Exhibit 10.14
EXECUTION COPY
PURCHASE AGREEMENT
This Purchase Agreement (the "AGREEMENT") is entered into as of October
4, 2000, by and among Xxxx Industries, Inc., a Delaware corporation (the
"COMPANY"), Anchor Holdings, Inc., a Delaware corporation and the sole
stockholder of the Company ("PARENT"), Henlopen Manufacturing Co., Inc., a New
York corporation ("BUYER 1"), and Compagnie Generale de Participation
Industrielle et Financiere, a company organized under the laws of France ("BUYER
2") (Buyer 1 and Buyer 2 are collectively referred to herein as the "BUYER").
INTRODUCTION
The Company and Parent wish to sell, and the Buyer wishes to buy, all
of the assets of the Company's cosmetics packaging division (the "COSMETICS
DIVISION"), including without limitation all of the outstanding capital stock of
Cepillos De Xxxxxxxxx X.X. de C.V., a corporation organized under the laws of
Mexico and a wholly-owned subsidiary of the Company and Parent ("CEPILLOS"), on
the terms and conditions set forth herein. The Company is the owner of 999
series "A" shares and 1,187,459 series "B" shares of Cepillos (together, the
"COMPANY CEPILLOS SHARES"), and Parent is the owner of one series "A" share of
Cepillos (the "PARENT CEPILLOS SHARES" and, together with the Company Cepillos
Shares, the "CEPILLOS SHARES"). The term "Cosmetics Division" includes without
limitation Cepillos.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE; CLOSING
SECTION 1.01. PURCHASE AND SALE.
(a) PURCHASED ASSETS. On the terms and conditions of this
Agreement, the Company shall sell, convey, transfer, assign and deliver to Buyer
1 at the Closing (as hereinafter defined), all of the Company's right, title and
interest in and to all of the assets owned or leased by, or licensed to, the
Company of every kind, type or description, wherever located, whether now
existing or hereafter acquired, that are used or held for use primarily in the
operation of, or otherwise are primarily related to, the Cosmetics Division,
whether tangible or intangible, real, personal or mixed (the "PURCHASED
ASSETS"), free and clear of all Liens (as hereinafter defined), except for
Permitted Liens (as hereinafter defined). The Purchased Assets shall not include
the Excluded Assets (as hereinafter defined) and shall include, without
limitation, the following assets:
(i) all trade accounts receivable, notes receivable
(including with respect to leases of equipment), negotiable instruments and
chattel paper received as a result of the operation of the Cosmetics Division;
(ii) all tangible assets used or held for use
primarily in connection with the business or operations of the Cosmetics
Division, including machinery and equipment, parts, computer hardware, copiers,
tools, dies, jigs, patterns, molds, office equipment, leasehold improvements,
fixtures and other improvements on real estate, furniture, automobiles, trucks
and other vehicles, and including those items as set forth on SCHEDULE
1.01(a)(ii);
(iii) all inventory used or held for use primarily in
connection with the business or operations of the Cosmetics Division wherever
located (including raw materials, work in process, finished goods, labels and
packaging materials, service parts and supplies), including all inventory used
or held for use at the storage space leased by the Company for the Cosmetics
Division in Brownsville, Texas and Dayton, New Jersey and at the Company's
facilities in Elk Grove, Illinois and Cepillos' facility in Matamoros, Mexico;
(iv) all agreements, commitments, understandings,
binding arrangements, licenses and other legally binding arrangements (and
benefits arising therefrom) primarily relating to or arising primarily from the
business or operations of the Cosmetics Division (collectively, the "ASSUMED
CONTRACTS"), including without limitation those Material Contracts (as
hereinafter defined) set forth on SCHEDULE 1.01(a)(iv), and all rights against
suppliers for repair or replacement of defective products covering any of the
tangible assets of the Cosmetics Division, to the extent legally transferable;
(v) all Permits (as hereinafter defined) set forth on
SCHEDULE 1.01(A)(V);
(vi) all sales orders and sales contracts, purchase
orders and purchase contracts, quotations and bids generated by the operation of
the Cosmetics Division;
(vii) all customer lists, customer records and
customer information relating to the Cosmetics Division;
(viii) all intellectual property rights used by the
Company, Parent or Cepillos primarily in or otherwise primarily relating to the
business or operations of the Cosmetics Division, including the following: all
patents and patent applications listed in SCHEDULE 2.08 and all rights deriving
therefrom (the "PATENTS"); all trademarks, trademark applications and trademark
registrations, trade names, service marks and service names listed in SCHEDULE
2.08, together with the goodwill associated therewith and all rights deriving
therefrom (the "TRADEMARKS"); all registered copyrights listed in SCHEDULE 2.08
or unregistered copyrights used or held for use primarily in connection with the
business or operations of the Cosmetics Division and all rights deriving
therefrom (the "COPYRIGHTS"); all internet domain names listed in SCHEDULE 2.08
(the "DOMAIN NAMES"); and, any know-how, unpatented inventions, commercial and
technical trade secrets, engineering, production and other designs, drawings,
specifications, formulae, technology, computer and electronic data processing
programs and software,
-2-
processes, know-how, confidential information, business and marketing plans,
trade dress and slogans, licenses and rights with respect to the foregoing and
all goodwill associated with such intellectual property rights (together with
the Patents, the Trademarks, the Copyrights and the Domain Names, the
"INTELLECTUAL PROPERTY");
(ix) all goodwill of the Cosmetics Division,
including the right to represent oneself as the successor to the Cosmetics
Division; and
(x) all books and records, wherever located,
primarily relating to the Cosmetics Division including the following:
blueprints, drawings and other technical papers, payroll, employee benefits,
accounts receivable and payable, inventory, maintenance, and asset history
records, ledgers, and books of original entry, all insurance records and OSHA
and EPA files, sales records, books of account, files, invoices, inventory
records, accounting records, product specifications, drawings, engineering,
operating and production records, advertising materials, cost and pricing
information, supplier lists, business plans, catalogs, quality control records
and manuals, research and development files, laboratory books, patent and
trademark files and litigation files, AND EXCLUDING any of the foregoing
relating to the Excluded Assets, and including, if reasonably requested by the
Buyer, such other redacted records as may be necessary to operate the Cosmetics
Division.
(b) CEPILLOS SHARES. Pursuant to the Assignment Agreement
attached hereto as EXHIBIT 1.01(b) and subject to the terms and conditions of
this Agreement, the Company and Parent shall sell, convey, endorse, transfer,
assign and deliver to Buyer 2 and Buyer 2's designee at the Closing, free and
clear of all Liens, the Company Cepillos Shares and the Parent Cepillos Shares,
respectively.
(c) CERTAIN DEFINITIONS. As used herein, "LIEN" means any
lien, pledge, charge, option, restriction on transfer, claim, mortgage, deed to
secure debt, deed of trust, conditional sale or other title retention agreement,
or other security interest, security title or encumbrance of any kind. As used
herein, "PERMITTED LIENS" means (i) such imperfections of title, easements,
encumbrances, or restrictions which individually or in the aggregate do not
impair in any material respect the use or ownership of the Purchased Assets,
(ii) Liens for taxes (whether federal, state, local or foreign) attributable to
any taxable period beginning on or prior to the Closing Date and not yet due or
payable or being contested in good faith and (iii) materialmen's, mechanics',
carriers', workmen's, warehousemen's, repairmen's and other like Liens arising
in the ordinary course of business, or deposits to obtain the release of such
liens.
SECTION 1.02. EXCLUDED ASSETS. Notwithstanding the foregoing, the
Company shall not transfer to the Buyer, and the Purchased Assets shall not
include (i) cash and cash equivalents of the Company, (ii) the assets of the
Company used primarily in connection with its other businesses and divisions
that are not the Cosmetics Division and that are not specifically included in
the definition of Purchased Assets and (iii) any of the assets listed on
SCHEDULE 1.02 (collectively, the "EXCLUDED ASSETS").
-3-
SECTION 1.03. PURCHASE PRICE. The aggregate purchase price to be paid
by the Buyer for the Purchased Assets and the Cepillos Shares shall be Sixty
Seven Million Dollars ($67,000,000) (the "PURCHASE Price"), subject to
adjustment as set forth in Section 1.10, and the Purchased Assets and Cepillos
shall be free of or not include (A) any indebtedness and (B) any cash. The Buyer
shall pay Sixty Five Million Five Hundred Thousand Dollars ($65,500,000) of the
Purchase Price at the Closing by wire transfer of immediately available funds to
an account of the Company designated in writing to the Buyer no later than two
business days prior to the Closing Date. At the Closing, the Buyer shall deliver
(i) One Million Five Hundred Thousand Dollars ($1,500,000) of the Purchase Price
(the "PURCHASE PRICE ESCROW AMOUNT") to the escrow agent (the "ESCROW AGENT")
named in the escrow agreement to be entered into as of the Closing Date among
the Buyer, the Company and the Escrow Agent in the form and substance mutually
satisfactory to the Buyer and the Company (the "ESCROW Agreement"), and (ii) One
Million Five Hundred Thousand Dollars ($1,500,000) (the "ADDITIONAL ESCROW
AMOUNT") to the Escrow Agent. The Escrow Agreement shall provide that the
Purchase Price Escrow Amount and Additional Escrow Amount are to be invested in
an interest-bearing money market fund. Prior to the Closing, the Buyer and the
Company shall select a mutually satisfactory bank or trust company to act as the
Escrow Agent. All fees and expenses of the Escrow Agent shall be shared equally
by the Company and the Buyer.
SECTION 1.04. ASSUMPTION OF LIABILITIES.
(a) AGREEMENT TO ASSUME. At the Closing, the Buyer shall
assume and agree to discharge and perform when due, only those liabilities and
obligations of the Company or Parent with respect to the Cosmetics Division
which are described in Section 1.04 (b) (the "ASSUMED LIABILITIES"). All the
liabilities and obligations of the Company or Parent or any of their respective
Affiliates (as hereinafter defined), other than Cepillos, of whatever kind or
nature, known or unknown, fixed or contingent, accrued or unaccrued, other than
the Assumed Liabilities, are hereinafter referred to as the "EXCLUDED
LIABILITIES."
Notwithstanding the foregoing, the Buyer does not assume or
agree to pay, discharge or perform, and will not be deemed by virtue of the
execution and delivery of this Agreement or any document delivered at the
Closing pursuant to this Agreement, or as a result of the consummation of the
transactions contemplated by this Agreement, to have assumed, or to have agreed
to pay, discharge or perform, any Excluded Liabilities.
(b) DESCRIPTION OF ASSUMED LIABILITIES. The Assumed
Liabilities shall consist of the following, and only the following, liabilities
of the Company or Parent with respect to the Cosmetics Division:
(i) accounts payable and accrued liabilities relating
to Purchased Assets as of the Closing Date (as herein defined) incurred in the
ordinary course of business, excluding accounts payable or accrued liabilities
to the Company, Parent or any of their Affiliates (as hereinafter defined) other
than Cepillos;
(ii) all liabilities, obligations and commitments of
the Company or Parent accruing with respect to periods commencing as of the
close of business on the Closing Date under the Assumed Contracts;
-4-
(iii) all liabilities, obligations and commitments of
the Company accruing with respect to periods commencing as of the close of
business on the Closing Date under the sales orders and sales contracts,
purchase orders and purchase contracts, quotations and bids generated by the
operation of the Cosmetics Division that constitute Purchased Assets and were
entered into or received in the ordinary course of business;
(iv) all Taxes (as hereinafter defined) arising out
of, relating to or in respect of the Purchased Assets or the use thereof for any
taxable periods after the Closing Date and the portion after the Closing Date of
any taxable period that includes (but does not end on) such day, it being
understood that the Company and Parent are retaining all such Taxes for any
taxable periods prior to the Closing Date of any taxable period that includes
such day;
(v) all obligations, liabilities and commitments
arising from the conduct of the Buyer's business or the use or ownership of the
Purchased Assets after the Closing; and
(vi) the liabilities specifically set forth on
SCHEDULE 1.04(b).
SECTION 1.05. ALLOCATION. The total amount of the Purchase Price and
the Assumed Liabilities shall be allocated among the Purchased Assets and the
Cepillos Shares as set forth on SCHEDULE 1.05. It is agreed by the parties that
such allocation was arrived at by arm's-length negotiation and in the judgment
of the parties properly reflects the fair market value of the Purchased Assets
and the Cepillos Shares transferred pursuant to this Agreement. The Buyer, and
the Company and Parent further agree that such allocation of the Purchase Price
meets and shall meet the requirements of Section 1060 of the Internal Revenue
Code of 1986, as amended (the "Code"), and all U.S. Department of Treasury
regulations promulgated thereunder. It is agreed that the allocations under this
Section 1.05 will be binding on all parties for federal, state, local and other
tax purposes in connection with the purchase and sale of the Purchased Assets
and the Cepillos Shares and will be consistently reflected by each party on its
tax returns.
SECTION 1.06. THE CLOSING. The closing (the "CLOSING") of the purchase
and sale of the Purchased Assets and the Cepillos Shares hereunder will take
place at Xxxxxxxxx & Xxxxxxx, 1330 Avenue of the Americas, New York, New York on
October 18, 2000 or, if the conditions set forth in Article V herein are not
then satisfied or waived, at such later date as is five (5) business days after
satisfaction or waiver of such conditions (the "CLOSING DATE").
SECTION 1.07. DELIVERIES BY THE COMPANY AND PARENT. At the Closing, and
upon satisfaction or waiver of the conditions set forth in Section 5.02 herein,
the Company and Parent shall deliver or cause to be delivered to the Buyer the
Cepillos Shares and the instruments, consents, opinions, certificates and other
documents required by Section 5.01.
-5-
SECTION 1.08. DELIVERIES BY THE BUYER. At the Closing, and upon
satisfaction or waiver of the conditions set forth in Section 5.01 herein, the
Buyer shall deliver or cause to be delivered to the Company the Purchase Price
and the instruments, opinions, certificates and other documents required by
Section 5.02.
SECTION 1.09. DESIGNATION OF AFFILIATES BY THE BUYER. Prior to the
Closing, upon at least ten (10) days advance written notice to the Company, the
Buyer may designate one or more of its Affiliates to acquire all or part of the
Purchased Assets and the Cepillos Shares at the Closing, in which event all
references herein to the "Buyer" shall be deemed also to refer to such
Affiliates, jointly and severally, as appropriate; PROVIDED, HOWEVER, that no
such designation shall in any event limit or affect the obligations of the Buyer
under this Agreement; and PROVIDED, FURTHER, that the Buyer shall not designate
any Affiliate to acquire all or any part of the Purchased Assets and the
Cepillos Shares if (i) the designation of such Affiliate would require that any
consent, approval, order, qualification, filing, application or waiver be
obtained or made that would not otherwise be required or (ii) after such time as
any request for, or other filing or application in connection with, any consent,
approval, order, qualification or waiver required to be obtained pursuant hereto
has been made, if the designation of such Affiliate would require that such
request, filing or application be made again or amended. Except where the
context otherwise requires, all references herein to the "Buyer" shall be deemed
to refer to Buyer 1 and Buyer 2, jointly and severally. As used herein, an
"AFFILIATE" has the meaning ascribed to it in Rule 405 promulgated under the
Securities Act of 1933, as amended.
SECTION 1.10. NET WORKING CAPITAL ADJUSTMENT.
(a) NET WORKING CAPITAL. As used herein, "NET WORKING CAPITAL"
means, as measured as of the Closing Date, the difference between (i) all
current assets of the Cosmetics Division (which consist of, without duplication,
the current assets of Cepillos and the Purchased Assets that are current
assets), and (ii) all current liabilities of the Cosmetics Division (which
consist of, without duplication, the current liabilities of Cepillos, current
indebtedness of Cepillos, if any, and the Assumed Liabilities that are current
liabilities), as determined in accordance with generally accepted accounting
principles in the United States ("GAAP") except as noted on SCHEDULE 2.02, on a
basis consistent with the procedures and practices used in the preparation of
the Financial Statements (as defined in Section 2.02) and as finally determined
in accordance with Section 1.10(b). An illustration of the calculation of Net
Working Capital as of July 1, 2000 is set forth on SCHEDULE 1.10.
(b) DETERMINATION OF NET WORKING CAPITAL.
(i) Within 45 days after the Closing Date, each of
the Company and the Buyer will deliver to the other a certificate (each, a "NET
WORKING CAPITAL CERTIFICATE") executed by the delivering party (the "DELIVERING
PARTY") setting forth an itemization of Net Working Capital. Without limiting
the foregoing, each of the Company and the Buyer will use all commercially
reasonable efforts to deliver a Net Working Capital Certificate to the other
within 30 days after the Closing Date. Promptly following the Closing Date, the
Buyer's representatives and the Company's representatives shall conduct a joint
inventory review in connection with the determination of Net Working Capital.
-6-
(ii) If the Buyer and the Company are unable to agree
upon the Net Working Capital within 15 days after delivery of both Net Working
Capital Certificates, the Buyer and the Company agree to select KPMG LLP
("KPMG") (unless KPMG's services have recently been utilized by the Company and
its Affiliates or the Buyer and its Affiliates or KPMG does not accept the
engagement, in which case the parties will mutually select a nationally
recognized firm of independent accountants whose services have not recently been
utilized by the Company and its Affiliates or the Buyer and its Affiliates (and
if the parties fail to make such selection within such 15 days, they will do so
by lot)) to resolve the disputed items and make a determination of the Net
Working Capital. Such determination will be made within 45 days after such
selection and will be final and binding upon the parties. The fees, costs and
expenses of the accounting firm so selected will be borne by the party whose
positions generally did not prevail in such determination, or if the accounting
firm determines that neither party could be fairly found to be the prevailing
party, then such fees, costs and expenses will be borne equally by the Company
and the Buyer.
(iii) If either the Company or the Buyer does not
deliver a Net Working Capital Certificate to the other within the 45-day period
set forth in subsection (i) above, the Net Working Capital specified in the Net
Working Capital Certificate delivered by the Delivering Party will be
conclusively presumed to be true and correct in all respects and will be binding
upon the parties.
(c) ADJUSTMENT TO PURCHASE PRICE. At such time as the Net
Working Capital is finally determined, the Escrow Agreement shall provide, and
the parties hereto agree, as follows:
(i) If the Net Working Capital is less than Five
Million Four Hundred Thousand Dollars ($5,400,000), then the Buyer and the
Company shall direct the Escrow Agent (A) to release to the Buyer (x) the excess
of Five Million Four Hundred Thousand Dollars ($5,400,000) over the Net Working
Capital (plus any accrued interest earned on such excess amount) (the "WORKING
CAPITAL DEFICIENCY"), up to the total Purchase Price Escrow Amount (plus any
accrued interest earned on such amount), and (y) the Additional Escrow Amount
(plus any accrued interest earned on such amount), and (B) to release to the
Company, the remainder of the Purchase Price Escrow Amount, if any (plus any
accrued interest earned on such amount), in each case by wire transfer of
immediately available funds. If the Purchase Price Escrow Amount is less than
the Working Capital Deficiency, the Company shall pay the Buyer the full amount
of such shortfall (plus any accrued interest on such amount at an interest rate
equal to that earned on the Purchase Price Escrow Amount) at the same time
payment is made to the Buyer by the Escrow Agent.
(ii) If the Net Working Capital is greater than Six
Million Six Hundred Thousand Dollars ($6,600,000), then the Company and the
Buyer shall direct the Escrow Agent (A) to release to the Company (x) the excess
of the Net Working Capital over Six Million Six Hundred Thousand Dollars
($6,600,000) (plus any accrued interest earned on such amount) (the "WORKING
CAPITAL EXCESS"), up to the total Additional Escrow Amount (plus any accrued
interest earned on such amount), and (y) the Purchase Price Escrow Amount (plus
any accrued interest earned on such amount), and (B) to release to the Buyer the
remainder of the Additional Escrow
-7-
Amount, if any (plus any accrued interest earned on such amount), in each case
by wire transfer of immediately available funds. If the Additional Escrow Amount
is less than the Working Capital Excess, the Buyer shall pay the Company the
full amount of such shortfall (plus any accrued interest earned on such amount
at an interest rate equal to that earned on the Additional Escrow Amount) at the
same time payment is made to the Company by the Escrow Agent.
(iii) If the Net Working Capital is greater than (or
equal to) Five Million Four Hundred Thousand Dollars ($5,400,000) and less than
(or equal to) Six Million Six Hundred Thousand Dollars ($6,600,000), then the
Company and the Buyer shall direct the Escrow Agent (A) to release to the
Company the Purchase Price Escrow Amount (plus any accrued interest earned on
such amount) and (B) to release to the Buyer the Additional Escrow Amount (plus
any accrued interest earned on such amount), in each case by wire transfer of
immediately available funds.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND PARENT
The Company and Parent jointly and severally represent and warrant to
the Buyer as follows:
SECTION 2.01. ORGANIZATION AND POWER; VALID AND BINDING OBLIGATION.
(a) The Company and Parent are corporations duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Cepillos is a corporation duly organized, validly existing and in good standing
under the laws of Mexico (or substantially equivalent terms under the laws of
Mexico). The Company, Parent and Cepillos each have full corporate power and
authority to own, lease and operate their respective properties and to carry on
their respective businesses as such businesses are now conducted. The copies of
the charter and bylaws of the Company, Parent and Cepillos, each as amended to
date, that have been delivered to the Buyer by the Company are complete and
correct copies thereof. Each of the Company and Cepillos is qualified to do
business in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties or assets requires such
qualification, except where the failure to so qualify individually or in the
aggregate could not reasonably be expected to have a material adverse effect on
(i) the operations, properties, assets, condition (financial or otherwise),
business or results of operations of the Cosmetics Division or (ii) the ability
of the Company or Parent, as the case may be, to perform its obligations under
this Agreement (each, a "MATERIAL ADVERSE EFFECT").
(b) The Company and Parent have full corporate power and
authority and have taken all required action necessary to permit them (i) to
execute, deliver and carry out the terms of this Agreement and all other
documents and instruments to be executed by the Company, Parent and Cepillos
pursuant to this Agreement (collectively, the "SELLER DOCUMENTS") and (ii) to
consummate the transactions contemplated hereby and thereby. None of such
actions will (with notice of time or lapse of time or both) violate, conflict
with or result in a breach of
-8-
any of the terms, conditions or provisions of the Company's, Parent's or
Cepillos' respective certificates of incorporation, charter, by-laws or other
organizational documents or of any law, permit, statute or administrative
regulation or agreement with any Governmental Authority.
(c) This Agreement constitutes, and when executed and
delivered by each of the Company and Parent at Closing each Seller Document
shall constitute, the valid and legally binding obligation of each of the
Company and Parent, respectively, enforceable against them, as applicable, in
accordance with their respective terms.
SECTION 2.02. FINANCIAL STATEMENTS. The Company has delivered to the
Buyer the unaudited pro-forma consolidated balance sheets of the Cosmetic
Division as at December 31, 1998 and 1999, and the unaudited pro-forma
consolidated statements of operations for the fiscal years then ended. The
Company has delivered to the Buyer audited balance sheets of Cepillos as at
December 31, 1998 and 1999, and the audited consolidated statements of
operations, retained earnings and cash flows of Cepillos for the fiscal years
then ended. The Company has also furnished to the Buyer the unaudited pro-forma
consolidated balance sheet of the Cosmetics Division as at June 30, 2000 and the
unaudited pro-forma consolidated statements of operations of the Cosmetics
Division for the 6-month period then ended. Such financial statements and the
notes thereto (the "FINANCIAL STATEMENTS"), if any, are complete and accurate in
all material respects and fairly present the financial condition of the
Cosmetics Division and Cepillos on a stand-alone basis at the respective dates
thereof and the results of their operations for the periods then ended, make
full provision for all established, deferred or contingent liabilities whether
liquidated or unliquidated, and were prepared in accordance with the books and
records of the Company and Cepillos in conformity with GAAP, consistently
applied during the periods covered thereby, except, in the case of unaudited
pro-forma financial statements, for the omission of footnotes and normal,
immaterial or recurring year-end adjustments, and except as set forth on
SCHEDULE 2.02.
SECTION 2.03. ABSENCE OF CERTAIN CHANGES. Except as set forth on
SCHEDULE 2.03, since June 30, 2000, no event or events have occurred which could
be reasonably expected to have or result in a Material Adverse Effect and the
Company, Parent and Cepillos have not, with respect to the Cosmetics Division:
(i) sold, encumbered, transferred, assigned, removed
or agreed to the removal of any assets or property that would have been included
in the Purchased Assets if the Closing had been held on the date hereof, other
than (A) sales of inventory, obsolete or immaterial assets in the ordinary
course of business, consistent with past practice, and (B) cash applied in
payment of the Company's and Cepillos' liabilities in the ordinary course of
business consistent with past practice, and except as permitted by this
Agreement;
(ii) suffered any loss, or any material interruption
in use, of any material assets or property (whether or not covered by insurance)
or condemnation or other taking;
(iii) paid (except for business payables incurred and
paid in the ordinary course of business consistent with past practice), loaned
or advanced any amount to or
-9-
in respect of, or sold, transferred or leased any non-cash property or non-cash
assets (real, personal or mixed, tangible or intangible) to, or entered into,
amended or waived any rights under any transactions, agreements or arrangements
with or for the benefit of, the Company, Parent or Cepillos or any of their
respective Affiliates or any officers or directors of the foregoing or any of
their respective Affiliates;
(iv) waived any rights other than in the ordinary
course of business consistent with past practice;
(v) failed to pay or discharge when due any material
liabilities;
(vi) mortgaged, pledged or otherwise subjected any of
the Purchased Assets or the Cepillos Shares to any Lien;
(vii) deferred any material capital expenditures;
(viii) with respect to the Cosmetics Employees (as
hereinafter defined), (A) other than in the ordinary course of business
consistent with past practice, accelerated, altered or increased the salaries or
other compensation of, or made any advance or loan to, or made any acceleration,
alteration, or increase in, or any addition to, any benefits to which such
employees may be entitled or (B) discarded or otherwise disposed of any
personnel files, employee payroll records or any other records;
(ix) changed any methods or procedures relating to
credit practices or of the accounting principles followed by it or the methods
of applying such principles with respect to the accounts receivable, the
inventory or other aspects of the Cosmetics Division (including reserves),
except for such changes which are required by generally accepted accounting
principles;
(x) allowed the levels of raw materials, supplies,
work in process or other materials included in the inventory of the Company,
Parent or Cepillos to vary in any material respect from the levels customarily
maintained;
(xi) entered into any material transaction other than
in the ordinary course of business consistent with past practice; or
(xii) without limiting any of the foregoing,
conducted its business and operations other than in the ordinary course of
business consistent with past practice (this clause (xii) shall not be deemed to
be breached by virtue of the entry by the Company, Parent and Cepillos into this
Agreement or its consummation of the transaction contemplated hereby).
SECTION 2.04. UNDISCLOSED LIABILITIES. Except as set forth in Schedule
2.04, and except as reflected, reserved against or otherwise disclosed in the
Financial Statements, the Cosmetics Division and Cepillos did not have, as of
June 30, 2000, and do not have, any direct or indirect obligations, liabilities,
indebtedness, loss, damage or deficiency (matured or unmatured, fixed or
contingent, liquidated or unliquidated) other than (i) those set forth or
adequately provided for in
-10-
the Financial Statements or described in the footnotes thereto, (ii) those
incurred in the ordinary course of business and not required to be set forth in
the Financial Statements or described in the footnotes thereto under generally
accepted accounting principles consistently applied by the Company, (iii) those
incurred in the ordinary course of business consistent with past practice since
June 30, 2000 and (iv) those which individually or in the aggregate would not be
reasonably expected to have or result in a Material Adverse Effect. In addition,
as of the Closing Date, Cepillos will have no indebtedness. For purposes of this
Agreement, "INDEBTEDNESS" means, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, (B) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments, (C) all obligations of such person under conditional sale or other
title retention agreements relating to property purchased by such person, (D)
all obligations of such person issued or assumed as the deferred purchase price
of property or services (excluding obligations of such person to creditors for
raw materials, inventory, services and supplies incurred in the ordinary course
of such person's business), (E) all capitalized lease obligations of such
person, (F) all obligations of such person under interest rate or currency swap
transactions (valued at the termination value thereof), (G) all letters of
credit issued for the account of such person (excluding letters of credit issued
for the benefit of suppliers to support accounts payable to suppliers incurred
in the ordinary course of business), (H) all obligations of such person to
purchase securities (or other property) which arises out of or in connection
with the sale of the same or substantially similar securities or property, and
(I) all guarantees and arrangements having the economic effect of a guarantee of
such person of any indebtedness of any other person.
SECTION 2.05. TAXES.
(a) The representations set forth in this Section 2.05 are
subject to the qualifications set forth on SCHEDULE 2.05. The Buyer has been
provided with true and correct copies of the original and amended Tax returns of
Cepillos for all open years. The Company, and Cepillos, respectively, have
prepared and filed when due all Tax and/or information returns required by law
to be filed and have paid when due all Taxes, assessments and other governmental
charges levied upon any of their properties, assets, income, imports, exports,
taxes related to the maquiladora transactions of Cepillos, or franchises shown
to be due thereon, other than those not yet delinquent. All such returns are
true and correct in all material respects. Cepillos has not executed any waiver
that would have the effect of extending any applicable statute of limitations in
respect of any of its Tax liabilities. There are no unpaid assessments against
the Company or Cepillos or any additional Taxes, penalties or interest for any
fiscal period or any pending or threatened tax examination or audit by any
federal, state or local taxing authority. All Taxes and other assessments and
levies that the Company or Cepillos is required by law to withhold or to collect
for payment have been duly withheld and collected and paid to the proper
Governmental Authority. There are no Tax liens or claims pending or, to the
knowledge of the Company and Parent, threatened against the Company or Cepillos,
or their respective assets or property. Except as set forth on SCHEDULE 2.05,
there are no outstanding Tax sharing agreements or other such arrangements
between Cepillos or any other corporation or entity (other than the Company or
any Affiliate of the Company). Cepillos will not be required to recognize for
income tax purposes in a taxable year beginning on or after the Closing Date any
amount of income or gain which it would have been required to recognize under
the accrual method of accounting for Tax purposes in a Pre-Closing Tax Period.
-11-
As used herein, the following terms shall have the meanings indicated
below:
"GOVERNMENTAL AUTHORITY" shall mean any nation, state, county, city or
political subdivision and any domestic or foreign official, agency, arbitrator,
authority, court, department, commission, board, bureau, instrumentality or
governmental body of any thereof.
"PRE-CLOSING TAX PERIOD" shall mean all taxable periods ending on or
before the Closing Date and the portion ending on the Closing Date of any
taxable period that includes (but does not end on) such day.
"TAX" or "TAXES" shall mean any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and other similar amounts imposed with
respect thereto) imposed by any government or taxing authority, including
without limitation taxes or other charges on or with respect to income, imports,
exports, franchise, windfall or other profits, gross receipts, property, Mexican
asset tax, sales, use, capital stock, payroll, employment, social security,
workers' compensation, Mexican Housing Institute quotas, unemployment
compensation or net worth; taxes related to the maquiladora transactions of
Cepillos; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added or gains taxes; license, registration and
documentation fees; and customs' duties, tariffs and similar charges.
SECTION 2.06. PERSONAL PROPERTY, ETC. Except as listed on SCHEDULE
2.06, (a) the Company has good title to or a valid leasehold or license interest
in each item of personal property that constitutes the Purchased Assets and (b)
Cepillos has good title to or a valid leasehold or license interest in each item
of its personal property, free and clear of any Liens except Permitted Liens,
except where failure to have such good title, valid leasehold or license
interest could not be reasonably expected to have a Material Adverse Effect.
Except as set forth on SCHEDULE 2.06, all operating assets of Cepillos and the
Purchased Assets are in good operating condition and repair, normal wear and
tear excepted, except where failure to be in good operating condition or repair
could not be reasonably expected to have a Material Adverse Effect. Except as
set forth on SCHEDULE 2.06, the Purchased Assets and the assets and properties
of Cepillos are sufficient to conduct the business and operations of the
Cosmetics Division as it is presently being conducted.
SECTION 2.07. REAL PROPERTY. Cepillos has good and marketable title to
the real property listed on SCHEDULE 2.07, subject to Permitted Liens and any
Liens or title imperfections shown on SCHEDULE 2.07. Except as set forth on
SCHEDULE 2.07, the Company and Parent do not own any real property used
primarily in connection with the business or operations of the Cosmetics
Division. SCHEDULE 2.07 describes each interest in real property leased by the
Company or Cepillos for use in connection with the operation of the Cosmetics
Division, including the lessor of such leased property and identifies each lease
or any other arrangement under which such property is leased. The Company has
heretofore delivered or caused to be delivered to the Buyer true, correct and
complete copies of all such real property leases (including all material
modifications, amendments and supplements). Each such real property lease is
valid, binding on the Company and in full force and effect. All rent and other
sums and charges payable by the
-12-
Company or Cepillos, as applicable, as tenants thereunder are current. The
Company and Cepillos enjoy peaceful and quiet possession of their respective
leased premises listed on SCHEDULE 2.07 and have not received any notice
asserting the existence of a default under any such leasehold and neither the
Company nor Cepillos has been informed that the lessor under any of the leases
has taken action or threatened to terminate the lease before the expiration date
specified in the lease, and, except as shown on SCHEDULE 2.07, the transactions
contemplated by this Agreement will not be the basis for the lessor to terminate
the lease prior to that expiration date.
SECTION 2.08. INTELLECTUAL PROPERTY. SCHEDULE 2.08 sets forth a list of
all the Patents, Trademarks, registered Copyrights, and Domain Names primarily
used by the Company, Parent or Cepillos in business or the operations of, or
otherwise primarily relating to, the Cosmetics Division. The Intellectual
Property set forth on SCHEDULE 2.08 includes all of the foregoing necessary for
the conduct of the Cosmetics Division. Except as set forth on SCHEDULE 2.08, the
Company or Cepillos hold all interests in such Intellectual Property purported
to be owned or licensed by them, respectively. None of the Company, Parent or
Cepillos have been notified of any claim by any person that the Company, as it
relates to the Cosmetics Division, or Cepillos is violating any patent,
copyright, trademark, service xxxx, trade name, trade secret, proprietary right
or any other intellectual property right owned by any other person. To the
knowledge of the Company and Parent, no person is infringing in any material
respect upon the rights of the Company, Parent or Cepillos in, or otherwise
violating in any material respect, any of the Intellectual Property.
SECTION 2.09. MATERIAL CONTRACTS AND COMMITMENTS. SCHEDULE 2.09 sets
forth for the Company and Cepillos a complete and accurate list and compilation
of all of the following contracts, agreements and instruments, except those
which will be terminated at or before the Closing:
(a) contracts which primarily relate to the operation of the
Cosmetics Division with respect to which the Company or Cepillos has any
liability or obligation, contingent or otherwise, involving more than $25,000,
other than purchase orders and sales orders entered into in the ordinary course
of business;
(b) contracts which place any material limitation on the
method of conducting or the scope of the business of the Cosmetics Division,
including agreements containing covenants not to compete;
(c) contracts of the Company or Cepillos with officers and
employees of the Company engaged primarily in the Cosmetics Division involving
any payments in excess of $25,000; and
(d) all other material contracts, agreements or instruments of
Cepillos, the Company or Parent relating primarily to the business or operations
of the Cosmetics Division, other than purchase orders and sales orders entered
into in the ordinary course of business.
-13-
All of the foregoing are herein called "MATERIAL CONTRACTS". Except as
set forth in SCHEDULE 2.09, there have been no material amendments or side or
supplemental arrangements to or in respect of any Material Contract. The Company
has made available to the Buyer true, correct and complete copies of all
Material Contracts. Each Material Contract is valid and in full force and
effect, and, to the knowledge of the Company, each other party thereto, the
Company and Cepillos have performed all their respective material obligations
thereunder. Neither the Company nor Cepillos is in default in any material
respect under any Material Contract. To the knowledge of the Company and Parent,
no third party is in default under any material provision of any Material
Contract.
SECTION 2.10. ACCOUNTS RECEIVABLE. SCHEDULE 2.10 contains a true aged
list of unpaid accounts and notes receivable relating to the Cosmetics Division
as of August 26, 2000, all of which, to the knowledge of the Company and Parent,
are collectible in the ordinary course of business, net of applicable reserves.
SECTION 2.11. ACCOUNTS PAYABLE. To the knowledge of the Company and
Parent, SCHEDULE 2.11 contains a true and complete list of all accounts payable
relating to the Cosmetics Division as of August 26, 2000.
SECTION 2.12. INVENTORY. The inventory included in the Purchased Assets
is the only inventory used or held for use in the Cosmetics Division, is valued
for financial statement purposes at the lower of cost or market in aggregate
using the first in, first out method value. To the knowledge of the Company and
Parent, such inventory, net of applicable reserves, is useable and salable in
the ordinary course of business.
SECTION 2.13. LITIGATION. Except as disclosed on SCHEDULE 2.13 and to
the extent related to the Cosmetics Division, the Purchased Assets or Cepillos,
there has not been for the past two years nor is there currently any action,
suit, litigation, judicial or administrative proceeding, claim, arbitration,
order judgment, decree, settlement agreement or, to the knowledge of the Company
and Parent, investigation (each, an "ACTION") pending against the Company,
Parent or Cepillos, or any of their respective officers, representatives or
employees in their employment capacity with the Company, Parent or Cepillos,
including but not limited to any Action under or relating to any Environmental
Law (as hereinafter defined), in each case which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect; or, to
the knowledge of the Company and Parent, any threat of any such Action. To the
knowledge of the Company and Parent, except as disclosed on SCHEDULE 2.13 and to
the extent related to the Cosmetics Division, the Purchased Assets or Cepillos,
the Company, Parent and Cepillos are not party to the provisions of any order,
writ, injunction, judgment or decree of any court or Governmental Authority,
including any settlement, judgment, decree, order, agreement or negotiation or
other similar obligation or proceeding under or relating to any Environmental
Law, and there is no material Action initiated by the Company, Parent or
Cepillos currently pending or any material Action which the Company, Parent or
Cepillos intends to initiate related to the Cosmetics Division.
SECTION 2.14. GOVERNMENTAL APPROVAL AND OTHER CONSENTS. Except for
filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR ACT") or as set
-14-
forth on SCHEDULE 2.14 and SCHEDULE 3.02, no consent, order, approval,
authorization, declaration or filing (each a "CONSENT"), including, without
limitation, any consent, approval or authorization of or declaration or filing
with any Governmental Authority or any party to an Assumed Contract or any other
contract, lease, license, agreement, indenture, mortgage, debenture, note or
other instrument related to the Purchased Assets, Cepillos or the Cosmetics
Division, is required on the part of the Company, Parent or Cepillos for or in
connection with the execution, delivery and performance of this Agreement or any
Seller Document or the sale of the Purchased Assets and the Cepillos Shares
pursuant hereto or any other transaction pursuant to this Agreement, except for
those which, if not obtained, would not have a Material Adverse Effect
individually or in the aggregate.
SECTION 2.15. LICENSES AND PERMITS. SCHEDULE 2.15 sets forth a list of
all federal, local, municipal and foreign governmental licenses, franchises,
permits, certificates, privileges, immunities, approvals and other
authorizations held by each of the Company, Parent and Cepillos in connection
with the business or operations of the Cosmetics Division and which are
necessary for and material to the business or operations of the Cosmetics
Division (collectively, the "PERMITS"). The Company, Parent and Cepillos own,
hold or possess all Permits which are necessary to entitle the Company, in
connection with the business or operations of the Cosmetics Division, and
Cepillos to own or lease, operate and use its assets and to carry on and conduct
its business substantially as currently conducted. Such Permits are in full
force and effect, no material violations are or have been recorded in respect
thereof, no proceeding is pending, or, to the knowledge of the Company and
Parent, threatened to revoke or limit any Permits or to affect the rights of the
Company under any Permit. Except as set forth on SCHEDULE 2.15, the consummation
of the transactions contemplated in this Agreement will not result in the
non-renewal, revocation, expiration, withdrawal, ineffectiveness, termination,
or any terms of similar import, of any Permits.
SECTION 2.16. COMPLIANCE WITH LAW. Except as set forth on SCHEDULE
2.16, each of the Company and Cepillos is in compliance with all foreign,
federal, state or local statutes, laws, ordinances, judgments, decrees, orders
or governmental rules, regulations, policies and guidelines applicable to it,
except where noncompliance would not have a Material Adverse Effect (and except
as to Environmental Laws, as to which Section 2.23 applies).
SECTION 2.17. EMPLOYEES AND COMPENSATION.
(a) Except for the employees of Cepillos, no officer or
employee of the Company whose duties primarily relate to the business or
operations of the Cosmetics Division (together with the employees of Cepillos,
the "COSMETICS EMPLOYEES") is represented by any union and, to the knowledge of
the Company and Parent, there is no labor strike, slowdown, stoppage or
organizational effort pending or threatened against the Company.
(b) SCHEDULE 2.17 sets forth (i) a true and correct list of
the name, location and current annual salary of each Cosmetics Employee other
than the employees of Cepillos (the "U.S. EMPLOYEES"), (ii) a true and correct
list of the name of each U.S. Employee who has a Mexican working visa, and (iii)
any other form of compensation (other than salary or customary benefits) paid or
payable by the Company or Cepillos to each such person for the current fiscal
year.
-15-
SECTION 2.18. COMPANY BENEFIT PLANS.
(a) The Buyer (i) shall not be responsible for any existing or
future liability under any plan, program, or arrangement maintained by the
Company or Parent, other than the Cepillos Benefit Plans (as hereinafter
defined), or under which the Company or Parent has or may have any obligation to
contribute, with respect to any Cosmetics Employee, whether such plan, program
or arrangement is formal or informal, written or unwritten, and whether or not
such plan, program, or arrangement is an "employee benefit plan" subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")
(collectively, "COMPANY BENEFIT PLANS") and (ii) shall not be obligated to
administer or maintain any Company Benefit Plan.
(b) The Company has provided to the Buyer true and complete
copies of: (i) each Company Benefit Plan that is an "employee welfare benefit
plan" under Section 3(1) of ERISA; (ii) each Company Benefit Plan that is
intended to be tax-qualified under Section 401(a), 401(f), or 403(a) of the Code
and is an "employee pension benefit plan" under Section 3(2) of ERISA; (iii) the
most recent annual report, including Form 5500, required for each Company
Benefit Plan described under (i) and (ii); and (iv) the most recent
determination letter received from the Internal Revenue Service ("SERVICE") with
respect to a Company Benefit Plan described under (ii), or the application
therefor, if such letter has not been issued by the Service.
(c) Except as set forth on SCHEDULE 2.18, with respect to each
Company Benefit Plan: (i) such plan has been administered and enforced in
accordance with its terms and all applicable laws in all material respects; (ii)
no breach of fiduciary duty has occurred with respect to which any Company
Benefit Plan may be liable or otherwise damaged in any material respect; (iii)
no material disputes are pending or threatened; and (iv) no "prohibited
transaction" (within the meaning of either Section 4975(c) of the Code or
Section 406 of ERISA) has occurred with respect to which any Company Benefit
Plan may be liable or otherwise damaged in any material respect.
(d) Each Company Benefit Plan that is intended to satisfy any
provision of the Code in order to receive tax-favored treatment does satisfy and
has at all prior times satisfied such provision, in all material respects. Each
Company Benefit Plan that is intended to be "qualified" within the meaning of
Section 401(a), 401(f), or 403(a) of the Code is, and has at all times been, so
qualified and is the subject of a determination letter from the Service to the
effect that such Company Benefit Plan and the trust or trusts thereunder (if
any) are qualified and exempt from federal income taxes under Sections 401(a),
401(f), 403(a), and 501(a), whichever is respectively applicable, of the Code;
PROVIDED that if such determination letter has not yet been issued by the
Service, the Company shall provide a copy of such letter to the Buyer when a
favorable letter is issued by the Service or shall notify the Buyer that such
Company Benefit Plan is not qualified under Section 401(a), 401(f), or 403(a) of
the Code, if the Service does not issue a favorable letter with respect to such
Company Benefit Plan.
-16-
(e) The Buyer shall not be responsible for any existing
agreement between the Company and any Cosmetics Employee, other than the
Cepillos Employees (as hereinafter defined) and severance benefits as provided
herein, including an agreement (i) the benefits of which are contingent, or the
terms of which are materially altered, upon the occurrence of a transaction
involving the Buyer in the nature of any of the transactions contemplated by
this Agreement, (ii) providing any term of employment or compensation guarantee
or (iii) providing severance benefits or other benefits after the termination of
employment of such employee regardless of the reason for such termination of
employment.
SECTION 2.19. CEPILLOS BENEFIT PLANS.
(a) SCHEDULE 2.19(a) contains a complete and accurate list of
the names of all unionized employees, non-unionized employees and individuals
who are full-time or part-time employees of Cepillos as of the date hereof
(collectively, the "CEPILLOS EMPLOYEES"), including employees who have been laid
off on a temporary basis or who are on maternity, disability or other leave of
absence. SCHEDULE 2.19(a) specifies the position and daily wages of each
Cepillos Employee.
(b) Except as disclosed on SCHEDULE 2.19(b), Cepillos is not a
party to or bound by an employment or consulting contract or any other written
contract with any officer, employee or consultant other than oral contracts of
indefinite hire terminable by Cepillos without cause or reasonable notice.
(c) Except as disclosed on SCHEDULE 2.19(c), none of the
Cepillos Employees has been absent continually from work for a period in excess
of one week. There are no complaints, claims or charges outstanding, or to the
knowledge of Cepillos, anticipated, nor are there any orders, decisions,
directions or convictions currently registered or outstanding by any
Governmental Authority against or in respect Cepillos under or in respect of any
Mexican employment legislation, including Mexican Social Security legislation
and Mexican Housing Fund legislation.
(d) SCHEDULE 2.19(d) identifies each retirement, pension,
bonus, stock purchase, profit sharing, stock option, deferred compensation,
severance or termination pay, insurance, medical, hospital, dental, vision care,
drug, food, sick lease, disability, salary continuation, legal benefits,
unemployment benefits, vacation, incentive or other compensation plan or
arrangement or other employee benefit which is maintained, or otherwise
contributed to or required to be contributed to, by Cepillos for the benefit of
employees or former employees of Cepillos (the "CEPILLOS BENEFIT PLANS") and a
true and complete copy of each Cepillos Benefit Plan has been furnished to the
Buyer. Each Cepillos Benefit Plan has been maintained in all material respects
in compliance with its terms and with the requirements prescribed by applicable
Mexican laws.
(i) All contributions to, and payments from, each
Cepillos Benefit Plan which may have been required to be made in accordance with
the terms of any such Cepillos Benefit Plan, or with the recommendation of the
actuary for such Cepillos Benefit Plan and, where applicable, any Mexican laws
which govern such Cepillos Benefit Plan, have been made in a timely manner.
-17-
(ii) All material reports, returns and similar
documents (including applications for approval or contributions) with respect to
any Cepillos Benefit Plan required to be filed with any Governmental Authority
or distributed to any Cepillos Benefit Plan participant have been duly filed or
distributed on a timely basis.
(iii) To the knowledge of the Company and Parent,
there are no pending investigations by any Governmental Authority involving or
relating to any Cepillos Benefit Plan, no threatened or pending claims (except
for claims for benefits payable in the normal operation of the Cepillos Benefit
Plans), suits or proceedings against any Cepillos Benefit Plan or asserting any
rights or claims to benefits under any Cepillos Benefit Plan which could give
rise to a liability nor are there any facts that could give rise to any
liability in the event of such investigation, claim, suit or proceeding.
(e) All accruals for unpaid vacation pay, premiums for
unemployment insurance, health premiums, severance payments, pension plan
premiums, accrued wages, salaries and commissions and employee benefit plan
payments have been reflected in the books and records of Cepillos.
(f) Cepillos is not in default with respect to the payment of
any fee concerning social security, housing fund, retirement savings and any
other labor or social benefit required by law or contract in favor of their
employees.
SECTION 2.20. INSURANCE. The Cosmetics Division, its properties and the
Cosmetics Employees are insured under the insurance policies listed on SCHEDULE
2.20. All such policies are in full force and effect, all premiums with respect
thereto have been paid to the extent due, and no notice of cancellation or
termination has been received by the Company, Parent or Cepillos with respect to
any such policy.
SECTION 2.21. CUSTOMERS AND SUPPLIERS.
(a) SCHEDULE 2.21(a) sets forth a list of the ten largest
customers of the Cosmetics Division based on sales during each of the calendar
year ended December 31, 1999 and the seven months ended July 31, 2000, showing
the approximate total sales by the Cosmetics Division to each such customer
during each such period. Except as set forth on SCHEDULE 2.21(a), no customer
listed on SCHEDULE 2.21(a) has provided written notice to the Company of any
current intention by such customer to materially and adversely alter its
existing relationship with the Cosmetics Division.
(b) SCHEDULE 2.21(b) sets forth a list of the ten largest
suppliers of the Cosmetics Division based on purchases during each of the
calendar year ended December 31, 1999 and the seven months ended July 31, 2000,
showing the approximate total purchases by the Cosmetics Division from each such
supplier during each such period.
-18-
SECTION 2.22. BROKERS. Except for Banc of America Securities LLC, none
of the Company, Parent or Cepillos have dealt with any broker, finder or similar
agent with respect to the transactions contemplated by this Agreement, and none
of them are under any obligation to pay any broker's fee, finder's fee or
commission in connection with the transactions contemplated by this Agreement as
a result of any agreement to which the Company, Parent or Cepillos is a party
other than to Banc of America Securities LLC.
SECTION 2.23. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth
on SCHEDULE 2.23:
(a) The Company, Parent and Cepillos have complied, and will
at the Closing Date be in compliance, in all material respects with all
applicable Environmental Laws (as hereinafter defined), other than, in the case
of the Company and Parent, to the extent unrelated to the business or operations
of the Cosmetics Division and the use or ownership of the Purchased Assets.
(b) The Company, Parent and Cepillos own, hold or possess all
Permits which are necessary or required under the Environmental Laws to entitle
the Company, in connection with the business or operations of the Cosmetics
Division, and Cepillos to own or lease, operate and use its assets and to carry
on and conduct its current business and operations substantially as currently
conducted (the "ENVIRONMENTAL PERMITS"). Such Environmental Permits are in full
force and effect, no material violations are or have been recorded in respect
thereof, no proceeding is pending, or, to the knowledge of the Company and
Parent, threatened to revoke or limit any Environmental Permits thereof or to
adversely affect the rights of the Company, Parent and Cepillos under any
thereof, and the Company, Parent and Cepillos do not know of any basis for any
such proceeding. Except as set forth on SCHEDULE 2.15, the consummation of the
transactions contemplated in this Agreement will not result in the non-renewal,
revocation, expiration, withdrawal, ineffectiveness, termination, or any terms
of similar import, of any Environmental Permits.
(c) No facility or property leased, used, or owned by the
Company in connection with the business or operations of the Cosmetics Division
is listed on the National Priority List established by the United States
Environmental Protection Agency or on any other federal list that relates or
pertains to the disposal of hazardous or potentially hazardous substances, or on
any state list of hazardous waste disposal sites.
(d) To the knowledge of the Company and Parent, there is no
pending or threatened Environmental Claim (as hereinafter defined) against the
Company or Parent which is or could reasonably be expected to be material to the
business or operations of the Cosmetics Division, or against Cepillos. Within
the past three years, or, if not resolved, within any previous years, the
Company, Parent and Cepillos have not received any written claim, lawsuit,
notice, allegation, or other written communication from any person or entity
that alleges that, in connection with the business or operations of the
Cosmetics Division, the Company, Parent or Cepillos, their respective assets,
real and/or leased property, and/or business is, was or will be not in
compliance in any material respect with any Environmental Law or subject to
material liability or responsibility of any kind under or relating to any
Environmental Law.
-19-
(e) To the knowledge of the Company and Parent, there are no
present or past conditions relating to the Company or Parent in connection with
the business or operations of the Cosmetics Division or Cepillos, or their
respective assets, or any real property owned, leased or used or held for use or
intended to be used or held for use by the Company or Parent in connection with
the business or operations of the Cosmetics Division or Cepillos, or any
appurtenances thereto or improvements thereon, that could reasonably be expected
to lead to any material liability or obligation under any Environmental Law. The
Company's Cosmetics Division does not use, handle, manufacture, treat,
transport, receive, process, store, ship, generate, release, discharge, dump, or
dispose of any Hazardous Substances (as hereinafter defined) except where such
use has been in compliance in all material respects with all Environmental Laws.
To the knowledge of the Company and Parent, except for those that are or were
present in compliance in all material respects with all Environmental Laws,
there are now and have been in the past no Hazardous Substances located at, on,
in, under, or about any of the Company's, Parent's or Cepillos' respective
assets and/or real or leased property used or held for use in connection with
the business or operations of the Cosmetics Division.
(f) There has been no material Release of any Hazardous
Substance in connection with the business or operations of the Cosmetics
Division, at, on, about, under, adjacent to, or near any of the Company's,
Parent's or Cepillos' respective assets and/or real or leased or used property
and to the Company's and Parent's knowledge, none of such properties has been
used at any time as a landfill or waste disposal site. To the knowledge of the
Company and Parent, the Company and Parent in connection with the business or
operations of the Cosmetics Division, and Cepillos have not disposed of or
treated, or arranged for the disposal or treatment of any Hazardous Substances
at any site or location that was not authorized or licensed to receive such
materials for disposal or treatment, or at any site or location for which it has
received a notice of potential liability or request for information under the
Environmental Laws, or at any site or location which, pursuant to any
Environmental Law has been placed on any cleanup list, or is the subject of a
claim, order, decree, request, settlement, or other demand from any person or
entity for removal, remedial response, corrective action, abatement, or cleanup
or corrective work.
(g) The Company and Parent in connection with the business or
operations of the Cosmetics Division, and Cepillos do not use, and have not
used, do not place, and have not placed, any underground storage tank, separator
or other subsurface containment device (whether or not presently abandoned and
whether or not on property now or previously occupied by the Company, Parent or
Cepillos).
(h) There are no environmental reports and no material
environmental data, audits, or assessments in the possession of the Company,
Parent or any of their respective Affiliates describing the conditions of the
Company, or Parent, in connection with the business or operations of the
Cosmetics Division or Cepillos, their respective assets or any property owned,
leased, used or operated by the Company or Parent in connection with the
business or operations of the Cosmetics Division that have not been provided (in
true and correct form) to the Buyer.
-20-
As used herein, the following terms shall have the meanings indicated
below:
"DISPOSAL" and "THREATENED RELEASE" shall have the definitions assigned
thereto by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended through the Closing Date
("CERCLA").
"ENVIRONMENT" shall mean soil, surface waters, groundwaters, land,
surface or subsurface strata and ambient air.
"ENVIRONMENTAL CLAIM" shall mean any litigation, claim, proceeding,
order, directive, summons, complaint or citation, from any Governmental
Authority or any third person alleging potential liability or responsibility for
violation of any Environmental Laws or relating to an injury caused by Hazardous
Substances.
"ENVIRONMENTAL LAW" shall mean all applicable laws, federal, state,
provincial, local, and foreign laws, codes, principles of common law,
ordinances, statutes, regulations, and rules, and all orders, writs,
injunctions, decisions, directives, policies, guidelines, interpretations,
awards, judgments, and decrees or terms of similar import applicable to it or to
the assets, properties, and business thereof, pertaining to, relating to, or
arising out of the environment, environmental protection, pollution, the use,
storage, treatment, generation, transportation, processing, handling,
production, manufacturing, or disposal of materials (including Hazardous
Substances, as hereinafter defined), the release or discharge of substances into
the environment, health, safety, and occupational safety and health, and further
including, without limitation, those related to obtaining and maintaining in
force all environmental permits, licenses, registrations, and other governmental
authorizations, making all notifications, and involving all Governmental
Authorities in environmental activities as required and all of the foregoing as
amended through the Closing Date.
"HAZARDOUS SUBSTANCES" shall mean any substance, whether waste, liquid,
gaseous or solid matter, fuel, micro-organism, ray, odor, radiation, energy,
vector, plasma and organic or inorganic matter, which is, is deemed to be, or
becomes, alone or in any combination, a hazardous material, a hazardous
substance, hazardous waste, hazardous chemical, toxic chemical, a pollutant, a
contaminant, a deleterious substance, a source of pollution or contamination, or
term of similar import, under any Environmental Law.
"RELEASE" shall mean any accidental or intentional spilling, leaking,
pumping, pouring, emitting, discharging, injecting, escaping, leaching,
migrating, dumping or disposing into the air, land, surface water or ground
water or otherwise into the environment (including, the abandonment or
discarding of receptacles containing any Hazardous Substances). The term
"Release" shall also include, without limitation, the meaning set forth in
Section 101(22) of CERCLA.
SECTION 2.24. AFFILIATE TRANSACTIONS. Except as set forth on SCHEDULE
2.24, (a) Cepillos is not a party to any contract or arrangement with, or
indebted, either directly or indirectly, to the Company, its Affiliates, or any
of its or its Affiliates' officers, employees, directors or stockholders or
their immediate relatives, (b) none of such persons is indebted to Cepillos or
has
-21-
any direct or indirect ownership interest in, or any contractual or business
relationship with, any person with which the Company, Parent or Cepillos is or
was Affiliated and (c) the Purchased Assets are not subject to any contract or
arrangement with the Company, its Affiliates, or any of its or its Affiliates'
officers, employees, directors or stockholders or their immediate relatives.
SECTION 2.25. CEPILLOS CAPITALIZATION; NO SUBSIDIARIES.
(a) The authorized and outstanding capital stock of Cepillos
consists only of the Company Cepillos Shares and the Parent Cepillos Shares. All
of the outstanding capital stock of Cepillos is owned beneficially and of record
by the Company and Parent in the amounts set forth in the introduction of this
Agreement. The outstanding capital stock of Cepillos is duly authorized, validly
issued, fully paid and nonassessable (or substantially equivalent terms under
the laws of Mexico). Except as set forth on SCHEDULE 2.25(A), the Company
Cepillos Shares are owned by the Company and the Parent Cepillos Shares are
owned by Parent, in each case free and clear of any Liens.
(b) The Buyer will at the Closing acquire good and marketable
title to the Cepillos Shares, free and clear of any Liens.
(c) Other than pursuant to this Agreement, there is no
preemptive right, subscription right, option, warrant, call, right, contract,
agreement, commitment, understanding or arrangement with respect to the
issuance, sale, delivery, transfer, repurchase or redemption of the Cepillos
Shares or the capital stock of Cepillos, or with respect to any future offer,
sale or issuance of securities by Cepillos, including any right of conversion or
exchange under any security or other instrument.
(d) Cepillos has no subsidiaries. Cepillos does not own or
have the right to acquire any equity interest in any other corporation,
partnership, joint venture, trust or other business organization.
(e) To the knowledge of the Company and Parent, all material
records that presently exist and that relate to Cepillos are in the possession
or control of Cepillos and are located at the offices of Cepillos or of its
counsel or independent auditors.
(f) The minute books of Cepillos, copies of which have been
made available to the Buyer, contain accurate minutes of all actions taken at
all meetings of, and accurate consents to all actions taken without meetings by,
the Board of Directors (and any committees thereof) and the shareholders of
Cepillos, and the Shareholders Registry Book and the Capital Stock Variations
Book are up to date and contain all recordings as required by law.
(g) SCHEDULE 2.25(g) contains a true, correct and complete
list of all persons currently holding powers of attorney from Cepillos and a
summary statement as to the terms thereof.
(h) SCHEDULE 2.25(h) contains a true and correct and complete
list as of the date hereof of (i) all banks, trust companies, savings and loan
associations and brokerage firms
-22-
with which Cepillos has an account or a safe deposit box, (ii) the names of all
persons authorized to draw thereon, to have access thereto or to authorize
transactions therein and (iii) the names of all persons, if any, holding powers
of attorney from Cepillos and a summary statement as to the terms thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Company and Parent as
follows:
SECTION 3.01. ORGANIZATION, POWER AND STANDING.
(a) Buyer 1 is a corporation duly organized, validly existing
and in good standing under the laws of the State of New York. Buyer 2 is a
company duly organized, validly existing and in good standing under the laws of
France. The Buyer has full corporate or company power and authority to own,
lease and operate its properties and to carry on its business as such business
is now conducted.
(b) The Buyer has full corporate power and authority and has
taken all required action necessary to permit it (i) to execute, deliver and
carry out the terms of this Agreement and all other documents and instruments to
be executed by the Buyer pursuant to this Agreement (collectively, the "BUYER
DOCUMENTS") and (ii) to consummate the transactions contemplated hereby and
thereby. None of such actions will (with notice of time or lapse of time or
both) violate, conflict with or result in a breach of any of the terms,
conditions or provisions of the Buyer's certificate of incorporation, by-laws or
other organizational documents or of any law, permit, statute or administrative
regulation or agreement with any Governmental Authority.
(c) This Agreement constitutes, and when executed and
delivered by the Buyer at Closing each Buyer Document shall constitute, the
valid and legally binding obligation of the Buyer enforceable against it in
accordance with their respective terms.
SECTION 3.02. GOVERNMENT APPROVALS AND OTHER CONSENTS. Except for
filings under the HSR Act or as set forth on SCHEDULE 2.14 and SCHEDULE 3.02, no
Consent, including without limitation any consent, approval or authorization of
or declaration or filing with any Governmental Authority or any other third
party, is required on the part of the Buyer for or in connection with the
execution, delivery and performance of this Agreement or any Buyer Document or
the purchase of the Purchased Assets and the Cepillos Shares pursuant hereto or
any other transaction pursuant to this Agreement, except for those which, if not
obtained, would not have a material adverse effect on the ability of the Buyer
to perform its obligations under this Agreement.
SECTION 3.03. BROKERS. Except for PNB Paribas Corporate Finance, the
Buyer and its Affiliates have not dealt with any broker, finder or similar agent
with respect to the transactions contemplated by this Agreement, and none of
them is under any obligation to pay any broker's fee, finder's fee or commission
in connection with the transactions contemplated by this Agreement as a result
of any agreement to which the Buyer or its Affiliates is a party other than to
PNB Paribas Corporate Finance.
-23-
SECTION 3.04. FINANCIAL ABILITY. The Buyer has the financial capability
to consummate the transactions contemplated by this Agreement and the Buyer
understands that under the terms of this Agreement the Buyer's obligations
hereunder are not in any way contingent or otherwise subject to (a) the Buyer's
or any of its Affiliates' consummation of any financing arrangements or the
Buyer's or any of its Affiliates' obtaining any financing or (b) the
availability of any financing to the Buyer or any of its Affiliates.
ARTICLE IV
COVENANTS
SECTION 4.01. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) The Company and Parent shall permit the Buyer's officers,
employees, attorneys, consultants, accountants and other representatives access,
upon reasonable notice and during normal business hours throughout the period
prior to the Closing, to all of the properties, books, contracts, documents and
records of the Company and Cepillos which relate primarily to the business or
operation of the Cosmetics Division and shall furnish to the Buyer such
information as the Buyer may at any time and from time to time reasonably
request. Any such access shall be managed by and conducted through Xxxxxxxx X.
xxXxxxx and shall be subject to such additional limitations as the Company may
reasonably require to prevent disclosure of the transactions contemplated
hereby.
(b) The Confidentiality and Nonsolicitation Agreement by
Techpack International for the benefit of the Company and Banc of America
Securities LLC, dated April 20, 2000, shall remain in full force and effect, and
such agreement is and shall be applicable to the Buyer, Techpack International
and their respective Affiliates, each as an "Acquiror" therein, and all of their
respective officers, directors, partners, employees, agents and advisors.
SECTION 4.02. CONDUCT OF BUSINESS. From the date hereof until the
Closing Date, except with the prior written consent of the Buyer:
(a) The Company shall operate, and shall cause Cepillos to
operate, the Cosmetics Division only in the ordinary course of business
consistent with past practice and shall not permit Cepillos to effect any
extraordinary transactions (other than any such transactions expressly required
by applicable law or by this Agreement) that could result in any increase in the
Tax liability of Cepillos or a reduction in any Tax asset of Cepillos. Without
limiting the generality of the foregoing, the Company shall (x) use all
commercially reasonable efforts to preserve intact in all material respects the
Cosmetics Division's present business organizations and reputation and to
preserve its relationships with employees, creditors, customers and suppliers
and others having significant business relationships with the Cosmetics Division
and (y) not, without the prior written consent of the Buyer, directly or
indirectly, cause or permit any state of affairs, action or omission described
in clauses (i) through (xii) of Section 2.03.
-24-
(b) The Company and Parent shall comply in all material
respects in connection with the business and operations of the Cosmetics
Division, and shall cause Cepillos to comply in all material respects, with all
laws, orders and all terms of the Assumed Contracts, and promptly following
receipt thereof give the Buyer copies of any notice received by the Company,
Parent or Cepillos from any Governmental Authority or other person alleging any
material violation of any such law, order or contract.
(c) Without the prior written consent of the Buyer, the
Company shall not, and shall not permit Cepillos to, with respect to the
business or operations of the Cosmetics Division other than in the ordinary
course of business consistent with past practice, transfer any Cosmetics
Employee to any other division of the Company or Parent or any Affiliate
thereof, or transfer any employee of any other division of the Company or Parent
or any Affiliate thereof to the Cosmetics Division.
SECTION 4.03. EXCLUSIVITY. Prior to the Closing Date, or the earlier
termination of this Agreement in accordance with its terms, the Company and
Parent shall not, and shall not permit any stockholder, director, officer,
employee or agent of the Company, Parent or any of their respective Affiliates
to, directly or indirectly, (i) solicit any competing offers for the acquisition
of the Cosmetics Division or (ii) respond favorably to, negotiate or enter into
any agreement with respect to, or furnish any information concerning the
Cosmetics Division in response to, any offer or indication of interest with
respect the acquisition of the Cosmetics Division.
SECTION 4.04. CONSENTS AND APPROVALS. The Company and Parent, on the
one hand, and the Buyer on the other hand shall cooperate and use their
respective commercially reasonable efforts to obtain all Consents necessary to
consummate the transactions contemplated hereby which are required to be
obtained by applicable law or regulations or otherwise. The Company and Parent
shall use all commercially reasonable efforts (not including the payment of any
additional consideration) (i) to obtain all Consents which are listed on
SCHEDULE 2.14 and (ii) to obtain an amendment to the Industrial Building Lease
dated as of March 9, 1995 (the "ELK GROVE LEASE") between MG Investment
Properties and the Company for 0000 Xxxxxxx Xxxxxx, Xxx Xxxxx Xxxxxxx, Xxxxxxxx,
as extended, pursuant to which the Buyer shall be granted an option to renew the
Elk Grove Lease for an additional one-year term on substantially the same terms
as are in effect as of the date of this Agreement. To the extent the sale,
transfer or assignment of any Assumed Contract or Permit requires the consent of
any third party, this Agreement shall not constitute an agreement to effect such
sale, transfer or assignment if such action would constitute a breach or
violation of such Assumed Contract or Permit or any statute, rule or regulation.
If the Company or Parent are unable to obtain any Consent (other than any
Consent listed on SCHEDULE 2.14 and marked with an asterisk) prior to the
Closing, the Closing shall nonetheless take place and, thereafter, the Company
and Parent shall take or cause to be taken all commercially reasonable steps
(not including the payment of any additional consideration) requested by the
Buyer to secure such Consent after the Closing or otherwise to transfer or
provide to the Buyer the benefits of such Assumed Contracts or Permits, and the
Buyer shall provide the Company and Parent with reasonable assistance in
connection therewith.
-25-
SECTION 4.05. HSR ACT FILINGS. Each of the Buyer and the Company shall
promptly make, or cause to be made, any and all required filings under the HSR
Act or pursuant to the antitrust laws of any other Governmental Authority set
forth on SCHEDULE 3.02, and shall request early termination of the waiting
period required under the HSR Act or any other applicable antitrust laws. The
parties agree to cooperate and respond promptly to any inquiries or
investigations initiated by the Federal Trade Commission, the Department of
Justice or any other applicable Governmental Authority in connection with any
such filings. The Buyer shall pay all filing fees required by any Governmental
Authority in connection with such filings.
SECTION 4.06. REASONABLE EFFORTS. Each party hereto agrees to use its
commercially reasonable good faith efforts to obtain the satisfaction of the
conditions specified in this Agreement necessary to consummate the transactions
contemplated hereby. Notwithstanding anything to the contrary in Sections 4.04,
4.05 and 4.06, in complying with its obligations under such Sections hereof, (i)
neither Buyer nor any of its Affiliates shall be required to divest any of their
respective businesses, product lines or assets, (ii) except as expressly set
forth herein, neither Buyer nor any of its Affiliates shall be required to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have an adverse effect on the business, assets,
financial condition, results of operations or prospects of Buyer and its
affiliates taken as a whole or of Buyer combined with the Cosmetics Division
after the Closing, (iii) no party shall be required to agree to the imposition
of or to comply with, any condition, obligation or restriction on Buyer or any
of its Affiliates seeking to restrain or prohibit Buyer's or any of its
Affiliate's ownership or operation of all or any portion of the business or
assets of the Cosmetics Division, or of Buyer and its Affiliates, or to compel
Buyer or any of its Affiliates to dispose of or hold separate all or any portion
of the business or assets of the Cosmetics Division, or of Buyer and its
Affiliates, seeking to impose limitations on the ability of Buyer or any of its
Affiliates effectively to exercise full rights of ownership of the Cepillos
Shares or the Purchased Assets or seeking to require divestiture by Buyer or any
of its Affiliates of any Cepillos Shares or Purchased Assets, or (iv) Buyer
shall not be required to waive any of the conditions in Article V.
SECTION 4.07. COSMETICS EMPLOYEES. The Buyer shall offer employment to
all U.S. Employees, at a salary or hourly rate, as applicable, and with a
compensation package that, in the aggregate, is substantially similar to the one
he or she is currently receiving for service with the Company. As of the Closing
Date, the Buyer will assume all employee-related liabilities with respect to the
U.S. Employees who are hired by the Buyer to the extent that such liabilities
arise out of and relate to facts and circumstances that occur after the Closing
Date and that occur in connection with a U.S. Employee's employment with the
Buyer. Nothing in this Section 4.07 shall be construed to limit or restrict the
ability of the Buyer to terminate the employment of the U.S. Employees or to
maintain the terms of such employment, including any particular level of
benefits, except that each U.S. Employee shall be entitled to receive service
credit for the aggregate of his or her years of employment with the Company (and
its predecessors) and employment with the Buyer for purposes of determining
severance benefits to which he or she will be entitled under the Buyer's
employee severance plan, if any.
SECTION 4.08. ENDORSEMENT OF CHECKS, ETC. The Company hereby authorizes
the Buyer following the Closing to endorse for deposit only its name on and
collect for the Buyer's account any checks received in payment of any accounts
included in the Purchased Assets, and any
-26-
refunds of deposits, prepaid expenses and similar amounts included in the
Purchased Assets. If any amounts due to the Buyer are received by the Company,
the Company shall turn the same over to the Buyer.
SECTION 4.09. REFUNDS AND REMITTANCES. After the Closing, if the
Company or any of its Affiliates receive any refund or other amount which is a
Purchased Asset or is otherwise properly due and owing to the Buyer in
accordance with the terms of this Agreement, the Company promptly shall remit or
shall cause to be remitted, such amount to the Buyer at the address set forth in
Section 8.01. After the Closing, if the Buyer or any of its Affiliates receive
any refund or other amount which is an Excluded Asset or is otherwise properly
due and owing to the Company in accordance with the terms of this Agreement, the
Buyer promptly shall remit or shall cause to be remitted, such amount to the
Company at the address set forth in Section 8.01. After the Closing, if the
Buyer or any of its Affiliates receive any refund or other amount which is
related to claims (including workers' compensation), litigation, insurance or
other matters for which the Company or Parent is responsible hereunder, and
which amount is not a Purchased Asset, or is otherwise properly due and owing to
the Company in accordance with the terms of this Agreement, the Buyer promptly
shall remit, or cause to be remitted, such amount to the Company at the address
set forth in Section 8.01. After the Closing, if the Company or any of its
Affiliates receive any refund or other amount which is related to claims
(including workers' compensation), litigation, insurance or other matters for
which the Buyer is responsible hereunder, and which amount is not an Excluded
Asset, or is otherwise properly due and owing to the Buyer in accordance with
the terms of this Agreement, the Company promptly shall remit, or cause to be
remitted, such amount to the Buyer at the address set forth in Section 8.01.
SECTION 4.10. CONFIDENTIAL INFORMATION; NONCOMPETITION AND
NONSOLICITATION COVENANT.
(a) For a period of time commencing on the Closing Date and
ending on the third anniversary of the Closing Date, each of the Company, Parent
and Xxxxxx X. Xxxxx ("XXXXX") agrees that each of them shall keep confidential
all financial or other confidential and proprietary information primarily
concerning the Cosmetics Division known by the Company, Parent or Votis or any
of such person's respective Affiliates except: (i) as otherwise expressly
permitted pursuant to the terms of this Agreement, (ii) with the prior written
consent of the Buyer, (iii) as may be required by applicable law or court
process, or (iv) such information which is or becomes generally available to the
public other than as a result of a violation of this provision.
(b) In furtherance of the sale of the Purchased Assets and the
Cepillos Shares to the Buyer hereunder by virtue of the transactions
contemplated hereby, each of the Company, Parent and Votis covenants and agrees
that, for a period commencing on the Closing Date and ending on the second
anniversary of the Closing Date, none of the Company, Parent and Votis nor any
of their respective Affiliates will induce, solicit, attempt to persuade or
endeavor to entice away from the Cosmetics Division, or otherwise interfere with
the business relationship of the Cosmetics Division with any customer, employee
(to the extent that such employee's employment is not terminated by the Buyer
without cause) or consultant of the Cosmetics Division as of the Closing Date.
In addition, for the period commencing on the Closing Date and
-27-
ending on the second anniversary of the Closing Date, none of the Company,
Parent and Votis nor any of their respective Affiliates will directly or
indirectly, or by action in concert with others, own, manage, operate, join,
control, finance or participate in, or participate in the ownership, management,
operation, control or financing of, or be connected as a principal, agent,
representative, consultant, employee, investor, owner, partner, manager, joint
venturer or otherwise with, or permit its respective name to be used by or in
connection with, any business, enterprise or other entity engaged anywhere in,
or in competition with, the mascara packaging, lipstick packaging, nail
applicator, or closures for nail applicators, mascara or perfume bottle
packaging businesses of the Cosmetics Division as conducted as of the Closing
Date; PROVIDED that ownership of less than five percent (5%) of the economic or
voting interests of any corporation having its securities actively traded on a
national securities exchange or on the Nasdaq Stock Market shall not alone be
considered a violation of this subsection; PROVIDED, further, that the Company's
French affiliate may continue to sell caps for perfume bottles to the L'Oreal
Group to the same exent such business is currently conducted.
(c) In the event of a breach or threatened breach by any party
of the provisions of this Section 4.10, the non-breaching party shall be
entitled to seek an injunction restraining such party from such breach and such
other and further relief as may be proper and necessary to ensure compliance
with the provisions of this Section 4.10.
(d) Votis shall only be liable under this Section 4.10 for
breaches by him personally of the terms of this Section.
SECTION 4.11. TAX MATTERS.
(a) (i) The Buyer shall timely prepare and file with the
appropriate authorities all Tax returns, reports and forms of the Cepillos that
are required to be filed after the Closing Date and shall pay all Taxes due with
respect to such returns, reports and forms; PROVIDED, HOWEVER, that prior to
filing any such return for a Straddle Period (as defined hereinafter) the Buyer
will provide a copy of such return to the Company and give the Company
sufficient opportunity to review and provide comments thereto; PROVIDED FURTHER
that Parent and the Company shall reimburse the Buyer (in accordance with the
procedures set forth in Section 6.05) for any amount owed by Parent and the
Company pursuant to Section 6.05 with respect to the taxable periods covered by
such returns, reports or forms. Parent and the Company shall timely prepare and
file with the appropriate authorities all Tax returns, reports and forms of
Cepillos that are required to be filed on or before the Closing Date (the
"CEPILLOS RETURNS"). Parent and the Company shall pay all Taxes due with respect
to such Cepillos Returns, reports and forms; all such Cepillos Returns, reports
and forms shall be filed in a manner consistent with past practice of Cepillos.
The Buyer, Parent and the Company agree to cause Cepillos to file all Tax
returns, reports and forms for the period including the Closing Date on the
basis that the relevant taxable period ended as of the close of business on the
Closing Date, unless the relevant taxing authority will not accept a return,
report or form filed on that basis.
(ii) Parent, the Company, Cepillos and the Buyer
shall reasonably cooperate, and shall cause their respective Affiliates,
officers, directors, agents, employees, shareholders, partners and other
representatives reasonably to cooperate, in preparing and filing
-28-
all returns, reports and forms relating to Taxes, including maintaining and
making available to each other all records necessary in connection with Taxes
and in resolving all disputes and audits with respect to all taxable periods
relating to Taxes.
(b) All transfer, documentary, sales, use, registration and
other such Taxes (including all applicable real estate transfer or gains Taxes)
and related fees (including any penalties, interest and additions to Tax)
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Buyer, and the Buyer, the Company and Parent shall
cooperate in timely making all filings, returns, reports and forms as may be
required to comply with the provisions of all Tax laws, PROVIDED that (i) Parent
and the Company shall pay any stock transfer Taxes due as a result of the sale
of the Cepillos Shares and (ii) each of (A) the Buyer and (B) Parent and the
Company shall be required to pay one-half of all transfer, documentary, sales,
use, registration and other such Taxes (including all applicable real estate
transfer or gains Taxes) and related fees (including any penalties, interest and
additions to Tax) incurred in connection with the purchase and sale in Mexico of
any of the Purchased Assets in connection with this Agreement and the
transactions contemplated hereby, PROVIDED that the Buyer's total liability
under this subsection (ii) shall in no event exceed Five Hundred Thousand
Dollars ($500,000).
(c) Parent and the Company shall cause the provisions of any
Tax sharing agreement between Parent, the Company and any of their respective
Affiliates (other than Cepillos), on the one hand, and Cepillos, on the other
hand, to be terminated on or before the Closing Date.
SECTION 4.12. INFORMATION TECHNOLOGIES. For a period of one year
following the Closing, the Company shall make available to the Buyer access to
and use of its MAPICS information processing software pursuant to the Services
Agreement (the "SERVICES AGREEMENT") to be entered into by and between the
Company and the Buyer as of the Closing Date on such terms and conditions as are
set forth on SCHEDULE 4.12.
SECTION 4.13. CERTAIN EQUIPMENT. SCHEDULE 4.13 sets forth the equipment
included in the Purchased Assets which is located in Bonneval, France (the
"BONNEVAL EQUIPMENT") and Morristown, Tennessee (the "MORRISTOWN EQUIPMENT").
With respect to the Bonneval Equipment, the Company and the Buyer shall act in
accordance with Schedule 4.13. With respect to the Company's premises in
Morristown, Tennessee known as "Plant C", the Company and the Buyer shall enter
into a lease in the form of EXHIBIT 4.13 (the "MORRISTOWN LEASE").
SECTION 4.14. ESCROW AGREEMENT. The Company and the Buyer shall enter
into the Escrow Agreement as of the Closing Date.
SECTION 4.15. USE OF NAME. The Company and Parent shall cease to use
and shall not license or permit any third party to use any of the Trademarks and
any trade name, trade dress, service xxxx, slogan, logo or trademark and the
like which is deceptively similar to any of the Trademarks. Nothing set forth in
this Agreement shall prevent the Company and Parent from using or licensing to
use any other trade name, trade dress, service xxxx, slogan, logo or trademark
including the name and xxxx "Anchor" and any name or xxxx incorporating the name
-29-
"Anchor"; PROVIDED, HOWEVER, that for a period of five years from the Closing
Date the Company and Parent shall not use, transfer, sell, convey or license for
use the xxxx "Anchor" and any name or xxxx incorporating the name "Anchor" to
any business, enterprise or other entity anywhere in competition with the
mascara packaging, lipstick packaging, nail applicator, or closures for nail
applicators, mascara or perfume bottle packaging businesses of the Cosmetics
Division as conducted as of the Closing Date; PROVIDED FURTHER, that Buyer may
use, for the limited purpose of transitioning the Cosmetics Division to new
names and marks, the name and xxxx "Anchor" for the one-year period following
the Closing Date.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.01. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. The
obligation of the Buyer to purchase the Purchased Assets and the Cepillos Shares
is expressly subject to the fulfillment or express written waiver of the
following conditions on or prior to the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES TRUE; OBLIGATIONS
PERFORMED. Each of the representations and warranties contained in Article II
shall be true and correct in all respects at and as of the date hereof and at
and as of the Closing Date with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all respects as of such date or time), unless any such failures
to be true and correct, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect; the Company and Parent
shall have performed in all material respects, on or before the Closing Date,
all covenants, agreements and obligations contained in this Agreement which by
the terms hereof are required to be performed by the Company and Parent,
respectively, on or before the Closing Date; and the Buyer shall have received a
certificate signed by an authorized officer of each of the Company and Parent to
such effect.
(b) REQUIRED CONSENTS. The Company will have obtained all
Consents listed on SCHEDULE 2.14 and marked with an asterisk.
(c) ENVIRONMENTAL PERMITS. The Buyer shall have obtained all
Permits set forth on SCHEDULE 2.15 and marked with an asterisk; PROVIDED,
HOWEVER, that the foregoing shall not be condition to the obligation of the
Buyer to purchase the Purchased Assets and the Cepillos Shares if (A) the Buyer
shall not have used commercially reasonable efforts to obtain such Permits or
(B) the failure to obtain such Permits would not reasonably be expected to
restrict in any material respect the Buyer's ability to operate the Cosmetics
Division's business and operations that are located in the United States
following the Closing.
(d) NO INJUNCTION, ETC. No action or proceeding by or before
any Governmental Authority shall be pending or threatened challenging or seeking
to restrain or prohibit the transactions contemplated by this Agreement, the
Services Agreement, the Escrow Agreement, the Morristown Lease and the other
Seller Documents. No order, decree, temporary restraining order, preliminary
injunction, permanent injunction or other order issued by any
-30-
Governmental Authority preventing the transactions contemplated by this
Agreement, the Services Agreement, the Escrow Agreement, the Morristown Lease
and the other Seller Documents shall be in effect.
(e) LEGAL OPINIONS FROM COUNSEL FOR THE COMPANY. Buyer shall
have received the written opinions of (i) Xxxxx Xxxxxxxx Xxxxxx y Xxxxxxxx Xxx,
S.C. and (ii) Xxxxxx, Hall & Xxxxxxx, counsel for the Company and Parent, dated
as of the Closing Date and in form and substance reasonably satisfactory to the
Buyer.
(f) HSR ACT. The waiting period under the HSR Act applicable
to the transactions contemplated by this Agreement shall have expired or been
terminated and any approvals or waiting periods required pursuant to the
antitrust laws of any other Governmental Authority set forth on SCHEDULE 3.02
shall have been obtained or shall have expired or been terminated, as the case
may be.
(g) INSTRUMENTS OF TRANSFER. The Company and Parent shall have
delivered to the Buyer such bills of sale, assignments and other instruments of
transfer as are reasonably necessary to transfer title to the Purchased Assets
and the Cepillos Shares to the Buyer as contemplated by Article I, including the
Assignment Agreement.
(h) LEASES. The Company shall have assigned to the Buyer its
rights under its leases for its facility at Elk Grove, Illinois.
(i) ACTIONS AND PROCEEDINGS. Prior to the Closing, all
actions, proceedings, instruments and documents required to carry out the
transactions contemplated hereby, and all other legal matters required for such
transactions, shall have been reasonably satisfactory to the Buyer and its
counsel, and the Buyer shall have received (i) the Services Agreement, duly
executed by the Company, (ii) the Morristown Lease, duly executed by the
Company, (iii) the Escrow Agreement, duly executed by the Company, and (iv) such
other ancillary closing documents as the Buyer or its counsel may reasonably
request.
SECTION 5.02. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS. The
obligation of the Company to sell the Purchased Assets and the Company Cepillos
Shares, and the Parent to sell the Parent Cepillos Shares, is expressly subject
to the fulfillment or express written waiver of the following conditions on or
prior to the Closing Date:
(a) REPRESENTATIONS AND WARRANTIES TRUE; OBLIGATIONS
PERFORMED. Each of the representations and warranties contained in Article III
shall be true and correct in all respects at and as of the date hereof and at
and as of the Closing Date with the same effect as though such representations
and warranties had been made at and as of such time, other than representations
and warranties that speak as of a specific date or time (which need only be true
and correct in all respects as of such date or time), unless any such failures
to be true and correct, either individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the ability of the
Buyer to perform its obligations under this Agreement; the Buyer shall have
performed in all material respects, on or before the Closing Date, all
covenants, agreements and obligations contained in this Agreement which by the
terms hereof are required to be performed by the Buyer, on or before the Closing
Date; and the Company and Parent shall have received a certificate signed by an
authorized officer of the Buyer to such effect.
-31-
(b) LEGAL OPINION FROM COUNSEL FOR BUYER. The Company shall
have received the written opinion of Xxxxxxxxx & Xxxxxxx, counsel for Buyer,
dated the Closing Date and in form and substance reasonably satisfactory to the
Company and Parent.
(c) NO INJUNCTION, ETC. No action or proceeding by or before
any Governmental Authority shall be pending or threatened challenging or seeking
to restrain or prohibit the transactions contemplated by this Agreement, the
Services Agreement, the Escrow Agreement and the other Buyer Documents. No
order, decree, temporary restraining order, preliminary injunction, permanent
injunction or other order issued by any Governmental Authority preventing the
transactions contemplated by this Agreement, the Services Agreement, the Escrow
Agreement, the Morristown Lease, and the other Buyer Documents shall be in
effect.
(d) HSR ACT. The waiting period under the HSR Act applicable
to the transactions contemplated by this Agreement shall have expired or been
terminated and any approvals or waiting periods required pursuant to the
antitrust laws of any other Governmental Authority set forth on SCHEDULE 3.02
shall have been obtained or shall have expired or been terminated, as the case
may be.
(e) PURCHASE PRICE. The Buyer shall have paid the Purchase
Price less the Purchase Price Escrow Amount to the Company and the Purchase
Price Escrow Amount and the Additional Escrow Amount to the Escrow Agent, all in
accordance with the provisions of Article I of this Agreement.
(f) ASSUMPTION OF LIABILITIES. The Buyer shall have delivered
to the Company instruments of transfer reasonably acceptable to the Company
pursuant to which the Buyer shall assume the Assumed Liabilities including, but
not limited to, such assumption instruments as may be reasonably requested by
the lessors under any leases referenced in this Agreement.
(g) ACTIONS AND PROCEEDINGS. Prior to the Closing, all
actions, proceedings, instruments and documents required to carry out the
transactions contemplated hereby, and all other legal matters required for such
transactions, shall have been reasonably satisfactory to the Company and its
counsel, and the Company shall have received (i) the Services Agreement, duly
executed by the Buyer, (ii) the Morristown Lease, duly executed by the Buyer,
(iii) the Escrow Agreement, duly executed by Buyer, and (iv) such other
ancillary closing documents as the Company or its counsel may reasonably
request.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
SECTION 6.01. SURVIVAL. The Company, Parent and the Buyer agree that
the representations and warranties contained in this Agreement shall survive the
Closing for a period
-32-
of two (2) years and no claim for indemnification resulting from the breach of
any representation or warranty set forth herein shall be made more than two (2)
years after the Closing Date, except that with respect to (i) the
representations and warranties contained in Section 2.23 (Compliance with
Environmental Laws), the period of two (2) years shall instead be three (3)
years and (ii) the representations and warranties contained in Section 2.05
(Taxes), the period of two (2) years shall instead extend until the expiration
of the applicable statute of limitations relating thereto. The Buyer shall not
be entitled to make any claim for indemnification under Section 6.02(iii) at any
time after the third anniversary of the Closing Date. Any claims or notices for
indemnification made prior to the expiration of the applicable survival period
as set forth in this Section and setting forth with reasonable specificity the
nature and scope of such claim shall survive the expiration of the applicable
survival period for purposes of this Article VI, PROVIDED that, unless the
parties otherwise agree, such claim shall expire nine (9) months after such
claim is made unless the Buyer has commenced a lawsuit with respect to such
claim.
SECTION 6.02. INDEMNIFICATION OF BUYER. Subject to Section 6.01 and
except as otherwise set forth in Section 6.05, each of the Company and Parent
hereby jointly and severally indemnifies and agrees to defend and hold harmless
the Buyer and its Affiliates and their respective officers, directors, agents,
employees, shareholders, partners and other representatives from and against any
and all claims (including claims of creditors of the Company), demands, actions,
causes of actions, losses, costs, damages, liabilities, obligations, taxes,
fees, liens, settlements, judgments, penalties and expenses including, without
limitation, reasonable attorneys' fees (collectively, "LOSSES") incurred by such
indemnified party by reason of, resulting from or arising out of (i) the breach
of any representation or warranty of the Company or Parent set forth herein,
(ii) the breach, non-fulfillment or non-performance of any of the covenants or
agreements of the Company or Parent set forth in this Agreement, the Services
Agreement, the Escrow Agreement or any of the other Seller Documents, (iii) any
HSE Matter (as hereinafter defined), (iv) any existing or future liability
connected with any Company Benefit Plan, (v) the failure by the Company or
Parent to pay or otherwise discharge when due and payable any Excluded Liability
or (vi) the conduct of the business of the Company, other than the Cosmetics
Division, or the ownership of the Excluded Assets after the Closing Date.
For purposes of Section 6.02, "HSE MATTER" shall mean any liability
pertaining to the Company, Parent or Cepillos or their respective assets,
liabilities, or real or leased property that is in existence on or prior to the
Closing Date relating to Hazardous Substances or any Environmental Law; the
obligations under or requirements imposed by the Environmental Laws pertaining
to the Company, Parent or Cepillos or their respective assets, liabilities, or
real or leased property on or prior to the Closing Date; the use, presence,
existence, release, emanation, emission, dispersal, migration, leaching,
discharge, escape, generation, or disposal of any Hazardous Substance in
connection with the Company, Parent or Cepillos or their respective assets,
liabilities, or real or leased property on or before the Closing Date; any
liability for any health effect or safety consideration that relates to a
violation of any Environmental Law and is related to or in connection with the
Company or its assets, liabilities, or real or leased property on or prior to
the Closing Date; any liability involving matters regulated under the
Environmental Laws identified, alluded to, mentioned, described, or indicated in
any environmental assessment report pertaining to the Company, Parent or
Cepillos or their respective assets, liabilities, or real or leased property on
or prior to the Closing Date; or any
-33-
liabilities or obligations of the Company, Parent or Cepillos or their
respective assets, liabilities, or real or leased property at any time on or
prior to the Closing Date pursuant to the Environmental Laws.
Notwithstanding the foregoing,
(a) the Company's and Parent's obligation and liability for
any and all such Losses under Section 6.02 (other than pursuant to Section 6.02
(iv) or (v)) shall not exceed in the aggregate the amount of Fifteen Million
Dollars ($15,000,000);
(b) the Company and Parent shall have no obligation to
indemnify or hold harmless the Buyer with respect to any single Loss which is
less than Twenty Five Thousand Dollars ($25,000); PROVIDED that such single Loss
is not one of a series of related Losses that aggregate to Twenty Five Thousand
Dollars ($25,000) or more;
(c) the Company and Parent shall have no obligation to
indemnify or hold harmless the Buyer except to the extent that the aggregate
amount of Losses incurred by the Buyer (excluding Losses for which
indemnification would not be available as a result of clause (b) above) exceeds
One Hundred Seventy Five Thousand Dollars ($175,000) (subject to the other
limitations contained in this Article VI);
(d) the Company and Parent shall not be obligated to indemnify
or hold harmless the Buyer with respect to Losses relating to HSE Matters,
Environmental Laws, Environmental Claims or any breach of the representations
and warranties contained in Section 2.23, except:
(i) to the extent the Buyer has received (1) any
notice or claim by or from any Governmental Authority or other third party
relating to the performance of remedial action or a demand for payment or (2)
any assessment by any Governmental Authority of any fine, penalty or damages,
(ii) in reasonable settlement of a written claim of
noncompliance with any Environmental Laws asserted by any Governmental Authority
or other third party, or
(iii) to the extent the Buyer makes a reasonable and
good faith determination that remedial action is required in order to be in
compliance with Environmental Laws;
(e) the Company and Parent shall not be obligated to indemnify
or hold harmless the Buyer with respect to Losses relating to HSE Matters,
Environmental Laws, Environmental Claims or any breach of the representations
and warranties contained in Section 2.23 arising out of any environmental
testing (which includes any sampling, surveying, digging, drilling or similar
activities performed for the purpose of determining compliance with
Environmental Laws) that is not required (1) under applicable law, (2) by a
Governmental Authority or (3) by a Governmental Authority or insurance company
in connection with an expansion or modification of Cosmetics Division
facilities. The Buyer agrees (i) to use
-34-
commercially reasonable efforts (including agreeing to pay reasonable additional
costs or premiums for insurance coverage) to select an insurance provider that
shall not require any such environmental testing and (ii) to give prior written
notice to the Company in the event any environmental testing is to be performed
as contemplated by Section 6.02(e)(3).
(f) the Company and Parent shall not be obligated to indemnify
or hold harmless the Buyer under Section 6.02 with respect to Losses (other than
Losses in connection with Third Party Claims) arising out of any breach of the
representations and warranties of the Company and Parent (including as such
breach may be otherwise indemnifiable as a Loss relating to an HSE Matter,
Environmental Laws or an Environmental Claim) to the extent that, as of the date
of this Agreement, (i) the Buyer (A) has actual knowledge of a particular fact
or circumstance and (B) has actual knowledge that the existence of such fact or
circumstance constitutes a breach of such representations and warranties and
(ii) the Company and Parent were unaware (A) of such fact or circumstance and
(B) that the existence of such fact or circumstance would constitute a breach of
such representations and warranties; PROVIDED, HOWEVER, that if the Company or
Parent asserts that this Section 6.02(f) is applicable to a particular claim by
Buyer under Section 6.02, then the Company or Parent, as the case may be, shall
have the burden of proving the matters set forth in this Section 6.02(f); and
PROVIDED, FURTHER that proof that the Buyer, Company or Parent, as the case may
be, had access to a document containing such fact or describing such
circumstance shall not be proof in and of itself that the Buyer, Company or
Parent, as the case may be, had actual knowledge of such fact or circumstance;
for purposes of this Section 6.02(f) and Section 6.08, the term "Buyer" shall be
deemed to include Pechiney;
(g) the Company and Parent shall have no obligation to
indemnify the Buyer for any reductions in value calculated using a "multiplier"
or any other similar method having a similar effect; and
(h) the Company and Parent shall have no obligation for any
indemnifiable Loss suffered by the Buyer to the extent of that amount relating
to such matter that has been specifically taken account of in Net Working
Capital, as determined finally in accordance with Section 1.10.
In determining the foregoing thresholds and in otherwise determining
the amount of any Losses (including any Tax indemnity payments under Section
6.05(a)) for which the Buyer is entitled to assert a claim for indemnification,
the amount of any such Losses shall be determined after (1) deducting therefrom
the amount of any insurance proceeds or other third party recoveries received by
the Buyer in respect of such Losses (which recoveries the Buyer agrees to use
commercially reasonable efforts, at the Buyer's expense, to obtain) and the
amount of any tax benefit realized in the year in which the indemnity payment is
made and (2) increasing such amount to take account of any tax cost incurred by
the Buyer (or its Affiliates) arising from the receipt of the indemnity payment.
If an indemnification payment is received by the Buyer, and the Buyer later
receives insurance proceeds, other third party recoveries, or tax benefits in
respect of the related Losses, the Buyer shall promptly pay to the Company a sum
equal to the lesser of (i) the actual amount of insurance proceeds, other third
party recoveries, or tax benefit or (ii) the actual amount of the
indemnification payment previously paid by the Company with respect to such
Losses. In computing the amount of such tax cost or tax benefit, the Buyer shall
-35-
be deemed to recognize all other items of income, gain, loss, deduction or
credit before recognizing any item arising from the receipt of the indemnity
payment or the incurrence or payment of any Loss.
SECTION 6.03. INDEMNIFICATION OF COMPANY. Subject to Section 6.01, the
Buyer hereby indemnifies and agrees to defend and hold harmless the Company and
its Affiliates and their respective officers, directors, agents, employees,
shareholders, partners, other representatives from and against any and all
Losses incurred by such indemnified party by reason of, resulting from or
arising out of (i) the breach of any representation or warranty of the Buyer set
forth herein, (ii) the breach, non-fulfillment or non-performance of any of the
covenants or agreements of the Buyer set forth herein, (iii) the failure by the
Buyer to pay or otherwise discharge when due and payable any Assumed Liability
or (iv) the conduct of the business of the Cosmetics Division or the ownership
of the Purchased Assets and the Cepillos Shares after the Closing Date.
SECTION 6.04. PROCEDURE FOR THIRD PARTY AND ENVIRONMENTAL
INDEMNIFICATION.
(a) If any party (the "INDEMNIFIED PARTY") receives notice of
the commencement of any action or proceeding or the assertion of any claim by a
third party or the imposition of any penalty or assessment for which indemnity
may be sought under Section 6.02 or Section 6.03 (a "THIRD PARTY CLAIM"), and
such Indemnified Party intends to seek indemnity pursuant to this Article VI,
the Indemnified Party shall promptly provide the other party (the "INDEMNIFYING
PARTY") with notice of such Third Party Claim. The Indemnifying Party shall be
entitled to participate in or, at its option, assume the defense, appeal or
settlement of such Third Party Claim. Such defense or settlement shall be
conducted through counsel selected by the Indemnifying Party and approved by the
Indemnified Party, which approval shall not be unreasonably withheld or delayed,
and the Indemnified Party shall fully cooperate with the Indemnifying Party in
connection therewith. The Indemnified Party may participate in the defense or
settlement of such Third Party Claim at its own expense, provided that if the
Indemnifying Party fails to assume the defense or settlement of any Third Party
Claim within twenty (20) business days after receipt of notice thereof from the
Indemnified Party, the Indemnified Party shall have the right to undertake the
defense, appeal or settlement of such Third Party Claim at the expense and for
the account of the Indemnifying Party. The Indemnifying Party shall not settle
any Third Party Claim the defense or settlement of which is controlled by it
without the Indemnified Party's prior written consent (which consent shall not
be unreasonably withheld or delayed), unless the terms of such settlement or
compromise release such Indemnified Party from any and all liability and
obligation with respect to such Third Party Claim. The Indemnified Party shall
not settle any Third Party Claim the defense or settlement of which is
controlled by it without the Indemnifying Party's prior written consent (which
consent shall not be unreasonably withheld or delayed), unless the terms of such
settlement or compromise release such Indemnifying Party from any and all
liability and obligation with respect to such Third Party Claim.
(b) In any case of a claim against the Company under Section
6.02 relating to HSE Matters, Environmental Laws, Environmental Claims or any
breach of the representations and warranties contained in Section 2.23 (each, an
"HSE CLAIM"), to the extent reasonably
-36-
practicable given the exigencies of the circumstances, the Buyer shall provide
the Company with the opportunity to consult reasonably in advance with the Buyer
and, if the Buyer has control over the matter pursuant to Section 6.04(a) or
otherwise, give reasonable consideration to the Company's requests, comments and
advice with respect to (i) the scope and type of any investigation or remedial
action to be taken or implemented, (ii) the selection of consultants,
contractors and other third-parties with respect to any such investigation or
remedial action and (iii) the form and substance of any plan, report or
submission to be transmitted to any Governmental Authority or third party
regarding any such investigation or remedial action (including with respect to
the scope and type of such investigation or remedial action). If the Buyer has
control over the matter pursuant to Section 6.04(a) or otherwise, the Company
shall be entitled to participate, at its own expense, in any meetings between
the Buyer or its consultants and representatives of any Governmental Authority
or third party relating to any such HSE Claim, except to the extent such
Governmental Authority or third party will not permit the Company to so
participate. The Company shall maintain as confidential, except as otherwise
required by applicable law, any non-public information exchanged or obtained in
the course of such consultation. In addition, the Buyer shall (i) retain and,
upon the Company's request, provide to the Company any records and information
which are reasonably relevant to such HSE Claim, (ii) provide the Company during
normal business hours and upon reasonable prior request, reasonable access to
any area on the Purchased Assets related to any such HSE Claim and (iii) make
employees of the Buyer available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Notwithstanding the foregoing, (1) if the HSE Claim involves a Third Party
Claim, Buyer shall be under no obligation to disclose to the Company, or to give
the Company access to, any information as to which attorney-client privilege may
be available until a mutually satisfactory joint defense agreement has been
executed by the Company, Buyer and, if applicable, Cepillos, and (2) if the HSE
Claim does not involve a Third Party Claim, Buyer shall not be required to give
the Company access to any information, personnel or consultants applicable to
such HSE Claim upon the commencement of any litigation involving the Company,
the Buyer and, if applicable, Cepillos regarding such HSE Claim except to the
extent required by the discovery rules applicable to such litigation.
SECTION 6.05. TAX INDEMNITY.
(a) The Company and Parent, jointly and severally, shall
indemnify the Buyer and its Affiliates (including, after the Closing Date,
Cepillos) and their respective officers, directors, agents, employees,
shareholders, partners and other representatives and hold them harmless from (i)
all Taxes of Cepillos for the Pre-Closing Tax Period and all Losses of Buyer and
its Affiliates (including Cepillos) associated with such Taxes, (ii) all Losses
(as a result of Treasury Regulation 1.1502-6(a) or otherwise) incurred by such
indemnified party by reason of, resulting from, related to, or arising out of
Taxes of Parent or the Company or any Affiliate of Parent or the Company (other
than Cepillos) and (iii) any Tax liability of Cepillos resulting therefrom.
(b) In the case of any taxable period that includes (but does
not end on) the Closing Date (a "STRADDLE PERIOD"):
-37-
(i) real, personal and intangible property Taxes
("PROPERTY TAXES") of Cepillos for the Pre-Closing Tax Period shall be equal to
the amount of such Property Taxes for the entire Straddle Period multiplied by a
fraction, the numerator of which is the number of days during the Straddle
Period that are in the Pre-Closing Tax Period and the denominator of which is
the number of days in the Straddle Period; and
(ii) the Taxes of Cepillos (other than Property
Taxes) for the Pre-Closing Tax Period shall be computed as if such taxable
period ended as of the close of business on the Closing Date.
(c) Parent's and the Company's indemnity obligation in respect
of Taxes for a Straddle Period shall initially be effected by their payment to
the Buyer of the excess of (i) such Taxes for the Pre-Closing Tax Period over
(ii) the amount of such Taxes paid by Parent, the Company or any of their
affiliates (other than Cepillos) at any time plus the amount of such Taxes paid
by Cepillos on or prior to the Closing Date. Parent and the Company shall
initially pay such excess to the Buyer within thirty (30) days after the return,
report or form with respect to the final liability for such Taxes is required to
be filed (or, if later, is actually filed). If the amount of such Taxes paid by
Parent, the Company or any of their affiliates (other than Cepillos) at any time
plus the amount of such Taxes paid by Cepillos on or prior to the Closing Date
exceeds the amount payable by Parent and the Company pursuant to the preceding
sentence, the Buyer shall pay to Parent and the Company the amount of such
excess within thirty (30) days after the return, report or form with respect to
the final liability for such Taxes is required to be filed. The payments to be
made pursuant to this paragraph by Parent, the Company or the Buyer with respect
to a Straddle Period shall be appropriately adjusted to reflect any final
determination with respect to Straddle Period Taxes.
(d) The following procedures shall apply for indemnification
of Tax claims:
(i) If a claim shall be made by any taxing authority,
which, if successful, will likely result in an indemnity payment to the Buyer,
its Affiliates or any of their respective officers, directors, agents,
employees, shareholders, partners and other representatives pursuant to Section
6.05, the Buyer shall promptly notify Parent and the Company in writing of such
claim (a "TAX CLAIM").
(ii) With respect to any Tax Claim (other than a Tax
Claim relating solely to Taxes of Cepillos for a Straddle Period), the Company
may control all proceedings taken in connection with such Tax Claim (including
selection of counsel) and, without limiting the foregoing, may in its sole
discretion pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with any taxing authority with respect thereto, and
may, in its sole discretion, either pay the Tax claimed and xxx for a refund
where applicable law permits such refund suits or contest the Tax Claim in any
permissible manner; PROVIDED that the Company shall obtain the prior written
consent of the Buyer before entering into any settlement of such claim; and
PROVIDED FURTHER that the Buyer and counsel of its choice shall be permitted to
participate in any proceedings in connection with a Tax Claim at the Buyer's
expense. Parent and the Buyer shall jointly control all proceedings taken in
connection with any Tax Claim relating solely to Taxes of Cepillos for a
Straddle Period.
-38-
(iii) The Buyer, Cepillos and each of their
respective Affiliates shall cooperate with Parent and the Company in contesting
any Tax Claim, which cooperation shall include, without limitation, the
retention and (upon Parent's or the Company's request) the provision to Parent
and the Company of records and information which are reasonably relevant to such
Tax Claim, and making employees available on a mutually convenient basis to
provide additional information or explanation of any material provided hereunder
or to testify at proceedings relating to such Tax Claim.
(iv) No party shall settle a Tax Claim relating
solely to Taxes of Cepillos for a Straddle Period without each of the other
party's prior written consent, which consent shall not be unreasonably withheld.
(e) Notwithstanding the above, Company and Parent shall not be
required to indemnify the Buyer and its Affiliates for any Losses incurred by
reason of, resulting from, related to, or arising out of Taxes required to be
paid by Buyer under Section 4.11(b) of this Agreement or to the extent included
in the Assumed Liabilities.
SECTION 6.06. CERTAIN LIMITATIONS. The parties hereto agree that the
Company and Parent (i) shall be liable to the Buyer or Cepillos for up to a
maximum amount of $100,000 in respect of the reasonable and verifiable costs or
expenses associated with any repair, replacement or modification of the waste
water system (including the installation of any waste water treatment facility)
at the Cepillos facility located in Matamoros, Mexico undertaken by the Buyer or
Cepillos in connection with any excess waste water discharge at such Cepillos
facility, if reasonably necessary in order for the Cepillos facility to operate
in the ordinary course of business in compliance with Environmental Laws at any
time prior to the third anniversary of the Closing Date, and (ii) shall not be
liable to the Buyer for the installation of a fire extinguishing sprinkler
system at the Cepillos facility located in Matamoros, Mexico, PROVIDED that,
with respect to clause (ii) above, if at any time prior to the third anniversary
of the Closing Date the Buyer or Cepillos is ordered by a court or Governmental
Authority in order to be in compliance with Environmental Laws to install any
such sprinkler system (unless such order is made at the suggestion of Buyer or
Cepillos), the Company and Parent shall jointly and severally indemnify the
Buyer and Cepillos pursuant to Section 6.02 for any reasonable and verifiable
costs or expenses attributable to the installation of such sprinkler system up
to a maximum amount of $200,000. Any liability of the Company and Parent to the
Buyer pursuant to this Section 6.06 shall not be subject to, nor shall in any
way be applicable to or count towards, the limitations set forth in Section
6.02(a), 6.02(b) and 6.02(c) on the Company's and Parent's obligation to
indemnify the Buyer. Notwithstanding any other provision in this Agreement to
the contrary, the remedies set forth in this Section 6.06 shall be the sole and
exclusive remedies of the Buyer with respect to liabilities for the costs and
expenses associated with any repair, replacement or modification of the waste
water system or the installation of the fire extinguisher sprinkler system as
set forth in this Section 6.06.
SECTION 6.07. REMEDIES EXCLUSIVE. Except with respect to the provisions
of Section 4.10, the remedies provided in this Article VI shall be the exclusive
remedies of the parties hereto after the Closing in connection with any breach
of a representation or warranty, non-performance, partial or total, of any
covenant or agreement contained herein or any other matter relating to the
transactions contemplated hereby.
-39-
SECTION 6.08. CERTAIN MATERIAL ADVERSE EFFECTS. The Company and Parent
shall not be obligated to indemnify or hold harmless the Buyer under Section
6.02 with respect to Losses (other than Losses in connection with Third Party
Claims) arising out any breach of the representations and warranties of the
Company and Parent (including as such breach may be otherwise indemnifiable as a
Loss relating to an HSE Matter, Environmental Laws or an Environmental Claim) to
the extent that,
(i) as of the Closing Date (1) (A) the Buyer has
actual knowledge of a particular fact or circumstance, (B) the Buyer has actual
knowledge that the existence of such fact or circumstance constitutes a breach
of such representations and warranties and (C) such breach of representation or
warranty would permit the Buyer to terminate this Agreement under Section
7.01(b)(i) and notwithstanding such breach the Closing occurs, and (2) (A) the
Company and Parent were unaware of such fact or circumstance, (B) the Company
and Parent were unaware that the existence of such fact or circumstance would
constitute a breach of such representations and warranties and (C) such breach
of representation or warranty would permit the Buyer to terminate this Agreement
under Section 7.01(b)(i) and notwithstanding such breach the Closing occurs;
PROVIDED, HOWEVER, that if the Company or Parent asserts that this Section 6.08
is applicable to a particular claim by Buyer under Section 6.02, then the
Company or Parent, as the case may be, shall have the burden of proving the
matters set forth in this Section 6.08; and PROVIDED, FURTHER that proof that
the Buyer, Company or Parent, as the case may be, had access to a document
containing such fact or describing such circumstance shall not be proof in and
of itself that the Buyer, Company or Parent, as the case may be, had actual
knowledge of such fact or circumstance, or
(ii) (1) such breaches relate to facts or
circumstances occurring after the date of signing and on or prior to the Closing
Date, (2) the occurrence of such facts or circumstances was or were beyond the
control of the Company or Parent and did not involve a breach of any covenant or
agreement of the Company or Parent hereunder, and (3) such breach of
representation or warranty would permit the Buyer to terminate this Agreement
under Section 7.01(b)(i) and notwithstanding such breach the Closing occurs.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated:
(a) by mutual written consent of the Buyer, Parent and the
Company;
(b) by the Buyer, if (i) any of the representations and
warranties contained in Article II shall not be true and correct in all
respects, unless any such failures to be true and correct, either individually
or in the aggregate, could not reasonably be expected to have a
-40-
Material Adverse Effect or (ii) the Company or Parent shall have breached or
failed to perform in any material respect any of its respective obligations,
covenants or agreements under this Agreement, PROVIDED that any such breach or
breaches, failure to perform or misrepresentation is not cured within thirty
(30) days after the Buyer gives the Company written notice identifying such
breach, failure or misrepresentation;
(c) by the Company or Parent, if (i) any of the
representations and warranties contained in Article III shall not be true and
correct in all respects, unless any such failures to be true and correct, either
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the ability of the Buyer to perform its obligations
under this Agreement or (ii) the Buyer shall have breached or failed to perform
in any material respect any of its respective obligations, covenants or
agreements under this Agreement, PROVIDED that any such breach or breaches,
failure to perform or misrepresentation is not cured within thirty (30) days
after the Company or Parent gives the Buyer written notice identifying such
breach, failure or misrepresentation;
(d) by the Buyer, if the conditions set forth in Section 5.01
become incapable of being satisfied;
(e) by the Company or Parent, if the conditions set forth in
Section 5.02 become incapable of being satisfied; or
(f) by the Buyer, Parent or the Company if the Closing has not
occurred by December 31, 2000, or such other date, if any, as the Buyer, Parent
and the Company may agree in writing.
SECTION 7.02. EFFECT OF TERMINATION.
(a) If this Agreement is terminated (i) under Section 7.01(a)
or (ii) under Sections 7.01(d), (e) or (f) at a time when no party is in breach
of a representation or warranty or in violation of a covenant or agreement
contained herein, except as provided in Section 7.02(c), all further obligations
of the Company and Parent to the Buyer and of the Buyer to the Company and
Parent shall terminate without further liability of any party hereto.
(b) If this Agreement is terminated under Section 7.01(b),
(c), (d), (e) or (f) at a time when a party is in breach of a representation or
warranty or in violation of a covenant or agreement contained in this Agreement,
except (i) as provided in Sections 7.02(c), the liabilities and obligations of
the party not in breach or violation of this Agreement shall terminate, and (ii)
the party which is in breach or violation of this Agreement shall remain liable
for such breaches and violations, and nothing shall be deemed to restrict the
remedies available against such party.
(c) The obligations of the Buyer under Section 4.01(b) shall
survive the termination of this Agreement.
-41-
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES. All notices to a party hereunder shall be deemed
to have been adequately given if delivered in person (in a manner through which
delivery may be verified) or sent by nationally recognized overnight delivery
service or mailed, certified mail, return receipt requested, to such party at
its address set forth below (or such other address as it may from time to time
designate in writing to the other parties hereto):
To the Company, Parent or Votis:
Xxxx Industries, Inc.
Tyson Place - Suite 200
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
with a copy to:
Xxxx X. Xxxxxxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
To the Buyer: Henlopen Manufacturing Co., Inc.
00 Xxxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: President
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SECTION 8.02. NO WAIVER. No failure to exercise and no delay in
exercising, on the part of the Buyer, the Company or Parent, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
SECTION 8.03. AMENDMENTS AND WAIVERS. This Agreement may be modified or
amended only by a writing signed by the Buyer, the Company, Parent and, with
respect to Section 4.10, Votis. No waiver of any term or provision hereof shall
be effective unless signed in writing by the party waiving such term or
provision.
-42-
SECTION 8.04. CHOICE OF LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to the choice of law provisions thereof.
SECTION 8.05. CONSENT TO JURISDICTION. The Company, Parent and the
Buyer each agrees to the exclusive jurisdiction of any state or Federal court
within the Southern District of New York, with respect to any claim or cause of
action arising under or relating to this Agreement, and waives personal service
of any and all process upon it, and consents that all services of process be
made by registered or certified mail, return receipt requested, directed to it
at its address in accordance with Section 8.01, and service so made shall be
deemed to be completed when received. The Company, Parent and the Buyer each
waives any objection based on forum non conveniens and waives any objection to
venue of any action instituted hereunder. Nothing in this paragraph shall affect
the right of the Company, Parent or the Buyer to serve legal process in any
other manner permitted by law.
SECTION 8.06. BINDING EFFECT AND BENEFITS. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, successors and assigns but, except as set forth in Section 1.09, may not
be assigned by any party without the written consent of the Buyer and the
Company.
SECTION 8.07. INTEGRATION; DISCLOSURE ON SCHEDULES. This writing,
together with the Exhibits and Schedules attached hereto, and the Services
Agreement, the Escrow Agreement, the Morristown Lease, and other Seller
Documents and Buyer Documents embody the entire agreement and understanding
among the parties with respect to this transaction and supersedes all prior
discussions, understandings and agreements concerning the matters covered
hereby, except as set forth in Section 4.01(b). The inclusion of any item in any
Schedule is not evidence of the materiality of such item for the purposes of any
other Schedule or this Agreement.
SECTION 8.08. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
SECTION 8.09. LIMITATION ON SCOPE OF AGREEMENT. If any provision of
this Agreement is unenforceable or illegal, such provision shall be enforced to
the fullest extent permitted by law and the remainder of the Agreement shall
remain in full force and effect.
SECTION 8.10. HEADINGS. The headings of Articles and Sections herein
are inserted for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
SECTION 8.11. EXPENSES. All legal and other costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such costs and expenses, except as otherwise
expressly provided for herein.
SECTION 8.12. BOOKS AND RECORDS. Each of the Buyer and the Company will
retain after the Closing Date all books and records pertaining to the Purchased
Assets and Cepillos in
-43-
accordance with a reasonable records retention policy. After the Closing Date,
the Company and the Buyer shall grant to each other such access to financial
records and other information in their possession related to the Cosmetics
Division and such cooperation and assistance as shall be reasonably required to
enable each of them to complete their legal, regulatory, stock exchange and
financial reporting requirements and to complete their tax returns. In the event
that any such tax return becomes the subject of any audit or investigation, the
Company and the Buyer shall give the other all reasonable cooperation, access
and assistance as needed during normal business hours with respect to books and
records and other financial data included in the Purchased Assets to enable
either of them to defend any such audit or investigation. Each party shall
promptly reimburse the other for such other party's reasonable out-of-pocket
expenses associated with requests made by such first party under this Section
8.12, but no other charges shall be payable by the requesting party to the other
party in connection with such requests.
SECTION 8.13. NO THIRD-PARTY BENEFICIARIES. Except as expressly set
forth herein, nothing in this Agreement will be construed as giving any person,
other than the parties hereto and their respective heirs, successors and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof.
SECTION 8.14. FURTHER ASSURANCES. Following the Closing, the Company
and Parent shall execute and deliver to the Buyer such documents and take such
other actions as the Buyer may reasonably request in order to consummate more
effectively the transactions and to vest in the Buyer good title to the
Purchased Assets and the Cepillos Shares.
SECTION 8.15. TAX TREATMENT OF INDEMNITY PAYMENTS. The Company, Parent
and the Buyer agree to treat all payments made by each, to or for the benefit of
the other under the indemnity provisions of this Agreement as adjustments to the
Purchase Price for Tax purposes and that such treatment shall govern for
purposes hereof except to the extent that the laws of a particular jurisdiction
provide otherwise, in which case such payments shall be made in an amount
sufficient to indemnify the relevant party on an after-Tax basis.
SECTION 8.16. PUBLICITY. Except as otherwise required by law or
applicable stock exchange rules, no party hereto may issue any press release or
other public disclosure concerning this transaction without the prior written
consent of the other parties hereto.
SECTION 8.17. DEFINITIONS. Except as otherwise expressly provided in
this Agreement, the following rules of interpretation apply to this Agreement:
(i) the singular includes the plural and the plural includes the singular; (ii)
"or" and "either" are not exclusive and "include" and "including" are not
limiting; (iii) a reference to any agreement or other contract includes
permitted supplements and amendments; (iv) a reference to a law includes any
amendment or modification to such law and any rules or regulations issued
thereunder; (v) a reference to generally accepted accounting principles refers
to United States generally accepted accounting principles; (vi) a reference in
this Agreement to an Article, Section, Annex, Exhibit or Schedule is to the
Article, Section, Annex, Exhibit or Schedule of this Agreement; (vii)
capitalized terms used and not defined in the Annexes, Exhibits or Schedules
attached to this Agreement shall have the meanings set forth in this Agreement;
and (viii) "$" or dollars shall mean the lawful currency of the United States.
-44-
The following terms, as used in this Agreement, have the meanings given
to them in the section indicated:
TERM SECTION OR PLACE WHERE DEFINED
Acquiror Section 4.01
Action Section 2.09
Additional Escrow Amount Section 1.03
Affiliate Section 1.09
Agreement First Paragraph
Anchor Section 4.14
Assumed Contracts Section 1.01
Assumed Liabilities Section 1.04
Buyer First Paragraph
Buyer Documents Section 3.01
Cepillos Introduction
Cepillos Benefit Plans Section 2.19
Cepillos Employees Section 2.19
Cepillos Returns Section 4.11
Cepillos Shares Introduction
CERCLA Section 2.23
Closing Section 1.06
Closing Date Section 1.06
Code Section 1.05
Company First Paragraph
Company Benefit Plans Section 2.18
Company Cepillos Shares Introduction
Consent Section 2.14
Copyrights Section 1.01
Cosmetics Division Introduction
Cosmetics Employees Section 2.17
Delivering Party Section 1.10
Disposal Section 2.18
Domain Names Section 1.01
Elk Grove Lease Section 4.04
employee benefit plan Section 2.14
employee pension benefit plan Section 2.14
employee welfare benefit plan Section 2.14
Environment Section 2.23
Environmental Claim Section 2.23
Environmental Law Section 2.23
Environmental Permits Section 2.23
ERISA Section 2.18
Escrow Agent Section 1.03
Escrow Agreement Section 1.03
-45-
TERM SECTION OR PLACE WHERE DEFINED
Excluded Assets Section 1.02
Excluded Liabilities Section 1.04
Financial Statements Section 2.02
GAAP Section 1.10
Governmental Authority Section 2.05
Hazardous Substances Section 2.18
HSE Claim Section 6.04(b)
HSE Matter Section 6.02
HSR Act Section 2.14
indebtedness Section 2.04
Indemnified Party Section 6.04
Indemnifying Party Section 6.04
Intellectual Property Section 1.01
Lien Section 1.01
Losses Section 6.02
Material Adverse Effect Section 2.01
Material Contracts Section 2.09
Morristown Equipment Section 4.13
Morristown Lease Section 4.13
Net Working Capital Section 1.10
Net Working Capital Certificate Section 1.10
Parent First Paragraph
Parent Cepillos Shares Introduction
Patents Section 1.01
Permits Section 2.15
Permitted Liens Section 1.01
Pre-Closing Tax Period Section 2.05
Property Taxes Section 6.05
Purchase Price Section 1.03
Purchase Price Escrow Amount Section 1.03
Purchased Assets Section 1.01
Release Section 2.23
Seller Documents Section 2.01
Service Section 2.18
Services Agreement Section 4.12
Straddle Period Section 6.05
Tax Section 2.05
Tax Claim Section 6.05
Taxes Section 2.05
Third Party Claim Section 6.04
Threatened Release Section 2.18
Trademarks Section 1.01
U.S. Employees Section 2.17
Votis Section 4.10
Working Capital Deficiency Section 1.10
Working Capital Excess Section 1.10
-46-
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as a sealed instrument as of the date first above written.
XXXX INDUSTRIES, INC.
By: _______________________
(Title)
ANCHOR HOLDINGS, INC.
By: _______________________
(Title)
HENLOPEN MANUFACTURING CO., INC.
By: _______________________
(Title)
COMPAGNIE GENERALE DE
PARTICIPATION INDUSTRIELLE ET
FINANCIERE
By: _______________________
(Title)
Accepted and Agreed as to
Section 4.10 only:
________________________
Xxxxxx X. Xxxxx
