PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is effective as of
December ___, 1999 by and among Xxxxx-Xxxxxx Company, a Massachusetts
corporation with a principal address at 000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxxx,
Xxxxxxxxxxxxx 00000 ("Seller"), and McLad Corporation, a Nevada corporation with
a principal address of c/o Ladish Co., Inc. ("Ladish"), Xxxxxx, Xxxxxxxxx 00000
(hereinafter referred to as "Buyer"). Xxxxxx is a signatory to this agreement
for purposes of being jointly and severally liable for the performance by Buyer,
its wholly owned subsidiary, of all obigations of Buyer pursuant to this
Agreement.
RECITALS
WHEREAS, pursuant to the terms of an Asset Contribution Agreement (the
"Asset Contribution Agreement") and a Company Agreement (the "Company
Agreement") dated July 30, 1998 and effective as of August 1, 1998, Seller, its
wholly owned subsidiary Xxxxx-Xxxxxx Investment Castings, Inc. ("WGIC"), and
Titanium Metals Corporation ("TIMET") formed Xxxxx-Xxxxxx Titanium Castings, LLC
(the "Company"), a limited liability company organized under the laws of the
State of Delaware for the purpose of owning and operating two previously
existing titanium investment casting businesses: one located in Franklin, New
Hampshire (the "Franklin Business"), and another located in Albany, Oregon
(hereinafter defined as the "Albany Business");
WHEREAS, Precision Castparts Corp., an Oregon corporation ("PCC") and W-G
Acquisition Corp., a Massachusetts corporation and a wholly-owned subsidiary of
PCC ("Acquisition Sub"), have entered into an Agreement and Plan of Merger dated
as of May 17, 1999 (the "Merger Agreement"), pursuant to which Acquisition Sub
has commenced a tender offer for all of the outstanding shares of common stock
of Seller (the "Tender Offer"); and
WHEREAS, The United States Federal Trade Commission ("FTC") has required,
in connection with the Tender Offer and the other transactions contemplated by
the Merger Agreement, that Seller divest certain assets including the Albany
Business; and
WHEREAS, the FTC, Seller and PCC have executed an Agreement Containing
Consent Orders (the "Agreement Containing Consent Orders") which, among other
things, requires that, upon completion of the Tender Offer, Seller and PCC hold
separate the Albany Business until the divestiture of the Albany Business is
completed; and
WHEREAS, to facilitate the divestiture of the Albany Business, Seller and
TIMET have reached an agreement pursuant to which (i) the Franklin Business was
sold back to WGIC from the Company, (ii) a pro-rata distribution was made by the
Company to Seller, WGIC and TIMET of the purchase price for such sale, and (iii)
Seller, by the Closing (as defined herein) shall have acquired all right, title
and interest in the membership interest of TIMET in the Company; and
WHEREAS, to further facilitate the divestiture of the Albany Business, the
entire right, title and interest in the membership interest of WGIC in the
Company, by the Closing, shall have been distributed as a dividend to Seller,
the parent of WGIC; and
WHEREAS, Seller, by the Closing, will own the entire membership interest in
the Company (hereinafter referred to as the "Membership Interest"); and
WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from
Seller the entire Membership Interest of the Company;
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, and agreements contained in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller mutually agree as follows:
DEFINITIONS
As used in this Agreement, the following terms shall have the meaning set
forth below:
"Affiliate" -- An Affiliate of any person or entity shall mean any
individual, corporation, partnership, limited liability company or other entity
controlled by, controlling, or under common control with such person.
"Albany Business" -- The Albany Business shall mean the entire business and
assets owned, leased and operated by the Company in connection with the titanium
investment castings operation conducted by the Company in Albany, Oregon. For
purposes of those representations and warranties of Seller set forth in Article
2 which refer to the Albany Business, the term Albany Business shall be deemed
to include the Company in connection with its ownership and operation of the
Albany Business.
"Code" -- The Code shall mean the Internal Revenue Code of 1986, as
amended.
"ERISA"---ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Know" or "Knowledge" --- The terms "know" or "knowledge," or any variation
thereof, with respect to any person shall include any actual knowledge by such
entity or person or such entity or person's officers, directors and/or
management committee members and shall encompass matters which the person or
entity or the person's or entity's officers, directors and/or management
committee members should have known after reasonable inquiry.
"Real Estate"-- Real Estate shall refer collectively to all real property
and the buildings thereon owned and/or leased by the Company as more
particularly identified in Schedule 2.3 hereof.
Capitalized terms defined herein shall have such definitions for all
purposes hereunder.
1. Purchase and Sale of Membership Interest
1.1 Transfer of Membership Interest. Subject to and upon the terms
and conditions set forth herein and in reliance upon the covenants,
representations, and warranties herein contained, at the Closing (as
defined in ss. 1.6 hereof), Seller shall sell, transfer, assign and
2
deliver to Buyer all of the Membership Interest of the Company. The
foregoing transfer shall be evidenced by execution of the form of
Assignment of Membership Interest attached hereto as Exhibit 1.5(a).
1.2 Consideration for Such Transfers. The aggregate consideration
paid by Buyer for the transfer in Section 1.1 above (the "Purchase Price")
shall be Twenty-Six Million Six Hundred Thousand Dollars ($26,600,000.00)
subject to adjustment as provided in Section 1.3 below.
1.3 Adjustment to Purchase Price for Balance Sheet Changes.
(a) Closing Balance Sheet. Within 60 days following the Closing
Date (as set forth in Section 1.6) the Buyer shall prepare and deliver
to the Seller a balance sheet for the Albany Business as of the close
of business on the Closing Date (the "Preliminary Closing Balance
Sheet"). The Preliminary Closing Balance Sheet and the final balance
sheet determined in accordance with paragraphs (b), (c), (d) and (e)
of this Section 1.3 (the "Final Closing Balance Sheet") shall be
prepared in accordance with principles, practices and procedures that
are the same as those which resulted in the asset and liability values
reflected in the balance sheet effective as of October 2, 1999 (the
"Peg Date"), which is attached hereto as Schedule 1.3 (the "Peg
Balance Sheet"). The Preliminary Closing Balance Sheet and the Final
Closing Balance Sheet are sometimes collectively referred to herein as
the Preliminary and Final Closing Balance Sheets. Notwithstanding the
foregoing, the following specific provisions shall take precedence
over such principles, practices and procedures in the preparation of
the Preliminary and Final Closing Balance Sheets:
(i) The amounts included in the Preliminary and Final
Closing Balance Sheets for fixed assets (i.e., net plant,
property and equipment) will be the same as those included in the
Peg Balance Sheet except as necessary to reflect those changes in
the net asset values that result from new transactions and actual
changes in facts and circumstances occurring during the period
after (but not including) the Peg Date through and including the
Closing Date (the "Change Period"). (To illustrate, if an item of
machinery and equipment was included in the Peg Balance Sheet at
a net book value of $1 million, but had not been used for the
past several years, or would no longer function, or would require
major repairs to put it in working condition, this item would be
valued at $1 million in the Preliminary and Final Closing Balance
Sheets because no changes in circumstances occurred during the
Change Period which would warrant a reduction in the book value
of that asset as of the Closing Date that would not have been
equally appropriate as of the Peg Date. However, if a change in
facts or circumstances occurred during the Change Period which
would have warranted a change in the book value of such item of
machinery and equipment that would not have been equally
appropriate as of the Peg Date, then the book value of such item
would be changed on the Preliminary and Final Closing Balance
Sheets.
(ii) The quantities of inventory used to determine the
inventory amount to be included in the Preliminary and Final
Closing Balance Sheets will be based on the results of a physical
inventory to be taken as of the opening of business on the
Closing Date in accordance with procedures to be mutually agreed
to by the parties. The physical inventory quantities will be
priced utilizing the same valuation methodologies which were used
in the determination of
3
the inventory amount reflected in the Peg Balance Sheet and in
the case of items which were not on hand as of the Peg Date in
accordance with the normal procedures of the Albany Business.
(b) Seller's Review of Preliminary Closing Balance Sheet. Seller
shall have 30 days following receipt of the Preliminary Closing
Balance Sheet to review (the "Seller's Review") such balance sheet. If
Seller determines, in Seller's reasonable judgment, that it has not
been prepared in accordance with the provisions of paragraph (a), then
within the said 30-day period allowed for Seller's Review, Seller
shall prepare and deliver a letter to Buyer (the "Seller's Letter")
setting forth in reasonable detail the adjustments that Seller
determines are appropriate. During the said 30-day period, Buyer shall
grant Seller reasonable access during normal business hours to the
books and records of the Albany Business and its working papers
pertaining to the Preliminary Closing Balance Sheet and shall
authorize the Albany Business's auditors to grant Seller's auditors
access to any working papers or other documents prepared by such
auditors with respect to the Preliminary Closing Balance Sheet. If
Seller does not prepare and furnish Seller's Letter to Buyer within
the said 30-day period, then the Preliminary Closing Balance Sheet as
prepared by Buyer will become the Final Closing Balance Sheet.
(c) Buyer Response to Seller's Letter. Buyer will have 30 days
following receipt of Seller's Letter, if any, to review such letter
and prepare a written response (the "Buyer's Letter") setting forth
Buyer's position with respect to each adjustment proposed by Seller in
Seller's Letter. If Buyer does not prepare and furnish Buyer's Letter
to Seller within the 30 days allowed, then all of the adjustments set
forth in Seller's Letter shall be deemed to have been accepted by
Buyer, and the Final Closing Balance Sheet shall be prepared by
adjusting the Preliminary Closing Balance Sheet for all of the
adjustments set forth in Seller's Letter.
(d) Meeting to Resolve Proposed Adjustments. As soon as
practicable, but not later than ten days following the receipt by
Seller of Buyer's Letter, if any, the parties shall meet and endeavor
to mutually resolve any of Seller's adjustments not agreed to in
Buyer's Letter. If the parties reach agreement on the remaining
adjustments, if any, then the Final Closing Balance Sheet shall be
prepared by adjusting the Preliminary Closing Balance Sheet for the
adjustments agreed to in Buyer's Letter and those resolved by the
parties.
(e) Resolution by Accounting Arbitrator. If the parties do not
meet within the said ten-day period, or they fail to agree to meet at
some later date, or they meet but are unable to resolve all of the
adjustments set forth in Seller's Letter to the mutual satisfaction of
both parties, then the parties, jointly, or if one party is unwilling
then the other party singly, shall engage the Portland, Oregon office
of a nationally recognized accounting firm not regularly retained by
either party or Affiliate of either party (the "Accounting
Arbitrator") to resolve any of Seller's adjustments which remain
unresolved. The Accounting Arbitrator shall be furnished with a copy
of the Agreement, the Peg Balance Sheet, the Preliminary Closing
Balance Sheet, Seller's Letter, Buyer's Letter and any other relevant
correspondence between the parties. The Accounting Arbitrator must,
within 30 days from the date such documents are furnished, complete
its review and render a written report setting forth its conclusion
with respect to each of Seller's adjustments which were unresolved
between the parties. The Accounting Arbitrator shall be granted access
to the books and records of the Albany Business as well as the working
4
papers or other documents which either party or its accountants may
have which relate to the Preliminary Closing Balance Sheet and any
other documents or information which the Accounting Arbitrator may
deem appropriate. The parties shall have the right to submit written
materials to the Accounting Arbitrator and make oral presentations all
in accordance with procedures to be set forth in the engagement letter
between the parties and the Accounting Arbitrator. The decision by the
Accounting Arbitrator shall be in writing and delivered to both Buyer
and Seller. The Accounting Arbitrator's decision shall be conclusive
and binding upon the parties and may be entered and enforced in any
court of competent jurisdiction. The parties agree to submit to the
jurisdiction of any such court for the enforcement of such award or
decision. Seller and Buyer shall each pay 50% of the fees and expenses
of the Accounting Arbitrator. If the Accounting Arbitrator is engaged,
the Final Closing Balance Sheet will be prepared by adjusting the
Preliminary Closing Balance Sheet for any of Seller's adjustments
accepted by Buyer's Letter, those agreed to by the parties and those
determined by the Accounting Arbitrator.
(f) Positive or Negative Purchase Price Adjustment. When the
Final Closing Balance Sheet is determined pursuant to the provisions
of paragraphs (b), (c), (d) and (e), then the net asset/equity value
set forth on such Final Closing Balance Sheet will be the Final Net
Asset Value and the Final Net Asset Value so determined shall be
compared to the net asset/equity amount set forth on the Peg Balance
Sheet (the "Peg Value"). If the Peg Value is more than the Final Net
Asset Value, the Seller shall pay to Buyer an amount equal to the
difference. Payment of such amount shall be made in cash within three
days of determination of the Final Closing Balance Sheet by wire
transfer to the Buyer's account. If the Final Net Asset Value is more
than the Peg Value, the Buyer shall pay to Seller an amount equal to
the difference in cash by wire transfer to the account of Seller
within three days of determination of the Final Closing Balance Sheet.
1.4 Payment. The Purchase Price shall be paid to Seller at the
Closing, by wire transfer of the Purchase Price in immediately available
funds to Seller's accounts as directed by Seller at the Closing.
1.5 Delivery of Documents. On the Closing Date, Seller shall deliver
to Buyer, effective as of the Closing Date, the following documents:
(a) fully executed assignments of Membership Interest conveying
to Buyer all right, title and interest in and to the entire Membership
Interest;
(b) the originals, as amended, of the Certificate of Formation,
Company Agreement, minute book, membership interest ledger, company
seal, and all other books and records of the Company, and to the
extent in the possession of the Seller or the Company, books and
records relating to the conduct of the Albany Business prior to the
formation of the Company;
(c) certificate from the Secretary of State of Delaware and each
other state in which the Company is qualified to do business as a
foreign entity indicating that the Company is in good standing under
the laws of each such state; and
(d) the resignations of all management committee members and
officers of the Company effective as of the Closing.
5
1.6 Closing. The consummation of the purchase and sale of the
Membership Interest being transferred herein (the "Closing") shall take
place at a place to be mutually agreed upon by Buyer and Seller on December
20, 1999 commencing at 10:00 a.m., or at such other time as may be mutually
agreed upon in writing by the Buyer and the Seller (the "Closing Date").
2. Representations and Warranties of Seller.
Seller represents and warrants to Buyer as set forth in this Article 2.
2.1 Company Status. The Company is a limited liability company duly
organized, validly existing, and in good standing under the laws of the
State of Delaware. It has full power and authority to own or lease its
property and assets and to carry on its business as it has been, and is,
conducted. Schedule 2.1 sets forth those jurisdictions in which the Company
is qualified to do business as a foreign entity. True, accurate, and
complete copies of the Articles of Organization, Company Agreement,
minutes, and membership interest books of the Company, as amended to date,
have been delivered to Buyer prior to or on the date this Agreement is
executed, and there have been no transactions involving the business of the
Company which, according to accepted legal practice, should have been set
forth in such books other than those in fact set forth therein. The minute
books of the Company contain complete and accurate records of all material
actions of the members and management committee of the Company. A true,
accurate, and complete list of names and addresses of all management
committee members and officers of the Company has been delivered to Buyer
prior to the date this Agreement is executed.
2.2 Ownership of Membership Interest.. At the Closing, Seller shall
own the entire Membership Interest free and clear of liens and encumbrances
of any nature or kind. No portion of the Membership Interest will be
subject to preemptive rights, options or other agreements of any kind. The
Company has not issued or sold, nor is there outstanding any other
membership interest, stock, bond, warrants, options, convertible
debentures, or other securities of the Company of any nature whatsoever
except those interests held by Xxxxx-Xxxxxx Investment Castings, Inc. and
TIMET Castings Corporation which interests shall have been acquired by
Seller by the Closing. Neither the Company nor Seller has any commitment,
either firm or conditional, to sell, issue, purchase or repurchase any
membership interest, stock or other securities or any rights with respect
thereto of the Company except with respect to the right of Seller to
acquire the Membership Interest of TIMET Castings Corporation. In addition,
except as set forth in Schedule 2.2, the Company has not declared or made,
or agreed to declare or make, any payment or distribution to members or to
purchase, redeem, or acquire, directly or indirectly, any portion of any
member's portion of the Membership Interest.
2.3 Real Property. Attached hereto as Schedule 2.3 is an accurate and
complete list of all Real Estate owned and leased by the Company. With
respect to Real Estate owned by the Company, the Company has good and
marketable title to all such property free and clear of any liens,
encumbrances, claims, or charges (except for taxes in the ordinary course
not yet due or payable). With respect to Real Estate leased by the Company,
the Company is not in default under any such lease nor does the Seller or
the Company have knowledge of any condition which has a material adverse
effect on the Company's occupancy and use of any such leased Real Estate
pursuant to the terms of any such lease. The Company does not have any
6
contractual obligations to purchase or acquire any other interest in real
property. There are not any condemnation, zoning or other land-use
proceedings, either instituted or, to the best of Seller's or Company's
knowledge, planned, which affect the Real Estate nor has Seller or the
Company received any notice of any special assessment proceedings which
affect the Real Estate. There are now in full force and effect duly issued
certificates of occupancy permitting the Real Estate and improvements
located thereon to be legally used and occupied as the same are now
constituted. All of the Real Estate has permanent rights of access to
dedicated public highways. No fact or condition exists which would prohibit
or adversely affect the ordinary rights of access to and from the Real
Estate from and to the existing highways and roads and there is no pending
or, to the Knowledge of the Seller and Company, threatened restriction or
denial, governmental or otherwise, upon such ingress and egress. There is
not, to the Knowledge of the Seller and Company, (i) any claim of adverse
possession or prescriptive rights involving any of the Real Estate, (ii)
any structure located on any Real Estate which encroaches on or over the
boundaries of neighboring or adjacent properties or (iii) any structure of
any other party which encroaches on or over the boundaries of any such Real
Estate. No public improvements have been commenced and, to the Company's
and Seller's Knowledge, none are planned which in either case may result in
special assessments against or otherwise materially adversely affect any
Real Estate. Neither Company nor Seller has notice or Knowledge of any (i)
planned or proposed increase in assessed valuations (other than annual
valuations performed under Oregon law) of any Real Estate, (ii) order
requiring repair, alteration, or correction of any existing condition
affecting any Real Estate or the systems or improvements thereat (except as
set forth in Schedule 2.30), (iii) condition or defect which could give
rise to an order of the sort referred to in "(ii)" above or (iv) any
structural, mechanical, or other defects of material significance affecting
any Real Estate or the systems or improvements thereat (including, but not
limited to, inadequacy for normal use of mechanical systems or disposal or
water systems at or serving the Real Estate) except as otherwise set forth
in Schedule 2.3.
2.4 Authorization. Seller has full power and authority and is duly
authorized to enter into this Agreement and to consummate the transactions
contemplated under this Agreement; and this Agreement, when executed,
constitutes the legal, valid, and binding obligation of each Seller,
enforceable against Seller in accordance with the terms and conditions set
forth in this Agreement subject to any applicable bankruptcy, insolvency,
or other laws affecting creditors' rights generally.
2.5 Subsidiaries. The Company does not have any subsidiaries, nor
does it directly or indirectly own or have any investment in any capital
stock or any other proprietary interest in any other entity.
2.6 Financial Statements. Seller has delivered to Buyer copies of
income and cash flow statements of the Albany Business for the twelve month
periods ending on May 31, 1997, May 31, 1998 and May 31, 1999, respectively
as well as the balance sheet of the Albany Business as of May 31, 1996, May
31, 1997, May 31, 1998 and May 31, 1999 (collectively, the "Financial
Statements"). Copies of the Financial Statements are attached as Schedule
2.6. To the extent that the Financial Statements reflect the conduct and
condition of the Albany Business on and after August 1, 1998 (the date on
which the Company began operating the Albany Business), the Financial
Statements, except as set forth in Schedule 2.6, have been prepared in
accordance with Generally Accepted Accounting Principles ("GAAP"), are
true,
7
correct and complete in all material respects and fairly reflect the
financial position and results of operations of the Albany Business as of
the date and for the respective periods indicated. To the extent that the
Financial Statements reflect the conduct and condition of the Albany
Business prior to August 1, 1998, such Financial Statements, to the
knowledge of Seller and the Company based on representations made by TIMET
in the Asset Contribution Agreement, fairly reflect the financial position
and results of operations of the Albany Business as of the date and for the
respective periods indicated. The individual line items reflected on the
Peg Balance Sheet have been prepared in accordance with principles,
practices and procedures consistent with those employed in preparing the
Financial Statements.
2.7 No Material Adverse Change. Since May 31, 1999,
(a) except as set forth in Schedule 2.7(a), there have been no
changes in the assets, properties, business, operations or condition
(financial or otherwise) of the Albany Business which either
individually or in the aggregate materially and adversely affect the
Albany Business, nor does the Seller have reason to know of any change
that is threatened, nor has there been any damage, destruction or loss
materially and adversely affecting the assets, properties, business,
operations or condition (financial or otherwise) of the Albany
Business, whether or not covered by insurance; and
(b) except as set forth in Schedule 2.7(b), the Albany Business
has not:
(i) incurred any indebtedness for borrowed money;
(ii) declared or paid any distribution of any kind to its
members or made any direct or indirect redemption, retirement,
purchase or other acquisition of any portion of the Membership
Interest;
(iii) made any loan or advance to any of its members,
officers, managers, employees, consultants, agents or other
representatives (other than travel advances made in the ordinary
course of business), or made any other loan or advance otherwise
than in the ordinary course of business;
(iv) made any payment or commitment to pay any severance or
termination pay to any of its officers, managers, employees,
consultants, agents or other representatives, other than payments
to, or commitments to pay, persons made in the ordinary course of
business;
(v) except in the ordinary course of business, sold,
abandoned or made any other disposition of any of its assets or
properties, acquired inventory or equipment, granted or suffered
any lien or other encumbrance on any of its assets or properties;
entered into or amended any contract or other agreement to which
it is a party, or by or to which it or its assets or properties
are bound or subject, or pursuant to which it agrees to indemnify
any party or to refrain from competing with any party;
(vi) except for inventory or equipment acquired in the
ordinary course of business, made any acquisition of all or any
part of the assets, properties, capital stock or business of any
other person;
8
(vii) incurred any contingent liability as a guarantor or
otherwise with respect to the obligations of others or canceled
any material debt or claim owing to, or waived any material right
of, the Albany Business;
(viii) made any change in accounting methods or practices,
credit practices or collection policies used by the Albany
Business; or
(ix) made any commitment to make any future payments for
capital equipment or repairs;
(x) entered into any lease (whether as lessor or lessee);
(xi) made any increases in salaries, wages or benefits; and
(c) the Company has conducted the Albany Business only in the
ordinary course and consistently with its prior practices.
2.8 Accounts Receivable. Except as set forth in Schedule 2.8, each
account and note receivable (as encompassed within the Financial
Statements) represents a sale in the ordinary course of the Albany
Business's business and neither Seller nor the Company has any knowledge of
any disputes concerning the goods and services subject to such sales, the
price or terms relative to such sale, or of any pending insolvency or
setoffs or other proceedings involving the purchasers of such goods and
services. Except as set forth in Schedule 2.8, the Albany Business has no
accounts or notes receivable from any Affiliate of the Company or from any
member, manager, officer or employee of the Albany Business.
2.9 Inventory. Except as set forth in Schedule 2.9, (i) the inventory
of the Albany Business (including that reflected on the Financial
Statements and any inventory thereafter acquired by the Albany Business) is
and will be in good and merchantable condition and suitable and saleable or
usable in the manufacture of saleable finished goods in the ordinary course
of business and (ii) the values of the inventories stated in the Financial
Statements reflect the lower of cost or market in accordance with GAAP.
Purchase commitments for raw materials and parts are not in excess of
normal requirements. Since May 31, 1999, the Albany Business has not sold
any inventory items nor entered into any commitment for the sale of any
inventory items except for sales or commitments made in the ordinary course
of business.
2.10 Assets. The Company has no assets other than those of the Albany
Business. Attached to this Agreement as Schedule 2.10 is a listing of all
the material fixed assets of the Albany Business as of the date set forth
therein. None of the fixed assets of the Albany Business is held or will be
held as of the Closing Date by the Albany Business as lessee under any
lease or as a conditional sale vendee under a conditional sales contract or
other title retention agreement, except as otherwise provided in Schedule
2.10. None of the fixed assets of the Albany Business are subject to any
valid option or other right of any third party to acquire any interest in
any such assets. The Albany Business does not have any material assets that
are not fully reflected in the Financial Statements or the Schedules to
this Agreement, except those assets acquired since the date of the
Financial Statements in the ordinary course of
9
business, and which in the aggregate have no material adverse effect on the
financial condition or the conduct of the Albany Business.
2.11 Undisclosed Liabilities. The Company has no liabilities other
than those of the Albany Business. The Albany Business has no liabilities
or obligations (accrued, absolute or contingent), other than those set
forth on the Financial Statements, except as are listed in attached
Schedule 2.11 and except as would not have a material adverse effect on the
results of operations and conduct of business of the Albany Business. The
Albany Business has no liability or obligation (absolute or contingent) to
provide funds to or on behalf of, or to guarantee or assume any debt,
liability, or obligation of, any corporation, partnership, association,
limited liability company, joint venture, individual, or other person,
except as otherwise provided in Schedule 2.11.
2.12 Litigation. Except as set forth in Schedule 2.12.
(a) There are no proceedings, actions or claims pending or
threatened which would limit, impair, or adversely affect any of the
transactions completed by this Agreement or any of the Albany
Business' powers, rights, or privileges, which would materially limit
or impair the value of the Albany Business' assets or property or
which would result in a dissolution of the Company, including, without
limitation, any proceedings under bankruptcy or insolvency statutes;
(b) There are no judgments, decrees, injunctions, or court or
administrative orders outstanding against the Company.
(c) There are no suits, proceedings, or counterclaims (including,
except as set forth in Schedule 2.30, any administrative charges or
complaints) in law or in equity pending against the Company, its
properties, or businesses.
(d) There are no actions or proceedings pending in which the
Company is the plaintiff or petitioner.
2.13 Personal Property. Except as set forth in Schedule 2.13, the
Company has good and marketable title to all personal property, including,
without limitation, all personal property reflected on the Financial
Statements and in Schedule 2.10 and all personal property acquired by the
Albany Business since the date of the Financial Statements (except such
personal property as has been disposed of in the ordinary course of
business), free and clear of any lien, encumbrance, claim, or charge
whatsoever. All machinery, tools, equipment, and other tangible personal
property owned or leased by the Company which are used, usable by, or
useful to the Albany Business in the ordinary course of business are in
good operating condition, reasonable wear and tear excepted, and in a state
of reasonable maintenance and repair.
2.14 Contracts. Attached hereto as Schedule 2.14 is a true and
complete list of the following written contracts, agreements, or
commitments to which the Albany Business is party or by which the assets of
the Albany Business may be bound:
(a) contracts and other agreements with any current or former
officer, manager, member, employee, consultant, agent or other
representative of the Albany Business and
10
contracts and other agreements for the payment of fees or other
consideration to any entity in which any officer, manager or member of
the Albany Business has an interest;
(b) contracts and other agreements with any labor union or
association representing any employee of the Albany Business or
otherwise providing for any form of collective bargaining;
(c) contracts and other agreements for the purchase and sale of
materials, supplies, equipment, merchandise or services that contain
an escalation, renegotiation or redetermination clause or that
obligate the Albany Business to purchase all or substantially all of
its requirements of a particular product or material from a supplier,
or for periodic minimum purchases of a particular product or material
from a supplier;
(d) contracts and other agreements for the sale of any of the
assets or properties of the Albany Business other than in the ordinary
course of business or for the grant to any person of any options,
rights, or preferential or similar rights to purchase any such assets
or properties;
(e) partnership or joint venture agreements;
(f) contracts or other agreements under which the Albany Business
agrees to indemnify any party or to share the tax liability of any
party;
(g) contracts, options and other agreements for the purchase of
any asset, tangible or intangible calling for an aggregate purchase
price or payments in any one year of more than $100,000 in any one
case (or in the aggregate, in the case of any related series of
contracts and other agreements);
(h) contracts and other agreements that cannot by their terms be
canceled by the Albany Business and any successor or assignee of the
Albany Business without liability, premium or penalty on no more than
thirty days notice;
(i) contracts and other agreements with customers or suppliers
for the sharing of fees, the rebating of charges or other similar
arrangements;
(j) contracts and other agreements containing covenants of the
Albany Business not to compete in any line of business or with any
person or covenants of any other person not to compete with the Albany
Business in any line of business;
(k) contracts and other agreements relating to acquisition by the
Albany Business of any operating business or an ownership interest in
any other entity;
(l) contracts and other agreements requiring the payment to any
person of a commission or fee, including contracts or other agreements
with consultants which provide for aggregate payments in excess of
$50,000;
(m) contracts, indentures, mortgages, promissory notes, loan
agreements, guaranties, security agreements, pledge agreements, and
other agreements relating to the borrowing of money or securing of any
such liability;
11
(n) distributorship or licensing agreements;
(o) contracts under which the Albany Business will acquire or has
acquired ownership of, or license to, intangible property (including
software other than software licensed by the Albany Business as end
user for less than $50,000);
(p) leases, subleases or other agreements relating to real or
personal property to which the Albany Business is a party; and
(q) any other material contract or other agreement whether or not
made in the ordinary course of business that has or may have a
material adverse effect on the business or prospects, condition,
financial or otherwise, of the Albany Business or any of its assets or
properties.
Seller has caused to be delivered or made available to Buyer true and
complete copies of all such contracts, agreements and commitments (and
all amendments, waivers or other modifications thereto). All such
contracts, agreements, and commitments are valid, in full force and
effect, and binding and enforceable on all parties thereto in
accordance with their respective terms. To the knowledge of the Seller
and the Company, no occurrence or circumstance exists which
constitutes a breach or default, by the Company or any other party, or
which by lapse of time and/or giving of notice would constitute a
breach or default by the Company under any such contract, agreement,
or commitment.
2.15 Finders or Brokers. Except as set forth in Schedule 2.15, the
Seller has not employed any agent, investment banker, financial advisors,
broker, finder or intermediary in connection with the transactions
contemplated hereby who might be entitled to a fee or commission in
connection with this Agreement and the transactions contemplated hereby.
2.16 Customers. Schedule 2.16 sets forth the five customers who
accounted for the largest sales of the Albany Business for each of the last
two fiscal years (the "Customers"). The relationships of the Albany
Business with its Customers are generally good commercial working
relationships. The Seller and the Company have no knowledge of any plan,
intention or threat of any such Customer to terminate, cancel or otherwise
materially and adversely modify its relationship with the Albany Business.
2.17 Suppliers. Schedule 2.17 sets forth the five suppliers who
accounted for the largest purchases of raw materials and products used by
the Albany Business for each of the last two fiscal years (the
"Suppliers"). The relationships of the Albany Business with its Suppliers
are generally good commercial working relationships. The Seller and the
Albany Business have no knowledge of any plan, intention or threat of any
such Supplier to terminate, cancel or otherwise materially and adversely
modify its relationship with the Albany Business.
2.18 Intellectual Property. For purposes of this Section 2.18, the
term "Intellectual Property" shall mean (i) all patents, patent rights,
patent applications, trademarks, trademark applications, service marks,
service xxxx applications, trade names, and copyrights licensed to, used
by, owned by, claimed by, or registered in the name of the Albany Business,
or in which the Albany Business has any rights; and (ii) all research data,
market reports, distribution methods,
12
customer lists, trade secrets, and other proprietary and intellectual
property rights that the Albany Business claims or uses and that are not
within the general knowledge of the industry; and (iii) all computer
software licensed to, used by, owned by, or claimed by the Albany Business.
Except as set forth in Schedule 2.18, the Albany Business owns (or
possesses adequate licenses or other rights to), and has the right to own,
use, sell, license, or dispose of all Intellectual Property, and, to the
knowledge of Seller and the Company, its use, ownership, sales, and
licensing of the Intellectual Property does not infringe on any other
person's rights. To the knowledge of the Seller and the Company, no person
is infringing upon the Albany Business's rights in and to the Intellectual
Property. Rights of the Albany Business with regard to Intellectual
Property include all rights necessary, required, or desirable for the
conduct of the operations of the Albany Business as presently conducted. No
claim is pending or, to the knowledge of the Seller and the Company,
threatened to the effect that (i) the present or past usage of the
Intellectual Property by the Albany Business or the operations of the
Albany Business infringe upon or conflict with the asserted rights of any
other person in respect of any Intellectual Property, or (ii) any
Intellectual Property is invalid or unenforceable. No contract, agreement,
or understanding with any party exists that would impede or prevent the
continued existence of the entire right, title, and interest of the Albany
Business in and to any Intellectual Property upon consummation of the
transactions contemplated herein.
Set forth in Schedule 2.18 is a list or brief description of each
patent, patent right, patent application, trademark, trademark application,
service xxxx, service xxxx application, trade name and copyright licensed
to, used by, owned by, claimed by, or registered in the name of the Albany
Business.
Set forth in Schedule 2.18 is a list or brief description of each
license granted by the Albany Business, or a joint venture including the
Albany Business, to any person, corporation, partnership or unincorporated
entity, or otherwise, for the use of any of the Intellectual Property and a
notation of the contract or agreement pursuant to which each such license
has been granted.
2.19 Non-ERISA Employment Agreements and Plans. Set forth on Schedule
2.19 is a complete list of each current employment contract entered into by
the Albany Business, or by which the Albany Business is bound, and each
deferred compensation, bonus, profit sharing, equity appreciation,
incentive compensation, savings, change in control compensation, severance
or termination pay agreement or plan, and any other employee benefit plan,
agreement, arrangement, or commitment, whether formal or informal, not
required to be listed on Schedule 2.20, maintained, entered into or
contributed to by the Albany Business for the benefit of, or under which
the Albany Business is liable for any amount or benefit to, any current or
former manager, officer, employee, or independent contractor of the Albany
Business or any predecessor entity to the Albany Business or of any joint
venture to which the Albany Business is a party (the "Non-ERISA Plans").
The Seller has caused to be delivered to Buyer true and correct copies of
all plan documents, policy statements, or other available descriptions of
each Non-ERISA Plan listed on Schedule 2.20. Non Non-ERISA Plan provides
for any post-retirement benefit.
13
2.20 Benefit Plans
(a) Schedule 2.20 hereto sets forth a list of every Benefit Plan
(as hereinafter defined) that is maintained by the Company or by an
ERISA Affiliate (as hereinafter defined) with respect to the Albany
Business. With respect to any Benefit Plan, there has been no failure
to comply with any applicable provision of ERISA, the Code, and other
federal or state law, or any agreement, which, in either case, would
subject the Company or any ERISA Affiliate to liability (including,
without limitation, through any obligation of indemnification or
contribution) for any damages, penalties, or taxes, or any other loss
or expense which has or reasonably could be expected to have a
material adverse effect. No litigation or governmental administrative
proceeding or investigation or other proceeding is pending or, to
Seller's knowledge, threatened with respect to any such Benefit Plan.
For purposes of this Section:
(1) "Benefit Plan" means (A) all employee benefit plans
within the meaning of ERISA Section 3(3) maintained by the
Company, Seller or any ERISA Affiliate and (B) all stock option
plans and stock purchase plans, in each case in which any Albany
Business employee is eligible to participate.
(2) An entity "maintains" a Benefit Plan if such entity
sponsors, contributes to, or provides benefits under or through
such Benefit Plan, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under or
through such Benefit Plan, or if such Benefit Plan provides
benefits to or otherwise covers employees of such entity (or
their spouses, dependents or beneficiaries).
(3) An entity is an "ERISA Affiliate" of the Company for
purposes of this Section if the entity is any corporation, trade
or business that is along with the Company, a member of a
controlled group of corporations or a controlled group of trades
or businesses, as described in Code ss.414(b) or 414(k),
respectively, or ERISA ss.4001(b).
(b) Neither the Company nor any ERISA Affiliate has incurred, nor
does either reasonably expect to incur any liability under ERISA
ss.4062 that could subject the assets of the Albany Business to a lien
pursuant to ERISA ss.4068.
(c) Each Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a determination letter from
the Internal Revenue Service (the "IRS") that such Benefit Plan is so
qualified, and to the knowledge of Seller, nothing has occurred since
the date of such determination that could adversely affect the
qualified status of such Benefit Plan
2.21 Employee Relations. The Albany Business is not delinquent in
payments to any of its employees or consultants for any wages, salaries,
commissions, bonuses or other direct compensation for any services
performed by them to the date hereof or amounts required to be reimbursed
to such employees or consultants. Except as set forth in Schedule 2.21,
upon termination of the employment of any of such employees, the Albany
Business will not, by reason of anything done prior to the Closing, be
liable to any of such employees for severance pay or any other payments
(other than accrued salary, vacation or sick pay in accordance with the
normal policies of the Albany Business). Except as set forth in Schedule
2.21, there are no
14
administrative charges or court complaints against the Albany Business
concerning employment related matters.
2.22 Backlog. Schedule 2.22 hereof sets forth the true and accurate
backlog (as of the date set forth therein) of firm orders for the sale of
products or services of the Albany Business for which revenues have not
been recognized by the Albany Business.
2.23 Compliance with Law. Except as set forth in Schedule 2.23 and
except as would not have a material adverse effect on the Albany Business
and subject to Section 2.30 hereof, the Albany Business conducts its
business and utilizes its property in compliance in all material respects
with all applicable statutes, regulations, orders, and restrictions of the
United States of America, all applicable states and other subdivisions
thereof, all applicable foreign jurisdictions, all agencies and
instrumentalities of the foregoing, and all applicable national and
international self-regulatory bodies and authorities in respect of the
conduct of its business and ownership of its properties, and the
regulations adopted under such statutes. Except as set forth in Schedule
2.23 and Schedule 2.30, no claims, complaints, reports, or other documents
have been issued by any governmental agency concerning the operations of
the Albany Business.
2.24 Bank Accounts. Attached to this Agreement as Schedule 2.24 is a
true and complete list of all bank accounts (including, without limitation,
all checking accounts, savings accounts, N.O.W. accounts, or similar
accounts), safe deposit boxes, and money market fund accounts or similar
deposit accounts of the Albany Business, together with a list of all
authorized signatories relating to each account.
2.25 Insurance. Set forth on Schedule 2.25 is a complete list and
description of all policies of insurance including a list of all claims
filed since August 1, 1998, together with the premiums currently payable
thereon, providing for fire, property, casualty, business interruption,
personal or product liability, workers' compensation, errors and omissions,
and other forms of insurance coverage maintained by the Company or an
Affiliate of the Company with regard to the Albany Business. There is no
claim, action, suit, or proceeding arising out of or based upon any such
policies of insurance, and the Seller and the Albany Business have no
knowledge of the existence of any facts that would reasonably be expected
to constitute a basis for any such claim, action, suit, or proceeding.
There is no notice of any pending or threatened termination or premium
increase, including a retroactive premium adjustment, or default or
omission by the Albany Business with respect to any of such policies, and
the Albany Business is in material compliance with all conditions contained
therein.
2.26 No Conflicts with Other Agreements. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller do not, and will not, violate any provisions
of the Articles of Organization or Company Agreement of the Company or
violate any provision of, or cause a default under, or result in the
acceleration of any obligation under any agreement, instrument, lease,
lien, judgment, statute, law, rule, or regulation to which the Seller or
the Albany Business are a party or by which Seller or the Albany Business
or the property of Seller or the Albany Business may be bound or affected,
or conflict with or result in any breach of any of the terms, conditions,
or provisions of, or constitute a default under, or result in the creation
of any lien, security interest, charge, or encumbrance upon any of the
assets of the Albany Business under any note, indenture, mortgage, lease,
agreement, contract, purchase order, or other instrument or document to
which the Albany
15
Business is a party or by which it or any of its assets is bound or
affected. The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby by Seller does
not, and will not, require the consent or approval of, or filing with, any
court or administrative or governmental authority. The Seller has the legal
right and power to enter into this Agreement and to carry out the
transactions herein contemplated.
2.27 Taxes. Seller has delivered to Buyer copies of all tax returns
relating to the Company since August 1, 1998. Except as reflected on the
Financial Statements, there are no outstanding claims against the Company
for taxes (whether income taxes, employment taxes, withholding taxes,
franchise taxes, sales or use taxes, license taxes, excise taxes, or
otherwise) imposed by any federal, state, local, or other governmental
agency, authority, or subdivision. All tax returns and reports of the
Company required by law to be filed have been duly filed. All taxes,
assessments, fees, penalties, interest, and other governmental charges
(collectively, "Taxes") with respect to the Company and the Albany Business
which are due and payable have been paid and all taxes to be payable and
which are not yet due have been established as a reserve on the Financial
Statements. The Albany Business will have no liability for taxes in excess
of the amounts so paid or the reserves so established. No audit, dispute,
or administrative proceeding relating thereto is pending or to the
knowledge of Seller or the Company threatened.
2.28 Licenses and Permits. The Albany Business has all permits,
licenses, orders, and approvals of all federal, state, local, or foreign
governmental or regulatory bodies, and of all other persons, firms, and
entities required for it to own its assets and carry on its business as
presently conducted. Schedule 2.28 sets forth a list of those permits,
license, orders and approvals which the Company believes are material to
the Albany Business. All such permits, licenses, orders, and approvals are
in full force and effect, there have been no violations thereof by the
Albany Business, and no suspension or cancellation or limitation of any of
them is pending or threatened. Except as set forth on Schedule 2.28, none
of such permits, licenses, orders, or approvals will be adversely affected
by the consummation of the transactions described in this Agreement and
will be in full force and effect after the Closing.
2.29 Equipment Leases. Attached hereto as Schedule 2.29 is an accurate
and complete list of all equipment leases to which the Albany Business is a
party, including the name and address of the parties, the expiration date
of the lease, the monthly rent, and any additional rent payable under such
lease. True and complete copies of all such leases and any amendments
thereto have been delivered to Buyer. The Albany Business and each other
party thereto is in good standing under each such lease, and has received
no notice of default from any other party thereto nor any notice of
noncompliance with applicable state, federal, or municipal regulations; the
Albany Business has no obligation under such lease which it has not fully
performed, and Seller is not aware of any expenditures which are likely to
be required under the provisions of any such lease for any purpose other
than payment of rent.
2.30 Environmental Matters.
(a) For purposes of this Section 2.30, the following terms shall
have the meanings set forth below:
16
"Hazardous Substances" means (i) a pollutant, contaminant or
hazardous substance as defined in the Comprehensive Environmental
Response, Compensation and Liability Act, 42 X.X.X.xx. 9600 et seq.,
and its accompanying regulations ("CERCLA") or (ii) any hazardous
waste as defined in the Resource Conservation and Recovery Act, 42
X.X.X.xx. 6901 et seq.., and its accompanying regulations ("RCRA").
"Environmental Laws" means (i) CERCLA; (ii) RCRA; (iii) the Clean
Air Act; (iv) the Water Pollution Control Act; (v) the Toxic
Substances Control Act; (vi) the Occupational Safety and Health Act;
(vii) the State of Oregon counterparts to these laws, and (viii) any
regulations which are promulgated pursuant to the foregoing laws.
(b) Except as specifically set forth in Schedule 2.30(b) and
except in material compliance with Environmental Laws, the Albany
Business, during any time from and after August 1, 1998, has not
engaged in the handling, treatment, storage, use, generation, release,
dumping, or disposal of any Hazardous Substances. Except as set forth
in Schedule 2.30(b) and except in material compliance with
Environmental Laws, no Hazardous Substances, during any time from and
after August 1, 1998, have been released on, under, in or to the Real
Estate in any quantity or concentration that requires reporting under
any Environmental Law or in any manner that is reasonably likely to
have a material adverse effect on the Albany Business.
(c) To the knowledge of the Seller and the Company, except as
specifically set forth in Schedule 2.30(c), no underground storage
tanks are located on the Real Estate.
(d) Except as specifically set forth in Schedule 2.30(d), the
Albany Business's activities on the Real Estate comply with all
Environmental Laws except as would not have a material adverse effect
on the Albany Business. All permits under Environmental Laws necessary
for the operation of the Albany Business as presently conducted are
listed in Schedule 2.30(d).
(e) Except as specifically set forth in Schedule 2.30(e), (i)
there are no outstanding orders, judgments, or decrees of any court or
of any governmental agency or instrumentality under any Environmental
Law which specifically apply to the Albany Facility; and (ii) the
Company has not received from any governmental agency or
instrumentality or any other person notice that it has been named as a
responsible or potentially responsible party under any Environmental
Law for any site contaminated by Hazardous Substances.
2.31 Warranty Claims. Except as set forth on Schedule 2.31, neither
the Seller nor the Company has any knowledge of any existing or threatened
warranty claims related to products previously delivered by the Albany
Business.
2.32 Year 2000 Issues. The Albany Business has completed reviews of
those computers and imbedded systems which it believes could be susceptible
to faults as a result of an inability to recognize dates in the calendar
year 2000. To the Knowledge of the Seller and the Albany Business based
upon such reviews, the arrival of the calendar year 2000 will not result in
a fault in any computer or imbedded system which would give rise to a
material adverse effect on the Albany Business.
17
3. Representations and Warranties of Buyer
Buyer hereby represents and warrants to Seller the following:
3.1 Corporate Status. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada.
3.2 Authorization. Buyer has full power and authority to enter into
this Agreement and to consummate the transactions contemplated under this
Agreement; all necessary corporate action shall be duly taken in order to
authorize and ratify the execution and consummation of this Agreement; and
this Agreement constitutes the legal, valid, and binding obligation of
Buyer, enforceable in accordance with its terms and conditions, except as
enforceability may be limited by general principles of equity and laws
affecting rights of creditors generally.
3.3 No Conflict with Other Agreements. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated by this Agreement will conflict with, or result in a breach of
(a) any of the terms, conditions, or provisions of any law or any
regulation, order, writ, injunction, or decree of any court or government
instrumentality; (b) the Articles of Incorporation or Bylaws of the Buyer;
(c) and any agreement or other instrument to which the Buyer is a party, or
by which it is bound. All consents of third parties which may be required
of Buyer with respect to the transactions contemplated by this Agreement
have been obtained.
4. Covenants of the Seller
4.1 Conduct of Albany Business of the Albany Business.
(a) From the date hereof through the Closing Date, the Seller, to
the extent that Seller is allowed to exert any control over the Albany
Business pursuant to the Agreement Containing Consent Orders, will
cause the Company to take such reasonable actions as may be necessary
to preserve the business organization of the Albany Business intact;
keep available to the Albany Business the services of all current
employees and consultants; and preserve for the Buyer the goodwill of
the suppliers, customers, employees, and others having business
relations with the Albany Business;
(b) From the date hereof through the Closing Date, except as
otherwise permitted by this Agreement or consented to in writing by
Buyer, the Seller, to the extent that Seller is allowed to exert any
control over the Albany Business pursuant to the Agreement Containing
Consent Orders, will cause the Company to continue the operation of
the Albany Business in the ordinary course and maintain the assets,
properties, and rights of the Albany Business in at least as good
order and physical condition as exists on the date hereof, subject to
ordinary wear and tear. Without limiting the generality of the
foregoing, except as otherwise permitted by this Agreement or
consented to in writing by Buyer, the Seller, to the extent that
Seller is allowed to exert any control over the Albany Business
pursuant to the Agreement Containing Consent Orders, will not and will
not permit the Company or the Albany Business to,
(i) incur any obligation or liability (absolute, accrued,
contingent, or other), or increase the amount outstanding under
any existing obligation of the Company or the Albany Business,
including as a result of any draw under any line of credit,
except in the ordinary course of business and consistent with the
Albany Business's past business practices;
18
(ii) extend or defer the payment or satisfaction of any
obligation or liability (absolute, accrued, contingent, or other)
beyond the time that such payment or satisfaction would have been
due or paid pursuant to the terms of the instrument creating such
obligation or liability except in the ordinary course of business
and consistent with the Albany Business's past business
practices;
(iii) accelerate or attempt to accelerate the collection of
any account receivable or xxxx for, or collect for goods sold or
to be sold or services rendered or to be rendered prior to the
time that such receivable or amount would have been posted or
collected under the terms of the instrument creating such
receivable except in the ordinary course of business and
consistent with the Albany Business's past business practices;
(iv) transfer any asset to, pay any commission, salary,
bonus, rent, or fee to, or make or receive any loan to or from
any member or any relative or affiliate of any member, or redeem
or purchase any of its portion of the Membership Interest, or
agree to take any such action;
(v) establish, increase, decrease, or eliminate any
reserve for taxes or other liabilities, except through the
payment of such taxes or other liabilities (except for any
adjustment in any reserve for taxes in the ordinary course of
business and consistent with the Albany Business's past business
practices);
(vi) sell, assign, lease, or otherwise transfer or dispose
of any of the Real Estate or personal property or equipment of
the Company or the Albany Business, except for the replacement of
any worn out equipment in the ordinary and usual course of
business;
(vii) mortgage, pledge, or subject to lien, charge, or
other encumbrance any of the Real Estate or personal property or
equipment of the Company or the Albany Business;
(viii) cancel any debt or claim, or waive any right;
(ix) grant any increase in the compensation payable to any
member, officer, consultant, employee, or agent of the Albany
Business or terminate or hire any new employee, agent, or
consultant except in the ordinary course of business;
(x) enter into or agree to enter into any transaction
with or for the benefit of any member or any relative or
Affiliate of any member;
(xi) issue, sell, or transfer, or agree to issue, sell, or
transfer, any bond, debenture, or other security of the Company;
(xii) make any distributions or dividends to the members of
the Company (except that Seller may cause cash to be distributed
from the Company to Seller from time to time so long as such
distribution does not result in a material adverse effect on the
Albany Business), conduct any transactions in the Membership
Interest, or allow the exercise of any outstanding warrants,
options, or puts of securities of the Albany Business;
19
(xiii) enter into or amend any contract for the employment
of any officer, manager, employee, or other person on a
full-time, part-time, or consulting basis that is not terminable
by the Albany Business upon notice of thirty days or less without
cost or other liability to the Albany Business or any successor
thereof, except for accrued vacation pay and for past services;
(xiv) enter into any leases, agreements, contracts, or
other commitments, whether written or oral, other than
commitments for the purchase or sale of inventory or supplies
(in each case entered into in the ordinary and regular course of
business of the Albany Business);
(xv) materially modify, amend, supplement, or extend any
material contract;
(xvi) institute, terminate, or settle any administrative or
judicial proceedings;
(xvii) defer making any payment or a contribution under any
ERISA Plan or Non-ERISA Plan or incur any obligation to make any
such payment or contribution beyond the time that such would have
been made or incurred in the ordinary course of business and
consistent with the Albany Business's past practices;
(xviii) amend the Articles of Organization of the Company;
(xix) make any change in any of the Company's methods of
tax reporting or accounting; or
(x) change the banking or safe deposit arrangements of
the Albany Business.
4.2 Actions. To the extent that Seller is allowed to exert any
control over the Albany Business pursuant to the Agreement Containing
Consent Orders, the Seller shall (i) take or cause to be taken all actions
as may be necessary to keep accurate as of the Closing Date all
representations and warranties of Seller, (ii) refrain from taking or
causing to be taken any action that would render any of such
representations or warranties inaccurate as of the Closing Date, and (iii)
take or cause to be taken all steps as may be necessary and obtain all
agreements as may be necessary to perform or cause to be satisfied each
covenant or condition as provided under this Agreement.
4.3 Additional Further Action. If, at any time after the Closing, the
Buyer or the Company shall consider or be advised that any deeds, bills of
sale, assignments, assurances of any other actions or things are necessary
or desirable to vest, perfect, or confirm of record or otherwise in Buyer,
the Company or the Albany Business its right, title, or interest in, to, or
under any of the rights, properties, or assets acquired as a result of, or
in connection with, this Agreement or to otherwise carry out any of the
terms or provisions of this Agreement, the Seller, upon notice from the
Buyer or the Company, shall execute and deliver all such deeds, bills of
sale, assignments, and assurances and to take and do all such other actions
and things as may be necessary or desirable to vest, perfect, or confirm
any and all right, title, and interest in, to, and under such rights,
properties, or assets in Buyer or the Company or to otherwise carry out
this Agreement.
20
4.4 Affirmative Obligations. From the date hereof through the Closing
Date, the Seller will, or will cause the Company and the Albany Business
to,
(a) comply in all material respects with all applicable laws and
regulations; and
(b) permit Buyer to contact agents, customers, and suppliers of
the Albany Business to discover and confirm the nature of such agents,
customers and suppliers' business relationship with the Albany
Business and to preserve for Buyer the goodwill of the agents,
suppliers, customers, and others having business relations with the
Albany Business, provided that Buyer does not disclose the terms of
this Agreement to any of such persons or entities without the Seller's
prior written consent.
4.5 Cooperation with FTC. Buyer hereby expressly acknowledges that
consummation of the transactions contemplated hereby is subject to the
approval of the FTC in connection with the FTC's review of the Tender Offer
and the other transactions contemplated by the Merger Agreement. Buyer
covenants and agrees to use its commercially reasonable efforts to obtain
and furnish any information requested by the FTC regarding Buyer or the
transactions contemplated hereby and to otherwise cooperate with Seller in
obtaining approval by the FTC of this Agreement and the transactions
contemplated hereby. Seller shall use commercially reasonable efforts to
obtain the approval of this Agreement and the transactions contemplated
hereby by the FTC.
4.6 Non-Solicitation/Employment Obligations. From the date hereof
through and including that date which is eighteen (18) months after the
Closing, neither Seller nor any Affiliate of Seller shall employ or make
any offers of employment to any Key Employee of the Albany Business unless
the employment of any such Key Employee is involuntarily terminated from
the Albany Business. For purposes hereof, the term "Key Employee" shall
mean those employees specifically designated as Key Employees of the Albany
Business pursuant to the Agreement Containing Consent Orders.
4.7 Accrual of Stay Bonuses and Management Incentive Bonuses.
Pursuant to the Agreement Containing Consent Orders, Seller has agreed
with the FTC to provide incentive bonuses ("Stay Bonuses") for Key
Employees who continue their employment with the Albany Business through
the Closing. The Seller and Buyer have agreed that, for administrative
convenience, such Stay Bonuses will be paid by the Company through the
payroll of the Albany Business. In this regard, Seller, prior to the
Closing, shall cause to be accrued on the books of the Albany Business a
liability for such Stay Bonuses and will also endeavor to leave sufficient
cash in the payroll account of the Albany Business to enable the Company
to pay such Stay Bonuses and associated withholding immediately after the
Closing. Similarly, Seller has agreed that certain top management
employees of the Albany Business will be entitled at the time of Closing
to payments under the Management Incentive Plan maintained by Seller for
such employees. Again, for administrative convenience, the Seller and
Buyer have agreed that such management incentive bonuses shall be paid
through the payroll of the Albany Business. In this regard, Seller, prior
to the Closing, shall cause to be accrued on the books of the Albany
Business a liability for such management incentive bonuses and will also
endeavor to leave sufficient cash in the payroll account of the Albany
Business to enable the Company to pay such management incentive bonuses
and associated withholding immediately after the Closing.
21
4.8 Termination of Company Agreement. Prior to the Closing, Seller
shall cause the Company Agreement to be terminated and of no further force
and effect.
5. Conditions to Obligations of Buyer
The obligations of Buyer under this Agreement are subject to the
satisfaction of all of the following conditions prior to or at Closing, unless
waived by Buyer in writing:
5.1 Representations and Warranties. All of the representations and
warranties by Seller contained in this Agreement shall have been true in
all material respects when made and as of the Closing Date except as would
not have a material adverse effect on the Albany Business; and, with
respect to any representation or warranty made to Seller's Knowledge, the
underlying facts and circumstances shall have been true in all material
respects except as would not have a material adverse effect on the Albany
Business.
5.2 Material Performance by Seller. Seller shall have performed and
complied or caused to be performed or complied, in either case in all
material respects, with all agreements and conditions required by this
Agreement to be performed or complied with by the Seller or the Albany
Business prior to the Closing Date.
5.3 No Material Adverse Change. There shall not have occurred, nor
shall there exist as of the Closing, any event or set of circumstances that
constitutes or has resulted in a material adverse change in the financial
condition, properties or results of operation of theAlbany Business.
5.4 Books and Records. At Closing, Seller shall have delivered to the
Buyer original documents and any copies pertinent to the Company and the
Albany Business, including minute books, membership interest ledgers,
company seals and all contracts, leases correspondence, brochures and other
written or printed matter belonging to the Albany Business.
5.5 Certificate of Good Standing. At Closing, Seller shall have
delivered to Buyer certificates indicating that the Company is in good
standing under the laws of Delaware and in each jurisdiction in which it is
qualified to do business as a foreign entity.
5.6 Delivery of Certificates. Seller shall execute and deliver the
assignments of membership interest.
5.7 Resignation of Officers and Directors. The officers and
management committee members of the Company shall have submitted their
resignations to Buyer, with the exception of those officers designated as
necessary on Exhibit 5.7 by Buyer.
5.8 No Litigation. With the exception of the Agreement containing
Consent Order with the FTC, no proceeding shall be pending or threatened
before any court or any administrative or governmental authority to
restrain or prohibit or to obtain damages or other relief in connection
with the consummation of the transactions contemplated by this Agreement,
and no investigation that might eventuate in any such proceeding shall be
pending or threatened.
22
5.9 FTC Approval. The FTC shall have indicated in writing to Seller
that it deems Buyer to be an acceptable buyer of the Albany Business.
5.10 Side Letter from TIMET. Seller shall have delivered to Buyer a
letter from TIMET acknowledging TIMET's consent that the rights of
indemnication of the Company against TIMET pursuant to the Asset
Contribution Agreement may be enforced on behalf of the Company either by
the Company itself or by any Affiliate of the Company.
6. Conditions to Obligations of the Seller
The obligations of Seller under this Agreement are subject to the
satisfaction prior to or at Closing of all of the following conditions, unless
waived by Seller in writing:
6.1 Representations and Warranties. All representations and
warranties by Buyer contained in this Agreement shall be true and complete
in all material respects as of the Closing Date.
6.2 Complete Performance by Buyer. Buyer, in all material respects,
shall have performed and complied with all agreements and conditions on its
part required by this Agreement to be performed and complied with prior to
or as of the Closing Date.
6.3 Payment of Purchase Price. The Buyer shall have caused to be
delivered to Seller the Purchase Price in the manner set forth inss.1.4.
7. Transition.
7.1 Employee Matters.
(a) Termination of Participation in Seller Benefit Plans.
As of the Closing Date, all Employees shall cease to participate
in or benefit under Seller Benefit Plans. For purposes of this
Agreement "Seller Benefit Plans" shall mean those Benefit Plans
sponsored by the Seller or an ERISA Affiliate of the Seller other than
the Company in which the Company was an adopting affiliate or whose
Employees benefitted from under such Benefit Plans prior to the
Closing Date.
(b) Buyer COBRA Compliance.
Buyer agrees that Buyer shall be responsible for providing
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
continuation coverage under Code ss.4980B to any person who is an M&A
qualified beneficiary within the meaning of Prop. Treas. Reg. ss.
54.4980B-9. If Buyer fails to fulfill its obligation to provide COBRA
continuation coverage in accordance with this provision, Buyer shall
indemnify and hold harmless the Seller and its ERISA Affiliates
against any claim, cost, expense, liability, obligation, loss, or
damage, including attorneys' fees sustained by such failure.
23
(c) Direct Transfer of Balances in Seller's Savings and
Investment Plan.
Seller and Buyer shall take all necessary steps consistent with
applicable law to provide that certain accounts under Seller's Savings
and Investment Plan identified in Section 2.20 shall be transferred in
a direct trustee-to-trustee transfer from Seller's Savings and
Investment Plan to a plan maintained by Buyer which is subject to
Section 401(k) of the Code ("Buyer's Plan"). Accounts transferred
pursuant to the preceding sentence shall be all accounts under
Seller's Savings and Investment Plan (including, to the extent
reasonably feasible as determined by the administrator of Buyer's
Plan, any then-outstanding participant loans) of Employees who are
employees of the Company as of the day after the Closing Date. Such
transfer shall be carried out as soon as reasonably practicable after
the Closing Date. With respect to any such transferred participant
loans, such transfer of currently outstanding loans under this
provision is not intended to obligate Buyer's Plan to allow
participants to take out new loans with respect to such transferred
accounts, or to prevent such new loans if permitted under generally
applicable provisions of Buyer's Plan.
(d) Required Documentation.
In connection with the implementation of this Section 7.1, the
Seller and the Buyer shall cooperate, and the Seller or the Buyer, as
the case may be, shall cause the Company to cooperate, in the
preparation and filing of all documentation required to be filed with
any, trustee, fiduciary, applicable governmental agency or authority,
or other third party.
7.2 Assistance. Seller will cooperate with Buyer and will use its best
efforts to assist Buyer in a smooth transition of the ownership and
operation of the Albany Business on and after Closing Date, including the
preservation of the continued services of the employees of the Albany
Business and the preservation for the Albany Business of the goodwill of
suppliers, customers, and others having business relations with the Albany
Business.
8. Indemnification.
8.1 Indemnification by Seller Generally. Seller shall indemnify and
hold harmless Buyer, the Company and their respective directors, managers,
officers, shareholders, employees and agents, and their successors and
assigns, against any claim, cost, expense, liability, obligation, loss, or
damage, including attorneys' fees, sustained by Indemnitees arising out of
or resulting from:
(a) any misrepresentation or breach of any representation or
warranty made by Seller in this Agreement or any Schedule or Exhibit
attached hereto or delivered pursuant hereto;
(b) the breach of any covenant, agreement or obligation of Seller
contained in this Agreement or any Exhibit hereto or any other
instrument contemplated by this Agreement;
(c) any net increase in taxes assessed with regard to the Company
with respect to any periods ending on or prior to the Closing, except
to the extent that such increase is provided for in the Final Closing
Balance Sheet;
24
(d) the conduct by the Company of the Franklin Business and any
other activity unrelated to the Albany Business;
(e) damage to the City of Albany, Oregon stormwater drainage
system caused by the September 2, 1999 acid spill at the Real Estate
owned by the Albany Business; and
(f) any fines or penalties levied by the United States
Environmental Protection Agency ("EPA") as a result of previous
reporting failures which the Albany Facility has since discovered and
voluntarily brought to the attention of the EPA.
8.2 Limitations on Indemnification by Seller.
8.2.1 With respect to Section 8.1(a) above, Seller shall not be
required to pay any amount under such Section 8.1(a) except to the
extent that Buyer shall have incurred loss, liability, damage, cost or
expense, including counsel fees, covered by the provisions of Section
8.1(a) in excess of $500,000 in the aggregate (the "Deductible
Amount"). In addition, the maximum amount for which Seller shall be
liable under Section 8.1(a) shall be $5,000,000. Notwithstanding the
foregoing, to the extent that the Company has claims for
indemnification under the Asset Contribution Agreement against TIMET
which are subject to the $1,000,000 aggregate threshold set forth in
Section 6(b)(i)(B) of the Asset Contribution Agreement, the Deductible
Amount shall be reduced by the extent to which such claims against
TIMET exceed $500,000. By way of example, if the total value of claims
against TIMET which are subject to Section 6(b)(i)(B) of the Asset
Contribution Agreement is $700,000, then the Deductible Amount shall
be reduced to $300,000. To the extent that the Company expresses its
belief that it has claims against TIMET which are subject to the
$1,000,000 aggregate threshold, the Company shall provide Seller with
sufficient written notice and supporting material regarding such
claims so as to enable Seller to understand the nature and value of
such claims. In the event that Seller disagrees with the validity or
value of any such claim, such dispute shall be resolved by reference
to the dispute resolution provision of Section 12.7 of this Agreement.
8.2.2 Recognizing that the Albany Business was operated by TIMET
prior to August 1, 1998 and that, pursuant to the Asset Contribution
Agreement, TIMET has retained certain liabilities and provided certain
indemnifications in favor of the Company relating to the operation of
the Albany Business prior to August 1, 1998, the parties hereto agree
that the indemnification obligation of Seller under Section 8.1(a)
shall pertain only to the extent that the facts and circumstances
giving rise to such indemnification obligations actually occurred on
or after August 1, 1998 and before the Closing.
8.3 Credit for Tax Benefits. Seller shall receive a credit (on a
present value basis) to be applied against any indemnity payments otherwise
due hereunder for all tax credits, allowances, losses, deductions and
refunds to which Buyer becomes entitled as a result of any of the losses,
liabilities, damages, costs or expenses for which it is indemnified
hereunder.
8.4 Time Limit for Claims by Buyer against Seller. No claim for
indemnification pursuant to Section 8.1(a) shall be made unless asserted by
written notice prior to July 30, 2001, provided, however, that the time
limit on any claim for fraud or willful concealment shall be 90 days
following the time period which is prescribed by the applicable statute of
limitations together with any period during which such statute of
limitation is tolled. The rights and
25
obligations of the parties under this Article 8 shall be the exclusive
rights and obligations of the parties with respect to the breach of any
representation or warranty of Seller set forth in this Agreement.
8.5 Recovery from Third Parties. To the extent the Company has
potential claims against TIMET, an insurer or any other party with respect
to a matter indemnified by Seller under this Article 8, Buyer shall use all
commercially reasonable efforts to pursue such claims against such other
parties. Seller's indemnity obligations under this Article 8 shall be
reduced by any amounts recovered by Buyer from any third party, less
Buyer's reasonable legal costs in pursuing the recovery.
8.6 Indemnification by Buyer. Buyer shall indemnify and hold harmless
Seller and its directors, officers, shareholders, employees and agents, and
their successors and assigns, against any claim, cost, expense, liability,
obligation, loss, or damage, including attorneys' fees, sustained by
Indemnitees arising out of or resulting from the conduct of the business,
including the Albany Business, by the Buyer from and after the Closing
Date.
9. Indemnification Procedures. In the case of any claim asserted by a
third party against an indemnified party (the "Indemnitee"), notice shall be
given by the Indemnitee to the indemnifying party (the "Indemnitor") promptly
after such Indemnitee has actual knowledge of any claim as to which indemnity
may be sought, and the Indemnitee shall permit the Indemnitor (at the expense of
Indemnitor) to assume the defense of any claim or any litigation resulting
therefrom, provided that (i) the counsel for the Indemnitor who shall conduct
the defense of such claim or litigation shall be reasonably satisfactory to the
Indemnitee, (ii) the Indemnitee may participate in such defense at such
Indemnitee's expense, and (iii) the omission by any Indemnitee to give notice as
provided herein shall not relieve the Indemnitor of its indemnification
obligation under this Agreement except to the extent that the Indemnitor is
materially damaged as a result of such failure to give notice. Except with the
prior written consent of the Indemnitee, the Indemnitor shall not consent to
entry of any judgment or enter into any settlement that provides for injunctive
or other nonmonetary relief affecting the Indemnitee. In the event that the
Indemnitor does not accept the defense of any matter as above provided, the
Indemnitee shall have the full right to defend against any such claim or demand.
In any event, the Indemnitor and the Indemnitee shall cooperate in the defense
of any claim or litigation subject to this Section 8.5 and the records of each
shall be available to the other with respect to such defense.
10. Access to Information and Documents.
From the date hereof through the Closing Date, the Seller will continue to
give or cause the Albany Business to give to Buyer and its financial advisers,
legal counsel, independent accountants, and other representatives reasonable
access during normal business hours to all properties, documents, contracts,
employees, and records of or relating to the Albany Business and will furnish
Buyer with copies of such documents (certified, if so requested) and with such
information with respect to their affairs as Buyer from time to time reasonably
may request.
26
11. Termination; Recission of Transactions.
11.1 Termination. This Agreement may be terminated at any time prior
to consummation of the Closing by the parties as follows:
(a) by written agreement of the Buyer and Seller;
(b) by written notice from Buyer in the event that (i) the
representations and warranties of Seller shall not have been true and
correct in all material respects as of the date when made, or (ii) if
any of the conditions to Buyer's obligations as set forth in Section 5
shall not have been, or if it becomes apparent that any of such
conditions will not be, fulfilled by the Closing Date;
(c) by written notice from Seller in the event that (i) the
representations and warranties of Buyer shall not have been true and
correct in all material respects as of the date when made, or (ii) if
any of the conditions to Seller's obligations as set forth in Section
6 shall not have been, or if it becomes apparent that any of such
conditions will not be, fulfilled by the Closing Date;
(d) by written notice of Seller if, in the reasonable and good
faith judgement of Seller, the FTC will not approve the sale of the
Company to the Buyer.
11.2 Recission of Transactions. Buyer and Seller hereby expressly
agree to consummate the transactions contemplated under this Agreement upon
satisfaction of the conditions set forth in Article 5 hereof
notwithstanding that FTC approval of the Agreement and the transactions
contemplated hereby shall at such time be preliminary in nature and subject
to the final order of the FTC. The parties hereby agree that if, at the
time the FTC determines to make its order final, the FTC notified Seller
that Buyer is not an acceptable acquiror of the Purchased Assets or that
the Agreement is not an acceptable manner of divestiture, then (i) Seller
shall immediately rescind the sale to Buyer of the Purchased Assets
hereunder, (ii) Buyer and Seller shall return to their respective positions
immediately prior to the closing, Agreement shall terminate and all
obligations of the parties hereunder shall cease upon such termination; and
(iv) Buyer shall have no claims against Seller of any nature whatsoever
other than for the repayment of the Purchase Price.
12. Miscellaneous.
12.1 Binding Effect. This Agreement, including the Schedules and
Exhibits, shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted successors and assigns.
12.2 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and there are no representations, warranties,
covenants, or obligations except as set forth herein. This Agreement
supersedes all prior or contemporaneous agreements, understandings,
negotiations, and discussions, written or oral, of the parties hereto,
relating to any transaction contemplated by this Agreement. Nothing in this
Agreement is intended or shall be construed to confer upon or to give any
person other than the parties hereto any rights or remedies under or by
reason of this Agreement.
12.3 Severability. Each provision of this Agreement shall be
considered separable and if for any reason any provision or provisions
herein are determined to be invalid and contrary to any
27
existing or future law, such invalidity shall not impair the operation of
this Agreement or affect those portions of this Agreement which are valid.
12.4 Notices. Any notices, requests, demands, or other communications
hereunder, shall be in writing and shall be deemed to have been duly given
when personally delivered or transmitted by facsimile or five days after
being mailed by U.S. registered or certified mail, return receipt
requested, postage prepaid, to the following addresses:
If to Seller:
Xxxxx-Xxxxxx Company
000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: 000-000-0000
FAX: 000-000-0000
With a copy to:
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Telephone: 000-000-0000
FAX: 000-000-0000
If to Buyer:
McLad Corporation
C/o Ladish Co., Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: 000-000-0000
FAX: 000-000-0000
with a required copy to
Xxxxx & Xxxxxxx
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx, Esq.
Telephone: 000-000-0000
FAX: 000-000-0000
or to such other address as either party may specify in writing
to the other.
28
12.5 Further Assurances. The parties shall execute and deliver such
other and further documents or instruments as may be reasonably required to
consummate the transactions contemplated by this Agreement.
12.6 Extensions and Waivers. Buyer and Seller may, only by written
agreement signed by all parties, (a) extend the time for the performance of
any of their obligations or other acts under this Agreement; (b) waive any
inaccuracies in any of the representations and warranties contained in this
Agreement or in any instruments and documents delivered pursuant to this
Agreement; (c) waive compliance with or modify any of the covenants or
agreements contained in this Agreement; or (d) waive or modify the
performance of any of the obligations or other acts of the parties to this
Agreement.
12.7 Dispute Resolution. In the event of a dispute between the parties
concerning their respective rights and obligations under this Agreement, or
the breach, termination, negotiation, or validity hereof and/or the rights
or obligations of the parties arising out of or relating to this Agreement
or the breach, termination, negotiation or validity thereof, in any case
that the parties are unable to resolve amicably between themselves within
60 days of proper notice from one party to another, such dispute shall be
settled by arbitration in Denver, Colorado in an expedited manner in
accordance with the Rules of the American Arbitration Association by a duly
registered arbitrator to be selected jointly by the parties. In the event
that the parties cannot agree on an arbitrator, an arbitrator shall be
appointed by the President of the American Arbitration Association. The
decision of the arbitrator shall be final and binding upon the parties.
Each party irrevocably waives any objection to proceeding before the
American Arbitration Association based upon lack of personal jurisdiction
or to the laying of venue and further irrevocably and unconditionally
waives and agrees not to make a claim in any court that dispute resolution
before the American Arbitration Association has been brought in an
inconvenient forum. Each of the parties hereto agrees that its submission
to jurisdiction is made for the express benefit of the other parties
hereto. Notwithstanding the above, any party shall be entitled to seek a
restraining order or preliminary injunction in any court of competent
jurisdiction.
12.8 Choice of Law/Consent to Jurisdiction. All disputes, claims or
controversies arising out of or relating to this Agreement, or the
negotiation, validity or performance of this Agreement, or the transactions
contemplated hereby shall be governed by and construed in accordance with
the laws of the State of Oregon without regard to its rules of conflict of
laws. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the jurisdiction of the courts of the State of Oregon
and of the United States District Court for the District of Oregon (the
"Oregon Courts") solely and exclusively for purposes of enforcing any award
or decision in any proceeding under Section 12.7 and for any litigation
arising out of or relating to this Agreement, or the negotiation, validity
or performance of this Agreement, or the transactions contemplated hereby
(and agrees not to commence any litigation relating thereto except in such
courts), waives any objection to the laying of venue of any such litigation
in the Oregon Courts and agrees not to plead or claim in any Oregon Court
that such litigation in the Oregon Courts has been brought in any
inconvenient forum. Each of the parties hereto agrees, (i) to the extent
such party is not otherwise subject to service of process , and (ii) that
service of process may also be made on such party by prepaid certified mail
with a proof of mailing receipt validated by the United States Postal
Service constituting evidence of valid service. Service
29
made pursuant to (i) or (ii) above shall have the same legal force and
effect as if served upon such party personally within the State of Oregon.
12.9 Enumerations, and Headings. The enumerations and headings
contained in this Agreement are for convenience of reference only and are
not intended to have any substantive significance in interpreting this
Agreement.
12.10 Amendment. This Agreement may not be modified or amended except
with the written consent of both Seller and Buyer.
12.11 Expenses. Except as otherwise expressly set forth herein, Seller
and Buyer shall pay their own expenses in connection with the preparation,
negotiation, and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, all fees
and expenses of investment bankers, financial advisors, legal counsel,
independent accountants, and actuaries.
12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument
and all of which together shall be deemed to be one and the same
instrument, and shall become effective when one or more counterparts shall
have been signed by each of the parties.
30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal effective as of the day and year first above written.
XXXXX-XXXXXX COMPANY MCLAD CORPORATION
By: By:
------------------------------ -------------------------------
Name: Name:
Title: Title:
XXXXXX CO., INC., a Wisconsin corporation,
For purposes of being jointly and severally liable for the obligations of Buyer
By:
------------------------------
Name:
Title:
31
