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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
X.X.X. NEWCO., INC.,
XXXXXX TRANSPORT CO. INC.,
VAN HOUTEN LTD.
AND
XXXXXXX XXX XXXXXX
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TABLE OF CONTENTS
ARTICLE I
SALE OF ASSETS AND CLOSING
1.01 Assets.................................................................................1
1.02 Liabilities............................................................................4
1.03 Purchase Price; Allocation; Adjustment.................................................6
1.04 Xxxxxxx Xxx Xxxxxx Mortgage............................................................7
1.05 Closing................................................................................7
1.06 Further Assurances; Post-Closing Cooperation...........................................7
1.07 Third-Party Consents...................................................................8
1.08 Insurance Proceeds.....................................................................9
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS AND XXXXXXX XXX XXXXXX
2.01 Organization of Sellers................................................................9
2.02 Authority..............................................................................9
2.03 No Conflicts..........................................................................10
2.04 Governmental Approvals and Filings....................................................10
2.05 Books and Records.....................................................................10
2.06 Financial Statements..................................................................10
2.07 Absence of Changes....................................................................11
2.08 No Undisclosed Liabilities............................................................12
2.09 Taxes.................................................................................12
2.10 Legal Proceedings.....................................................................13
2.11 Compliance With Laws and Orders.......................................................14
2.12 Benefit Plans.........................................................................14
2.13 Real Property.........................................................................17
2.14 Tangible Personal Property; Investment Assets.........................................18
2.15 Intellectual Property Rights..........................................................19
2.16 Contracts.............................................................................19
2.17 Licenses..............................................................................20
2.18 Insurance.............................................................................21
2.19 Affiliate Transactions................................................................21
2.20 Employees; Labor Relations............................................................22
2.21 Environmental Matters.................................................................22
2.22 Substantial Customers.................................................................24
2.23 Accounts Receivable...................................................................25
2.24 Inventory.............................................................................25
2.25 Vehicles..............................................................................25
2.26 No Guarantees.........................................................................25
2.27 Year 2000.............................................................................25
2.28 All Assets and Properties.............................................................25
2.29 Brokers...............................................................................26
2.30 Disclosure............................................................................26
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.01 Organization..........................................................................26
3.02 Authority.............................................................................26
3.03 No Conflicts..........................................................................27
3.04 Governmental Approvals and Filings....................................................27
3.05 Legal Proceedings.....................................................................27
3.06 Financial Statements..................................................................27
3.07 Absence of Changes....................................................................28
3.08 Brokers...............................................................................28
ARTICLE IV
COVENANTS OF SELLERS AND XXXXXXX XXX XXXXXX
4.01 Regulatory and Other Approvals........................................................28
4.02 HSR Filings...........................................................................29
4.03 Investigation by Purchaser............................................................29
4.04 No Solicitations......................................................................29
4.05 Conduct of Business...................................................................30
4.06 Updated Accounts Receivable and Accident Register.....................................30
4.07 Employee Matters......................................................................30
4.08 Certain Restrictions..................................................................31
4.09 Security Deposits.....................................................................32
4.10 Delivery of Books and Records, Etc.; Removal of Property..............................32
4.11 Non-Competition.......................................................................32
4.12 Notice and Cure.......................................................................34
4.13 Fulfillment of Conditions.............................................................35
ARTICLE V
COVENANTS OF PURCHASER
5.01 Regulatory and Other Approvals........................................................35
5.02 Notice and Cure.......................................................................35
5.03 Fulfillment of Conditions.............................................................36
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
6.01 Representations and Warranties........................................................36
6.02 Performance...........................................................................36
6.03 Officer's Certificates................................................................36
6.04 Orders and Laws.......................................................................36
6.05 Regulatory Consents and Approvals.....................................................37
6.06 Third Party Consents..................................................................37
6.07 Opinion of Counsel....................................................................37
6.08 Real Property Leases..................................................................37
6.09 Title Insurance; Estoppel Certificates................................................37
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6.10 Contracts with Certain Customers......................................................38
6.11 Noncompetition and Employment Agreements..............................................38
6.12 Assignment and Xxxx of Sale...........................................................38
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS AND XXXXXXX XXX XXXXXX
7.01 Representations and Warranties........................................................38
7.02 Performance...........................................................................38
7.03 Letter of Credit......................................................................39
7.04 Promissory Note Security Agreement....................................................39
7.05 Assumption Agreement..................................................................39
7.06 Opinion of Counsel....................................................................39
7.07 Orders and Laws.......................................................................39
7.08 Regulatory Consents and Approvals.....................................................39
7.09 Third Party Consents..................................................................39
7.10 Proceedings...........................................................................39
7.11 Officer's Certificates................................................................40
7.12 Employment and Non-Competition Agreements.............................................40
7.13 Payment of Purchase Price.............................................................40
7.14 Payoff of Mortgage Loan...............................................................40
7.15 Execution and Delivery of Guaranty....................................................40
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENT
8.01 Survival of Representations, Warranties, Covenants and Agreements.....................40
ARTICLE IX
INDEMNIFICATION
9.01 Indemnity Agreement of Sellers and Xxxxxxx Xxx Xxxxxx.................................41
9.02 Purchaser's Indemnity Agreement.......................................................42
9.03 Indemnification Procedures............................................................43
9.04 Payment...............................................................................43
9.05 No Waiver.............................................................................44
9.06 Adjustment of Liability...............................................................44
9.07 Threshold and Limits for Assertion of Indemnified Claims..............................44
ARTICLE X
TERMINATION
10.01 Termination...........................................................................45
10.02 Effect of Termination.................................................................45
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ARTICLE XI
DEFINITIONS
11.01 Definitions...........................................................................45
ARTICLE XII
MISCELLANEOUS
12.01 Notices...............................................................................52
12.02 Entire Agreement......................................................................53
12.03 Expenses..............................................................................53
12.04 Public Announcements..................................................................54
12.05 Confidentiality.......................................................................54
12.06 Waiver................................................................................54
12.07 Amendment.............................................................................54
12.08 No Third Party Beneficiary............................................................54
12.09 No Assignment; Binding Effect.........................................................55
12.10 Headings..............................................................................55
12.11 Invalid Provisions....................................................................55
12.12 Governing Law.........................................................................55
12.13 Counterparts..........................................................................55
EXHIBITS
Exhibit A General Assignment and Xxxx of Sale
Exhibit B Form of Assumption Agreement
Exhibit C-1 Form of Promissory Note A
Exhibit C-2 Form of Promissory Note B
Exhibit D Form of Non-Competition and Restrictive Covenants Agreement
Exhibit E-1 Form of Officer's Certificate of Xxxxxx
Exhibit E-2 Form of Officer's Certificate of Van Houten
Exhibit F-1 Secretary's Certificate of Xxxxxx
Exhibit F-2 Secretary's Certificate of Van Houten
Exhibit G Opinion of Counsel to Sellers
Exhibit H Form of Employment Agreement for Xxxxxxx Xxx Xxxxxx
Exhibit I Form of Letter of Credit
Exhibit J Form of Security Agreement
Exhibit K Opinion of Counsel to Purchasers
Exhibit L Form of Officer's Certificate of Purchaser
Exhibit M Form of Secretary's Certificate of Purchaser
Exhibit N Form of Employment Agreement for Key Employees
Exhibit O Form of Guaranty
Exhibit P Form of Riverdale, New Jersey Real Property Lease
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of January 11, 1999, is made
and entered into by and among X.X.X. NewCo., Inc., an Ohio corporation
("Purchaser"), Xxxxxx Transport Co. Inc., an Ohio corporation ("Xxxxxx"), Van
Houten Ltd., a New Jersey business corporation (individually, "Van Houten" and
collectively with Xxxxxx, "Sellers") and Xxxxxxx Xxx Xxxxxx, a New Jersey
resident. Capitalized terms not otherwise defined herein have the meanings set
forth in Section 11.01.
W I T N E S S E T H
WHEREAS, Sellers are engaged in the truckload common and contract
motor carrier business (the "Business");
WHEREAS, Purchaser is a wholly-owned subsidiary of X.X.X.
Transportation Services, Inc., a Delaware corporation ("X.X.X."), which is also
engaged in business activities similar to the Business;
WHEREAS, Sellers desire to sell, transfer and assign to Purchaser, and
Purchaser desires to purchase and acquire from Sellers, certain of the assets
of Sellers relating to the operation of the Business, and in connection
therewith, Purchaser has agreed to assume certain of the liabilities of Sellers
relating to the Business, all on the terms set forth herein; and
WHEREAS, Xxxxxxx Xxx Xxxxxx is the sole shareholder of the Sellers and
believes the selling of certain of the assets of Sellers relating to the
operation of the Business, including the sale of the Real Property (as defined
herein) owned by him and his spouse, is in his best interests and desires to
enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS AND CLOSING
1.01 Assets.
(a) Assets Transferred. On the terms and subject to the
conditions set forth in this Agreement, Sellers will sell, transfer,
convey, assign and deliver to Purchaser (or will arrange for such
sale, transfer, conveyance, assignment and delivery), and Purchaser
will purchase and pay for, at the Closing, free and clear of all Liens
other than Permitted Liens, all of Sellers' right, title and interest
in, to and under the following Assets and Properties of Sellers used
or held for use in connection with the Business, except as otherwise
provided in Section 1.01(b), as the same shall exist on the Closing
Date (collectively with any proceeds and awards referred to in Section
1.08, the "Assets"):
(i) Real Property. The real property described
in Section 1.01(a)(i) of the Disclosure Schedule, and all of
the rights arising out of the ownership thereof or
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appurtenant thereto (the "Real Property"), together with all
buildings, structures, facilities, fixtures and other
improvements thereto (the "Improvements");
(ii) Real Property Leases. (A) The leases and
subleases of real property described in Section
1.01(a)(ii)(A) of the Disclosure Schedule as to which either
Xxxxxx or Van Houten is the lessor or sublessor and (B) to
the extent their transfer is permitted under the terms
thereof and except for that certain lease of real property in
Riverdale, New Jersey as to which Xxxxxx is the lessee
("Riverdale"), the leases and subleases of real property
described in Section 1.01(a)(ii)(B) of the Disclosure
Schedule as to which either Xxxxxx or Van Houten is the
lessee or sublessee, together with any options to purchase
the underlying property and leasehold improvements thereon,
and in each case all other rights, subleases, licenses,
permits, deposits and profits appurtenant to or related to
such leases and subleases (the leases and subleases described
in subclauses (A) and (B), the "Real Property Leases");
(iii) Inventory. All inventories of raw
materials, demonstration equipment, office and other
supplies, parts, packaging materials and other accessories
related thereto which are held at, or are in transit from or
to, the locations at which the Business is conducted, or
located at customers' premises on consignment, in each case,
which are used or held for use by either Xxxxxx or Van Houten
in the conduct of the Business, including any of the
foregoing purchased subject to any conditional sales or title
retention agreement in favor of any other Person, together
with all rights of either Xxxxxx or Van Houten against
suppliers of such inventories (the "Inventory");
(iv) Accounts Receivable. All trade accounts
receivable and all notes, bonds and other evidences of
Indebtedness of and rights to receive payments arising out of
sales and transactions occurring in the regular course of the
conduct of the Business, including any rights of either
Xxxxxx or Van Houten with respect to any third party
collection procedures or any other Actions or Proceedings
which have been commenced in connection therewith (the
"Accounts Receivable");
(v) Tangible Personal Property. All furniture,
fixtures, equipment, machinery and other tangible personal
property (other than Inventory and Vehicles) used or held for
use in the conduct of the Business at the locations at which
the Business is conducted or at customers' premises on
consignment, or otherwise used or held for use by either
Xxxxxx or Van Houten in the conduct of the Business
(including but not limited to the items listed in Section
1.01(a)(v) of the Disclosure Schedule), including any of the
foregoing purchased subject to any conditional sales or title
retention agreement in favor of any other Person (the
"Tangible Personal Property");
(vi) Personal Property Leases. (A) The leases or
subleases of Tangible Personal Property described in Section
1.01(a)(vi)(A) of the Disclosure Schedule as to which either
Xxxxxx or Van Houten is the lessor or sublessor and (B) to
the extent their transfer is permitted under the terms
thereof, the leases of Tangible Personal Property described
in Section 1.01(a)(vi)(B) of the Disclosure Schedule as to
which either Xxxxxx or Van Houten is the lessee or sublessee,
together with any options to purchase the underlying property
(the leases and subleases described in subclauses (A) and
(B), the "Personal Property Leases");
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(vii) Business Contracts. All Contracts (other
than the Real Property Leases, the Personal Property Leases
and the Accounts Receivable) to which either Xxxxxx or Van
Houten is a party and which are utilized in the conduct of
the Business, including without limitation, Contracts
relating to the transportation customers of Xxxxxx and Van
Houten, suppliers, sales representatives, distributors,
purchase orders and marketing arrangements (the "Business
Contracts");
(viii) Prepaid Expenses. All prepaid expenses
relating to the Business, including, but not limited to, the
items listed in Section 1.01(a)(viii) of the Disclosure
Schedule (the "Prepaid Expenses");
(ix) Intangible Personal Property. All
Intellectual Property used or held for use in the conduct of
the Business (including Sellers' goodwill therein) and all
rights, privileges, claims, causes of action and options
relating or pertaining to the Business or the Assets,
including but not limited to the items listed in Section
1.01(a)(ix) of the Disclosure Schedule (the "Intangible
Personal Property");
(x) Licenses. To the extent their transfer is
permitted under the terms thereof or under applicable Laws,
all Licenses (including applications therefor) utilized in
the conduct of the Business, including but not limited to,
the Licenses listed in Section 1.01(a)(x) of the Disclosure
Schedule (the "Business Licenses");
(xi) Tractors, Trailers, Vans and Other
Vehicles. All tractors, trailers, vans and all other motor
vehicles owned or leased by either Xxxxxx or Van Houten and
used or held for use in the conduct of the Business,
including, but not limited to, the vehicles listed in Section
1.01(a)(xi) of the Disclosure Schedule (the "Vehicles");
(xii) Security Deposits. All security deposits
deposited by or on behalf of either Xxxxxx or Van Houten as
lessee or sublessee under the Real Property Leases (the
"Tenant Security Deposits");
(xiii) Books and Records. All Books and Records
used or held for use in the conduct of the Business or
otherwise relating to the Assets, other than the minute
books, stock transfer books and corporate seals of Sellers
(the "Business Books and Records");
(xiv) Insurance. To the extent their transfer is
permitted under the terms thereof, life insurance policies of
officers and other Employees of either Xxxxxx or Van Houten
(other than those certain life insurance policies which
Purchaser determines not to maintain in force and effect
which Purchaser will offer to such insured officers and other
Employees for maintenance by such insureds at their expense)
and all other insurance policies relating to the operation of
the Business;
(xv) Employee Benefit Plans. To the extent their
transfer is permitted under the terms thereof and applicable
Laws, all assets owned or held by any Benefit Plans;
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(xvi) Tax Refunds. All refunds or credits, if
any, of taxes due to or from either Xxxxxx or Van Houten,
except for any refunds due to or from Xxxxxxx Xxx Xxxxxx with
respect to federal and/or state income taxes;
(xvii) Cash. Cash, commercial paper, certificates
of deposit and other bank deposits, treasury bills and other
cash equivalents except to the extent set forth in Section
1.03(b)(iii) ("Cash"); and
(xviii) Other Assets and Properties. All other
Assets and Properties of Sellers used or held for use in
connection with the Business except as otherwise provided in
Section 1.01(b) (the "Other Assets").
To the extent any of the Business Books and Records are items
susceptible to duplication and are either (x) used in connection with any of
Sellers' businesses other than the Business or (y) are required by Law to be
retained by Sellers, Sellers may deliver photostatic copies or other
reproductions from which, in the case of Business Books and Records referred to
in clause (x), information solely concerning Sellers' businesses other than the
Business has been deleted.
(b) Excluded Assets. Notwithstanding anything in this
Agreement to the contrary, the following Assets and Properties of
Sellers (the "Excluded Assets") shall be excluded from and shall not
constitute Assets:
(i) Real and Personal Property. The real or
personal property described in Section 1.01(b)(ii) of the
Disclosure Schedule;
(ii) Corporate Records. The minute books, stock
transfer books and corporate seals of Sellers;
(iii) Litigation Claims. Any rights (including
indemnification) and claims and recoveries under litigation
of either Xxxxxx or Van Houten against third parties arising
out of or relating to events prior to the Closing Date;
(iv) Affiliate or Associate Notes and Loans. The
notes receivable from Affiliates or Associates, and the loans
to Affiliates or Associates, of either Xxxxxx or Van Houten
as specifically set forth in Section 1.01(b)(iv) of the
Disclosure Schedule; and
(v) Sellers' rights under this Agreement.
1.02 Liabilities.
(a) Assumed Liabilities. In connection with the sale,
transfer, conveyance, assignment and delivery of the Assets pursuant
to this Agreement, on the terms and subject to the conditions set
forth in this Agreement, at the Closing, Purchaser will assume and
agree to pay, perform and discharge when due the following obligations
of either Xxxxxx or Van Houten arising in connection with the
operation of the Business, as the same shall exist on the Closing Date
(the "Assumed Liabilities"), which, unless otherwise stated herein,
shall not exceed in the aggregate $11,400,000 (all liabilities
comprising the $11,400,000 limitation shall be calculated as of
January 4, 1999), and no others:
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(i) Real Property Lease Obligations. All
obligations of either Xxxxxx or Van Houten under the Real
Property Leases arising and to be performed on or after
the Closing Date, and excluding any such obligations arising
or to be performed prior to the Closing Date (which shall not
be counted toward the $11,400,000 limitation contained in
Section 1.02(a) above);
(ii) Accounts Payable. All obligations of either
Xxxxxx or Van Houten with respect to accounts payable
reflected or reserved against in the balance sheet included
in the Recent Financial Statements or those arising in the
ordinary course of business since the Recent Financial
Statement Date, including but not limited to the items listed
in Section 1.02(a)(ii) of the Disclosure Schedule (the
"Accounts Payable");
(iii) Certain Lease Obligations. All obligations
of either Xxxxxx or Van Houten under the Personal Property
Leases arising and to be performed on or after the Closing
Date, including obligations of either Xxxxxx or Van Houten
under leases for Vehicles and those certain operating leases
for rolling stock in favor of Meridian Leasing, Inc.,
Moretran Leasing Corporation and Van Houten arising prior to
the Closing Date as are specifically listed in Section
1.02(a)(iii) of the Disclosure Schedule (which shall not be
counted toward the $11,400,000 limitation contained in
paragraph (a) above); provided, however, that any such other
obligations to be performed prior to the Closing Date shall
be excluded;
(iv) Obligations under Contracts and Licenses.
All obligations of either Xxxxxx or Van Houten under the
Business Contracts and Business Licenses arising and to be
performed on or after the Closing Date, including obligations
of either Xxxxxx or Van Houten under those certain Business
Contracts for: (A) the purchase of tractors and/or trailers
but only to the extent such obligations (i) were and/or will
be incurred as a result of delivery after October 14, 1998
(including those to be delivered after Closing unless
cancelled by Purchaser without liability of any type to
either Xxxxxx or Van Houten) and (ii) are specifically listed
in Section 1.02(a)(iv)(A) of the Disclosure Schedule (which
shall not be counted toward the $11,400,000 limitation
contained in paragraph (a) above) and (B) customer credits
resulting from overpayments by Sellers' transportation
customers as are specifically listed in Section
1.02(a)(iv)(B) of the Disclosure Schedule (which shall not be
counted toward the $11,400,000 limitation contained in
paragraph (a) above); provided, however, that any such other
obligations to be performed prior to the Closing Date shall
be excluded;
(v) Accrued Expenses. All obligations of either
Xxxxxx or Van Houten with respect to accrued expenses
reflected or reserved against in the balance sheet included
in the Recent Financial Statements or those incurred in the
ordinary course of business since the Recent Financial
Statement Date, including without limitation the items listed
in Section 1.02(a)(v) of the Disclosure Schedule (the
"Accrued Expenses");
(vi) Obligations under Benefit Plans. All
obligations of either Xxxxxx or Van Houten under the Benefit
Plans delivered to Purchaser pursuant to this Agreement
arising and to be performed on or after the Closing Date
(which shall not be counted toward the $11,400,000 limitation
contained in paragraph (a) above), or reflected or reserved
against
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in the balance sheet included in the Recent Financial
Statements, or arising in the ordinary course of business
since the Recent Financial Statement Date, including but not
limited to the items listed in Section 1.02(a)(vi) of the
Disclosure Schedule; and
(vii) Other Obligations. Any other obligations of
either Xxxxxx or Van Houten so long as, when combined with
the other Assumed Liabilities comprising the $11,400,000
limitation contained in paragraph (a) above, such obligations
do not exceed $11,400,000 (obligations arising and to be
performed on or after the Closing Date shall not be counted
toward the $11,400,000 limitation contained in paragraph (a)
above).
(b) Retained Liabilities. Except for the Assumed
Liabilities, Purchaser shall not assume by virtue of this Agreement or
the transactions contemplated hereby, and shall have no liability for,
any Liabilities of either Xxxxxx or Van Houten (including, without
limitation, those related to the Business) of any kind, character or
description whatsoever (the "Retained Liabilities"). Sellers shall
discharge in a timely manner or shall make adequate provision for all
of the Retained Liabilities; provided, however, that either Xxxxxx or
Van Houten shall have the ability to contest, in good faith, any such
claim of liability asserted in respect thereof by any Person other than
Purchaser and its Affiliates.
1.03 Purchase Price; Allocation; Adjustment.
(a) Purchase Price. The aggregate purchase price for the
Assets and for the covenants contained in Section 4.11 is $14,000,000,
less the unpaid balance of notes receivable from and/or loans to East
Garden Associates and Xxxxx Xxxxxxxxx (the "Purchase Price"), plus the
Assumed Liabilities, subject to adjustment and payable as set forth in
paragraph (b) below.
(b) The Purchase Price, subject to adjustment as provided
herein, shall be paid as follows:
(i) $4,500,000 shall be paid to Sellers in
immediately available United States funds at the Closing;
(ii) $4,000,000 shall be represented by two (2)
promissory notes (the "Promissory Notes") executed by
Purchaser in favor of Sellers, substantially in the forms of
Exhibits C-1 and C-2 attached hereto. The Promissory Notes
shall be for a term of five (5) years and bear a simple
interest rate of six percent (6%) per annum. Principal under
the Promissory Notes shall be due and payable in sixty (60)
consecutive monthly installments on the first day of each
month. Interest on the Promissory Notes shall be payable at
the same time and in the same manner that principal shall be
payable. Pursuant to Sections 7.03 and 7.04, one of the
Promissory Note shall be secured by the Promissory Note
Security Agreement and the other Promissory Notes shall be
secured by the Letter of Credit. The costs and expenses of
the Letter of Credit, including renewals of the Letter of
Credit, shall be apportioned as set forth in Section 12.03;
(iii) (1) if the sum of Cash on hand plus
Accounts Receivable on January 4, 1999 is equal to or greater
than $5,500,000, Purchaser shall pay to Sellers (A) at the
Closing, in immediately available funds, $4,600,000, and (B)
ninety (90) days after the date of Closing, $900,000.
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(2) if the sum of Cash on hand plus
Accounts Receivable on January 4, 1999 is less than
$5,500,000, Purchaser shall pay to Sellers (A) at the
Closing, in immediately available United States funds,
$4,600,000, and (B) ninety (90) days after the date of the
Closing, the difference between (x) the sum of Cash on hand
plus Accounts Receivable on the Closing Date, and (y)
$4,600,000.
(c) The parties hereto acknowledge that the transactions
contemplated hereunder must be reported in accordance with Section
1060 of the Code. The parties shall report the transactions
contemplated hereunder for all purposes in accordance with the
Purchase Price allocation generally set forth in Section 1.03(c) of
the Disclosure Schedule and in accordance with the reporting
requirements of applicable Law. The parties hereto shall share
information and cooperate to the extent necessary to permit the
transactions to be properly, timely and consistently reported in
accordance with Section 1060 of the Code and the regulations
promulgated thereunder.
(d) Purchaser shall replace the two (2) letters of
credit issued by The Bank of New York with respect to the insurance
policies to which reference is made in Section 2.18. This replacement
and cancellation of the existing letters of credit shall have no
impact upon any of the other terms and/or conditions hereof, other
than as to the ability to assume the insurance coverage in question.
1.04 Xxxxxxx Xxx Xxxxxx Mortgage. In addition to the payment of
the Purchase Price at the Closing and in consideration for the sale, transfer,
conveyance, assignment and delivery of the Real Property, on the Closing Date,
Purchaser shall pay in full all amounts due and owing on that certain mortgage
loan, in a principal amount not to exceed $200,000, on the residence of Xxxxxxx
Xxx Xxxxxx, which is specifically set forth in Section 1.04 of the Disclosure
Schedule and was used to finance the purchase of the Real Property by Xxxxxxx
Xxx Xxxxxx and his spouse.
1.05 Closing. The Closing will take place at the offices of Xxxxx,
Xxxxxxxx & Xxxxxxx, LLP, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000-0000 at 10:00 a.m. local time, or at such other place and time as
Purchaser and Sellers mutually agree, on the Closing Date.
1.06 Further Assurances; Post-Closing Cooperation.
(a) At any time or from time to time after the Closing,
at Purchaser's request and without further consideration, either
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx shall execute and deliver to
Purchaser such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information
and take such other actions as Purchaser may reasonably deem necessary
or desirable in order more effectively to transfer, convey and assign
to Purchaser, and to confirm Purchaser's title to, all of the Assets,
and, to the full extent permitted by Law, to put Purchaser in actual
possession and operating control of the Business and the Assets and to
assist Purchaser in exercising all such rights with respect thereto,
and otherwise to cause Sellers and Xxxxxxx Xxx Xxxxxx to fulfill their
obligations under this Agreement and the other agreements, instruments
and documents contemplated hereby (such other agreements, instruments
and documents referred to herein as the "Operative Agreements").
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(b) At any time or from time to time after the Closing,
at either Xxxxxx'x, Van Houten's or Xxxxxxx Xxx Xxxxxx'x request and
without further consideration, Purchaser shall execute and deliver to
either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, as the case may be,
such instruments and provide such materials and information and take
such other actions as either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx,
as the case may be, may reasonably deem necessary or desirable in
order more effectively to consummate the transactions contemplated by
this Agreement and the Operative Agreements.
(c) Following the Closing, each party will afford the
other party, its counsel and its accountants, during normal business
hours, reasonable access to the books, records and other data relating
to the Business in its possession with respect to periods prior to the
Closing and the right to make copies and extracts therefrom, to the
extent that such access may be reasonably required by the requesting
party in connection with (i) the preparation of tax returns, (ii) the
determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any Governmental
or Regulatory Authority, (iv) the determination or enforcement of the
rights and obligations of any Indemnitee or (v) in connection with any
actual or threatened Action or Proceeding. Further, each party agrees
for a period extending six (6) years after the Closing Date not to
destroy or otherwise dispose of any such books, records and other data
unless such party shall first offer in writing to surrender such
books, records and other data to the other party and such other party
shall not agree in writing to take possession thereof during the
thirty (30) day period after such offer is made.
(d) If, in order properly to prepare its tax returns,
other documents or reports required to be filed with Governmental or
Regulatory Authorities or its financial statements or to fulfill its
obligations hereunder, it is necessary that a party be furnished with
additional information, documents or records relating to the Business
not referred to in paragraph (b) above, and such information,
documents or records are in the possession or control of the other
party, such other party shall use its best efforts to furnish or make
available such information, documents or records (or copies thereof)
at the recipient's request, cost and expense. Any information obtained
by Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx in accordance with this
paragraph shall be held confidential by such Persons in accordance
with Section 12.05.
(e) Notwithstanding anything to the contrary contained
in this Section, if the parties are in an adversarial relationship in
litigation or arbitration, the furnishing of information, documents or
records in accordance paragraphs (b) or (c) of this Section with
respect to the matters that are the subject of such litigation or
arbitration shall be subject to applicable rules relating to
discovery.
1.07 Third-Party Consents. To the extent that any of the Assets,
including but not limited to, any Real Property Lease, Personal Property Lease,
lease for Vehicles, insurance policy, Business Contract or Business License is
not assignable without the consent of another party, and to the extent that the
consummation of the transactions contemplated by this Agreement requires the
consent of another party, this Agreement shall not constitute an assignment or
an attempted assignment thereof if such assignment or attempted assignment
would constitute a breach thereof. Each of Xxxxxx, Van Houten, Xxxxxxx Xxx
Xxxxxx and Purchaser shall use their best efforts to obtain the consent of such
other party to the assignment of any of the Assets, including but not limited
to, any Real Property Lease, Personal Property Lease, lease for Vehicles,
insurance policy, Business Contract or Business License to Purchaser in all
cases in which such consent is or may be required for such assignment. If any
such consent shall
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not be obtained, each of Xxxxxx, Van Houten and Xxxxxxx Xxx Xxxxxx shall
cooperate with Purchaser in any reasonable arrangement designed to provide for
Purchaser the benefits intended to be assigned to Purchaser under this
Agreement, including enforcement at the cost and for the account of Purchaser
of any and all rights of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx against the
other party thereto arising out of the breach or cancellation thereof by such
other party or otherwise. If and to the extent that such arrangement cannot be
made, Purchaser shall have no obligation pursuant to Section 1.02 or otherwise
with respect to any such Asset. The provisions of this Section 1.07 shall not
affect the right of Purchaser not to consummate the transactions contemplated
by this Agreement if the condition to its obligations hereunder contained in
Section 6.06 has not been fulfilled.
1.08 Insurance Proceeds. If any of the Assets are destroyed or
damaged or taken in condemnation, the insurance proceeds or condemnation award
with respect thereto shall be an Asset. At the Closing, either Xxxxxx or Van
Houten, as the case may be, shall pay or credit to Purchaser any such insurance
proceeds or condemnation awards received by it on or prior to the Closing and
shall assign to or assert for the benefit of Purchaser all of its rights
against any insurance companies, Governmental or Regulatory Authorities and
others with respect to such damage, destruction or condemnation. As and to the
extent that there is available insurance under policies maintained by each of
Xxxxxx, Van Houten and their Affiliates, predecessors and successors in respect
of any Assumed Liability, except for any such insurance proceeds with respect
to which the insured is directly or indirectly self-insured or has agreed to
indemnify the insurer, either Xxxxxx or Van Houten, as the case may be, shall
cause such insurance to be applied toward the payment of such Assumed
Liability.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS AND XXXXXXX XXX XXXXXX
Sellers and Xxxxxxx Xxx Xxxxxx hereby jointly and severally represent
and warrant to Purchaser as follows:
2.01 Organization of Sellers. Xxxxxx is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Ohio. Van Houten is a corporation duly organized, validly existing and in good
standing under the Laws of the State of New Jersey. Sellers have full corporate
power and authority to conduct the Business as and to the extent now conducted
and to own, use and lease the Assets.
2.02 Authority. Sellers have full corporate power and authority to
execute and deliver this Agreement and the Operative Agreements to which each
is a party, to perform their obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby, including without
limitation to sell and transfer (pursuant to this Agreement) the Assets.
Xxxxxxx Xxx Xxxxxx has full power and authority to execute and deliver this
Agreement and the Operative Agreements to which he is a party, to perform his
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Sellers of this
Agreement and the Operative Agreements to which either Xxxxxx or Van Houten, as
the case may be, is a party, and the performance by each of their obligations
hereunder and thereunder, have been duly and validly authorized by the Boards
of Directors of Sellers and their respective shareholders, no other corporate
action on the part of Sellers or their shareholders being necessary. This
Agreement has been duly and validly executed and delivered by Sellers and
Xxxxxxx Xxx Xxxxxx and constitutes, and upon the execution of the Operative
Agreements to which each is a party, such Operative
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Agreements will constitute, legal, valid and binding obligations of either
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, as the case may be, enforceable
against either of them in accordance with their terms.
2.03 No Conflicts. The execution and delivery by Sellers and
Xxxxxxx Xxx Xxxxxx of this Agreement does not, and the execution and delivery
by Sellers and Xxxxxxx Xxx Xxxxxx of the Operative Agreements to which each is
a party, the performance by Sellers and Xxxxxxx Xxx Xxxxxx of their obligations
under this Agreement and such Operative Agreements and the consummation of the
transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the articles of
incorporation or by-laws (or other comparable corporate charter
documents) of Sellers;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in
Section 2.04 of the Disclosure Schedule, result in a violation or
breach of any term or provision of any Law or Order applicable to
Sellers, Xxxxxxx Xxx Xxxxxx or any of their Assets and Properties; or
(c) except as disclosed in Section 2.03 of the
Disclosure Schedule, (i) result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require any of Sellers or Xxxxxxx Xxx Xxxxxx to obtain
any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, or (iv) result
in the creation or imposition of any Lien upon any of the Assets or
any of their Assets and Properties under any Contract or License to
which either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx is a party or by
which any of their Assets and Properties are bound.
2.04 Governmental Approvals and Filings. Except as disclosed in
Section 2.04 of the Disclosure Schedule and records required by law to be
recorded or filed, no consent, approval or action of, filing with or notice to
any Governmental or Regulatory Authority on the part of either Xxxxxx, Van
Houten or Xxxxxxx Xxx Xxxxxx is required in connection with the execution,
delivery and performance of this Agreement or any of the Operative Agreements
to which any of them is a party or the consummation of the transactions
contemplated hereby or thereby.
2.05 Books and Records. Except as set forth in Section 2.05 of the
Disclosure Schedule, and except for Business Books and Records in the
possession of Sellers' attorneys and accountants, and records required by Law
to be recorded or filed, none of the Business Books and Records is recorded,
stored, maintained, operated or otherwise wholly or partly dependent upon or
held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the exclusive ownership and direct control
of one or more Employees.
2.06 Financial Statements. Prior to the execution of this
Agreement, Sellers have delivered to Purchaser true and complete copies of the
following financial statements:
(a) the audited balance sheets of the Business as of
December 31, 1997, 1996 and 1995, and the related audited statement of
operations for each of the fiscal years then ended; and
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(b) the unaudited balance sheets of the Business as of
October 30, 1998 (the "Recent Financial Statement Date") and the
related unaudited statement of operations for the portion of the
fiscal year then ended (the "Recent Financial Statements").
Except as set forth in the notes thereto and as disclosed in Section 2.06 of
the Disclosure Schedule, all such financial statements (i) were prepared from
the Books and Records of Sellers, (ii) fairly present the financial condition
and results of operations of the Business as of the respective dates thereof
and for the respective periods covered thereby, and (iii) were compiled from
Business Books and Records regularly maintained by management and used to
prepare the financial statements of Sellers. The Business Books and Records
fairly reflect, in all material respects, the income, expenses, assets and
liabilities of the Business and the Business Books and Records provided a fair
and accurate basis for the preparation of the financial statements delivered to
Purchaser in accordance with this Section 2.06.
2.07 Absence of Changes. Except for the execution and delivery of
this Agreement, the transactions to take place pursuant hereto on or prior to
the Closing Date, and changes attributable to Purchaser's accountants, since
the Recent Financial Statement Date there has not been any material adverse
change, or any event or development which, individually or together with other
such events, could reasonably be expected to result in a material adverse
change, in the Condition of the Business. Without limiting the foregoing,
except as disclosed in Section 2.07 of the Disclosure Schedule (with paragraph
references corresponding to those set forth below), there has not occurred,
between the Recent Financial Statement Date and the date hereof, any of the
following:
(a) (i) any increase in the salary, wages or other
compensation of any Employee; (ii) any establishment or modification
of (A) targets, goals, pools or similar provisions in respect of any
fiscal year under any Benefit Plan or any employment-related Contract
or other compensation arrangement with or for Employees or (B) salary
ranges, increase guidelines or similar provisions in respect of any
Benefit Plan or any employment-related Contract or other compensation
arrangement with or for Employees; or (iii) any adoption, entering
into or becoming bound by any Benefit Plan, employment-related
Contract or collective bargaining agreement, or amendment,
modification or termination (partial or complete) of any Benefit Plan,
employment-related Contract or collective bargaining agreement, except
to the extent required by applicable Law;
(b) (i) incurrences by either Xxxxxx or Van Houten of
Indebtedness with respect to the conduct of the Business, or (ii) any
voluntary purchase, cancellation, prepayment or complete or partial
discharge in advance of a scheduled payment date with respect to, or
waiver of any material right of either Xxxxxx or Van Houten under, any
Indebtedness of or owing to either of Xxxxxx or Van Houten with
respect to the conduct of the Business;
(c) any physical damage, destruction or other casualty
loss (whether or not covered by insurance) affecting any of the plant,
real or personal property or equipment of either of Xxxxxx or Van
Houten used or held for use in the conduct of the Business, other than
repairable damage to Vehicles, damage covered by insurance policies
and damages that will not have a material adverse effect on the
Condition of the Business;
(d) any material change in (i) any pricing, investment,
accounting, financial reporting, inventory, credit, allowance or tax
practice or policy of the Business or (ii) any method of
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calculating any bad debt, contingency or other reserve of the
Business for accounting, financial reporting or tax purposes;
(e) (i) any acquisition or disposition of any Assets and
Properties used or held for use in the conduct of the Business, other
than Inventory in the ordinary course of business consistent with past
practice; or (ii) any creation or incurrence of a Lien, other than a
Permitted Lien, on any Assets and Properties used or held in the
conduct of the Business;
(f) any entering into, amendment, modification,
termination (partial or complete) or granting of a waiver of any
material rights under or giving any consent with respect to (i) any
Contract which is required (or had it been in effect on the date
hereof would have been required) to be disclosed in the Disclosure
Schedule pursuant to Section 2.16(a) or (ii) any License disclosed in
Section 1.01(a)(x) of the Disclosure Schedule;
(g) capital expenditures or commitments for additions to
property, plant or equipment used or held for use in the conduct of
the Business constituting capital assets;
(h) any transaction with any officer, director,
Affiliate or Associate of either Xxxxxx or Van Houten or any Associate
of any such officer, director or Affiliate, except for actions in the
ordinary course of the employment of any such party;
(i) any entering into of a Contract to do or engage in
any of the foregoing after the date hereof; or
(j) any other transaction involving or development
affecting the Business or the Assets outside the ordinary course of
business consistent with past practice.
2.08 No Undisclosed Liabilities. Except as reflected or reserved
against in the balance sheet included in the Recent Financial Statements or in
the notes thereto or as disclosed in Section 2.08 of the Disclosure Schedule or
any other Section of the Disclosure Schedule, neither Xxxxxx nor Van Houten nor
Xxxxxxx Xxx Xxxxxx has Knowledge of any Liabilities against, relating to or
affecting the Business or any of the Assets, other than Liabilities incurred in
the ordinary course of business consistent with past practice which in the
aggregate are not material to the Condition of the Business.
2.09 Taxes.
(a) Except for amounts which individually or in the
aggregate would not be material to the financial condition either of
Xxxxxx or Van Houten, the provision made for taxes on the Financial
Statements is sufficient for the payment of all taxes, including but
not limited to, federal, state, foreign county, local and other
income, ad valorem, excise, profits, franchise, occupation, property,
payroll, sales, use, interstate motor carrier ("IMC"), fuel, license,
gross receipts and other taxes (and any interest and penalties) and
assessments, whether or not disputed, for which either Xxxxxx or Van
Houten has been advised it may be liable, or which has been assessed
against either Xxxxxx or Van Houten, at the date of such Financial
Statements and for all years and periods prior thereto. Since the date
of such Financial Statements, neither Xxxxxx nor Van Houten has
incurred any taxes other than taxes incurred in the ordinary course of
business consistent in type and amount with past practices.
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(b) Except as set forth in Section 2.09(b) of the
Disclosure Schedule, all federal, state, foreign, county, local and
other tax returns required to be filed by or on behalf of Xxxxxx or
Van Houten have been timely filed (or if filed late all applicable
penalties and interest have been paid) and when filed were true and
correct in all material respects, and the taxes shown as due thereon
were paid or adequately accrued. Complete copies of all tax returns or
reports filed by Xxxxxx or Van Houten for each of its five (5) most
recent fiscal years have been delivered to Purchaser. Each of Xxxxxx
and Van Houten has duly withheld and paid all taxes which it is
required to withhold and pay relating to salaries and other
compensation heretofore paid to its respective Employees, creditors,
shareholder(s) or any other third party. There are no Liens on any of
the Assets and Properties of either Xxxxxx or Van Houten that have
been filed or perfected in connection with any failure (or alleged
failure) to pay any tax.
(c) The federal and state income tax returns of each of
Xxxxxx and Van Houten have been audited by the Internal Revenue
Service and appropriate state taxing authorities for the periods and
to the extent set forth in Section 2.09(c) of the Disclosure Schedule
and, except to the extent disclosed in Section 2.09(c) of the
Disclosure Schedule, neither Xxxxxx nor Van Houten has received from
the Internal Revenue Service or from the tax authorities of any state,
county, local or other jurisdiction any notice of underpayment of
taxes or other deficiency which has not been paid nor any objection to
any return or report filed by each of Xxxxxx and Van Houten. Except as
set forth in Section 2.09(c) of the Disclosure Schedule, there are
outstanding no agreements or waivers extending the statutory period of
limitations applicable to any tax return or report.
(d) Neither Xxxxxx nor Van Houten has ever been a member
of an affiliated group of corporations that filed a consolidated tax
return on which the statute of limitations does not bar a federal tax
assessment.
(e) Except as set forth in Section 2.09(e) of the
Disclosure Schedule, neither Xxxxxx nor Van Houten has ever (i) filed
any consent or agreement under Section 341(f) of the Code, (ii)
applied for any tax ruling, (iii) entered into a closing agreement
with any taxing authority, (iv) filed an election under Section 338(g)
or Section 338(h)(10) of the Code (nor has a deemed election under
Section 338(e) of the Code occurred), (v) made any payments, or been a
party to an agreement (including this Agreement) that under any
circumstances could obligate it to make payments that will not be
deductible because of Section 280G of the Code, or (vi) been a party
to any tax allocation or tax sharing agreement. Neither Xxxxxx nor Van
Houten is a "United States real property holding company" within the
meaning of Section 897 of the Code.
(f) Each of Xxxxxx and Van Houten has been an electing S
corporation within the meaning of Sections 1361 and 1362 of the Code
since, with respect to Xxxxxx, December 30, 1986, and with respect to
Van Houten, its incorporation, and both of Xxxxxx and Van Houten will
remain S corporations through the Closing Date.
2.10 Legal Proceedings. Except as disclosed in Section 2.10 of the
Disclosure Schedule (with paragraph references corresponding to those set forth
below):
(a) There are no Actions or Proceedings pending for
which Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx has been served with
notice or, to the Knowledge of Xxxxxx, Van Houten
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or Xxxxxxx Xxx Xxxxxx, threatened against, relating to or affecting
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx with respect to the Business
or any of their Assets and Properties;
(b) except as set forth in the Accident Register
provided to Purchaser pursuant to Section 4.06(b), there are no facts
or circumstances Known to Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx
that could reasonably be expected to give rise to any Action or
Proceeding that would be required to be disclosed pursuant to clause
(a) above; and
(c) there are no Orders outstanding against either of
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx that materially limit or
adversely affect the conduct of the Business.
2.11 Compliance With Laws and Orders. Except as disclosed in
Section 2.11 of the Disclosure Schedule, to the Knowledge of Xxxxxx, Van Houten
or Xxxxxxx Xxx Xxxxxx, neither Xxxxxx, Van Houten nor Xxxxxxx Xxx Xxxxxx are,
nor have they, to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, at
any time within the last five (5) years been, nor have they received any notice
that they are or have at any time within the last five (5) years been, in
violation of or in default under any Law or Order applicable to the Business or
the Assets, except for violations and defaults that would not have a material
adverse effect on the Condition of the Business.
2.12 Benefit Plans.
(a) Disclosure. Section 2.12(a) of the Disclosure
Schedule sets forth all Benefit Plans. There are no Benefit Plans
common to Sellers and any Affiliate. True and correct copies of all
the Benefit Plans, including all amendments thereto, have heretofore
been provided to Purchaser. Each Benefit Plan is identified in Section
2.12(a) of the Disclosure Schedule, to the extent applicable, as one
or more of the following: an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA), a "defined benefit plan" (as
defined in Section 414 of the Code), an "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA), and/or as a plan intended
to be qualified under Section 401 of the Code. No Benefit Plan is a
"multiemployer plan" (as defined in Section 4001 of ERISA), and
neither Xxxxxx nor Van Houten has ever contributed or been obligated
to contribute to any such multiemployer plan.
(b) Terminations, Proceedings, Penalties, Etc. With
respect to each Benefit Plan that is subject to the provisions of
Title IV of ERISA and with respect to which either Xxxxxx or Van
Houten or any of its assets may, directly or indirectly, be subject to
any liability, contingent or otherwise, or the imposition of any lien
whether by reason of the complete or partial termination of any such
Benefit Plan, the funded status of any such Benefit Plan, any
"complete withdrawal" (as defined in Section 4203 of ERISA) or
"partial withdrawal" (as defined in Section 4205 of ERISA) by any
person from any such Benefit Plan, or otherwise):
(i) no such Benefit Plan has been terminated so
as to subject, directly or indirectly, any assets of either
Xxxxxx or Van Houten to any liability, contingent or
otherwise, or the imposition of any lien under Title IV of
ERISA;
(ii) no proceeding has been initiated or
threatened by any Person (including the Pension Benefit
Guaranty Corporation ("PBGC")) to terminate any such Benefit
Plan;
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(iii) no condition or event currently exists or
currently is expected to occur that could subject, directly
or indirectly, any assets of either Xxxxxx or Van Houten to
any liability, contingent or otherwise, or the imposition of
any lien under Title IV of ERISA, whether to the PBGC or to
any other person or otherwise on account of the termination
of any such Benefit Plan;
(iv) if any such Benefit Plan were to be
terminated as of the Closing Date, no assets of either Xxxxxx
or Van Houten would be subject, directly or indirectly, to
any liability, contingent or otherwise, or the imposition of
any lien under Title IV of ERISA with the exception of
administrative costs related to such termination;
(v) no "reportable event" (as defined in
Section 4043 of ERISA) has occurred with respect to any such
Benefit Plan;
(vi) no such Benefit Plan which is subject to
Section 302 of ERISA or Section 412 of the Code has incurred
any "accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code, respectively),
whether or not waived; and
(vii) no such Benefit Plan is a multiemployer
plan or a plan described in Section 4064 of ERISA.
(c) Prohibited Transactions. There have been no
"prohibited transactions" within the meaning of Section 406 or 407 of
ERISA or Section 4975 of the Code for which a statutory or
administrative exemption does not exist with respect to any Benefit
Plan, and no event or omission has occurred in connection with which
either Xxxxxx or Van Houten or any of its assets or any Benefit Plan,
directly or indirectly, could be subject to any liability under ERISA,
the Code or any other Law or Order applicable to any Benefit Plan,
including, without limitation, Sections 406, 407, 409, 501, 502, 510,
511, 601, 4062, 4063, 4069, 4071, or 4201 of ERISA, or Sections 4971,
4972, 4975, 4976, 4977, 4979 or 4980B of the Code, or under any
agreement, instrument, Law or Order pursuant to or under which either
Xxxxxx or Van Houten has agreed to indemnify or is required to
indemnify any Person against liability incurred under, or for a
violation or failure to satisfy the requirements of, any such
agreement, instrument, Law or Order.
(d) Full Funding. The funds available under each Benefit
Plan which is intended to be a funded plan equal or exceed the amounts
required to be paid, or which would be required to be paid if such
Benefit Plan were terminated, on account of rights vested or accrued
as of the Closing Date (using the actuarial methods and assumptions
then used by actuaries in connection with the funding of such Benefit
Plan).
(e) Controlled Group; Affiliated Service Group; Leased
Employees. Except as set forth in Section 2.12(e) of the Disclosure
Schedule, neither Xxxxxx nor Van Houten is or has ever been a member
of a controlled group of corporations as defined in Section 414(b) of
the Code or in common control with any unincorporated trade or
business as determined under Section 414(c) of the Code, or has ever
been a member of an "affiliated service group" within the meaning of
Section 414(m) of the Code. There are not and never have been any
leased employees within the meaning of Section 414(n) of the Code who
perform services for either Xxxxxx or Van Houten, and no individuals
are expected to become leased employees with the passage of time.
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(f) Payments and Compliance. With respect to each
Benefit Plan, (i) all payments due from either Xxxxxx or Van Houten to
date have been made and all amounts properly accrued to date as
liabilities which have not been paid have been properly recorded on
the books of Xxxxxx or Van Houten and are reflected in the Recent
Financial Statements; (ii) Xxxxxx and Van Houten have complied with,
and each such Employee Plan/Agreement conforms in all material
respects in form and operation to, all applicable laws and
regulations, including but not limited to ERISA and the Code, and all
reports and information relating to such Benefit Plan required to be
filed with any governmental entity have been timely filed; (iii) all
reports and information relating to each such Benefit Plan required to
be disclosed or provided to participants or their beneficiaries have
been timely disclosed or provided; (iv) each such Benefit Plan which
is intended to qualify under Section 401 of the Code has received a
favorable determination letter from the Internal Revenue Service with
respect to such qualification, its related trust has been determined
to be exempt from taxation under Section 501(a) of the Code, and
nothing has occurred since the date of such letter that has adversely
affected or is likely to adversely affect such qualification or
exemption; (v) there are no actions, suits or claims pending (other
than routine claims for benefits) or to the Knowledge of Xxxxxx, Van
Houten and Xxxxxxx Xxx Xxxxxx, threatened with respect to such Benefit
Plan or against the assets of such Benefit Plan; and (vi) no Benefit
Plan is established and maintained outside the United States primarily
for the benefit of individuals substantially all of whom are
nonresident aliens.
(g) Post-Retirement Benefits. No Benefit Plan provides
benefits, including, without limitation, death or medical benefits
(whether or not insured) with respect to current or former employees
beyond their retirement or other termination of service other than (i)
coverage mandated by Law, (ii) death or retirement benefits under any
Benefit Plan that is an employee pension benefit plan, (iii) deferred
compensation benefits accrued as liabilities on the books of either
Xxxxxx or Van Houten (including the Recent Financial Statements), (iv)
disability benefits under any Benefit Plan that is an employee welfare
benefit plan and which have been fully provided for by insurance or
otherwise or (v) benefits in the nature of severance pay of not more
than two weeks duration.
(h) No Triggering of Obligations. The consummation of
the transactions contemplated by this Agreement will not (i) entitle
any current or former employee of either Xxxxxx or Van Houten to
severance pay, unemployment compensation or any other payment, except
as expressly provided in this Agreement, (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due to any
such employee or former employee or (iii) result in any prohibited
transaction described in Section 406 of ERISA or Section 4975 of the
Code for which an exemption is not available.
(i) Delivery of Documents. There has been delivered to
Purchaser, with respect to each Benefit Plan:
(i) except as disclosed in Section 2.12(i)(i)
of the Disclosure Schedule, a copy of the annual report, if
required under ERISA, with respect to each such Benefit Plan
for the last two years;
(ii) a copy of the summary Benefit Plan
description, together with each summary of material
modifications, required under ERISA with respect to such
Benefit Plan, all material Employee communications relating
to such Benefit Plan, and, unless the
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Benefit Plan is embodied entirely in an insurance policy to
which either Xxxxxx or Van Houten is a party, a true and
complete copy of such Benefit Plan;
(iii) if the Benefit Plan is funded through a
trust or any third party funding vehicle (other than an
insurance policy), a copy of the trust or other funding
agreement and the latest financial statements thereof; and
(iv) the most recent determination letter
received from the Internal Revenue Service with respect to
each Benefit Plan that is intended to be a "qualified plan"
under Section 401 of the Code.
With respect to each Benefit Plan for which an annual report has been filed and
delivered to Purchaser pursuant to clause (i) of this paragraph above, no
material adverse change has occurred with respect to the matters covered by the
latest such annual report since the date thereof.
(j) Neither Xxxxxx nor Van Houten has any announced plan
or legally binding commitment to create any additional Benefit Plan or
to amend or modify any existing Benefit Plan.
2.13 Real Property. Section 1.01(a)(i) of the Disclosure Schedule
contains a true and correct list of each parcel of real property owned by
either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx and/or his spouse which is used
or held for use in connection with the Business, and Section(s) 1.01(a)(ii)(A)
and/or 1.01(a)(ii) (B) of the Disclosure Schedule contain a true and correct
list of each parcel of real property leased by either Xxxxxx or Van Houten (as
lessor or lessee) and used or held for use in connection with the Business.
(a) Except as disclosed in Section 2.13(a) of the
Disclosure Schedule, either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx
and/or his spouse has good and marketable fee simple title to the Real
Property, free and clear of all Liens other than Permitted Liens.
Except for the Real Property subject to Real Property Leases described
in Section 1.01(a)(ii)(A) of the Disclosure Schedule, either Xxxxxx,
Van Houten or Xxxxxxx Xxx Xxxxxx and/or his spouse is in possession of
the Real Property. Neither Xxxxxx, Van Houten nor Xxxxxxx Xxx Xxxxxx,
has Knowledge that any Real Property is located in a flood plain,
flood hazard area, wetland or lakeshore erosion area within the
meaning of any Law. Neither Xxxxxx, Van Houten, nor Xxxxxxx Xxx
Xxxxxx, has Knowledge that any public improvements have commenced or,
to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, that any
are planned which in either case may result in special assessments
against or otherwise materially adversely affect any of the Real
Property. To the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx, none of the Real Property or the Improvements, or the use
thereof, contravenes or violates any Law or Order in any material
respect.
(b) Either Xxxxxx or Van Houten has a valid and
subsisting leasehold estate in and the right to quiet enjoyment of the
real properties subject to the Real Property Leases described in
Section 1.01(a)(ii)(B) of the Disclosure Schedule for the full term
thereof. Each Real Property Lease is a legal, valid and binding
agreement, enforceable in accordance with its terms, of either Xxxxxx
or Van Houten and, to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx
Xxx Xxxxxx, of each other Person that is a party thereto, and, to the
Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, except as set
forth in Section 2.13(b) of the Disclosure Schedule, there is
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no, nor has either Xxxxxx or Van Houten received any notice of any,
default (or any condition or event which, after notice or lapse of
time or both, would constitute a default) of any material provision of
any Real Property Lease. Neither Xxxxxx nor Van Houten owe any
brokerage commissions with respect to any such leased space.
(c) Sellers have delivered, or will deliver upon
request, to Purchaser prior to the execution of this Agreement true
and complete copies of (i) all deeds, current leases, mortgages, deeds
of trust, certificates of occupancy, title insurance policies, surveys
and all amendments thereof, with respect to the Real Property that are
in Sellers' or Xxxxxxx Xxx Xxxxxx'x and his spouse's possession, and
(ii) all Real Property Leases (including any amendments and renewal
letters) and, to the extent they are requested by Purchaser and are in
Sellers' possession, all certificates of occupancy with respect to the
real property subject to the Real Property Leases described in Section
1.01(a)(ii)(B) of the Disclosure Schedule.
(d) Except as disclosed in Section 2.13(d) of the
Disclosure Schedule, to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx
Xxx Xxxxxx, no tenant or other party in possession of any of the real
properties subject to the Real Property Leases described in Section
1.01(a)(ii)(A) of the Disclosure Schedule has any right to purchase,
or holds any right of first refusal to purchase, such properties.
(e) Except as disclosed in Section 2.13(e) of the
Disclosure Schedule, the Improvements are in operating condition and
are adequate and suitable for the purposes for which they are
presently being used and, neither Xxxxxx, Van Houten nor Xxxxxxx Xxx
Xxxxxx has received any written notice of any (i) planned or proposed
increase in assessed valuations of any of the Real Property, (ii)
Order requiring repair, alteration, or correction of any existing
condition affecting any of the Real Property or the Improvements,
(iii) condition or defect which could give rise to an Order of the
sort referred to in "(ii)" above, or (iv) underground storage tanks
affecting any of the Real Property.
(f) Neither the whole nor any portion of the Real
Property is subject to any Order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor to the Knowledge of
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx has any such condemnation,
expropriation or taking been proposed.
2.14 Tangible Personal Property; Investment Assets.
(a) Either Xxxxxx or Van Houten is in possession of and
has good title to, or has valid leasehold interests in or valid rights
under Contract to use, all the Tangible Personal Property, which
includes all tangible personal property reflected on the balance sheet
included in the Recent Financial Statements and tangible personal
property acquired since the Recent Financial Statement Date other than
tangible personal property disposed of since such date in the ordinary
course of business consistent with past practice. All the Tangible
Personal Property is free and clear of all Liens, other than Permitted
Liens and Liens disclosed in Section 2.14(a) of the Disclosure
Schedule, and is in working order and condition such that it is in
compliance with applicable Law, and its use complies in all respects
with all applicable Laws, except for repairs to Vehicles required in
the ordinary course of business and except to the extent that any
failure to comply with any Law will not have a material adverse effect
on the Condition of the Business.
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(b) Section 2.14(b) of the Disclosure Schedule describes
each Investment Asset included among the Assets on the date hereof.
Except as disclosed in Section 2.14(b) of the Disclosure Schedule, all
such Investment Assets are owned by Xxxxxx and Van Houten, as the case
may be, free and clear of all Liens other than Permitted Liens.
2.15 Intellectual Property Rights. Either Xxxxxx or Van Houten has
interests in or uses only the Intellectual Property disclosed in Section
1.01(a)(ix) of the Disclosure Schedule in connection with the conduct of the
Business, each of which either Xxxxxx or Van Houten has all right, title and
interest in or a valid and binding rights under Contract to use. No other
Intellectual Property is used or necessary in the conduct of the Business.
Except as disclosed in Section 2.15 of the Disclosure Schedule, (i) either
Xxxxxx or Van Houten has the exclusive right to use the Intellectual Property
disclosed in Section 1.01(a)(ix) of the Disclosure Schedule, (ii) there are no
restrictions on the direct or indirect transfer of any Contract, or any
interest therein, held by either Xxxxxx or Van Houten in respect of such
Intellectual Property, (iii) neither Xxxxxx nor Van Houten has received any
notice that it is, in default (or with the giving of notice or lapse of time or
both, would be in default) under any Contract to use such Intellectual Property
and (iv) to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, no such
Intellectual Property is being infringed by any other Person. Neither Xxxxxx
nor Van Houten has received notice that it is infringing any Intellectual
Property of any other Person in connection with the conduct of the Business, no
claim is pending or, to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx, has been made to such effect that has not been resolved and, to the
Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, neither Xxxxxx nor Van
Houten is infringing any Intellectual Property of any other Person in
connection with the conduct of the Business.
2.16 Contracts.
(a) Section 2.16(a) of the Disclosure Schedule (with
paragraph references corresponding to those set forth below) contains
a true and complete list of each of the following Contracts or other
arrangements (true and complete copies or, if none, reasonably
complete and accurate written descriptions of which, together with all
amendments and supplements thereto and all written waivers of any
material terms thereof, have been delivered to Purchaser prior to the
execution of this Agreement or will be provided to Purchaser upon
request) to which either Xxxxxx or Van Houten is a party or by which
any of the Assets is bound:
(i) (A) all written Contracts (excluding
Benefit Plans) providing for a commitment of employment or
consultation services for a specified or unspecified term to,
and all written Contracts relating to employment or the
termination of employment of, any Employee, the name,
position and rate of compensation of each Employee party to
such a Contract and the expiration date of each such
Contract; and (B) any written or unwritten commitments
(excluding Benefit Plans and any such Contracts referred to
in clause (A)) involving an obligation of either Xxxxxx or
Van Houten to make payments in any year;
(ii) all written Contracts with any Person
containing any provision or covenant prohibiting or limiting
the ability of either Xxxxxx or Van Houten to engage in any
business activity or compete with any Person in connection
with the Business or, except as provided in Section 4.11,
prohibiting or limiting the ability of any Person to compete
with either Xxxxxx or Van Houten in connection with the
Business;
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(iii) all partnership, joint venture,
shareholders' or other similar written Contracts with any
Person in connection with the Business;
(iv) all written Contracts with distributors,
dealers, manufacturer's representatives, sales agencies or
franchises with whom either Xxxxxx or Van Houten deal in
connection with the Business;
(v) all written Contracts relating to the
future disposition or acquisition of any Assets;
(vi) all collective bargaining or similar labor
Contracts covering any Employee; and
(vii) all other written Contracts (other than
Benefit Plans, the Real Property Leases and insurance
policies listed in Section 2.18(a) of the Disclosure
Schedule) with respect to the Business that (A) involve the
payment or potential payment, pursuant to the terms of any
such Contract, by or to either Xxxxxx or Van Houten of more
than $5,000 annually and (B) cannot be terminated within
thirty (30) days after giving notice of termination without
resulting in a cost or penalty to either Xxxxxx or Van
Houten.
(b) To the Knowledge of Xxxxxx, Van Houten and Xxxxxxx
Xxx Xxxxxx, each Contract required to be disclosed in Section 2.16(a)
of the Disclosure Schedule is in full force and effect and constitutes
a legal, valid and binding agreement, enforceable in accordance with
its terms, of each party thereto; and except as disclosed in Section
2.16(b) of the Disclosure Schedule, neither Xxxxxx nor Van Houten, to
the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, is, or has
received notice that either Xxxxxx or Van Houten is, in violation or
breach of or default under any such Contract (or with notice or lapse
of time or both, would be in violation or breach of or default under
any such Contract) in any material respect.
(c) Except as disclosed in Section 2.16(c) of the
Disclosure Schedule, (i) the execution, delivery and performance by
Sellers and Xxxxxxx Xxx Xxxxxx of this Agreement and the Operative
Agreements to which either is a party, and the consummation of the
transactions contemplated hereby and thereby, will not (A) result in
or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (B) result in or
give to any Person any additional rights or entitlement to increased,
additional, accelerated or guaranteed payments under, or (C) result in
the creation or imposition of any Lien upon either Xxxxxx or Van
Houten, as the case may be, or any of their Assets and Properties
under, any Business Contract, and (ii) neither Xxxxxx, Van Houten nor
Xxxxxxx Xxx Xxxxxx is a party to or bound by any Business Contract
that has been or could reasonably be expected to be, individually or
in the aggregate with any other Business Contracts, materially adverse
to the Condition of the Business.
2.17 Licenses. Section 1.01(a)(x) of the Disclosure Schedule
contains a true and complete list of all material Licenses used or held for use
in the Business (and all pending applications for any such Licenses). Prior to
the execution of this Agreement, Sellers have delivered to Purchaser true and
complete copies of all such Licenses. Except as disclosed in Section 2.17 of
the Disclosure Schedule (with paragraph references corresponding to those set
forth below):
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(a) either Xxxxxx or Van Houten owns or validly holds
all Licenses, the failure of which to obtain or maintain would have a
material adverse effect on the Condition of the Business;
(b) each Business License is valid, binding and in full
force and effect, except to the extent that the failure of a Business
License to be valid, binding and in full force and effect would not
have a material adverse effect on the Condition of the Business;
(c) neither Xxxxxx nor Van Houten has received any
written notice that they are, in default (or with the giving of notice
or lapse of time or both, would be in default) under any Business
License; and
(d) the execution, delivery and performance by Sellers
and Xxxxxxx Xxx Xxxxxx of this Agreement and the Operative Agreements
to which either is a party, and the consummation of the transactions
contemplated hereby and thereby, will not (i) result in or give to any
Person any right of termination, cancellation, acceleration or
modification in or with respect to, (ii) result in or give to any
Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (iii) result in the
creation or imposition of any Lien upon either Xxxxxx or Van Houten,
as the case may be, or any of their Assets and Properties under, any
Business License.
2.18 Insurance.
(a) Section 2.18(a)(i) of the Disclosure Schedule
contains a true and complete list of all liability, property, workers'
compensation and other insurance policies currently in effect that
insure the Business, the Employees or the Assets. To the Knowledge of
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, each such insurance policy
is valid and binding and in full force and effect, no premiums due
thereunder have not been paid and neither Xxxxxx, Van Houten nor
Xxxxxxx Xxx Xxxxxx have received any notice of cancellation or
termination in respect of any such policy or is in default thereunder.
Except as set forth in Section 2.18(a)(ii) of the Disclosure Schedule,
neither Xxxxxx, Van Houten nor the Person to whom such policy has been
issued has received written notice that any insurer under any policy
referred to in this Section is denying liability with respect to a
claim thereunder or defending under a reservation of rights clause.
(b) Section 2.18(b) of the Disclosure Schedule contains
certificates as to the valid existence of all liability, property,
workers' compensation and other insurance policies currently in effect
that insure the Business, the Employees or the Assets.
2.19 Affiliate Transactions. Except as disclosed in Section
2.19(a) of the Disclosure Schedule, (i) no officer, director, Affiliate or
Associate of either Xxxxxx or Van Houten or any Associate of any such officer,
director or Affiliate provides or causes to be provided any assets, services or
facilities used or held for use in connection with the Business, and (ii) the
Business does not provide or cause to be provided any assets, services or
facilities to any such officer, director, Affiliate or Associate. Except as
disclosed in Section 2.19(b) of the Disclosure Schedule, each of the
transactions listed in Section 2.19(a) of the Disclosure Schedule is engaged in
on an arm's-length basis.
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2.20 Employees; Labor Relations.
(a) A list of the name of each Employee at the date
hereof, together with such Employee's position or function, annual
base salary or wages and any incentive or bonus arrangement with
respect to such Employee in effect on such date has been or will be
provided to the Purchaser upon request. Neither Xxxxxx, Van Houten nor
Xxxxxxx Xxx Xxxxxx has received any information that would lead it or
him to believe that a material number of such Employees will or may
cease to be Employees, or will refuse offers of employment from
Purchaser, because of the consummation of the transactions
contemplated by this Agreement.
(b) Except as disclosed in Section 2.20 of the
Disclosure Schedule, (i) no Employee is presently a member of a
collective bargaining unit and to the Knowledge of Xxxxxx, Van Houten
or Xxxxxxx Xxx Xxxxxx, there are no threatened or contemplated
attempts to organize for collective bargaining purposes any of the
Employees, and (ii) no unfair labor practice complaint or sex, age,
race or other discrimination claim has been brought during the last
five (5) years against either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx
with respect to the conduct of the Business before the National Labor
Relations Board, the Equal Employment Opportunity Commission or any
other Governmental or Regulatory Authority. Within the last five (5)
years, there has been no work stoppage, strike or other concerted
action by employees of either Xxxxxx or Van Houten engaged in the
Business. During that period, Sellers and Xxxxxxx Xxx Xxxxxx have
complied with all applicable Laws relating to the employment of labor,
including, without limitation those relating to wages, hours and
collective bargaining, except to the extent that any failure to comply
with any Law will not have a material adverse effect on the Condition
of the Business.
2.21 Environmental Matters.
(a) Sellers have obtained all Licenses which are
required under applicable Environmental Laws in connection with the
conduct of the Business or the Assets and each of such Licenses is in
full force and effect, except to the extent that any failure of such
Licenses to be in full force and effect will not have a material
adverse effect on the Condition of the Business. Sellers have
conducted the Business in compliance in all material respects with the
terms and conditions of all such Licenses and with any applicable
Environmental Law.
(b) Except as set forth in Section 2.21(b) of the
Disclosure Schedule (with paragraph references corresponding to those
set forth below):
(i) no Order has been issued, no Environmental
Claim has been filed, no penalty has been assessed and, to
the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, no
investigation or review is pending or, threatened by any
Governmental or Regulatory Authority with respect to any
alleged failure by either Xxxxxx or Van Houten to have any
License required under applicable Environmental Laws in
connection with the conduct of the Business or with respect
to any generation, treatment, storage, recycling,
transportation, discharge, disposal or Release of any
Hazardous Material in connection with the Business, and there
are no facts or circumstances in existence which could
reasonably be expected to form the basis for any such Order,
Environmental Claim, penalty or investigation; and
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(ii) neither Xxxxxx nor Van Houten has received
oral or written notice that it has transported or arranged
for the transportation of any Hazardous Material in
connection with the operation of the Business to any location
that is (i) listed on the NPL under CERCLA, (ii) listed for
possible inclusion on the NPL by the Environmental Protection
Agency in CERCLIS or on any similar state or local list or
(iii) the subject of enforcement actions by federal, state or
local Governmental or Regulatory Authorities that may lead to
Environmental Claims against either Xxxxxx, Van Houten or the
Business.
(c) With respect to the Real Property and Riverdale
(collectively, the "Subject Properties"), except as set forth in
Section 2.21(c) of the Disclosure Schedule (with paragraph references
corresponding to those set forth below):
(i) neither Xxxxxx nor Van Houten owns,
operates or leases a treatment, storage or disposal facility
on any of the Subject Properties requiring a permit under the
Resource Conservation and Recovery Act, as amended, or under
any other comparable Law; and, without limiting the
foregoing, (i) no polychlorinated biphenyl is or has been
present, (ii) no asbestos or asbestos-containing material is
or has been present, (iii) there are no underground storage
tanks or surface impoundments for Hazardous Materials, active
or abandoned, and (iv) no Hazardous Material has been
Released in a quantity reportable under, or in violation of,
any applicable Environmental Law;
(ii) no Hazardous Material generated in
connection with the operation of the Business has been
recycled, treated, stored, disposed of or Released by either
Xxxxxx or Van Houten at the Subject Properties, except for
Hazardous Materials used in connection with the ownership,
maintenance and repair of Vehicles in compliance with any
applicable Environmental Law;
(iii) no oral or written notification of a
Release of a Hazardous Material in connection with the
operation of the Business has been filed by or on behalf of
either Xxxxxx or Van Houten, and none of the Subject
Properties is listed or proposed for listing on the NPL,
CERCLIS or any similar state or local list of sites requiring
investigation or clean-up;
(iv) no Liens have arisen under or pursuant to
any Environmental Law on any of the Subject Properties, and
no federal, state or local Governmental or Regulatory
Authority action has been taken or, is in process that could
subject any of the Subject Properties to such Liens, and
neither Xxxxxx nor Van Houten would be required to place any
notice or restriction relating to the presence of Hazardous
Materials at any of the Subject Properties or in any deed to
the Real Property on which such site or facility is located;
and
(v) there have been no environmental
investigations, studies, audits, tests, reviews or other
analyses conducted by, or that are in the possession of,
either Xxxxxx or Van Houten in relation to any of the Subject
Properties which have not been delivered to Purchaser prior
to the execution of this Agreement.
(d) With respect to any real property leased or operated
by either Xxxxxx or Van Houten other than Riverdale (the "Leased
Properties"), to the Knowledge of Xxxxxx, Van Houten
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or Xxxxxxx Xxx Xxxxxx, except as set forth in Section 2.21(d) of the
Disclosure Schedule (with paragraph references corresponding to those
set forth below):
(i) neither Xxxxxx nor Van Houten owns,
operates or leases a treatment, storage or disposal facility
on any of the Leased Properties requiring a permit under the
Resource Conservation and Recovery Act, as amended, or under
any other comparable Law; and, without limiting the
foregoing, (i) no polychlorinated biphenyl is or has been
present, (ii) no asbestos or asbestos-containing material is
or has been present, (iii) there are no underground storage
tanks or surface impoundments for Hazardous Materials, active
or abandoned, and (iv) no Hazardous Material has been
Released in a quantity reportable under, or in violation of,
any Environmental Law;
(ii) no Hazardous Material generated in
connection with the operation of the Business has been
recycled, treated, stored, disposed of or Released by either
Xxxxxx or Van Houten on any of the Leased Properties, except
for Hazardous Materials used in connection with the
ownership, maintenance and repair of Vehicles in compliance
with any applicable Environmental Law;
(iii) no oral or written notification of a
Release of a Hazardous Material in connection with the
operation of the Business has been filed by or on behalf of
either Xxxxxx or Van Houten, and none of the Leased
Properties is listed or proposed for listing on the NPL,
CERCLIS or any similar state or local list of sites requiring
investigation or clean-up;
(iv) no Liens have arisen under or pursuant to
any Environmental Law on any Leased Properties, and no
federal, state or local Governmental or Regulatory Authority
action has been taken or, is in process that could subject
any of the Leased Properties to such Liens, and neither
Xxxxxx nor Van Houten would be required to place any notice
or restriction relating to the presence of Hazardous
Materials at any of the Leased Properties; and
(v) there have been no environmental
investigations, studies, audits, tests, reviews or other
analyses conducted by, or that are in the possession of,
either Xxxxxx or Van Houten in relation to any of the Leased
Properties which have not been delivered to Purchaser prior
to the execution of this Agreement.
2.22 Substantial Customers. Section 2.22(a) of the Disclosure
Schedule lists all Contracts and business arrangements of Xxxxxx with its ten
(10) largest transportation customers of the Business, on the basis of revenues
generated for the portion of the fiscal year ending October 31, 1998. Except as
disclosed in Section 2.22(b) of the Disclosure Schedule, none of such customers
of the Business has ceased or materially reduced its purchases from, or use of
the services of, the Business since the Recent Financial Statement Date, or to
the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, has threatened to
cease or materially reduce such purchases or use after the date hereof.
2.23 Accounts Receivable. Except as set forth in Section 2.23(a)
of the Disclosure Schedule, the Accounts Receivable (i) arose from bona fide
transactions in the ordinary course of business and are payable on Sellers'
customary trade terms, (ii) are legal, valid and binding obligations of the
respective debtors enforceable in accordance with their terms, (iii) to the
Knowledge of Xxxxxx, Van Houten or
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Xxxxxxx Xxx Xxxxxx, are not subject to any valid set-off or counterclaim, (iv)
do not represent obligations for goods sold on consignment, on approval or on a
sale-or-return basis or subject to any other repurchase or return arrangement,
(v) to the Knowledge of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, are
collectible in the ordinary course of business consistent with past practice in
the aggregate recorded amounts thereof, net of any applicable reserve reflected
in the balance sheet included in the Recent Financial Statements and subject to
extensions for time to pay granted in accordance with past practice, and (vi)
are not the subject of any Actions or Proceedings brought by or on behalf of
either Xxxxxx or Van Houten. Section 2.23(b) of the Disclosure Schedule
contains an aged schedule of the Accounts Receivable with respect to the
Business included in the Recent Financial Statements and as of November 30,
1998. Neither Xxxxxx nor Van Houten has any security arrangements or collateral
securing the repayment or other satisfaction of the Accounts Receivable.
2.24 Inventory. All the Inventory consists of a quality and
quantity usable in the ordinary course of business consistent with past
practice, subject to normal and customary allowances in the industry for
spoilage, damage and outdated items. All items included in the Inventory are
the property of either Xxxxxx or Van Houten, free and clear of any Lien other
than Permitted Liens, have not been pledged as collateral, are not held by
either Xxxxxx or Van Houten on consignment from others and conform in all
material respects to all standards applicable to such inventory or its use
imposed by Governmental or Regulatory Authorities.
2.25 Vehicles. Section 1.01(a)(xi) of the Disclosure Schedule
contains a true and complete list of all Vehicles owned or leased by either
Xxxxxx or Van Houten and used or held for use in the conduct of the Business.
Except as disclosed in Section 2.25 of the Disclosure Schedule, either Xxxxxx
or Van Houten has good and valid title to, or has valid leasehold interests in
or valid rights under Contract to use, each Vehicle, free and clear of all
Liens other than Permitted Liens.
2.26 No Guarantees. Except as set forth in Section 2.26 of the
Disclosure Schedule, none of the Liabilities of the Business or of either
Xxxxxx or Van Houten incurred in connection with the conduct of the Business is
guaranteed by or subject to a similar contingent obligation of any other
Person, nor has either Xxxxxx or Van Houten guaranteed or become subject to a
similar contingent obligation in respect of the Liabilities of any customer,
supplier or other Person to whom either Xxxxxx or Van Houten sells goods or
provides services in the conduct of the Business or with whom either Xxxxxx or
Van Houten otherwise has significant business relationships in the conduct of
the Business.
2.27 Year 2000. Sellers have developed and are in the process of
implementing a program to address, on a timely basis, the "Year 2000 Problem"
(that is, the risk that computer applications used by the Sellers may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999) as described in Section
2.27 of the Disclosure Schedule ("Sellers' Y2K Action Plan"), which shall be
assigned to Purchaser at the Closing.
2.28 All Assets and Properties. The sale of the Assets by Sellers
to Purchaser pursuant to this Agreement will effectively convey to Purchaser
all of the tangible and intangible property used by either Xxxxxx or Van Houten
(whether owned, leased or held under license by either Xxxxxx or Van Houten, by
any of Xxxxxx'x or Van Houten's Affiliates or Associates or by others) in
connection with the conduct of the Business as heretofore conducted by Sellers
(except for the Excluded Assets) including, without limitation, all tangible
Assets and Properties of Sellers reflected in the balance sheet included in the
Recent Financial Statements and Assets and Properties acquired since the Recent
Financial Statement Date in the conduct of the Business, other than the
Excluded Assets and Assets and Properties disposed of since
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such date, consistent with Section 2.07(e). Except as disclosed in Section 2.28
of the Disclosure Schedule, there are no shared facilities or services which
are used in connection with any business or other operations of either Xxxxxx
or Van Houten or any of Xxxxxx'x or Van Houten's Affiliates or Associates other
than the Business.
2.29 Brokers. Except for Xxxxx & Associates, Ltd., whose fees,
commissions and expenses are the sole responsibility of Xxxxxxx Xxx Xxxxxx, all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Sellers and Xxxxxxx Xxx Xxxxxx directly with
Purchaser without the intervention of any other Person on behalf of Sellers in
such manner as to give rise to any valid claim by any Person against Purchaser
for a finder's fee, brokerage commission or similar payment.
2.30 Disclosure. To the Knowledge of Xxxxxx, Van Houten or Xxxxxxx
Xxx Xxxxxx, all material facts relating to the Condition of the Business have
been disclosed to Purchaser in or in connection with this Agreement. No
representation or warranty contained in this Agreement, and no statement
contained in the Disclosure Schedule or in any certificate, list or other
writing furnished to Purchaser pursuant to any provision of this Agreement
(including without limitation the Financial Statements) contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers and Xxxxxxx Xxx
Xxxxxx as follows:
3.01 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the Laws of the State of Ohio.
Purchaser has full corporate power and authority to enter into this Agreement
and the Operative Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. Purchaser has full corporate power and authority to own and lease
its assets and conduct its business as now conducted, and, after the Closing,
Purchaser will have full corporate power and authority to conduct the Business
and to own and use the Assets.
3.02 Authority. Purchaser has full corporate power and authority
to execute and deliver this Agreement and the Operative Agreements to which it
is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby, including without
limitation to purchase (pursuant to this Agreement) the Assets. The execution
and delivery by Purchaser of this Agreement and the Operative Agreements to
which it is a party, and the performance by Purchaser of its obligations
hereunder and thereunder, have been duly and validly authorized by the Board of
Directors of Purchaser and its sole shareholder, no other corporate action on
the part of Purchaser or its sole shareholder being necessary. This Agreement
has been duly and validly executed and delivered by Purchaser and constitutes,
and upon the execution and delivery by Purchaser of the Operative Agreements to
which it is a party, such Operative Agreements will constitute, legal, valid
and binding obligations of Purchaser enforceable against Purchaser in
accordance with their terms.
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3.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement do not, and the execution and delivery by Purchaser of the Operative
Agreements to which it is a party, the performance by Purchaser of its
obligations under this Agreement and such Operative Agreements and the
consummation of the transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the certificate of
incorporation or by-laws of Purchaser;
(b) subject to obtaining the consents, approvals and
actions, making the filings and giving the notices disclosed in
Section 3.04 of the Disclosure Schedule, conflict with or result in a
violation or breach of any term or provision of any Law or Order
applicable to Purchaser or any of its Assets and Properties; or
(c) except as disclosed in Section 3.03 of the
Disclosure Schedule, (i) conflict with or result in a violation or
breach of, (ii) constitute (with or without notice or lapse of time or
both) a default under, (iii) require Purchaser to obtain any consent,
approval or action of, make any filing with or give any notice to any
Person as a result or under the terms of, or (iv) result in the
creation or imposition of any Lien upon Purchaser or any of its assets
or properties under any contract or license to which Purchaser is a
party or by which any of its assets and properties is bound.
3.04 Governmental Approvals and Filings. Except as disclosed in
Section 3.04 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the part
of Purchaser is required in connection with the execution, delivery and
performance of this Agreement or the Operative Agreements to which it is a
party or the consummation of the transactions contemplated hereby or thereby.
3.05 Legal Proceedings. There are no Actions or Proceedings
pending or, to the Knowledge of Purchaser, threatened against, relating to or
affecting Purchaser or any of its assets and properties which could reasonably
be expected to result in the issuance of an Order restraining, enjoining or
otherwise prohibiting or making illegal the consummation of any of the
transactions contemplated by this Agreement or any of the Operative Agreements
or which, if determined adversely to Purchaser, would have a material adverse
effect on Purchaser's business, condition (financial or otherwise), results of
operations, assets or prospects.
3.06 Financial Statements. Prior to the execution of this
Agreement, Purchaser has delivered to Sellers and Xxxxxxx Xxx Xxxxxx true and
complete copies of the following financial statements:
(a) the audited balance sheets of X.X.X. as of December
31, 1997, 1996 and 1995, and the related audited statement of
operations for each of the fiscal years then ended; and
(b) the unaudited balance sheets of X.X.X. as of
September 30, 1998 and the related unaudited statement of operations
for the portion of the fiscal year then ended.
Except as set forth in the notes thereto and as disclosed in Section 3.06 of
the Disclosure Schedule, all such financial statements (i) were prepared from
the Books and Records of X.X.X. in accordance with GAAP, (ii) fairly present
the financial condition and results of operations of X.X.X. as of the
respective dates thereof and for the respective periods covered thereby, and
(iii) were compiled from Books and
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Records regularly maintained by management and used to prepare the financial
statements of X.X.X. in accordance with the principles stated therein. X.X.X.
has maintained its Books and Records in a manner sufficient to permit the
preparation of financial statements in accordance with GAAP, and the Books and
Records provided a fair and accurate basis for the preparation of the financial
statements delivered to Sellers in accordance with this Section 3.06.
3.07 Absence of Changes. Since September 30, 1998, there has not
been any material adverse change, or any event or development which,
individually or together with other such events, could reasonably be expected
to result in a material adverse change, in X.X.X.'s business, financial
condition or results of operations.
3.08 Brokers. Except for Xxxxx & Associates, Ltd., whose fees,
commissions and expenses are the sole responsibility of Xxxxxxx Xxx Xxxxxx, all
negotiations relative to this Agreement and the transactions contemplated
hereby have been carried out by Sellers and Xxxxxxx Xxx Xxxxxx directly with
Purchaser without the intervention of any other Person on behalf of Purchaser
in such manner as to give rise to any valid claim by any Person against Seller
for a finder's fee, brokerage commission or similar payment.
ARTICLE IV
COVENANTS OF SELLERS AND XXXXXXX XXX XXXXXX
Sellers and Xxxxxxx Xxx Xxxxxx covenant and agree with Purchaser that,
at all times from and after the date hereof until the Closing and, with respect
to any covenant or agreement by its terms to be performed in whole or in part
after the Closing, for the period specified herein or, if no period is
specified herein, for five (5) years, Sellers and Xxxxxxx Xxx Xxxxxx will
comply with all covenants and provisions of this Article IV, except to the
extent Purchaser may otherwise consent in writing.
4.01 Regulatory and Other Approvals. Sellers and Xxxxxxx Xxx
Xxxxxx will (a) take all commercially reasonable steps necessary or desirable,
and proceed diligently and in good faith and use all commercially reasonable
efforts, as promptly as practicable to obtain all consents, approvals or
actions of, to make all filings with and to give all notices to Governmental or
Regulatory Authorities or any other Person required of either Xxxxxx, Van
Houten or Xxxxxxx Xxx Xxxxxx to consummate the transactions contemplated hereby
and by the Operative Agreements, (b) provide such other information and
communications to such Governmental or Regulatory Authorities or other Persons
as Purchaser or such Governmental or Regulatory Authorities or other Persons
may reasonably request in connection therewith and (c) cooperate with Purchaser
as promptly as practicable in obtaining all consents, approvals or actions of,
making all filings with and giving all notices to Governmental or Regulatory
Authorities or other Persons required of Purchaser to consummate the
transactions contemplated hereby and by the Operative Agreements. Sellers will
provide prompt notification to Purchaser when any such consent, approval,
action, filing or notice referred to in clause (a) above is obtained, taken,
made or given, as applicable, and will advise Purchaser of any communications
(and, unless precluded by Law, provide copies of any such communications that
are in writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement or any of the
Operative Agreements.
4.02 HSR Filings. In addition to and not in limitation of Sellers'
and Xxxxxxx Xxx Xxxxxx'x covenants contained in Section 4.01, Sellers and
Xxxxxxx Xxx Xxxxxx will (a) take promptly all actions
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necessary to make the filings required of Sellers or its Affiliates under the
HSR Act, (b) comply at the earliest practicable date with any request for
additional information received by Sellers or its Affiliates from the Federal
Trade Commission or the Antitrust Division of the Department of Justice
pursuant to the HSR Act and (c) cooperate with Purchaser in connection with
Purchaser's filing under the HSR Act and in connection with resolving any
investigation or other inquiry concerning the transactions contemplated by this
Agreement commenced by either the Federal Trade Commission or the Antitrust
Division of the Department of Justice or state attorneys general. Purchaser
will pay all filing fees in connection with filings required of Sellers or its
Affiliates under the HSR Act.
4.03 Investigation by Purchaser. Sellers and Xxxxxxx Xxx Xxxxxx
will (a) provide Purchaser and any Person who is considering providing
financing to Purchaser to finance all or any portion of the Purchase Price and
their respective officers, directors, employees, agents, counsel, accountants,
financial advisors, consultants and other representatives (collectively,
"Representatives") with full access, upon reasonable prior notice and during
normal business hours, to the Employees and such other officers, employees and
agents of Sellers who have any responsibility for the conduct of the Business,
to Sellers' accountants and to the Assets, and (b) furnish Purchaser and such
other Persons with all such information and data (including without limitation
copies of Business Contracts, Business Licenses, Benefit Plans and other
Business Books and Records) concerning the Business, the Assets and the Assumed
Liabilities as Purchaser or any of such other Persons may reasonably request in
connection with such investigation.
4.04 No Solicitations. Neither Sellers nor Xxxxxxx Xxx Xxxxxx will
take, nor will Sellers or Xxxxxxx Xxx Xxxxxx authorize any Affiliate or
Associate of either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx (or authorize any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of either Xxxxxx, Van Houten or Xxxxxxx
Xxx Xxxxxx or any such Affiliate or Associate) to take, directly or indirectly,
any action to solicit, encourage, negotiate, assist or otherwise facilitate
(including by furnishing confidential information with respect to the Business
or permitting access to the Assets and Properties and Books and Records of
either Xxxxxx or Van Houten) any offer or inquiry from any Person concerning
the direct or indirect acquisition of the Business by any Person other than (i)
Purchaser or its Affiliates or (ii) any other Person which has proposed any
merger or other Business Combination or purchase of equity interests or assets
to which either Xxxxxx, Van Houten, Xxxxxxx Xxx Xxxxxx or any Affiliate of
Xxxxxx or Van Houten is a party and which indirectly involves the Business,
provided that the Person making such proposal expressly recognizes the rights
of Purchaser hereunder in a written instrument reasonably satisfactory to
Purchaser. If either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx or any such
Affiliate or Associate (or any such Person acting for or on their behalf)
receives from any Person any offer, inquiry or informational request referred
to above, either Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx will promptly advise
such Person, by written notice, of the terms of this Section 4.04 and will
promptly, orally and in writing, advise Purchaser of such offer, inquiry or
request and deliver a copy of such notice to Purchaser.
4.05 Conduct of Business. Sellers and Xxxxxxx Xxx Xxxxxx will
operate the Business only in the ordinary course consistent with past practice.
Without limiting the generality of the foregoing, Sellers and Xxxxxxx Xxx
Xxxxxx will:
(a) use commercially reasonable efforts to (i) preserve
intact the present business organization and reputation of the
Business, (ii) keep available (subject to dismissals and retirements
in the ordinary course of business consistent with past practice) the
services of the Employees, (iii) maintain the Assets in working order
and condition such that they are in compliance with applicable Law in
all material respects, (iv) maintain the goodwill of customers,
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suppliers, lenders and other Persons to whom Sellers sell goods or
provide services or with whom Sellers otherwise have significant
business relationships in connection with the Business and (v)
continue all current sales, marketing and promotional activities
relating to the Business;
(b) except to the extent required by applicable Law, (i)
cause the Business Books and Records to be maintained in the usual,
regular and ordinary manner and (ii) not permit any material change in
any pricing, investment, accounting, financial reporting, inventory,
credit, allowance or tax practice or policy of Sellers that would
adversely affect the Business, the Assets or the Assumed Liabilities,
except as requested by Purchaser or its accountants;
(c) use commercially reasonable efforts to maintain in
full force and effect until the Closing substantially the same levels
of coverage as the insurance afforded under the Contracts listed in
Section 2.18(a)(i) of the Disclosure Schedule; and
(d) comply, in all material respects, with all Laws and
Orders applicable to the Business and promptly following receipt
thereof give Purchaser copies of any notice received from any
Governmental or Regulatory Authority or other Person alleging any
violation of any such Law or Order.
4.06 Updated Accounts Receivable and Accident Register.
(a) Sellers and Xxxxxxx Xxx Xxxxxx shall provide
Purchaser with updated statements of Accounts Receivable as of
November 30, 1998 and other management reports of each of Xxxxxx and
Van Houten as and when they are available.
(b) Prior to Closing, Sellers and Xxxxxxx Xxx Xxxxxx
shall cause to be delivered to Purchaser the Accident Register
pertaining to each of Xxxxxx and Van Houten, and shall cause to be
delivered no later than one day prior to Closing a current Accident
Register pertaining to each of Xxxxxx and Van Houten listing every
reportable accident actually reported to Xxxxxx or Van Houten prior to
the date of delivery of such Register.
4.07 Employee Matters. Except as may be required by Law or as
disclosed in Section 4.07 of the Disclosure Schedule (with paragraph references
corresponding to those set forth below), Sellers and Xxxxxxx Xxx Xxxxxx will
refrain from directly or indirectly:
(a) making any increase in the salary, wages or other
compensation of any Employee;
(b) adopting, entering into or becoming bound by any
Benefit Plan, employment-related Contract or collective bargaining
agreement with respect to the Business or any of the Employees, or
amending, modifying or terminating (partially or completely) any such
Benefit Plan, employment-related Contract or collective bargaining
agreement, except to the extent required by applicable Law; or
(c) establishing or modifying any (i) targets, goals,
pools or similar provisions in respect of any fiscal year under any
Benefit Plan or any employment-related Contract or other compensation
arrangement with or for Employees or (ii) salary ranges, increase
guidelines or similar provisions in respect of any Benefit Plan or any
employment-related Contract or other compensation arrangement with or
for Employees.
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Xxxxxx and Van Houten will administer each of their
respective Benefit Plans, or cause the same to be so administered, in all
material respects in accordance with the applicable provisions of the Code,
ERISA and all other applicable Laws. Sellers will promptly notify Purchaser in
writing of each receipt by any of Xxxxxx or Van Houten (and furnish Purchaser
with copies) of any notice of investigation or administrative proceeding by the
IRS, Department of Labor, PBGC or other Person involving any Benefit Plan.
4.08 Certain Restrictions. Sellers and Xxxxxxx Xxx Xxxxxx will
refrain from:
(a) acquiring or disposing of any Assets and Properties
used or held for use in the conduct of the Business (other than (i)
ordering and/or acquiring the equipment listed in Section 1.02(a)(iv)
of the Disclosure Schedule, (ii) equipment ordered in the ordinary
course of the Business and (iii) paying accounts payable and
collecting Accounts Receivable in the ordinary course of business), or
creating or incurring any Lien, other than a Permitted Lien, on any
Assets and Properties used or held for use in the conduct of the
Business;
(b) entering into, amending, modifying, terminating
(partially or completely), granting any waiver of any material
provision, under any Business Contract or any material Business
License;
(c) violating, breaching or defaulting under, or taking
or failing to take any action that (with or without notice or lapse of
time or both) would constitute a violation or breach of, or default
under, any term or provision of any Business Contract or any Business
License, except to the extent that any such violation, breach,
default, action or failure to take action would not have material
adverse effect on the Condition of the Business;
(d) incurring, purchasing, canceling, prepaying or
otherwise providing for a complete or partial discharge in advance of
a scheduled payment date with respect to, or waiving any right of
either Xxxxxx or Van Houten under, any Liability of or owing to either
Xxxxxx or Van Houten, as the case may be, in connection with the
Business, other than in the ordinary course of business consistent
with past practice;
(e) engaging with any Person in any Business
Combination, unless such Person agrees in a written instrument in form
and substance reasonably satisfactory to Purchaser to adopt and comply
with the terms and conditions of this Agreement as though such Person
was an original signatory hereto;
(f) engaging in any transaction with respect to the
Business with any officer, director, Affiliate or Associate of Xxxxxx
or Van Houten, or any Associate of any such officer, director or
Affiliate, except for actions in the ordinary course of the employment
of any such party;
(g) making capital expenditures or commitments for
additions to property, plant or equipment constituting capital assets
on behalf of the Business; or
(h) entering into any Contract to do or engage in any of
the foregoing.
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4.09 Security Deposits. Sellers will take all actions necessary to
transfer to Purchaser on the Closing Date all of Xxxxxx'x and Van Houten's
respective rights, titles and interests in and to the Tenant Security Deposits.
4.10 Delivery of Books and Records, Etc.; Removal of Property.
(a) On the Closing Date, Sellers and Xxxxxxx Xxx Xxxxxx
will deliver or make available to Purchaser at the locations at which
the Business is conducted all of the Business Books and Records and
such other Assets as are in Sellers' or Xxxxxxx Xxx Xxxxxx'x
possession at other locations, and, if at any time after the Closing
Sellers or Xxxxxxx Xxx Xxxxxx discover in its or his possession or
under its or his control any other Business Books and Records or other
Assets, Sellers or Xxxxxxx Xxx Xxxxxx, as the case may be, will
forthwith deliver such Business Books and Records or other Assets to
Purchaser.
(b) Within sixty (60) days after the Closing Date,
Sellers and Xxxxxxx Xxx Xxxxxx shall remove all Assets and Properties
not being sold to Purchaser hereunder from the Real Property and
Improvements. Such removal shall be at the sole cost and risk of
Sellers and Xxxxxxx Xxx Xxxxxx, including risk of loss and damage to
such Assets and Properties. Purchaser shall have no liability to
Sellers or Xxxxxxx Xxx Xxxxxx with respect to such removal and
transportation. Sellers and Xxxxxxx Xxx Xxxxxx shall be responsible
for all repairs to the Real Property and Improvements due to damage
caused by Seller's and/or Xxxxxxx Xxx Xxxxxx'x employees and agents in
connection with the removal of Sellers' Assets and Properties.
4.11 Non-Competition.
(a) Definitions. For the purposes of this Section 4.11,
the following terms shall have the meanings set forth below:
(i) the term "Confidential Information" shall
mean and include all information, data and know-how of either
Xxxxxx or Van Houten which is purchased and transferred to
Purchaser pursuant to the terms and conditions contained
herein or relates to the Business, including, without
limitation, all trade rights in which either Xxxxxx or Van
Houten has an interest, all customer lists and customer
information, all payment plans, information relating to the
solicitation of customers, all pricing, quotations, or
know-how and any other information (whether or not
constituting a trade secret) not generally known by
competitive businesses which has value to Purchaser in its
operation of the Business. Confidential Information shall not
include any data or information which has been voluntarily
disclosed to the public by Purchaser (except where such
disclosure has been made without authorization), that has
been independently developed and disclosed by others or that
otherwise enters the public domain by means other than by
breach of this Agreement by Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx.
(ii) the term "Competitive Activity" shall mean
and include any activity in which either Xxxxxx or Van Houten
directly or indirectly owns, manages, operates, controls, is
employed by (either as an employee or an independent
contractor) or participates in the ownership, management,
operation or control, of any business (other than the
business of Purchaser or its successors or assigns) in the
truckload common and contract motor carrier industry or any
business that is the same as, or substantially similar
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to or competitive with, the Business at or prior to the
Closing; provided, however, that the term "Competitive
Activity" shall not include the following specified activity:
Xxxxxxx Xxx Xxxxxx shall be allowed to serve as a financial
advisor to Gemini Traffic Sales, Inc. to identify and
facilitate a merger with or acquisition of other companies
which operate exclusively as a less-than-truckload
transportation carrier.
(iii) the term "Territory" shall mean the
forty-eight (48) continental states of the United States, the
Canadian Provinces of Ontario and Quebec and the country of
Mexico.
(b) Covenants Against Competition and Non-Solicitation
of Employees. Recognizing Purchaser's need to protect the goodwill of
the Business and the Assets being purchased hereunder and to induce
Purchaser to enter into this Agreement, Sellers and Xxxxxxx Xxx
Xxxxxx, jointly and severally, covenant and agree with Purchaser that
each of them will not, for a period of three (3) years following the
Closing Date, within the Territory, engage in any Competitive Activity
or, directly or indirectly, solicit the employment of or employ any
employee of either Xxxxxx or Van Houten in the Business or of
Purchaser or Purchaser's Affiliates, who was employed at any time from
the period beginning on the date of this Agreement and ending on the
Closing Date; provided, however, that Xxxxxx, Van Houten, and/or
Xxxxxxx Xxx Xxxxxx may solicit the employment of and hire any such
employee whose employment with Purchaser was terminated by Purchaser.
(c) Non-Solicitation of Customers. Recognizing the need
of Purchaser to protect the goodwill of the Business and the Assets
being purchased hereunder and to induce Purchaser to enter into this
Agreement, Sellers and Xxxxxxx Xxx Xxxxxx, jointly and severally,
covenant and agree that neither Sellers nor Xxxxxxx Xxx Xxxxxx will
take any customer lists of either Xxxxxx or Van Houten and neither
will, for a period of three (3) years following the Closing Date, for
any reason, solicit or attempt to solicit directly or indirectly or by
assisting others, any business from any of Purchaser's or its
successors' customers, including actively sought prospective customers
or any entity or person operating in the truckload common and contract
motor carrier industry, except for business which is in no way engaged
in the operation of the Business by Purchaser after Closing and of
which the purchase of Assets hereunder is the subject.
(d) Non-Disclosure of Confidential Information.
Recognizing Purchaser's need to protect the goodwill of the Business
and the Assets being purchased hereunder and to induce Purchaser to
enter into this Agreement, Sellers and Xxxxxxx Xxx Xxxxxx, jointly and
severally, covenant and agree with Purchaser that each will not
disclose, use or otherwise exploit for its or his own benefit, or for
the benefit of any other Person, any Confidential Information. The
covenant contained in this paragraph (d) shall survive for a period of
three (3) years following the Closing Date; provided, however, that
with respect to those items of Confidential Information which
constitute trade secrets under applicable law, the obligations of
confidentiality and non-disclosure as set forth in this paragraph (d)
shall continue to survive after said three (3) year period to the
greatest extent permitted by applicable law. These rights of Purchaser
are in addition to the rights Purchaser has under the common law or
any applicable statute relating to the protection of trade secrets.
(e) Remedies. Sellers and Xxxxxxx Xxx Xxxxxx acknowledge
that irreparable loss and injury would result to Purchaser upon any
breach of any of the covenants contained in this Section
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4.11 or any part thereof and that damages arising out of such breach
would be difficult to ascertain. Sellers and Xxxxxxx Xxx Xxxxxx agree,
in addition to any and all remedies provided at law or equity, that
Purchaser may petition and obtain, without bond from a court of law or
equity both temporary and permanent injunctive relief to enjoin any
breach by Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx of any such
covenant. In addition to the foregoing, Sellers and Xxxxxxx Xxx Xxxxxx
acknowledge that the covenants contained in this Section 4.11 are in
addition to any covenant against competition or non-disclosure of
confidential information which may be contained in any employment
agreement entered into with Purchaser contemporaneously with the
execution of this Agreement or thereafter and that any remedy
contained in this Section 4.11 shall be cumulative and not in lieu of
any remedy available to Purchaser under any such employment agreement.
(f) Blue Penciling. The parties hereto recognize that
the Laws and public policies of the various states of the United
States may differ as to the validity and enforceability of covenants
similar to those set forth in this Section 4.11. It is the intention
of the parties that the provisions of this Section be enforced to the
fullest extent permissible under the Laws and policies of each
jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such Laws or
policies) of any provisions of this Section shall not render
unenforceable, or impair, the remainder of the provisions of this
Section. Accordingly, if any provision of this Section shall be
determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the
operation of such provision in the particular jurisdiction in which
such determination is made and not with respect to any other provision
or jurisdiction.
4.12 Notice and Cure. Sellers will notify Purchaser in writing
(where appropriate, through updates to the Disclosure Schedule) of, and
contemporaneously will provide Purchaser with true and complete copies of any
and all information or documents relating to, and will use all commercially
reasonable efforts to cure before the Closing, any event, transaction or
circumstance, as soon as practicable after it becomes Known to either Xxxxxx,
Van Houten or Xxxxxxx Xxx Xxxxxx, occurring after the date of this Agreement
that causes or will cause any covenant or agreement of Sellers under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of Sellers contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
Sellers also will notify Purchaser in writing (where appropriate, through
updates to the Disclosure Schedule) of, and will use all commercially
reasonable efforts to cure, before the Closing, any violation or breach, as
soon as practicable after it becomes Known to either Xxxxxx, Van Houten or
Xxxxxxx Xxx Xxxxxx, of any representation, warranty, covenant or agreement made
by Sellers in this Agreement, whether occurring or arising before, on or after
the date of this Agreement. No notice given pursuant to this Section 4.12 shall
have any effect on the representations, warranties, covenants or agreements
contained in this Agreement for purposes of determining satisfaction of any
condition contained herein or shall in any way limit Purchaser's right to seek
indemnity under Article IX.
4.13 Fulfillment of Conditions. Sellers and Xxxxxxx Xxx Xxxxxx
will execute and deliver at the Closing each Operative Agreement that Sellers
and Xxxxxxx Xxx Xxxxxx are required hereby to execute and deliver as a
condition to the Closing, will take all commercially reasonable steps necessary
or desirable and proceed diligently and in good faith to satisfy each other
condition to the obligations of Purchaser contained in this Agreement and will
not take or fail to take any action that could reasonably be expected to result
in the nonfulfillment of any such condition.
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ARTICLE V
COVENANTS OF PURCHASER
Purchaser covenants and agrees with Sellers and Xxxxxxx Xxx Xxxxxx
that, at all times from and after the date hereof until the Closing and, with
respect to any covenant or agreement by its terms to be performed in whole or
in part after the Closing, for the period specified herein or, if no period is
specified herein, for five (5) years, Purchaser will comply with all covenants
and provisions of this Article V, except to the extent Sellers and Xxxxxxx Xxx
Xxxxxx may otherwise consent in writing.
5.01 Regulatory and Other Approvals. Purchaser will: (a) take all
commercially reasonable steps necessary or desirable, and proceed diligently
and in good faith and use all commercially reasonable efforts, as promptly as
practicable to obtain all consents, approvals or actions of, to make all
filings with and to give all notices to Governmental or Regulatory Authorities
or any other Person required of Purchaser to consummate the transactions
contemplated hereby and by the Operative Agreements, (b) provide such other
information and communications to such Governmental or Regulatory Authorities
or other Persons as such Governmental or Regulatory Authorities or other
Persons may reasonably request in connection therewith, and (c) cooperate with
Sellers and Xxxxxxx Xxx Xxxxxx as promptly as practicable in obtaining all
consents, approvals or actions of, making all filings with and giving all
notices to Governmental or Regulatory Authorities or other Persons required of
Sellers and/or Xxxxxxx Xxx Xxxxxx to consummate the transactions contemplated
hereby and by the Operative Agreements. Purchaser will provide prompt
notification to Sellers and Xxxxxxx Xxx Xxxxxx when any such consent, approval,
action, filing or notice referred to in clause (a) above is obtained, taken,
made or given, as applicable, and will advise Sellers and Xxxxxxx Xxx Xxxxxx of
any communications (and, unless precluded by Law, provide copies of any such
communications that are in writing) with any Governmental or Regulatory
Authority or other Person regarding any of the transactions contemplated by
this Agreement or any of the Operative Agreements.
5.02 Notice and Cure. Purchaser will notify Sellers and Xxxxxxx
Xxx Xxxxxx in writing (where appropriate, through updates to the Disclosure
Schedule) of, and contemporaneously will provide Sellers and Xxxxxxx Xxx Xxxxxx
with true and complete copies of any and all information or documents relating
to, and will use all commercially reasonable efforts to cure before the
Closing, any event, transaction or circumstance, as soon as practicable after
it becomes Known to Purchaser, occurring after the date of this Agreement that
causes or will cause any covenant or agreement of Purchaser under this
Agreement to be breached or that renders or will render untrue any
representation or warranty of Purchaser contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
Purchaser also will notify Sellers and Xxxxxxx Xxx Xxxxxx in writing (where
appropriate, through updates to the Disclosure Schedule) of, and will use all
commercially reasonable efforts to cure, before the Closing, any violation or
breach, as soon as practicable after it becomes Known to Purchaser, of any
representation, warranty, covenant or agreement made by Purchaser in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section 5.02 shall have any effect
on the representations, warranties, covenants or agreements contained in this
Agreement for purposes of determining satisfaction of any condition contained
herein or shall in any way limit Sellers' and Xxxxxxx Xxx Xxxxxx'x right to
seek indemnity under Article IX.
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5.03 Fulfillment of Conditions. Purchaser will execute and deliver
at the Closing each Operative Agreement that Purchaser is required hereby to
execute and deliver as a condition to the Closing, will take all commercially
reasonable steps necessary or desirable and proceed diligently and in good
faith to satisfy each other condition to the obligations of Sellers and Xxxxxxx
Xxx Xxxxxx contained in this Agreement and will not take or fail to take any
action that could reasonably be expected to result in the nonfulfillment of any
such condition.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser hereunder to purchase the Assets
and to assume and to pay, perform and discharge the Assumed Liabilities are
subject to the fulfillment, at or before the Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by Purchaser
in its sole discretion):
6.01 Representations and Warranties. Each of the representations
and warranties made by Sellers and Xxxxxxx Xxx Xxxxxx in this Agreement (other
than those made as of a specified date earlier than the Closing Date) shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date,
and any representation or warranty made as of a specified date earlier than the
Closing Date shall have been true and correct in all material respects on and
as of such earlier date.
6.02 Performance. Sellers and Xxxxxxx Xxx Xxxxxx shall have
performed and complied with, in all material respects, each agreement, covenant
and obligation required by this Agreement to be so performed or complied with
by Sellers and Xxxxxxx Xxx Xxxxxx at or before the Closing.
6.03 Officer's Certificates. Sellers shall have delivered to
Purchaser certificates, dated the Closing Date and executed by the Chairman of
the Board, the President or any Executive or Senior Vice President of each of
Xxxxxx and Van Houten, substantially in the form and to the effect of Exhibits
E-1 and E-2, respectively, attached hereto, and certificates, dated the Closing
Date and executed by the Secretary or any Assistant Secretary of each of Xxxxxx
and Van Houten, substantially in the form and to the effect of Exhibits F-1 and
F-2, respectively, attached hereto.
6.04 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Purchaser, and there shall not be pending or threatened on the Closing Date
any Action or Proceeding or any other action in, before or by any Governmental
or Regulatory Authority which could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability to Purchaser or the transactions contemplated by this Agreement
or any of the Operative Agreements of any such Law.
6.05 Regulatory Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit Purchaser, Sellers and Xxxxxxx Xxx Xxxxxx to
perform their obligations under this Agreement and the Operative Agreements
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and to consummate the transactions contemplated hereby and thereby (a) shall
have been duly obtained, made or given, (b) shall be in form and substance
reasonably satisfactory to Purchaser, (c) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (d)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement and the
Operative Agreements, including under the HSR Act, shall have occurred.
6.06 Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by Purchaser, Sellers and Xxxxxxx Xxx Xxxxxx of
their obligations under this Agreement and the Operative Agreements or to the
consummation of the transactions contemplated hereby and thereby as are
required under any Contract to which Purchaser, Sellers or Xxxxxxx Xxx Xxxxxx
are a party or by which any of their respective Assets and Properties are bound
(a) shall have been obtained, (b) shall be in form and substance reasonably
satisfactory to Purchaser, (c) shall not be subject to the satisfaction of any
condition that has not been satisfied or waived and (d) shall be in full force
and effect, except where the failure to obtain any such consent (or in lieu
thereof waiver) could not reasonably be expected, individually or in the
aggregate with other such failures, to materially adversely affect Purchaser,
the Assets, the Assumed Liabilities or the Business or otherwise result in a
material diminution of the benefits of the transactions contemplated by this
Agreement and the Operative Agreements to Purchaser.
6.07 Opinion of Counsel. Purchaser shall have received the opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel to Sellers and Xxxxxxx Xxx Xxxxxx, dated the
Closing Date, substantially in the form and to the effect of Exhibit G attached
hereto; and
6.08 Real Property Leases.
(a) For each of the Real Property Leases described in
Section 1.01(a)(ii)(B) of the Disclosure Schedule, Sellers shall have
delivered to Purchaser an Estoppel Certificate and, if required for
the assignment thereof, consent to assignment from the lessor
thereunder in form and substance reasonably satisfactory to Purchaser;
and
(b) Sellers shall have delivered to Purchaser for
execution a real property lease for Riverdale in the form attached
hereto as Exhibit P.
6.09 Title Insurance; Estoppel Certificates. Purchaser shall have
received (a) a policy of title insurance on forms of and issued by one or more
title companies reasonably satisfactory to Purchaser insuring the title of
Purchaser to the Real Property listed in Section 1.01(a)(i) of the Disclosure
Schedule, subject only to Permitted Liens and (b) Estoppel Certificates with
respect to the Real Property Leases listed in Section 1.01(a)(i)(A) of the
Disclosure Schedule.
6.10 Contracts with Certain Customers. All Contracts and business
arrangements of Xxxxxx with its ten (10) largest transportation customers of
the Business, on the basis of revenues generated for the portion of the fiscal
year ending October 31, 1998, as set forth in Section 2.22(a) of the Disclosure
Schedule, shall continue to be in full force and effect, and neither Xxxxxx,
Van Houten nor Xxxxxxx Xxx Xxxxxx shall have been notified by any one of such
customers of the termination or proposed termination of such Contract or
business arrangement. Purchaser has obtained from such customers reasonable
assurances satisfactory to Purchaser that they have no objection to the closing
of the transactions contemplated by this Agreement.
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6.11 Noncompetition and Employment Agreements.
(a) Purchaser shall have received an executed
Noncompetition and Restrictive Covenants Agreement from Sellers and
Xxxxxxx Xxx Xxxxxx in the form attached hereto as Exhibit C.
(b) Purchaser shall also have received executed
Employment Agreements, in the form attached hereto as Exhibit H with
respect to Xxxxxxx Xxx Xxxxxx, and Exhibit N with respect to the key
employees listed in Section 6.11(b) of the Disclosure Schedule.
6.12 Assignment and Xxxx of Sale. Sellers and Xxxxxxx Xxx Xxxxxx
shall have delivered to Purchaser an assignment and xxxx of sale, substantially
in the form of Exhibit A attached hereto, pursuant to which Sellers and Xxxxxxx
Xxx Xxxxxx assign the Assets.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS AND XXXXXXX XXX XXXXXX
The obligations of Sellers and Xxxxxxx Xxx Xxxxxx hereunder
to sell the Assets are subject to the fulfillment, at or before the Closing, of
each of the following conditions (all or any of which may be waived in whole or
in part by Sellers or Xxxxxxx Xxx Xxxxxx in their or his sole discretion):
7.01 Representations and Warranties. Each of the representations
and warranties made by Purchaser in this Agreement (other than those made as of
a specified date earlier than the Closing Date) shall be true and correct in
all material respects on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date, and any
representation or warranty made as of a specified date earlier than the Closing
Date shall have been true and correct in all material respects on and as of
such earlier date.
7.02 Performance. Purchaser shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by Purchaser at
or before the Closing.
7.03 Letter of Credit. Purchaser shall have delivered to Sellers a
letter of credit in favor of Sellers (the "Letter of Credit"), substantially in
the form of Exhibit I attached hereto, to provide security for certain of the
obligations owing from Purchaser to Sellers under two of the Promissory Notes.
7.04 Promissory Note Security Agreement. Purchaser shall have
executed and delivered to Sellers a security agreement executed by Purchaser in
favor of Sellers (the "Promissory Note Security Agreement"), substantially in
the form of Exhibit J attached hereto, to provide security for certain of the
obligations owing from Purchaser to Sellers under two of the Promissory Notes.
7.05 Assumption Agreement. Purchaser shall have executed and
delivered to Sellers an assumption agreement executed by Purchaser,
substantially in the form of Exhibit J attached hereto, pursuant to which
Purchaser assumes the Assumed Liabilities.
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7.06 Opinion of Counsel. Sellers and Xxxxxxx Xxx Xxxxxx shall have
received the opinion of Xxxxx, Xxxxxxxx & Xxxxxxx, LLP, counsel to Purchaser,
dated the Closing Date, substantially in the form and to the effect of Exhibit
K attached hereto.
7.07 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement or any of the Operative Agreements or which could reasonably be
expected to otherwise result in a material diminution of the benefits of the
transactions contemplated by this Agreement or any of the Operative Agreements
to Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, and there shall not be pending or
threatened on the Closing Date any Action or Proceeding or any other action in,
before or by any Governmental or Regulatory Authority which could reasonably be
expected to result in the issuance of any such Order or the enactment,
promulgation or deemed applicability to Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx or the transactions contemplated by this Agreement or any of the
Operative Agreements of any such Law.
7.08 Regulatory Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit Sellers, Xxxxxxx Xxx Xxxxxx and Purchaser to
perform their obligations under this Agreement and the Operative Agreements and
to consummate the transactions contemplated hereby and thereby (a) shall have
been duly obtained, made or given, (b) shall not be subject to the satisfaction
of any condition that has not been satisfied or waived and (c) shall be in full
force and effect, and all terminations or expirations of waiting periods
imposed by any Governmental or Regulatory Authority necessary for the
consummation of the transactions contemplated by this Agreement and the
Operative Agreements, including under the HSR Act, shall have occurred.
7.09 Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by Purchaser, Sellers and Xxxxxxx Xxx Xxxxxx of
their obligations under this Agreement and the Operative Agreements or the
consummation of the transactions contemplated hereby and thereby as are
required under any Contract to which Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx
is a party or by which any of the Assets are bound, (a) shall have been
obtained, (b) shall not be subject to the satisfaction of any condition that
has not been satisfied or waived and (c) shall be in full force and effect.
7.10 Proceedings. All proceedings to be taken on the part of
Purchaser in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be reasonably satisfactory in form and
substance to Sellers and Xxxxxxx Xxx Xxxxxx, and Sellers and Xxxxxxx Xxx Xxxxxx
shall have received copies of all such documents and other evidences as Sellers
and Xxxxxxx Xxx Xxxxxx may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
7.11 Officer's Certificates. Purchaser shall have delivered to
Sellers and Xxxxxxx Xxx Xxxxxx a certificate, dated the Closing Date and
executed by the Chairman of the Board, the President or any Executive or Senior
Vice President of Purchaser, substantially in the form and to the effect of
Exhibit L attached hereto, and a certificate, dated the Closing Date and
executed by the Secretary or any Assistant Secretary of Purchaser,
substantially in the form and to the effect of Exhibit M attached hereto.
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7.12 Employment and Non-Competition Agreements.
(a) Purchaser shall have executed a Non-Competition and
Restrictive Covenants Agreement with Sellers and Xxxxxxx Xxx Xxxxxx in
the form attached hereto as Exhibit D;
(b) Purchaser shall have executed an Employment
Agreement with Xxxxxxx Xxx Xxxxxx in the form attached hereto as
Exhibit H; and
(c) Purchaser shall have executed Employment Agreements,
in the form attached hereto as Exhibit N with the key employees listed
in Section 6.11(b) of the Disclosure Schedule.
7.13 Payment of Purchase Price. Purchaser shall have paid the
portion of the Purchase Price required to be paid at the Closing in accordance
with the provisions of Section 1.03(b).
7.14 Payoff of Mortgage Loan. Purchaser shall have delivered to
Xxxxxxx Xxx Xxxxxx funds sufficient to pay off in full the mortgage loan
referred to in, and as required by, Section 1.04.
7.15 Execution and Delivery of Guaranty. X.X.X. shall have
executed and delivered to Sellers an unconditional guaranty of payment and
performance of all obligations of Purchaser in the form attached hereto as
Exhibit O.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENT
8.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of Purchaser (whether or not exercised)
to investigate the Business or any right of any party (whether or not
exercised) to investigate the accuracy of the representations and warranties of
the other party contained in this Agreement, Sellers, Xxxxxxx Xxx Xxxxxx and
Purchaser have the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this Agreement. The
representations and warranties of Sellers, Xxxxxxx Xxx Xxxxxx and Purchaser
contained in this Agreement will survive the Closing for a period of three (3)
years; provided, however, that with respect to the representations and
warranties contained in Sections 2.09 (Taxes), 2.12 (Benefit Plans) and 2.21(c)
(Environmental Matters), such representations and warranties shall survive the
Closing for a period of five (5) years. The covenants and agreements of
Sellers, Xxxxxxx Xxx Xxxxxx and Purchaser contained in this Agreement will
survive the Closing (a) for a period of five (5) years with respect to the
covenants and agreements contained in Sections 1.06 (Further Assurances;
Post-Closing Cooperation), 12.03 (Expenses) and 12.05 (Confidentiality), and
(b) with respect to each other covenant or agreement contained in this
Agreement, until the last date on which such covenant or agreement is to be
performed. However, any representation, warranty, covenant or agreement that
would otherwise terminate in accordance with this Section 8.01 above will
continue to survive if a notice of indemnity as contemplated by Section 9.03
shall have been timely given under such Section on or prior to such termination
date, until the related claim for indemnification has been satisfied or
otherwise resolved as provided in Article IX, but only with respect to the
specific claim as to which the notice of indemnity has been properly given.
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ARTICLE IX
INDEMNIFICATION
9.01 Indemnity Agreement of Sellers and Xxxxxxx Xxx Xxxxxx.
Subject to the provisions of this Agreement and to the extent stated in Section
9.03, each of Xxxxxx, Van Houten and Xxxxxxx Xxx Xxxxxx, jointly and severally,
shall defend, indemnify and hold harmless Purchaser and its respective
successors and permitted assigns (and their respective directors, officers,
employees, agents and affiliates) from and against any and all direct or
indirect requests, demands, claims, payments, defenses, obligations,
recoveries, deficiencies, fines, penalties, interest, assessments, actions,
liens, causes of action, suits, proceedings, judgments, losses, damages
(including punitive, exemplary or consequential damages, and including, but not
limited to, lost income and profits and interruptions of business),
liabilities, costs and expenses of any kind or nature (including without
limitation interest, penalties and reasonable attorneys' fees and expenses,
reasonable attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder (but, as to enforcement of rights hereunder,
reasonable counsel fees and expenses shall be awarded to the prevailing party),
and reasonable consultants' fees and other costs of defending or investigating
any claim hereunder, whether or not resulting in any liability, and interest on
any amount payable as a result of the foregoing, whether accrued, absolute,
contingent, known, unknown, or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by the Assets or Purchaser or its
successors or permitted assigns or any of their respective directors, officers,
employees, agents or affiliates based upon, awarded or asserted, and which are
not waived by Purchaser in writing pursuant to Section 12.06 in respect of:
(a) (i) the operation of the Business or the use of the
Assets at any time on or before the Closing Date unless specifically
assumed by Purchaser pursuant to this Agreement, (ii) any actual or
alleged negligent, illegal, unjustified or wrongful act or omission of
Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx, or (iii) any other
liabilities of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx that are not
specifically assumed by Purchaser pursuant to this Agreement;
(b) (i) any breach of any representation or warranty,
except that with respect to a breach of the representation and
warranty set forth in Section 2.21(b)(ii), each of Xxxxxx, Van Houten
and Xxxxxxx Xxx Xxxxxx, jointly and severally, shall only pay all
direct losses of Purchaser or its successors or permitted assigns or
any of their respective directors, officers, employees, agents or
affiliates which are directly caused by such breach, or (ii)
non-fulfillment of any covenant or agreement on the part of Xxxxxx,
Van Houten or Xxxxxxx Xxx Xxxxxx contained in this Agreement, or (iii)
any misrepresentation in or omission from or nonfulfillment of any
covenant on the part of Xxxxxx, Van Houten or Xxxxxxx Xxx Xxxxxx
contained in any other agreement, certificate or other instrument
furnished or to be furnished to Purchaser by Xxxxxx, Van Houten or
Xxxxxxx Xxx Xxxxxx pursuant to this Agreement;
(c) any successful claims that the transactions
consummated under this Agreement constitute fraudulent conveyances by
Xxxxxx and/or Van Houten;
(d) any failure of Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx to transfer the Assets to Purchaser free and clear of all
Liens, other than Permitted Liens or the failure of Xxxxxx, Van Houten
or Xxxxxxx Xxx Xxxxxx to obtain, prior to the Closing Date, all
consents, approvals and waivers of lessors, landlords, suppliers and
other third parties as may be necessary to permit the
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assignment to Purchaser on the Closing Date of Sellers' contracts and
agreements and the consummation of the sale of the Assets to
Purchaser; or
(e) any and all Liabilities and/or Losses incurred or
imposed in connection with or based upon any provision of any Law or
Order arising out of any act or omission of (i) Xxxxxx, Van Houten or
Xxxxxxx Xxx Xxxxxx, (ii) Xxxxxx'x, Van Houten's or Xxxxxxx Xxx
Xxxxxx'x employees, agents or representatives or (iii) Xxxxxx'x or Van
Houten's predecessors in interest, occurring on or prior to the
Closing Date.
9.02 Purchaser's Indemnity Agreement. Subject to the provisions
of this Agreement and to the extent stated in Section 9.03, Purchaser shall
defend, indemnify and hold harmless Xxxxxx, Van Houten and Xxxxxxx Xxx Xxxxxx
and their successors and permitted assigns (and Xxxxxx'x or Van Houten's
directors, officers, employees, agents and Affiliates) from and against any and
all direct or indirect requests, demands, claims, payments, defenses,
obligations, recoveries, deficiencies, fines, penalties, interest, assessments,
actions, liens, causes of action, suits, proceedings, judgments, losses,
damages (including punitive, exemplary or consequential damages, and including,
but not limited to, lost income and profits and interruptions of business),
liabilities, costs and expenses of any kind or nature (including without
limitation interest, penalties and reasonable attorneys' fees and expenses,
attorneys' fees and expenses necessary to enforce their rights to
indemnification hereunder, and consultants' fees and other costs of defending
or investigating any claim hereunder, whether or not resulting in any
liability), and interest on any amount payable as a result of the foregoing,
whether accrued, absolute, contingent, known, unknown, or otherwise after the
Closing Date or thereafter asserted against, imposed upon or incurred by
Xxxxxx, Van Houten, Xxxxxxx Xxx Xxxxxx or their successors or permitted assigns
or any of Xxxxxx'x or Van Houten's directors, officers, employees, agents or
affiliates based upon, awarded or asserted against in respect of:
(a) any breach of any representation and warranty or
non-fulfillment of any covenant or agreement on the part of Purchaser
contained in this Agreement, or any misrepresentation in or omission
from or non-fulfillment of any covenant on the part of Purchaser
contained in any other agreement, certificate or other instrument
furnished or to be furnished to Xxxxxx, Van Houten or Xxxxxxx Xxx
Xxxxxx by Purchaser pursuant to this Agreement;
(b) Purchaser's failure to pay, perform or otherwise
comply with the Assumed Liabilities or any other liability or
obligation specifically and expressly assumed by Purchaser at Closing;
or
(c) the conduct of the Business after the Closing Date.
9.03 Indemnification Procedures. If any of Purchaser, Xxxxxx, Van
Houten or Xxxxxxx Xxx Xxxxxx becomes aware of or receives notice of any third
party claim or the commencement of any third party action or proceeding with
respect to which another party (the "Indemnitor") is obligated to provide
indemnification pursuant to this Article IX, the party entitled to
indemnification (the "Indemnitee") shall promptly give the Indemnitor notice
thereof. Such notice shall not be a condition precedent to any liability of the
Indemnitor under the provisions for indemnification contained in this
Agreement, unless (and only to the extent that) failure to give such notice
materially prejudices the rights of the Indemnitor with respect to such claims,
actions, or proceedings. The Indemnitor may compromise or defend, at the
Indemnitor's own expense, and by the Indemnitor's own counsel, any such matter
involving the asserted liability of the Indemnitee; provided, however, that no
compromise or settlement thereof may be effected
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by the Indemnitor without the Indemnitee's consent (which shall in any event
not be unreasonably withheld) unless (i) there is no finding or admission of
any violation of law by the Indemnitee or any violation of the rights of any
person by the Indemnitee and no effect on any other claims that may be made
against the Indemnitee and (ii) the sole relief provided is monetary damages
that are paid in full by the Indemnitor. If the Indemnitor elects not to
compromise or defend such matter, then the Indemnitee, at the Indemnitor's
expense and by the Indemnitee's own counsel, may defend such matter, but
regardless of whether or not the Indemnitor elects to assume the defense of any
such matter the Indemnitee may not compromise the defense thereof without the
prior written consent of the Indemnitor, which consent shall not be
unreasonably withheld. In any event, the Indemnitee, the Indemnitor and the
Indemnitor's counsel (and, if applicable, the Indemnitee's counsel) shall
cooperate in the compromise of, or the defense against, any such asserted
liability. If the Indemnitor chooses to defend any claim, the Indemnitee shall
make available to the Indemnitor any books, records, or other documents within
its control that are reasonably necessary or appropriate for such defense,
except for such investigation and defense costs incurred after the Indemnitor
(as defined herein) has agreed to assume defense of the claim pursuant to this
Article IX). After the Indemnitor has agreed to assume defense of the
Indemnitee's claim pursuant to this Article IX, the Indemnitor shall have no
further liability with respect to additional investigation and defense costs
incurred by the Indemnitee after such assumption. The foregoing indemnity
procedures shall not be read as a limitation on either party's right to seek
indemnification under Sections 9.01 and 9.02 for matters other than third party
initiated claims or demands.
9.04 Payment. The Indemnitor shall promptly pay the Indemnitee any
amount due under this Article IX, which payment may be accomplished in whole or
in part, at the option of the Indemnitee, by the Indemnitee setting off any
amount owed to any Indemnitor by the Indemnitee; provided, however that no such
set-off may be made against amounts payable under Section 1.03(b)(iii). To the
extent set-off is made by an Indemnitee in satisfaction or partial satisfaction
of an indemnity obligation under this Article IX that is disputed by the
Indemnitor, the Indemnitee shall pay into an interest bearing escrow account of
its counsel the amount owed to the Indemnitor by the Indemnitee until a
subsequent determination by final judgement not subject to appeal that all or a
portion of the indemnity obligation was not owed to the Indemnitee. If such
final determination shall find that the indemnity obligation was not owed to
the Indemnitee, then counsel to Indemnitee shall as soon as practicable
thereafter pay to Indemnitor the amount which was set off and paid into escrow
together with interest from the date of set-off until the date of such payment.
Upon judgment, determination, settlement or compromise of any third party
claim, the Indemnitor shall pay promptly on behalf of the Indemnitee, and/or to
the Indemnitee in reimbursement of any amount theretofore required to be paid
by it, the amount so determined by judgment, determination, settlement or
compromise and all other claims of the Indemnitee with respect thereto, unless
in the case of a judgment an appeal is made from the judgment. If the
Indemnitor desires to appeal from an adverse judgment, then the Indemnitor
shall post and pay the cost of the security or bond to stay execution of the
judgment pending appeal. Upon the payment in full by the Indemnitor of such
amounts, the Indemnitor shall succeed to the rights of such Indemnitee, to the
extent not waived in settlement, against the third party who made such third
party claim.
9.05 No Waiver. The closing of the transactions contemplated by
this Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has Knowledge of the breach, violation or failure of condition
constituting the basis of the claim at or before the Closing, unless otherwise
expressly agreed in writing.
9.06 Adjustment of Liability. In the event an Indemnitor is
required to make any payment under this Article IX in respect of any damages,
liability, obligation, loss, claim, or other amount
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indemnified hereunder, such Indemnitor shall pay the Indemnitee an amount (the
"Adjusted Amount") which is equal to the sum of (i) the amount of such damages,
liability, obligation, loss, claim or other amount, minus (ii) the amount of
any insurance proceeds the Indemnitee actually receives with respect thereto,
minus (iii) any third party payments actually received by the Indemnitee with
respect to such damages, liability, obligation, loss, claim or other amount
after demand or notice to such third party from the Indemnitor (with the
consent of the Indemnitee which will not be unreasonably withheld), plus (iv)
the amount of the Net Tax Liability. "Net Tax Liability" shall be equal to the
amount, if any, by which, the sum of all federal, state, and local taxes, if
any, required to be paid by such Indemnitee in respect of the receipt or
accrual of the Adjusted Amount exceeds the sum of (A) the value of any
reduction in taxes of such Indemnitee by reason of deductions, credits or
allowances in respect of the payment or accrual of the damages, liability,
obligation, loss, claim or other amount included in clause (i) above recognized
by such Indemnitee in the same year in which the taxes in respect of the
receipt or accrual by such Indemnitee of the Adjusted Amount would be payable
and (B) the net present value of any reduction in taxes of such Indemnitee by
reason of deductions, credits or allowances in respect of the payment or
accrual of the damages, liability, obligation, loss, claim or other amount
included in clause (i) above recognized by such Indemnitee in years thereafter.
The net present value of any such reduction in taxes shall be determined by
discounting the amount of such reduction in taxes semi-annually from the date
such tax saving is recognized or reasonably expected to be recognized (which
shall be deemed to be the date the applicable tax return on which such tax
saving would be properly reflected is due, without extensions) to the date of
payment of the applicable indemnity by such Indemnitor, applying a discount
factor equal to the interest rate on federal income tax deficiencies in effect
at the time of such adjustment. For purposes of determining the amount of any
taxes required to be paid and any tax savings recognized or reasonably expected
to be recognized by such Indemnitee hereunder, it shall be assumed that such
Indemnitee is subject to tax in each applicable taxing jurisdiction at the
highest applicable marginal rate then in effect in such jurisdiction.
9.07 Threshold and Limits for Assertion of Indemnified Claims.
Indemnitor shall have no liability under this Article IX unless the aggregate
amount of damages and losses to Indemnitee exceeds $50,000 (the "Threshold"),
and thereafter the Indemnitor shall be required to pay all claims hereunder, up
to a maximum of $2,000,000; provided, however, that with respect to any claims
arising hereunder in connection with any breach of the representations and
warranties contained in Section 2.09 (Taxes), 2.12 (Benefit Plans) or 2.21(c)
(Environmental Matters), the Indemnitor shall be required to pay all such
claims to the extent that such claims, when added to other claims made under
this Article IX and subject to the Threshold, do not exceed $5,000,000.
Indemnitor shall have no liability for claims aggregating the Threshold or
exceeding the maximum limits set forth herein.
ARTICLE X
TERMINATION
10.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of Sellers, Xxxxxxx Xxx Xxxxxx and Purchaser; or
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(b) at any time before the Closing, by Sellers, Xxxxxxx
Xxx Xxxxxx or Purchaser, in the event (i) of a material breach hereof
by the non-terminating party if such non- terminating party fails to
cure such breach within five (5) Business Days following notification
thereof by the terminating party or (ii) upon notification of the
non-terminating party by the terminating party that the satisfaction
of any condition to the terminating party's obligations under this
Agreement becomes impossible or impracticable with the use of
commercially reasonable efforts if the failure of such condition to be
satisfied is not caused by a breach hereof by the terminating party.
10.02 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 10.01, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of Sellers,
Xxxxxxx Xxx Xxxxxx or Purchaser (or any of their respective officers,
directors, employees, agents or other representatives or Affiliates), except as
provided in the next succeeding sentence and except that the provisions with
respect to expenses in Section 12.03 and confidentiality in Section 12.05 will
continue to apply following any such termination. Notwithstanding any other
provision in this Agreement to the contrary, upon termination of this Agreement
pursuant to Section 10.01(b) or (c), Sellers and Xxxxxxx Xxx Xxxxxx will remain
liable to Purchaser for any willful breach of this Agreement by Sellers or
Xxxxxxx Xxx Xxxxxx existing at the time of such termination, and Purchaser will
remain liable to Sellers and Xxxxxxx Xxx Xxxxxx for any willful breach of this
Agreement by Purchaser existing at the time of such termination, and Sellers,
Xxxxxxx Xxx Xxxxxx or Purchaser, as the case may be, may seek such remedies,
including damages and fees of attorneys, against the other with respect to any
such breach as are provided in this Agreement or as are otherwise available at
Law or in equity.
ARTICLE XI
DEFINITIONS
11.01 Definitions. (a) Defined Terms. As used in this Agreement,
the following defined terms have the meanings indicated below:
"Accounts Payable" has the meaning ascribed to it in Section
1.02(a)(ii).
"Accounts Receivable" has the meaning ascribed to it in
Section 1.01(a)(iv).
"Accrued Expenses" has the meaning ascribed to it in Section
1.02(a)(v).
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Adjusted Amount" has the meaning ascribed to it in Section
9.06 .
"Affiliate" means any Person that directly, or indirectly
through one of more intermediaries, controls or is controlled by or is under
common control with the Person specified. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by Contract or
otherwise and, in any event and without limitation of the previous sentence,
any Person owning ten percent (10%) or more of the voting securities of another
Person shall be deemed to control that Person.
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"Agreement" means this Asset Purchase Agreement and the
Exhibits, the Disclosure Schedule and the other Schedules hereto and the
certificates delivered in accordance with Sections 6.03 and 7.11, as the same
shall be amended from time to time.
"Assets" has the meaning ascribed to it in Section 1.01(a).
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles, real
estate, equipment, inventory, goods and Intellectual Property.
"Associate" means, with respect to any Person, any
corporation or other business organization of which such Person is an officer
or partner or is the beneficial owner, directly or indirectly, of ten percent
(10%) or more of any class of equity securities, any trust or estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as a trustee or in a similar capacity and any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person.
"Assumed Liabilities" has the meaning ascribed to it in
Section 1.02(a).
"Benefit Plan" means any Plan established by either Xxxxxx or
Van Houten, or any predecessor or Affiliate of either Xxxxxx or Van Houten,
existing at the Closing Date or prior thereto, to which either Xxxxxx or Van
Houten contribute or has contributed on behalf of any Employee, former employee
or director, or under which any Employee, former employee or director of either
Xxxxxx or Van Houten or any beneficiary thereof is covered, is eligible for
coverage or has benefit rights.
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and Assets and
Properties of such Person, including without limitation financial statements,
tax returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, Contracts, Licenses,
customer lists, computer files and programs, retrieval programs, operating data
and plans and environmental studies and plans.
"Business" has the meaning ascribed to it in the forepart of
this Agreement.
"Business Books and Records" has the meaning ascribed to it
in Section 1.01(a)(xiii).
"Business Combination" means with respect to any Person, any
merger, consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other equity interests
of such Person or any sale, dividend or other disposition of all or
substantially all of the Assets and Properties of such Person.
"Business Contracts" has the meaning ascribed to it in
Section 1.01(a)(vii).
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"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the States of New Jersey or Arkansas are
authorized or obligated to close.
"Business Licenses" has the meaning ascribed to it in Section
1.01(a)(x).
"Cash" has the meaning ascribed to it in Section
1.01(a)(xvii).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the rules and
regulations promulgated thereunder.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System, as provided for by 40 C.F.R.
Section 300.5.
"Closing" means the closing of the transactions contemplated
by this Agreement.
"Closing Date" means (a) the first Business Day after the day
on which the last of the consents, approvals, actions, filings, notices or
waiting periods described in or related to the filings described in Sections
7.07 through 7.09 has been obtained, made or given or has expired, as
applicable, or (b) such other date as Purchaser and Sellers mutually agree upon
in writing.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Competitive Activity" has the meaning ascribed to it in
Section 4.11(a)(ii).
"Condition of the Business" means the business, condition
(financial or otherwise), results of operations, Assets and Properties and
prospects of the Business.
"Confidential Information" has the meaning ascribed to it in
Section 4.11(a)(i).
"Contract" means any agreement, lease, license, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract
(whether written or oral).
"Defined Benefit Plan" means each Benefit Plan which is
subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title IV of
ERISA.
"Disclosure Schedule" means the record delivered to Purchaser
by Sellers and Xxxxxxx Xxx Xxxxxx herewith and dated as of the date hereof,
containing all lists, descriptions, exceptions and other information and
materials as are required to be included therein by Sellers and Xxxxxxx Xxx
Xxxxxx pursuant to this Agreement.
"Employee" means each employee, officer or consultant of
either Xxxxxx or Van Houten engaged full time in the conduct of the Business.
"Environmental Claim" means, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, Governmental or Regulatory Authority
response costs, damages to natural resources or other property, personal
injuries, fines or penalties arising
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out of, based on or resulting from (a) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any Governmental or Regulatory
Authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and any claim
by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" means any Law or Order relating to the
regulation or protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Estoppel Certificate" means the written certification,
issued not more than thirty (30) days prior to the Closing Date by a lessor,
sublessor or other party to a lease or occupancy agreement, stating (a) that
such lease or occupancy agreement is (i) in full force and effect and (ii) has
not been modified or amended except as described therein, (b) the date to which
rental has been paid, (c) that no default or event of default exists thereunder
and (d) that to the best of the knowledge of the issuer thereof, no event has
occurred which, with the giving of notice or lapse of time or both, would be a
default or event of default thereunder.
"Excluded Assets" has the meaning ascribed to it in Section
1.01(b).
"Financial Statements" means the financial statements
delivered to Purchaser pursuant to Section 2.06.
"GAAP" means generally accepted accounting principles,
consistently applied throughout the specified period and in the immediately
prior comparable period.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Hazardous Material" means (A) any petroleum or petroleum
products, flammable explosives, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants" or words of similar import under any
Environmental Law; and (C) any other chemical
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or other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated by any Governmental or Regulatory Authority
under any Environmental Law.
"HSR Act" means Section 7A of the Xxxxxxx Act (Title II of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended) and the
rules and regulations promulgated thereunder.
"IMC" has the meaning ascribed to it in Section 2.09.
"Improvements" has the meaning ascribed to it in Section
1.01(a)(i).
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Indemnitee" has the meaning ascribed to it in Section 9.03.
"Indemnitor" has the meaning ascribed to it in Section 9.03.
"Intangible Personal Property" has the meaning ascribed to it
in Section 1.01(a)(ix).
"Intellectual Property" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information (including
Xxxxxxx' X0X Action Plan), manufacturing, engineering and technical drawings,
know-how and all pending applications for and registrations of patents,
trademarks, service marks and copyrights; provided, however, that this
definition shall not include the use of the trade name "Van Houten" so long as
such name is not used by Sellers or Xxxxxxx Xxx Xxxxxx in any activity related
or similar to the Business.
"Inventory" has the meaning ascribed to it in Section
1.01(a)(iii).
"Investment Assets" means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase and
securities convertible into or exchangeable for other securities), interests in
joint ventures and general and limited partnerships, mortgage loans and other
investment or portfolio assets owned of record or beneficially by Sellers
(other than trade receivables generated in the ordinary course of business of
the Sellers).
"IRS" means the United States Internal Revenue Service.
"Knowledge of" or "Known to" means, with respect to Xxxxxx,
Van Houten and Xxxxxxx Xxx Xxxxxx, the knowledge of Xxxxxxx Xxx Xxxxxx, Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxxx or any department head or manager of either Xxxxxx
or Van Houten, as the case may be, and with respect to the Knowledge of
Purchaser, any officer, department head or manager of Purchaser or X.X.X.
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"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Leased Properties" has the meaning ascribed to it in Section
2.21(d).
"Letter of Credit" has the meaning ascribed to it in Section
7.03.
"Liabilities" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Licenses" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents granted or issued by any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment).
"Net Tax Liability" has the meaning ascribed to it in Section
9.06.
"NPL" means the National Priorities List under CERCLA.
"Operative Agreements" has the meaning ascribed to it in
Section 1.06(a).
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Other Assets" has the meaning ascribed to it in Section
1.01(a)(xvii).
"X.X.X." has the meaning ascribed to it in the forepart of
this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation
established under ERISA.
"Permitted Lien" means (i) any Lien for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii) any
statutory Lien arising in the ordinary course of business by operation of Law
with respect to a Liability that is not yet due or delinquent and (iii) any
minor imperfection of title or similar Lien which individually or in the
aggregate with other such Liens does not materially impair the value of the
property subject to such Lien or the use of such property in the conduct of the
Business.
"Person" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union, association or Governmental or Regulatory Authority.
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"Personal Property Leases" has the meaning ascribed to it in
Section 1.01(a)(vi).
"Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services, cafeteria,
life, health, accident, disability, workmen's compensation or other insurance,
severance, separation or other Benefit Plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Prepaid Expenses" has the meaning ascribed to it in Section
1.01(a)(viii).
"Promissory Notes" has the meaning ascribed to it in Section
1.03(b)(ii).
"Promissory Note Security Agreement" has the meaning ascribed
to it in Section 7.04.
"Purchase Price" has the meaning ascribed to it in Section
1.03(a).
"Purchaser" has the meaning ascribed to it in the forepart of
this Agreement.
"Real Property" has the meaning ascribed to it in Section
1.01(a)(i).
"Real Property Leases" has the meaning ascribed to it in
Section 1.01(a)(ii).
"Recent Financial Statement Date" has the meaning ascribed to
it in Section 2.06(b).
"Recent Financial Statements" has the meaning ascribed to it
in Section 2.06(b).
"Release" or "Released" means any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"Representatives" has the meaning ascribed to it in Section
4.03.
"Retained Liabilities" has the meaning ascribed to it in
Section 1.02(b).
"Riverdale" has the meaning ascribed to it in Section
1.01(a)(ii).
"Sellers" has the meaning ascribed to it in the forepart of
this Agreement.
"Sellers' Y2K Action Plan" has the meaning ascribed to it in
Section 2.27.
"Subject Properties" has the meaning ascribed to it in
Section 2.21(c).
"Tangible Personal Property" has the meaning ascribed to it
in Section 1.01(a)(v).
"Tenant Security Deposits" has the meaning ascribed to it in
Section 1.01(a)(xii).
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"Territory" has the meaning ascribed to it in Section
4.11(a)(iii).
"Threshold" has the meaning ascribed to it in Section 9.07.
"Vehicles" has the meaning ascribed to it in Section
1.01(a)(xi).
"Year 2000 Problem" has the meaning ascribed to it in Section
2.27.
(b) Construction of Certain Terms and Phrases. Unless
the context of this Agreement otherwise requires, (i) words of any gender
include each other gender; (ii) words using the singular or plural number also
include the plural or singular number, respectively; (iii) the terms "hereof,"
"herein," "hereby" and derivative or similar words refer to this entire
Agreement; (iv) the terms "Article" or "Section" refer to the specified Article
or Section of this Agreement; and (v) the phrases "ordinary course of business"
and "ordinary course of business consistent with past practice" refer to the
business and practice of Sellers in connection with the Business. Whenever this
Agreement refers to a number of days, such number shall refer to calendar days
unless Business Days are specified. All accounting terms used herein and not
expressly defined herein shall have the meanings given to them under GAAP.
ARTICLE XII
MISCELLANEOUS
12.01 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered by personal delivery, certified mail or national overnight delivery
service that provides a receipt for delivery to the parties at the following
addresses:
If to Purchaser, to:
X.X.X. NewCo., Inc.
c/o X.X.X. Transportation Services, Inc.
Xxxxxxx 000 Xxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, President
with a copy to:
Xxxxx, Xxxxxxxx & Xxxxxxx, XXX
Xxxxx 0000, Xxxxxxxxx XX
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx Xxxxxxx Xxxxxxxx, Esq.
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If to Sellers and Xxxxxxx Xxx Xxxxxx, to:
Xxxxxx Transport Co. Inc.
00 Xxxxx #00
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx Xxx Xxxxxx
with a copy to:
Xxxxx Rice & Dreifuss
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
All such notices, requests and other communications will be deemed given upon
delivery (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section).
Any party from time to time may change its address or other information for the
purpose of notices to that party by giving notice specifying such change to the
other party hereto.
12.02 Entire Agreement. This Agreement and the Operative Agreements
supersede all prior discussions and agreements between the parties with respect
to the subject matter hereof and thereof, including without limitation, that
certain letter of intent between X.X.X., the Sellers and Xxxxxxx Xxx Xxxxxx,
dated October 14, 1998, and contains the sole and entire agreement between the
parties hereto with respect to the subject matter hereof and thereof.
12.03 Expenses. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Section 10.02), whether
or not the transactions contemplated hereby are consummated, each party will
pay its own costs and expenses incurred in connection with the negotiation,
execution and closing of this Agreement and the Operative Agreements and the
transactions contemplated hereby and thereby. The parties hereto agree that the
costs and expenses incurred in connection with the negotiation, execution and
closing of the Letter of Credit will be divided equally between Purchaser and
Xxxxxxx Xxx Xxxxxx.
12.04 Public Announcements. At all times at or before the Closing,
Sellers and Purchaser will not issue or make any reports, statements or
releases to the public or generally to the employees, customers, suppliers or
other Persons to whom Sellers sell goods or provide services in connection with
the Business or with whom Sellers otherwise have significant business
relationships in connection with the Business with respect to this Agreement or
the transactions contemplated hereby without the consent of the other, which
consent shall not be unreasonably withheld. If either party is unable to obtain
the approval of its public report, statement or release from the other party
and such report, statement or release is, in the opinion of legal counsel to
such party, required by Law in order to discharge such party's disclosure
obligations, then such party may make or issue the legally required report,
statement or release and promptly furnish the other party with a copy thereof.
12.05 Confidentiality. Each party hereto will hold, and will use
its best efforts to cause its Affiliates, and their respective Representatives
to hold, in strict confidence from any Person (other than
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any such Affiliate or Representative), unless (i) compelled to disclose by
judicial or administrative process (including without limitation in connection
with obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law or (ii) disclosed in an Action or Proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, all documents and information concerning the other party or any of
its Affiliates furnished to it by the other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information
can be shown to have been (a) previously known by the party receiving such
documents or information, (b) in the public domain (either prior to or after
the furnishing of such documents or information hereunder) through no fault of
such reserving party or (c) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential; provided, however, that following the Closing the foregoing
restrictions will not apply to Purchaser's use of documents and information
concerning the Business, the Assets or the Assumed Liabilities furnished by
Sellers hereunder. In the event the transactions contemplated hereby are not
consummated, upon the request of the other party, each party hereto will, and
will cause its Affiliates and their respective Representatives to, promptly
redeliver or cause to be redelivered all copies of documents and information
furnished by the other party in connection with this Agreement.
12.06 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
12.07 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
12.08 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article IX.
12.09 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of
Law and (b) that Purchaser may assign any or all of its rights, interests and
obligations hereunder to (i) any Affiliate or Associate, provided that any such
Affiliate or Associate agrees in writing to be bound by all of the terms,
conditions and provisions contained herein, (ii) any post- Closing purchaser of
the Business or a substantial part of the Assets or (iii) any financial
institution providing purchase money or other financing to Purchaser from time
to time as collateral security for such financing, but no such assignment
referred to in clause (i) or (ii) shall relieve Purchaser of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
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12.10 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
12.11 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
12.12 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of New Jersey applicable to
a contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
12.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party as of the date first
above written.
X.X.X. NEWCO., INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXXX TRANSPORT CO. INC.
By: /s/ Xxxxxxx Xxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxx Xxxxxx
Title: President
VAN HOUTEN LTD.
By: /s/ Xxxxxxx Xxx Xxxxxx
---------------------------------------
Name: Xxxxxxx Xxx Xxxxxx
Title: President
/s/ Xxxxxxx Xxx Xxxxxx (L.S.)
------------------------------------
Xxxxxxx Xxx Xxxxxx, Individually
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