREST THEREIN MAY BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF UNLESS THE SAME ARE REGISTERED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE AND THE CORPORATION
SHALL HAVE RECEIVED EVIDENCE OF SUCH EXEMPTION
36
SATISFACTORY TO THE CORPORATION (WHICH MAY
INCLUDE, AMONG OTHER THINGS, AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION)."
(ii) Any legend required by the laws of the State of Delaware or Tennessee
or any other applicable state securities laws.
(i) It is understood that any legend on a certificate pursuant to SECTION
9.01(H)(I) shall be removed, and JAII shall have a certificate issued
without such legend to the holder thereof, if the securities represented
by the certificate are registered under the Securities Act and/or such
legend may be properly removed under the terms of Rule 144 and/or Rule
145 promulgated under the Securities Act, and/or if the holder of the
certificate provides JAII (upon JAII's request in light of the
circumstances surrounding the request) with an opinion of counsel for
such holder, reasonably satisfactory to legal counsel for JAII to the
effect that a sale, transfer or assignment of such securities may be
made without registration or is subject to an exemption from
registration, and that the legend is no longer required;
(j) The Seller is an "accredited investor", as such term is defined in Rule
501(a) of the Securities Act;
(k) The Seller acknowledges that as a result of disclosures by Buyer
contemplated under this Agreement, the Seller may, from time to time,
have material, non-public information concerning JAII. The Seller
confirms that it and its respective affiliates are aware, and that it
has advised its representatives that (i) the United States securities
laws may prohibit a person who has material, non-public information from
purchasing or selling securities of any company to which such
information relates, and (ii) material, non-public information shall not
be communicated to any other person except as permitted herein;
(l) The Seller will comply with the policies of JAII relating to xxxxxxx
xxxxxxx that apply to all officers and directors of JAII;
(m) Prior to April 26, 2000, the Sellers shall not sell any shares of JAII
Common Stock acquired pursuant to this Agreement;
(n) Between April 26, 2000 and April 26, 2001, the Sellers may sell up to
50% of the aggregate amount of shares of JAII Common Stock acquired
pursuant to this Agreement, subject to the restrictions on resale set
forth in this ARTICLE IX;
(o) After April 26, 2001, the Sellers may sell up to 100% of the aggregate
amount of shares of JAII Common Stock acquired pursuant to this
Agreement, subject to the restrictions on resale set forth in this
ARTICLE IX; and
(p) The Sellers may not dispose of more than 25,000 shares (in aggregate) of
JAII Common Stock in any three-month period.
37
ARTICLE X.
REPRESENTATIONS AND WARRANTIES OF JAII AND JAII ACQUISITION SUB
JAII and JAII Acquisition Sub, jointly and severally, represent and
warrant to the Sellers that:
SECTION 10.01 JAII AND JAII ACQUISITION SUB.
JAII is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the full corporate
power and authority to own, lease and operate its properties and carry on its
businesses in all respects as presently owned or conducted. Attached hereto as
SECTION 10.01 SCHEDULE (A) is a copy of a certificate of good standing from the
Secretary of State of the State of Delaware evidencing the due organization,
valid existence and good standing of JAII in the State of Delaware.
JAII Acquisition Sub is a Delaware limited partnership, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite legal power and authority to own, lease and operate its
properties and carry on its business in all respects as presently owned or
conducted. Attached hereto as SECTION 10.01 SCHEDULE (B) is a copy of a
certificate of good standing from the Secretary of State of the State of
Delaware evidencing the due organization, valid existence and good standing of
JAII Acquisition Sub as a limited partnership in the State of Delaware.
SECTION 10.02 BROKERS.
No broker, finder or investment banker is entitled to any brokerage,
finders or other fee or commission in connection with the transactions hereunder
based upon arrangements made by or on behalf of Buyer.
SECTION 10.03 AUTHORIZATION.
The execution and delivery by JAII Acquisition Sub and JAII of this
Agreement and each document to which JAII Acquisition Sub and JAII is a party
and the performance by JAII Acquisition Sub and JAII of their respective
obligations hereunder are with respect to JAII Acquisition Sub and JAII: (i)
within their respective corporate and partnership powers and (ii) not in
violation of any provision of their charter or by-laws or partnership agreement,
as applicable.
SECTION 10.04 POWER OF THE JAII ACQUISITION SUB AND JAII TO APPROVE PURCHASE OF
THE ASSETS AND THE ACQUIRED BUSINESS OF THE COMPANIES.
JAII Acquisition Sub and JAII have the full power, legal capacity and
authority to execute and deliver this Agreement and each other document to which
the JAII Acquisition Sub and JAII are parties and to perform their obligations
in this Agreement and in all other documents to which they are a party. This
Agreement constitutes and each such other document when executed and delivered
by JAII Acquisition Sub and JAII, will constitute, the legal, valid and binding
obligation of JAII Acquisition Sub and JAII, enforceable against JAII
Acquisition Sub and JAII in accordance with its terms, except as that
enforceability may be: (i) limited by any applicable bankruptcy, insolvency,
38
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a proceeding in
equity or at law). JAII Acquisition Sub and JAII have obtained, in accordance
with all applicable state corporate law and partnership law, their respective
charters and by-laws and partnership agreement, all approvals and have taken or
will take as of the Closing Date all actions necessary for the authorization,
execution, delivery and performance by JAII Acquisition Sub and JAII of this
Agreement and the other documents to which JAII Acquisition Sub and JAII are
parties, including, but not limited to the purchase of the Assets and the
Acquired Business of the Companies and the transactions contemplated herein.
SECTION 10.05 CONFLICTS WITH LAW OR OTHER AGREEMENTS; REQUIRED FILINGS AND
CONSENTS.
The execution and delivery of this Agreement and each other document to
which JAII Acquisition Sub and JAII are parties do not, and the performance of
this Agreement and each other document (including, without limitation, the
consummation of the transactions contemplated hereunder) will not: (i) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to JAII Acquisition Sub and JAII or by which they are bound or affected, or (ii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of JAII
Acquisition Sub and JAII pursuant to any agreement, note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, insurance policy or
other instrument or obligation to which JAII Acquisition Sub and JAII are
parties, or by which JAII Acquisition Sub and JAII or any of their properties
are bound or affected, except where the violation, breach or default would not
reasonably be expected to have a material adverse effect on Buyer.
SECTION 10.06 REQUIRED FILINGS AND CONSENTS.
Except for compliance with HSR, the execution and delivery of this
Agreement by Buyer does not, and the performance of this Agreement by Buyer
(including, without limitation, the consummation of the transactions
contemplated hereunder) will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any governmental or regulatory
authority, domestic or foreign, on the part of Buyer.
SECTION 10.07 LITIGATION AND JUDGMENTS.
(a) Litigation.
Except as set forth on SECTION 10.07(A) SCHEDULE (A), there is no
legal proceeding (or governmental investigation) pending before
any court or governmental body, or any other duly constituted
tribunal, or, to the best of Buyer's knowledge, threatened or in
prospect, involving Buyer that (i) questions the validity of this
Agreement or (ii) seeks to delay, prohibit or restrict in any
manner any action taken or contemplated to be taken by Buyer
under this Agreement .
(b) No Orders, Judgments or Decrees.
39
Buyer is not subject to any order, judgment or decree, or any
other legal restriction, which would prevent or hinder the
transactions contemplated by this Agreement.
SECTION 10.08 VALIDITY OF SHARES.
The JAII Common Stock to be issued pursuant to the terms of this
Agreement shall, when issued, (i) be duly authorized, validly issued, fully paid
and nonassessable and free of Liens (other than Liens created by reason of the
Escrow Agreement) created by Buyer; (ii) be free and clear of any transfer
restrictions and Liens, other than those imposed under applicable federal and
state securities laws and regulations and under the Escrow Agreement to be
executed pursuant to this Agreement; and (iii) not be subject to any preemptive
rights created by statute, the Certificate of Incorporation or the By-Laws of
JAII or Buyer.
SECTION 10.09 CONTINUED EMPLOYMENT.
Upon Closing, Buyer agrees to offer employment to substantially all of
the employees of the Companies at each of the Companies' plants so that there
will not be a reduction of more than 45 employees at each of the Companies'
facilities and there will be no more than a one-third reduction in the number of
employees at each such plant. Buyer further agrees to provide to the employees
any notice required by the Worker Adjustment and Retraining Notifications Act
(29 USC ss.ss.2101 et. seq.) as a result of the actions of Buyer subsequent to
Closing. Nothing in this Error! Reference source not found. shall confer any
rights upon any person or entity other than the parties to this Agreement.
SECTION 10.10 FULL DISCLOSURE.
The materials delivered by the Buyer to the Sellers as SECTION 9.01(A)
SCHEDULE (A) WITH respect to the JAII Shares do not at the time filed with the
Securities and Exchange Commission contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein
not in light of the circumstances under which they were made misleading.
ARTICLE XI.
ADDITIONAL AGREEMENTS
SECTION 11.01 CONDUCT OF BUSINESS BY THE COMPANIES PENDING THE CLOSING.
From the date hereof to the Closing Date, except as set forth on SECTION
11.01 SCHEDULE (A), as expressly permitted or required by this Agreement or as
otherwise consented to by Buyer in writing, each Company will:
(a) maintain itself at all times as a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction under which it is incorporated;
(b) carry on its business and operations in a good and diligent
manner on an arm's-length basis and substantially in the manner
carried on as of the date hereof and the Company will not engage
in any activity or transaction or make any commitment to
40
purchase or spend other than in the ordinary course of its
business as heretofore conducted;
(c) continue to carry all of its existing insurance;
(d) use commercially reasonable efforts to preserve its business
organization intact, to keep available to Buyer the services of
its employees and independent contractors and to preserve for
Buyer its relationships with suppliers, licensees, distributors
and customers and others having business relationships with it;
(e) maintain its facilities, machinery and equipment in good
operating condition and repair, subject only to ordinary wear and
tear;
(f) not take any action which would be prohibited by SECTION
8.27; and
(g) without limiting the foregoing, consult with Buyer regarding
all significant developments, transactions and proposals relating
to the Acquired Business or the Assets.
SECTION 11.02 ACCESS TO INFORMATION.
(a) Access.
From the date hereof to the Closing Date, the Shareholder shall,
and shall cause the Companies, and its officers, directors,
employees, auditors and other agents to, afford Buyer and its
auditors, employees, and other agents reasonable access, at all
reasonable times, to the officers, employees, agents, properties,
offices, and other facilities of the Companies and to all
customers, suppliers and other parties with which the Companies
conduct Business, all books and records, and shall furnish Buyer
with all financial, operating and other data and information with
respect to the business and properties of the Companies as Buyer,
through its employees or agents, may reasonably request. No
investigation pursuant to this SECTION 11.02(A) shall affect any
representations or warranties of the parties herein or the
conditions to the obligations of the parties hereto.
(b) Confidentiality.
All information furnished by the Sellers hereunder shall be
treated as the property of the Sellers, as applicable, until
consummation of the transactions hereby, and, if such
transactions shall not occur and the Sellers are not in default
hereunder, Buyer shall return to the Sellers all documents or
other materials containing information supplied hereunder and
shall keep such information confidential and shall not use such
information for any competitive purpose, except that Buyer shall
be free to use and disclose all or any of such information which
(i) was already in their possession at the time of disclosure to
it; (ii) is a matter of public knowledge; (iii) has been or is
hereafter published other than through Buyer; or (iv) is lawfully
obtained by Buyer
41
from a third person without restrictions of confidentiality. The
covenants of Buyer contained in this SECTION 11.02(B) shall
terminate at the Closing.
Section 11.03 Notification of Certain Matters.
The Sellers shall give prompt notice to Buyer of: (i) the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which would
be likely to cause any representation or warranty contained in this Agreement to
be untrue or inaccurate; and (ii) any failure of the Sellers to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied
hereunder.
SECTION 11.04 FURTHER ACTION; REASONABLE EFFORTS.
Upon the terms and subject to the conditions hereof, each of the parties
hereto shall use all commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and to do or cause to be done all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereunder.
SECTION 11.05 NO SHOP.
Each of the Sellers agree that, from the date hereof and until the
termination of this Agreement in accordance with ARTICLE XIII, no Seller, nor
any of its respective officers and directors, shall and the Sellers will direct
and use their best efforts to cause each of their respective Representatives not
to initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including any proposal or
offer to the Shareholder) with respect to a merger, acquisition, consolidation
or similar transaction involving, or any purchase of all or any significant
portion of the assets or any equity securities of, the Companies or engage in
any activities, discussions or negotiations concerning, or provide any
Confidential Information respecting, the Companies or Buyer to, or have any
discussions with any Person relating to such an offer or proposal or otherwise
facilitate any effort or attempt to make or implement such an offer or proposal.
The Sellers shall promptly notify Buyer of any such offer or proposal.
SECTION 11.06 XXXX XXXXX XXXXXX ACT MATTERS.
If Buyer shall determine that filings pursuant to and under the Xxxx
Xxxxx Xxxxxx Act (the HSR Act) are necessary or appropriate in connection with
the effectuation of the Acquisition and the Companies wil1 compile and file (or
will cause its "ultimate parent entity" as determined for purposes of the HSR
Act) to file under the HSR Act, within ten (10) days of the date of this
Agreement, such information respecting it as the HSR Act requires of an Entity
to be acquired. The Shareholder will, and will cause each of the Companies to,
coordinate and cooperate with Buyer in exchanging such information and supplying
such assistance as may be reasonably requested by Buyer in connection with the
filings and other actions contemplated by this SECTION 11.06.
SECTION 11.07 PAYMENT OF BROKER'S FEES AND EXPENSES.
On or prior to the Closing, the Companies shall pay all of the fees and
expenses of Xxxxxxx Xxxxx which are due and payable at or prior to the Closing
in connection with the transactions contemplated by this Agreement.
42
SECTION 11.08 CONSENTS AND APPROVALS.
The Sellers, as promptly as practicable, will obtain, or cause to be
obtained, all consents (including, without limitation, all Governmental
Approvals and any consents required under any Contract) necessary to be obtained
by it in order to consummate the sale and transfer of the Assets pursuant to
this Agreement and the consummation of the other transactions contemplated
hereby.
SECTION 11.09 COOPERATION WITH RESPECT TO FINANCING.
The Sellers agree to cooperate in any reasonable manner with Buyer in
connection with Buyer's obtaining of financing to consummate the transactions
contemplated hereby and, in connection therewith.
SECTION 11.10 CHANGE OF CORPORATE NAMES.
The Companies and the Shareholder shall each file an amendment
immediately following the Closing to their respective Articles of Incorporation
changing their names from Imperial Fabricating Company of Tennessee, Inc. and
Fleet Design, Inc., and Imperial Group, Inc. to the names set forth on SECTION
11.10 SCHEDULE (A).
ARTICLE XII.
INDEMNIFICATION
SECTION 12.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representatives and warranties of each party contained in this
Agreement shall survive the Closing for a period of three (3) years following
the Closing, except the representations and warranties with respect to (i)
SECTION 8.28 shall survive until the expiration of the applicable statutes of
limitations (including all periods of extension and tolling) and (ii) SECTIONS
8.01, 8.02, 8.07, 8.10, 8.14(A), 10.02 10.03 and SECTION 10.08 shall survive
indefinitely following the Closing. The representations and warranties of each
party contained in this Agreement shall apply to the Assets, the Acquired
Business and the Assumed Liabilities. Each representation and warranty made in
this Agreement shall be considered amended and supplemented by each of the
Schedules and shall survive as noted above notwithstanding any investigation at
any time made by or on behalf of any party to this Agreement.
SECTION 12.02 INDEMNIFICATION BY THE SELLERS.
The Sellers, jointly and severally, shall indemnify, hold harmless and
defend (and pay or reimburse) Buyer, its successors and assigns, and its
officers, directors, employees, affiliates and agents ("Buyer's Indemnified
Persons") from, for and against any loss, damage, liability, deficiency or claim
(including without limitation reasonable attorneys' fees and other costs and
expenses incident to any suit, action, dispute, investigation or other
proceeding or in asserting any of their respective rights) arising out of or
resulting from (and will pay Buyer's Indemnified Persons in accordance with the
provisions of this ARTICLE XII, the full amount of any sum which Buyer's
Indemnified Persons become obligated on account of):
43
(a) Any breach of the representations and warranties of the
Sellers in this Agreement or the Schedules to this Agreement, or
by Industrial Realty Partners under the Real Estate Purchase
Agreement;
(b) Nonfulfillment of any covenant, agreement, condition or other
obligation of the Sellers in this Agreement or by Industrial
Realty Partners under the Real Estate Purchase Agreement;
(c) All taxes determined by reference to income, capital gain,
gross income, gross receipts, net profits or similar items for
all tax periods prior to and including the date of through
Closing;
(d) Any Excluded Asset;
(e) Any Excluded Liability or an Excluded Liabilty under the Real
Estate Purchase Agreement.
(f) Liabilities with respect to the warranty claim of PACCAR; as
described in SECTION 12.02(F) SCHEDULE (A);
(g) Third Party and Governmental Environmental Liabilities
and Costs;
(h) Buyer's Environmental Expenditures;
(i) Enforcement of this SECTION 12.02; and
(j) Each of the foregoing is referred to as a "Buyer's
Indemnified Loss." This indemnification applies notwithstanding
the closing, the delivery of any instruments of conveyance, and
regardless of any investigation at any time made by or on behalf
of Buyer or of any information Buyer may have. The obligation of
the Sellers to indemnify Buyer for a Buyer Indemnified Loss under
SECTION 12.02(A) shall expire in accordance with the expiration
of the specific warranty as set forth in SECTION 12.02(A) and
SECTION 12.02(H) shall expire on the third (3rd) anniversary of
the date of the Closing. Provided, however that no claim
presented in writing for indemnification pursuant to this ARTICLE
XII prior to the termination and expiration of the
indemnification obligation as set forth herein will be affected
in any way by that termination and expiration.
SECTION 12.03 INDEMNIFICATION BY JAII AND JAII ACQUISITION SUB.
JAII Acquisition Sub and JAII, jointly and severally, shall
indemnify, hold harmless and defend (and pay or reimburse) the Sellers, their
successors and assigns, and their officers, directors, employees, affiliates and
agents ("Sellers' Indemnified Persons") from, for and against any loss, damage,
liability, deficiency or claim (including without limitation reasonable
attorneys' fees and other costs and expenses incident to any suit, action,
dispute, investigation or other proceeding)
44
arising out of or resulting from (and will pay Sellers' Indemnified Persons in
accordance with the provisions of this ARTICLE XII, the full amount of any sum
which Sellers' Indemnified Persons become obligated on account of):
(a) Any breach of the representations and warranties of JAII
Acquisition Sub or JAII in this Agreement (including the
Schedules) or of JAII Acquisition Sub or JAII under the Real
Estate Purchase Agreement;
(b) Nonfulfillment of any covenant, agreement, condition or other
obligation of JAII Acquisition Sub or JAII in this Agreement or
of JAII Acquisition Sub or JAII under the Real Estate Purchase
Agreement;
(c) Any acquired Assets, the Acquired Business and the Assumed
Liabilities; and
(d) Enforcement of this SECTION 12.03.
Each of the foregoing is referred to as a "Sellers' Indemnified Loss."
SECTION 12.04 CONDITIONS OF INDEMNIFICATION.
All claims for indemnification under this Agreement shall be asserted
and resolved as follows:
(a) Notification of Claim, Election Period.
A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party from
whom indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims asserted against the Indemnified
Party ("Third Party Claim") that could give rise to a right of
indemnification under this Agreement and (ii) transmit to the
Indemnified Party a written notice ("Claim Notice") describing in
reasonable detail the nature of the Third Party Claim, a copy of
all papers served with respect to that claim (if any), an
estimate of the amount of Damages attributable to the Third Party
Claim to the extent feasible (which estimate shall not be
conclusive of the final amount of that claim) and the basis for
the Indemnified Party's request for indemnification under this
Agreement. Except as set forth in SECTION 12.01 and SECTION
12.02(J), the failure to promptly deliver a Claim Notice shall
not relieve the Indemnifying Party of its obligations to the
Indemnified Party with respect to the related Third Party Claim
except to the extent that the resulting delay is materially
prejudicial to the defense of that claim. Within 15 days after
receipt of any Claim Notice (the "Election Period"), the
Indemnifying Party shall notify the Indemnified Party (i) whether
the Indemnifying Party disputes its potential liability to the
Indemnified Party under this SECTION 12.04 with respect to that
Third Party Claim, and (ii) if the Indemnifying Party does not
dispute its potential liability to the Indemnified Party with
respect to that Third Party Claim, whether the Indemnifying Party
desires, at the sole cost and
45
expense of the Indemnifying Party, to defend the Indemnified
Party against that Third Party Claim.
(b) Defense of Third Party Claims by Indemnifying Party.
If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified
Party within the Election Period that the Indemnifying Party
elects to assume the defense of the Third Party Claim, then the
Indemnifying Party shall have the right to defend, at its sole
cost and expense, that Third Party Claim by all appropriate
proceedings which proceedings shall be prosecuted diligently by
the Indemnifying Party to a final conclusion or settled at the
discretion of the Indemnifying Party in accordance with this
SECTION 12.04 provided that counsel for the Indemnifying Party
who shall conduct the defense of such claim or litigation shall
be reasonably satisfactory to the Indemnified Party), and the
Indemnified Party will furnish the Indemnifying Party with all
information in its possession with respect to that Third Party
Claim and otherwise cooperate with the Indemnifying Party in the
defense of that Third Party Claim. Except with the prior written
consent of the Indemnified Party, no Indemnifying Party, in the
defense of any such claim or litigation, shall consent to entry
of any judgment or enter into any settlement that provides for
injunctive or other non-monetary relief affecting the Indemnified
Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Indemnified
Party of a release from all liability with respect to such claim
or litigation.
In the event that the Indemnified Party shall in good faith
determine that the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such
claim by the Indemnifying Party might be expected to affect
adversely the Indemnified Party's tax liability for any taxable
year or the ability of Indemnified Party to conduct its business
(including relationships with customers, suppliers or other
parties with whom the Indemnified Party conducts business), or
that the Indemnified Party may have available to it one or more
defenses or counterclaims that are inconsistent with one or more
of those that may be available to the Indemnifying Party in
respect of such claim or any litigation relating thereto, the
Indemnified Party shall have the right at all times to take over
and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sole cost of the
Indemnified Party, PROVIDED that if the Indemnified Party does so
take over and assume control, the Indemnified Party shall not
settle such claim or litigation without the written consent of
the Indemnifying Party, such consent not to be unreasonably
withheld. In the event that the Indemnifying Party does not
accept the defense of any matter as above provided, the
Indemnified Party shall have the full right to defend, at the
Indemnified Party's cost, against any such claim or demand and
shall be entitled to settle or agree to pay in full such claim or
demand. In any event, the Indemnifying Party and the Indemnified
Party shall cooperate in the defense of any claim or litigation
subject to this SECTION 12.04(B) and the records of each shall
46
be available to the other with respect to such defense.
Notwithstanding anything else in this Agreement to the contrary,
if there is any claim asserted by any third party relating to any
tax return for any period that ends after the Closing Date which
if successful could result in Buyer being indemnified under
SECTION 12.02, Buyer shall solely participate in, control and
resolve such claim, provided Buyer shall communicate with the
Sellers regarding the status of the claim.
The Indemnified Party is hereby authorized at the sole cost and
expense of the Indemnifying Party, to file, during the Election
Period any motion, answer or other pleadings that the Indemnified
Party shall deem necessary or appropriate to protect its
interests or those of the Indemnifying Party. The Indemnified
Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the
Indemnifying Party pursuant to this SECTION 12.04 and will bear
its own costs and expenses with respect to that participation;
provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party, and the Indemnified Party has
been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional
to those available to the Indemnifying Party, then the
Indemnified Party may employ separate counsel at its own expense
(which expense may be included in the claim for indemnification)
and, on its written notification of that employment, the
Indemnifying Party shall not have the right to assume or continue
the defense of such action on behalf of the Indemnified Party.
(c) Disputed Liability, Defense of Third Party Claims.
If the Indemnifying Party (i) within the Election Period (a)
disputes its potential liability to the Indemnified Party under
this ARTICLE XII, (b) elects not to defend the Indemnified Party
pursuant to SECTION 12.04(B); or (c) fails to notify the
Indemnified Party that the Indemnifying Party elects to defend
the Indemnified Party pursuant to SECTION 12.04(B) or (ii) elects
to defend the Indemnified Party pursuant to SECTION 12.04(B), but
fails diligently and promptly to prosecute or settle the Third
Party Claim, then the Indemnified Party shall have the right to
defend, at the sole cost and expense of the Indemnifying Party
(if the Indemnified Party is entitled to indemnification
hereunder), the Third Party Claim by all appropriate proceedings,
which proceedings shall be promptly and vigorously prosecuted by
the Indemnified Party to a final conclusion or settled. The
Indemnified Party shall have full control of such defense and
proceedings. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to
the effect that the Indemnifying Party disputes its potential
liability to the Indemnified Party under this SECTION 12.04(C)
and if that dispute is resolved in favor of the Indemnifying
Party, the Indemnifying Party shall not be required to bear the
costs and expenses of the Indemnified Party's defense pursuant to
this SECTION 12.04(C), or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full
for all reasonable costs and
47
expenses of such litigation. The Indemnifying Party may
participate in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant this SECTION
12.04(C) and the Indemnifying Party shall bear its own costs and
expenses with respect to that participation.
(d) Direct Claims.
In the event any Indemnified Party should have a claim against
any Indemnifying Party hereunder that does not involve a Third
Party Claim, the Indemnified Party shall transmit to the
Indemnifying Party a written notice (the "Indemnity Notice")
describing in reasonable detail the nature of the claim, an
estimate of the amount of Damages attributable to that claim to
the extent feasible (which estimate shall not be nonexclusive of
the final amount of that claim) and the basis of the Indemnified
Party's request for indemnification under this Agreement. If the
Indemnifying Party does not notify the Indemnified Party within
15 days from its receipt of the Indemnity Notice that the
Indemnifying Party disputes the claim specified by the
Indemnified Party in the Indemnity Notice that claim shall be
deemed a liability of the Indemnifying Party hereunder. If the
Indemnifying Party has timely disputed that claim as provided
above, that dispute shall be resolved by proceedings in an
appropriate court of competent jurisdiction if the parties do not
reach settlement of that dispute within 30 days after notice of
that dispute is given.
(e) Payments Of Indemnified Amounts.
Payments of all amounts owing by an Indemnifying Party pursuant
to this ARTICLE XII relating to a Third-Party Claim shall be made
promptly when due.
SECTION 12.05 LIMITATIONS ON INDEMNIFICATION.
(a) Limitations on the Sellers' Indemnification Obligations for
Breach of Representation or Warranty.
Notwithstanding the provisions of this ARTICLE XII, the Sellers
shall not be required to indemnify or hold harmless Buyer on
account of any Buyer Indemnified Loss under SECTION 12.02(A),
unless the liability of the Sellers in respect of that Buyer
Indemnified Loss, when aggregated with the liability of the
Sellers in respect of all Buyer Indemnified Losses under SECTION
12.02(A) and SECTION 12.02(H), exceeds $300,000. In no event
shall the aggregate joint and several liability of the Sellers
under SECTION 12.02(A) and SECTION 12.02(H) exceed $6,000,000.
(b) The Sellers' Indemnification Obligations for Nonfulfillment
of Agreements, Tax Matters and Excluded Assets. The Sellers'
indemnification or reimbursement liability to Buyer for claims
made under SECTION 12.02(A), SECTION 12.02(C) SECTION 12.02(D)
and SECTION 12.02(F) shall not be subject to the limitations
described in SECTION 12.05(A), notwithstanding that Buyer's
rights to indemnification under SECTION 12.02(A), SECTION
12.02(C) SECTION 12.02(D) and SECTION 12.02(F) could also be
claimed under SECTION 12.02(A).
48
(c) The Sellers' Indemnification Obligations for Excluded
Liabilities. The Sellers' indemnification or reimbursement
liability to Buyer for claims made under SECTION 12.02(E) shall
not be subject to the limitations described in SECTION 12.05(A),
notwithstanding that Buyer's and JAII's rights to indemnification
under SECTION 12.02(E) could also be claimed under SECTION
12.02(A); provided, however, that if a claim is made by Buyer for
indemnification under SECTION 12.02(E) and such claim could also
be claimed as a breach of representation or warranty under
SECTION 8.13, SECTION 8.16, SECTION 8.21, SECTION 8.23(B), or for
a claim under SECTION 12.02(H) then such claim shall be treated
as a claim under SECTION 12.02(A) and subject to the limitations
on Sellers' obligations to indemnify Buyer and JAII as set forth
in SECTION 12.05(A).
(d) The Sellers' Indemnification Obligations for Third-Party and
Governmental Authorities Claims for Environmental Liabilites and
Claims. The Sellers' indemnification or reimbursement liability
to Buyer for claims made under SECTION 12.02(G) shall not be
subject to the limitations described in SECTION 12.05(A),
notwithstanding that Buyer's rights to indemnification under
SECTION 12.02(G) could also be claimed under SECTION 12.02(A) or
under SECTION 12.02(H).
(e) Limitations on the Sellers' Indemnification Obligations for
Buyer's Environmental Expenditures.
Notwithstanding the provisions of this ARTICLE XII, the Seller
shall not be required to indemnify or hold harmless Buyer on
account of any Buyer's Indemnified Loss under SECTION 12.02(H),
unless the liability of the Sellers in respect of that Buyer's
Indemnified Loss, when aggregated with the liability of the
Seller in respect of all Buyer's Indemnified Losses under SECTION
12.02(A) and SECTION 12.02(H), exceeds $300,000. In no event
shall the aggregate joint and several liability of the Sellers
under SECTION 12.02(A) and SECTION 12.02(H), exceed $6,000,000.
(f) Limitations on Buyer's Indemnification Obligations.
Notwithstanding the provisions of this ARTICLE XII, JAII
Acquisition Sub and JAII shall not be required to indemnify or
hold harmless the Sellers on account of any Sellers' Indemnified
Loss under SECTION 12.03(A), unless the liability of Buyer in
respect of that Sellers' Indemnified Loss, when aggregated with
the liability of the Seller in respect of all Buyer's Indemnified
Losses under SECTION 12.03 exceeds $300,000. In no event shall
the aggregate joint and several liability of JAII Acquisition Sub
and JAII under SECTION 12.03(A), exceed $6,000,000. JAII
Acquisition Sub and JAII's indemnification and reimbursement
liability to the Sellers for claims under SECTION 12.03(B),
SECTION 12.03(C), and SECTION 12.03(D) shall not be subject to
the limitations described in this paragraph, notwithstanding that
the Sellers' rights to indemnification under SECTION 12.03(B),
SECTION 12.03(C) and SECTION 12.03(D) could also be claimed under
SECTION 12.03(A).
49
ARTICLE XIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 13.01 TERMINATION.
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date provided any one
of the following events occur:
(i) by mutual written consent of the Sellers and Buyer;
(ii) the Sellers, on the one hand, or by Buyer, on the other
hand, if a material breach or default shall be made by the other
party in the observance or in the due and timely performance of
any of the representations, covenants, agreements or conditions
contained herein;.
(iii) by Buyer or the Sellers, if any court of competent
jurisdiction, governmental authority shall have issued an order,
decree, or ruling or taken any other action restraining,
enjoining or otherwise prohibiting any of the transactions
hereunder and such order, decree, ruling or other action shall
have become final and nonappealable;
(iv) without any action or notice (in writing or otherwise) if
any Bankruptcy Proceeding shall have been instituted or consented
to by or against either of the Companies by any of the parties
hereto;
(v) by the Sellers if the transactions contemplated by this
Agreement to take place at the Closing shall not have been
consummated by the close of business on the 30th day after April
26,1999 (the "Expiration Date"), unless the failure of such
transactions to be consummated results from the failure of the
Sellers to perform or adhere to any agreement required hereby to
be performed or adhered to by the Sellers prior to or on the
Expiration Date;
(vi) by Buyer if the transactions contemplated by this Agreement
to take place at the Closing shall not have been consummated by
the close of business on the Expiration Date; or
(vii) by the Sellers solely for the reason that the Buyer has not
acquired sufficient financing to consummate the transactions
contemplated by this Agreement to take place at the Closing not
later that the close of business on the Expiration Date and the
Buyer refuses or is unable to close by the Expiration Date.
Provided, however, that the Seller's right to terminate under
this Section and Buyer's obligation to pay the fee set forth in
SECTION 13.02(E) shall only arise if the following conditions are
met: (i) the representations and warranties of the Sellers are
true and correct as of the date hereof and the date of such
termination and the Sellers deliver to Buyer a certificate to
that effect (ii) the events described in SECTION 13.01(III) and
SECTION
50
13.01(IV) have not taken place; and (iii) the Buyer's refusal or
inability to close or acquire sufficient financing is not due to
the failure of the Sellers to perform or comply with any of the
covenants, agreements or conditions which they are required to
perform or comply with prior to the Closing.
SECTION 13.02 EFFECT OF TERMINATION.
(a) Termination by Agreement.
In the event of the termination of this Agreement pursuant to SECTION
13.01(I) this Agreement shall forthwith become void and have no effect
and there shall be no liability on the part of any party hereto.
(b) Termination for Legal Restraint.
In the event of the termination of this Agreement pursuant to SECTION
13.01(III) or SECTION 13.01(IV) this Agreement shall forthwith become
void and have no effect and there shall be no liability on the part of
any party hereto.
(c) Unilateral Termination.
In the event of the termination of this Agreement pursuant to SECTION
13.01(V) or SECTION 13.01(VI) this Agreement shall forthwith become void
and have no effect and there shall be no liability on the part of any
party hereto, unless the failure of the such transactions to become
consummated result from the failure of the terminating party to perform
or adhere to any agreement required hereby to be performed or adhered to
by the terminating prior to or on the Expiration Date. In such event, a
unilateral termination by a defaulting termination shall entitle the
non-defaulting party to terminate this Agreement under SECTION 13.01(II)
and proceed under SECTION 13.02(D).
(d) Termination for Cause.
In the event of the termination of this Agreement pursuant to SECTION
13.01(II), the non-defaulting party shall be entitled to its rights and
remedies at law or in equity.
(e) Termination for Failure of Financing.
In the event of the termination of this Agreement by Sellers pursuant to
SECTION 13.01(VII), then the Buyer shall pay to the Sellers a fee of
$500,000. Buyer's payment to the Sellers of the $500,000 fee shall
constitute liquidated damages and a release with respect to any claim
for damages which the Sellers would otherwise be entitled to assert
against the Buyer with respect to this Agreement and the transactions
contemplated thereby.
SECTION 13.03 AMENDMENT.
This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
51
SECTION 13.04 WAIVER.
At any time prior to the Closing Date, either party hereto may: (a)
extend the time for the performance of any of the obligations or other acts of
the other party hereto; (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto; and
(c) waive compliance with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party to be bound thereby. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise have at
law or in equity. The rights and remedies of any party based upon, arising out
of or otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant or agreement or failure to fulfill any conditions shall in no
way be limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy or breach is based may also be
the subject matter of any other representation, warranty, covenant or agreement
as to which there is no inaccuracy or breach. The representations and warranties
of the Sellers shall not be affected or deemed waived by reason of any
investigation made by or on behalf of Buyer (including but not limited to by any
of its advisors, consultants or representatives) or by reason of the fact that
Buyer or any of such advisors, consultants or representatives knew or should
have known that any such representation or warranty is or might be inaccurate.
ARTICLE XIV.
GENERAL PROVISIONS
SECTION 14.01 NOTICES.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by cable, telecopy,
telegram or telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(i) if to Buyer:
Johnstown America Industries, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
52
Attn: Xx. Xxxxxxx X. Xxxxxxxxx
with a copy to:
Xx. Xxxxxx X. Wall
Winston & Xxxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
(b) if to the Sellers:
Xx. Xxxx Xxxxxxxxx
Mr. Xxx Xxxxx
And for the Companies and the Shareholder
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xx. 00000
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xx. Xxxxxx X. Xxxxxx
Xxxxx Xxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
SECTION 14.02 PARTIES IN INTEREST.
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement, except
as provided in ARTICLE XII with respect to indemnification of Indemnified
Parties.
SECTION 14.03 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware regardless of the law, that might otherwise
govern under applicable principles of conflicts of laws thereof.
53
SECTION 14.04 HEADINGS.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 14.05 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 14.06 EXPENSES.
Each party shall pay all of their own respective expenses incurred by or
on behalf of each of them in connection with this Agreement and the transactions
contemplated hereunder, including, but not limited to, all attorneys' fees.
The Companies and Buyer shall pay their respective obligations for all
federal, state, local, foreign and other transfers, sales, use or similar taxes
applicable to, imposed upon or arising out of the transfer of the Assets.
SECTION 14.07 ENTIRE AGREEMENT, ASSIGNMENT.
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof. This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of the other party hereto,
provided that (i) Buyer may assign this Agreement to any subsidiary of Buyer or
to any lender to Buyer or any subsidiary or affiliate thereof as security for
obligations to such lender in respect of the financing arrangements entered into
in connection with the transactions contemplated hereby and any refinancing,
extensions, refundings or renewals thereof, PROVIDED, FURTHER, that no
assignment to any such lender shall in any way affect Buyer's obligations or
liabilities under this Agreement and (ii) Buyer may assign Buyer's right to
indemnification or reimbursement upon a sale or transfer of all or substantially
all of the assets of the Acquired Business.
SECTION 14.08 TIME.
Time is of the essence in the performance of this Agreement.
SECTION 14.09 REFORMATION AND SEVERABILITY.
If any provision of this Agreement is invalid, illegal or unenforceable
that provision shall, to the extent possible, be modified in such manner as to
be valid, legal and enforceable so as to most nearly retain the intent of the
parties hereto as expressed herein and if such a modification is not possible,
that provision shall be severed from this Agreement and in either case the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
SECTION 14.10 PREPARATION AND FILING OF TAX RETURNS.
Each party hereto will provide to each of the other parties hereto such
cooperation and information as each of them reasonably may request in filing any
Return, amended Return or claim
54
for refund, determining a liability for Taxes or a right to refund of Taxes or
in conducting any audit or other proceeding in respect of Taxes. This
cooperation and information shall include providing copies of all relevant
portions of the relevant Returns, together with such accompanying schedules and
work papers, documents relating to rulings or other determinations by Taxing
Authorities and records concerning the ownership and Tax bases of property as
are relevant and which a party possesses. Each party will make its employees, if
any, reasonably available on a mutually convenient basis at its cost to provide
an explanation of any documents or information so provided. Subject to the
preceding sentence, each party required to file Returns pursuant to this
Agreement shall bear all costs attributable to the preparation and filing of
those Returns.
SECTION 14.11 NEWS RELEASES.
Except as required by applicable law, prior to the Closing, no notices
to third parties or other publicity, including press releases, concerning any of
the transactions provided for herein shall be made, except for such written
information as shall have been approved in writing as to form and content by the
other party, which approval shall not be unreasonably withheld.
SECTION 14.12 ACCESS TO BOOKS AND RECORDS.
From and after the Closing, Buyer shall and shall cause its officers,
directors, employees, auditors and other agents to, afford the Sellers and its
auditors, employees, and other agents reasonable access, at all reasonable
times, to the officers, employees, agents, properties, offices, and other
facilities of the Acquired Business, all books and records, and shall furnish
the Sellers with all financial, operating and other data and information with
respect to the Acquired Business as the Sellers, through its employees or
agents, may reasonably request and as is reasonably required for Sellers to
prepare and file tax returns or other reports, returns, studies or other
information with governmental authorities or agencies or to fulfill, claim or
defend its rights and obligations under ARTICLE XII or to review and audit the
books and records of Buyer with respect to the calculation and payment of the
Earn-Out Amount. The Sellers shall have the right to retain or make copies of
all such information, at their expense. Buyer will make its employees, if any,
reasonably available on a mutually convenient basis at its cost to provide an
explanation of any documents or information so provided. Sellers agree that all
information provided pursuant to this Section shall be considered confidential
information and maintained by the Sellers as confidential information for use
only with respect to the matters set forth in this Section.
55
IN WITNESS WHEREOF, Buyer and the Sellers have each caused this
Agreement to be executed as of the date first written above.
IMPERIAL FABRICATING COMPANY OF TENNESSEE, INC.
BY:______________________________
---------------------------------
TITLE
FLEET DESIGN, INC.
BY:______________________________
---------------------------------
TITLE
IMPERIAL GROUP, INC.
BY:______________________________
---------------------------------
TITLE
Shareholders of Imperial Group, Inc.
------------------------------
Xxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxx
00
Xxxxxxxxx Xxxxxxx Industries, Inc.
A Delaware corporation
By:________________________________
-----------------------------------
Title
Imperial Group Acquisition, L.P.
A Delaware Limited Partnership
By: Imperial Group Holding Corp.-1
A Delaware corporation
By:________________________________
-----------------------------------
Title
57
EXHIBIT A
DEFINITIONS
DEFINED TERMS. As used in this Agreement, the following terms have the meanings
assigned to them below:
"Acquired Business" has the meaning specified in the Preliminary Statement.
"Affiliate" means, as to any specified Person, any other Person that, directly
or indirectly through one or more intermediaries or otherwise, controls, is
controlled by or is under common control with the specified Person. As used in
this definition, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a Person
(whether through ownership of Capital Stock of that Person, by contract or
otherwise).
"Agreement" means this Agreement, including all attached Schedules, Annexes,
Addenda and Exhibits, as each of the same may be amended, modified or
supplemented from time to time pursuant to the provisions hereof or thereof.
"Applicable Law" means all applicable provisions of all (i) constitutions,
treaties, statues, laws (including the common law), rules, regulations,
ordinances, codes or orders of any Governmental Authority, (ii) Governmental
Approvals and (iii) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental Authority.
"Assets" is defined in SECTION 2.03.
"Assumed Liabilities" is defined in SECTION 2.05.
"Assumption Agreement" is defined in SECTION 2.05.
Average Working Capital shall mean $5,825,522.00 which the parties acknowledge
and agree has been calculated in accordance with the definition of Working
Capital for the period from July 1998 to February 1999, in accordance with
SECTION 4.02 SCHEDULE (A)
"Buyer's Environmental Expenditures" means all expenditures paid by Buyer which
are necessary to cause the Acquired Business to be in compliance with any and
all requirements of Environmental Laws as of the Closing Date, including,
without limitation, all Environmental Permits issued under or pursuant to such
Environmental Laws, including, without limitation, all expenditures related to
all fees, disbursements and expenses of counsel, experts, personnel and
consultants based on, arising out of or otherwise in respect of the operations
of the Acquired Business on or prior to the Closing. Buyer's Environmental
Expenditures shall not include any expenditure or Damage incurred by
58
Buyer with respect to any Remedial Action or any Included Property or the
Property as defined in the Real Estate Purchase Agreement (purchased by Buyer as
part of the Assets or leased pursuant to this Agreement).
"Capital Stock" means, with respect to: (a) any corporation, any share, or any
depositary receipt or other certificate representing any share, of an equity
ownership interest in that corporation; and (b) any other Entity, any share,
membership or other percentage interest, unit of participation or other
equivalent (however designated) of an equity interest in that Entity.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. ss. 9601 et seq.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means, with respect to any Person, all trade secrets
and other confidential, nonpublic and/or proprietary information of that Person,
including information derived from reports, investigations, research, work in
progress, codes, marketing and sales programs, capital expenditure projects,
cost summaries, pricing formulae, contract analyses, financial information,
projections, confidential filings with any Governmental Authority and all other
confidential, nonpublic concepts, methods of doing business, ideas, materials or
information prepared or performed for, by or on behalf of that Person.
"Counsel for Buyer" means Winston & Xxxxxx.
"Closing Balance Sheet" means the Balance Sheet prepared in accordance with
SECTION 4.02.
"Closing Date Working Capital" shall mean the Working Capital of the Acquired
Business transferred to Buyer at Closing calculated on a basis consistent with
the calculation of Average Working Capital for the assets and liabilities
transferred to Buyer at Closing. For purposes of calculating the Closing Date
Working Capital, Non-Cash Current Assets and Non-Cash Current Liabilities shall
not include any affiliated receivables, affiliated payables, Excluded Assets and
Excluded Liabilities.
"Damage" to any specified Person means any cost, damage (including any
consequential, exemplary, punitive or treble damage) or expense (including
reasonable fees and actual disbursements by attorneys, consultants, experts or
other Representatives and Litigation costs), any fine of or penalty on or any
liability (including loss of earnings or profits) of any other nature of that
Person; provided, that if any Indemnified Party should have a claim against any
Indemnifying Party that does not involve a Third Party Claim and for which the
Indemnified Party seeks indemnification pursuant to ARTICLE XII, the amount of
Damages attributable to that claim will not include any amount representing
consequential, exemplary, punitive or treble damage. Provided, further, that in
the event the Buyer incurs Damage to which it is entitled to indemnification
from Sellers under this Agreement and Buyer receives insurance proceeds
(including the costs of defense of any Third Party
59
Claims) from any of the insurance policies as contemplated by SECTION
2.06(F),SECTION 2.03(G),SECTION 2.03(H), SECTION 2.03(I) then such proceeds as
received by the Buyer shall be credited against such Damages for the benefit of
the Sellers.
"Damage Claim" means, as asserted (a) against any specified Person, any claim,
demand or Litigation made or pending against the specified Person for Damages to
any other Person, or (b) by the specified Person, any claim or demand of the
specified Person against any other Person for Damages to the specified Person.
"Entity" means any sole proprietorship, corporation, partnership of any kind
having a separate legal status, limited liability company, business trust,
unincorporated organization or association, mutual company, joint stock company
or joint venture.
"Environmental Laws" means any and all Governmental Requirements relating to the
environment or worker health or safety, including ambient air, surface water,
land surface or subsurface strata, or to emissions, discharges, Releases or
threatened Releases of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or wastes (including Solid Wastes, Hazardous Wastes or
Hazardous Substances) or noxious noise or odor into environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, recycling, removal, transport or handling of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes (including,
without limitations, petroleum, petroleum distillates, asbestos or asbestos-
containing material, polychlorinated biphenyls, chlorofluorocarbons (including
chlorofluorocarbon- 12) or hydrochlorofluorocarbons).
"Environmental Permits" means any federal, state and local permit, license,
registration, consent, order, administrative consent order, certificate,
approval or other authorization necessary for the conduct of the Acquired
Business as currently conducted or previously conducted under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means, with respect to any specified Person at any time, any
other Person, including an Affiliate of the specified Person, that is, or at any
time within six years of that time was, a member of any ERISA Group of which the
specified Person is or was a member at the same time.
"ERISA Group" means any "group of organizations" within the meaning of Section
414(b), (c), (m) or (o) of the Code or any "controlled group" as defined in
Section 4001(a)(14) of ERISA.
"ERISA Pension Benefit Plan" means any "employee pension benefit plan", as
defined in Section 3(2) of ERISA, including any plan that is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code (excluding any Multiemployer Plan).
"Exchange Act" means the Securities Exchange Act of 1934.
60
"GAAP" means generally accepted accounting principles and practices in the
United States as in effect from time to time and have been or are applied on a
basis consistent with the most recent Financial Statements delivered to Buyer
prior to the Closing Date.
"Governmental Approval" means at any time any authorization, consent, approval,
permit, franchise, certificate, license, implementing order or exemption of, or
registration or filing with any Governmental Authority, including any
certification or licensing of a natural person to engage in a profession or
trade or a specific regulated activity, at that time.
"Governmental Authority" means (a) any national, state, county, municipal or
other government, domestic or foreign, or any agency, board, bureau, commission,
court, department or other instrumentality of any such government, or (b) any
Person having the authority under any applicable Governmental Requirement to
assess and collect Taxes for its own account.
"Governmental Requirement" means at any time (a) any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
award, authorization or other requirement of any Governmental Authority in
effect, and as then may be interpreted by applicable Governmental Authorities,
at that time or (b) any obligation included in any certificate, certification,
franchise, permit or license issued by any Governmental Authority or resulting
from binding arbitration, including any requirement under common law, at that
time.
"Hazardous Substances" means any substance that: (i) is or contains asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or
petroleum-derived substances or wastes, radon gas or related materials; (ii)
requires investigation, removal or remediation under any Environmental Law, or
is defined, listed, identified or regulated as a "Solid Waste", Hazardous Waste"
or "Hazardous Substance" thereunder, or (iii) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is regulated by any Governmental Authority or Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"Included Real Property" means the real property owned by the Sellers as set
forth on SECTION 2.03(L) SCHEDULE (A), together with all other structures,
facilities, improvements, fixtures, systems, equipment and items of property
presently or hereafter located thereon or attached or appurtenant thereto prior
to the Closing, which are owned by Sellers.
"Included Leased Property" means the real property leased to the Sellers as set
forth on SECTION 2.05(A)(IV) SCHEDULE (A), together with all other structures,
facilities, improvements, fixtures, systems, equipment and items of property
presently or hereafter located thereon attached or appurtenant thereto prior to
the Closing, which are owned by Sellers.
"Indebtedness" of any Person means, without duplication, (a) any liability of
that Person (i) for borrowed money or arising out of any extension of credit to
or for the account of that Person
61
(including reimbursement or payment obligations with respect to surety bonds,
letters of credit, banker's acceptances and similar instruments) for the
deferred purchase price of property or services or arising under conditional
sale or other title retention agreements, other than trade payables arising in
the ordinary course of business, (ii) evidenced by notes bonds, debentures or
similar instruments, (iii) in respect of capital leases or (iv) in respect of
interest rate protection agreements, (b) any liability secured by any Lien upon
any property or assets of that Person (or upon any revenues, income or profits
of that Person therefrom), whether or not that Person has assumed that liability
or otherwise become liable for the payment thereof or (c) any liability of
others of the type described in the preceding clause (a) or (b) in respect of
which that Person has incurred, assumed or acquired a liability by means of a
Guaranty.
"Information" means written information, including (a) data, certificates,
reports and statements (excluding financial statements) and (b) summaries of
unwritten agreements, arrangements, contracts, plans, policies, programs or
practices or of unwritten amendments or modifications of, supplements to or
waivers under any of the foregoing documents.
"Intellectual Property" means any and all United States and foreign: (a) patents
(including design patents, industrial designs and utility models) and patent
applications (including design patents, industrial designs and utility models)
and patent applications (including docketed patent disclosures awaiting filing,
reissues, divisions, continuations-in-part and extensions), patent disclosures
awaiting filing determination, inventions, and improvements thereto; (b)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof; (c)
copyrights (including software) and registrations thereof; (d) inventions,
processes, designs, formulae, trade secrets, know-how, industrial models,
confidential and technical information, manufacturing, engineering and technical
drawings, product specifications and confidential business information; and (e)
intellectual property rights similar to any of the foregoing.
"Inventories" is defined in SECTION 2.03(B).
"IRS" means the Internal Revenue Service.
"Lien" means, with respect to any property or asset of any Person (or any
revenues, income or profits of that Person therefrom) (in each case whether the
same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise), (a) any mortgage, lien, security interest, pledge,
attachment, levy or other charge or encumbrance of any kind thereupon or in
respect thereof or (b) any other arrangement, under which the same is
transferred, sequestered or otherwise identified with the intention of
subjecting the same to, or making the same available for, the payment or
performance of any liability in priority to the payment of the ordinary,
unsecured creditors of that Person, including any "adverse claim" (as defined in
the applicable Uniform Commercial Code) in the case of any Capital Stock. For
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset that it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to that asset.
62
"Litigation" means any action, case, proceeding, claim, grievance, suit or
investigation or other proceeding conducted by or pending before any
Governmental Authority or any arbitration proceeding.
"Material" means, as applied to any Asset or the Acquired Business, any
consequence of any fact or circumstance relating to the business, operations,
property or assets, liabilities, financial condition or results of operations ,
as the case may be and which exceeds $50,000.00.
"Material Adverse Effect" means, with respect to the consequences of any fact or
circumstance (including the occurrence or non-occurrence of any event) with
respect to the Assets or Acquired Business, that is Materially adverse to the
business, operations, prospects, results of operations, condition (financial or
otherwise), properties (including intangible properties), assets (including
intangible assets) or liabilities of the Acquired Business.
"Multiemployer Plan" means a "multiemployer" plan as defined in Section
4001(a)(3) of ERISA, Section 414 of the Code or Section 3(37) of ERISA.
"Permitted Liens" means (i) Liens reserved against in the December Balance
Sheet, to the extent so reserved, (ii) Liens for Taxes not yet due and payable
or which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on Sellers' books in
accordance with GAAP, or (iii) Liens and encumbrances set forth in the title
commitments for the Included Property which are acceptable to Buyer.
"Person" means any natural person, Entity, estate, trust, union or employee
organization or Governmental Authority or, for the purpose of the definition of
"ERISA Affiliate," any trade or business.
"Prohibited Transaction" means any transaction that is prohibited under Section
4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of
the Code or Section 408 of ERISA.
"Real Property Laws" is defined in SECTION 8.18.
"Release" means any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, pouring, emitting, escaping, emptying,
seeping, dispersal, migration, transporting, placing and the like, including
without limitation, the moving of any materials through, into or upon, any land,
soil, surface water, ground water on air, or otherwise entering into the
environment.
"Remedial Action" means all actions required by a state or federal governmental
authority or agency to (i) study, investigate, identify or delineate any such
Hazardous Substances; (ii) respond to or address the Release or threatened
Release of Hazardous Substances; (iii) clean up, remove, treat or in any other
way remediate any Hazardous Substances; or (iv) prevent the Release of Hazardous
63
Substances so that they do not migrate or endanger or threaten to endanger
public health or welfare or the environment, in each case, to be performed in
compliance with applicable Environmental Laws and in a manner that does not
adversely affect the operation, marketability and value of the Included
Property.
"Representatives" means, with respect to any Person, the directors, officers,
employees, Affiliates, accountants (including independent certified public
accountants), advisors, attorneys, consultants or other agents of that Person,
or any other representatives of that Person or of any of those directors,
officers, employees, Affiliates, accountants (including independent certified
public accountants), advisors, attorneys, consultants or other agents.
"Returns" of any Person means the returns, reports or statements (including any
Information returns) any Governmental Requirement requires to be filed by that
Person for purposes of any Tax.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers' Counsel" shall mean Xxxxx, Xxxxxxx & Xxxxx.
"Solid Wastes, Hazardous Wastes or Hazardous Substances" have the meanings
ascribed to those terms in CERCLA, the Resource Conservation and Recovery Act,
as amended, 42 USC ss.6901 et SEQ. ("RCRA") or any other Environmental Law
applicable to the business or operations of the Company or any company
Subsidiary which imparts a broader meaning to any of those terms than does
CERCLA or RCRA.
"Subsidiary" of any specified Person at any time, means any Entity a majority of
the Capital Stock of which is at that time owned or controlled, directly or
indirectly, by the specified Person.
"Tax" or "Taxes" means all net or gross income, gross receipts, net proceeds,
sales, use, ad valorem, value added, franchise, bank shares, withholding,
payroll, employment, excise, property, deed, stamp, alternative or add-on
minimum, environmental or other taxes, assessments, duties, fees, levies or
other governmental charges or assessments of any nature whatever imposed by any
Governmental Requirement, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"Taxing Authority" means any Governmental Authority having or purporting to
exercise jurisdiction with respect to any Tax.
"Third Party and Governmental Environmental Liabilities and Costs" means all
Damages incurred by Buyer, whether direct or indirect, known or unknown, current
or potential, past, present or future, imposed by, under or pursuant to
Environmental Laws or Environmental Permits, (whether on-site or off-site)
including, without limitation, all Damages to Buyer related to Remedial Actions,
and all
64
fees, disbursements and expenses of counsel, experts, personnel and consultants
based on, arising out of or otherwise in respect of: the operations of the
Acquired Business on or prior to the Closing or any condition existing on, in or
under the Included Property or the Property as defined in the Real Estate
Purchase Agreement as of the Closing (which are the results of the actions of
the Sellers and/or any lessor of the Included Property, but excluding any Damage
directly caused by Buyer), including without limitation, the Included Property
located at 0000 Xxxxxxx 00 and 0000 Xxxxxxx 00, Xxx Xxxx, Xxxxxx Xxxxxx,
Xxxxxxxxx.
"Welfare Plan" means an "employee welfare benefit plan" as defined in Section
3(1) of ERISA.
"Working Capital" shall mean the difference between the Non-Cash Current Assets
and Non-Cash Current Liabilities. For purposes of this Agreement, "Non-Cash
Current Assets" shall mean the sum of (a) trade accounts receivable less any
allowance for bad debts and any reserves for overbilling; plus (b) receivables
from scrap sales; plus (c) Inventories, net of any reserve; plus (d) prepaid
expenses excluding prepaid loan costs and prepaid expenses related to the
preparation of the Assets for sale. For purposes of this Agreement, "Non-Cash
Current Liabilities" shall mean the sum of (a) all trade accounts payable; plus
(b) accrued expenses; plus (c) reserves for warranty, product liability, product
recall and defective merchandise claims; plus (d) accrued and withheld taxes;
plus (e) state and federal income taxes payable computed using the subchapter S
corporation status and the individual shareholder federal tax rates.
65
LIST OF SCHEDULES:
SECTION 2.03 SCHEDULE (A)
Permitted Encumbrances 2
SECTION 2.03(E) SCHEDULE (A)
Corporate Names 3
SECTION 2.03(H) SCHEDULE (A)
Excluded Cash and Cash Equivalent Assets 3
SECTION 2.03(L) SCHEDULE (A)
Included Real Property 4
SECTION 2.04 SCHEDULE (A)
Excluded Assets 4
SECTION 2.05(A)(II) SCHEDULE (A)
Assumed Contracts and Liabilities 5
SECTION 2.05(A)(II)SCHEDULE (B)
Other Assumed Agreements 5
SECTION 2.05(A)(IV) SCHEDULE (A)
Included Real Property Leases 5
SECTION 2.05(B) SCHEDULE(A).
Assumption Agreement 5
SECTION 3.03(A) SCHEDULE (A)
Indemnification Escrow Agreement 7
SECTION 3.03(B) SCHEDULE (A)
Tennessee Plant Escrow Agreement 8
SECTION 3.03(C) SCHEDULE (A)
Texas Plant Escrow Agreement 8
SECTION 3.04 SCHEDULE (A)
Earn Out Payment Calculation 8
SECTION 3.05 SCHEDULE (A)
Closing Indebtedness 8
SECTION 4.02 SCHEDULE (A)
Calculation of Average Working Capital 9
SECTION 5.02 SCHEDULE (A)
Industrial Realty Partners Real Estate 10
SECTION 5.02 SCHEDULE (B)
Industrial Realty Partners Real Estate Agreement 10
SECTION 5.03 SCHEDULE (A)
List of Individuals for Employment Agreements 11
SECTION 5.03 SCHEDULE (B)
Form of Employment Agreement 11
SECTION 5.05 SCHEDULE (A).
Agreements requiring Consents and Approvals 11
SECTION 5.07 SCHEDULE (A)
Form of Opinion from Sellers' Counsel
SECTION 5.11 SCHEDULE (A)
Authorizing Minutes of Imperial Group, Inc. 12
1
SECTION 5.11 SCHEDULE (B)
Authorizing Minutes of the Companies 12
SECTION 5.14 SCHEDULE (A)
Sellers' Closing Certificate 12
SECTION 5.15 SCHEDULE (A)
Non-Competition Agreements 13
SECTION 5.18 SCHEDULE (A).
List of Included Leased Property 13
SECTION 5.19 SCHEDULES (A) AND (B) LEASE AND DESIGN/BUILD AGREEMENT FOR
TENNESSEE ---- 13
SECTION 5.20 SCHEDULES (A) AND (B).
Lease and Design/Build for Texas 13
SECTION 6.07 SCHEDULE (A)
Buyer's Opinion of Counsel 15
SECTION 6.11 SCHEDULE (A)
Authorizing Minutes of Buyer 16
SECTION 6.12 SCHEDULE (A)
Buyer's Closing Certificate 16
SECTION 8.01(A) SCHEDULE (A)
Articles of Incorporation for Imperial Group, Inc. 17
SECTION 8.01(A) SCHEDULE (B)
By-Laws of Imperial Group, Inc. 17
SECTION 8.01(B) SCHEDULE (A)
Certificates of Existence for Imperial Group, Inc. 17
SECTION 8.01(B) SCHEDULE (B)
Foreign Qualification of Imperial Group, Inc. 17
SECTION 8.02(A) SCHEDULE (A)
Articles of Incorporation for the Companies 18
SECTION 8.02(A) SCHEDULE (B)
By-Laws of the Companies 18
SECTION 8.02(B) SCHEDULE (A)
Certificates of Existence of the Companies 18
SECTION 8.02(B) SCHEDULE (B)
Foreign Qualification Certificates of the Companies 18
SECTION 8.03(A) SCHEDULE (A)
Liens of shares of stock 18
SECTION 8.03(B) SCHEDULE (A)
Liens on Imperial Shareholders' Shares 19
SECTION 8.05(A) SCHEDULE (A)
Breach of Contracts and Agreements 19
SECTION 8.05(B) SCHEDULE (A)
Required Filings and Consents 20
SECTION 8.06(A) SCHEDULE (A)
Litigation 20
SECTION 8.06(A) SCHEDULE (B)
Pending Claims 20
SECTION 8.06(B) SCHEDULE (A)
Orders, Decrees and Judgments 20
SECTION 8.07 SCHEDULE (A)
2
Xxxxxxx Xxxxx Agreements 21
SECTION 8.08 SCHEDULE (A)
Related Transactions 21
SECTION 8.11(B) SCHEDULE (A)
Joint Ventures and Partnerships 22
SECTION 8.12(A) SCHEDULE (A)
Company Obligations to other Sellers 22
SECTION 8.12(B) SCHEDULE (A)
Shareholder Obligations to the Companies 22
SECTION 8.12(C) SCHEDULE (A)
Powers of Attorney 22
SECTION 8.13 SCHEDULE (A)
Material Licenses, Permits, Authorizations 22
SECTION 8.14(A) SCHEDULE (A)
Exceptions to Personal Property Title 23
SECTION 8.14(A) SCHEDULE (B)
Consigned Inventory 23
SECTION 8.14(B)SCHEDULE (A)
List of Owned Tangible Personal Property 23
SECTION 8.14(C) SCHEDULE (A)
List of Leased Tangible Personal Property 23
SECTION 8.14(D) SCHEDULE (A)
Exception to Condition of Property 24
SECTION 8.15 SCHEDULE (A)
Exceptions to Title to Receivables and Collectibility 24
SECTION 8.16 SCHEDULE (A)
List of Tradenames and Intellectual Property 24
SECTION 8.17 SCHEDULE (A)
List of Title Commitments on Includes Property 25
SECTION 8.17 SCHEDULE (B)
Exceptions to Title on Included Real Property 25
SECTION 8.18 SCHEDULE (A)
Exceptions to Condition of Property 25
SECTION 8.19 SCHEDULE (A)
Land Use Regulation Exception 26
SECTION 8.22(A) SCHEDULE (A)
List of Environmental Permits 27
SECTION 8.22(B) SCHEDULE (A)
Alleged Violations or Liability of the Companies 27
Violations of Environmental Laws or Permits 27
SECTION 8.22(C) SCHEDULE (A)
Remedial and other Environmental Actions 27
SECTION 8.22(D) SCHEDULE (A)
Other Environmental Matters 28
SECTION 8.23(A) SCHEDULE (A)
Uncollectible Receivables 29
SECTION 8.23(B) SCHEDULE (A)
Projections 29
SECTION 8.23(C) SCHEDULE (A)
3
Excluded Assets and Excluded Liabilities included in Prior Financials 30
SECTION 8.24(A) SCHEDULE (A)
Employee Census 30
SECTION 8.24(B) SCHEDULE (A)
Other Wages and Benefits 30
SECTION 8.24(C) SCHEDULE (A)
Employee Benefit Plans 30
SECTION 8.24(D) SCHEDULE (A)
Exceptions to Plan Qualifications 31
SECTION 8.24(G) SCHEDULE (A)
Multiemployer Plans 32
SECTION 8.25(A) SCHEDULE (A)
List of Insurance Policies 32
SECTION 8.25(B) SCHEDULE (A)
Noncompetition Agreements 32
SECTION 8.25(C) SCHEDULE (A)
Other Material Contracts and Agreements 32
SECTION 8.25(C) SCHEDULE (B)
Exceptions to General Representation and Warranty Concerning Contracts 33
SECTION 8.27 SCHEDULE (A)
Absence of Changes 33
SECTION 8.28 SCHEDULE (A).
Exceptions to Taxes 35
SECTION 8.30 SCHEDULE (A)
Exceptions to Product Warranties 36
SECTION 8.31 SCHEDULE (A)
Ten Largest Customers 36
SECTION 8.31 SCHEDULE (B)
Changes in Customer Relationships 37
SECTION 8.32 SCHEDULE (A)
Exceptions to Year 2000 Issues 37
SECTION 9.01 SCHEDULE (A)
JAII Stock Disclosure Information 37
SECTION 10.01 SCHEDULE (A)
Certificate of Good Standing for JAII 40
SECTION 10.01 SCHEDULE (B)
Certificate of Good Standing for Limited Partnership 40
SECTION 10.07(A) SCHEDULE (A)
Buyer's Litigation Exceptions 42
SECTION 11.01 SCHEDULE (A)
Exceptions to Conduct Pending Closing 43
SECTION 11.11 SCHEDULE (A)
New Corporate Names for the Companies 45
SECTION 12.02(F) SCHEDULE (A)
Paccar Warranty Claim 46
4
