Exhibit 2(a)
ASSET PURCHASE AGREEMENT
Between
BACOU USA SAFETY, INC.,
a wholly-owned Subsidiary of Bacou USA, Inc.
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ASSOCIATES, INC.
d/b/a ▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries, Inc.
Dated as of December 31, 1997
TABLE OF CONTENTS
ARTICLE I - SALE AND PURCHASE OF THE ASSETS...................................1
1.1 ASSETS................................................................1
1.2 EXCLUDED ASSETS.......................................................3
1.3 FOREIGN ACQUISITIONS..................................................3
1.4 HEREOF, HEREIN, ETC...................................................4
1.5 COMPUTATION OF TIME PERIODS...........................................4
1.6 ACCOUNTING TERMS......................................................4
ARTICLE II - THE CLOSING......................................................4
2.1 PLACE AND DATE........................................................4
2.2 PURCHASE PRICE........................................................5
2.3 CONTINGENT PURCHASE PRICE.............................................5
2.4 ALLOCATION OF PURCHASE PRICE..........................................5
2.5 ASSUMPTION OF LIABILITIES.............................................6
2.6 EXCLUDED LIABILITIES..................................................6
2.7 CONSENT OF THIRD PARTIES..............................................7
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER........................8
3.1 ORGANIZATION..........................................................8
3.2 AUTHORIZED CAPITALIZATION; OUTSTANDING STOCK..........................8
3.3 SUBSIDIARIES..........................................................8
3.4 AUTHORITY; BINDING EFFECT.............................................8
3.5 NON-CONTRAVENTION.....................................................9
3.6 FINANCIAL STATEMENTS..................................................9
3.7 INTERIM CHANGES......................................................10
3.8 OWNED AND LEASED PROPERTY............................................12
3.9 ENVIRONMENTAL MATTERS................................................14
3.10 INTELLECTUAL PROPERTY RIGHTS........................................16
3.11 LITIGATION..........................................................17
3.12 TAXES...............................................................18
3.13 COMPLIANCE WITH APPLICABLE LAW......................................19
3.14 CONTRACTS...........................................................20
3.15 BENEFIT PLANS.......................................................21
3.16 TRANSACTIONS WITH AFFILIATES........................................23
3.17 INSURANCE...........................................................23
3.18 LABOR RELATIONS.....................................................24
3.19 LOCATION OF OFF SITE ASSETS.........................................24
3.20 INVENTORIES.........................................................24
3.21 CUSTOMERS...........................................................25
3.22 SUPPLIERS; RAW MATERIALS............................................25
3.23 ABSENCE OF CERTAIN BUSINESS PRACTICES...............................25
3.24 CONFIDENTIALITY.....................................................26
3.25 NO GUARANTEES.......................................................26
3.26 RECORDS.............................................................26
3.27 BROKERS, FINDERS, ETC...............................................26
3.28 BUSINESS DESCRIPTION................................................26
3.29 DISCLOSURE..........................................................26
3.30 FOREIGN SUBSIDIARIES................................................27
3.31 RECEIVABLES.........................................................27
3.32 AGENTS..............................................................27
3.33 WARRANTY AND PRODUCT LIABILITY CLAIMS...............................27
3.34 NO OTHER AGREEMENTS TO SELL.........................................28
3.35 COPIES OF DOCUMENTS.................................................28
3.36 OFFICERS, DIRECTORS AND KEY EMPLOYEES...............................28
3.37. YEAR 2000 COMPATIBILITY............................................28
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER.........................29
4.1 ORGANIZATION.........................................................29
4.2 AUTHORITY; BINDING EFFECT............................................29
4.3 BROKERS, FINDERS, ETC................................................29
4.4 FINANCING............................................................29
ARTICLE V - FURTHER AGREEMENTS OF THE COMPANY................................29
5.1 CONDUCT OF BUSINESS..................................................30
5.2 NO SOLICITATION......................................................31
5.3 ACCESS AND INFORMATION...............................................31
5.4 FINANCIAL STATEMENTS.................................................31
5.5 PUBLIC ANNOUNCEMENTS.................................................32
5.6 FURTHER ACTIONS......................................................32
5.7 FURTHER ASSURANCES...................................................32
5.8 LIABILITY FOR TRANSFER TAXES.........................................33
5.9 CERTIFICATES OF TAX AUTHORITIES......................................33
5.10 USE OF BUSINESS NAME................................................33
5.11 ENVIRONMENTAL ASSESSMENT............................................33
5.12 BANK ACCOUNTS.......................................................33
ARTICLE VI - FURTHER AGREEMENTS OF THE BUYER.................................34
6.1 PUBLIC ANNOUNCEMENTS.................................................34
6.2 FURTHER ACTIONS......................................................34
6.3 FURTHER ASSURANCES...................................................34
6.4 POST CLOSING PAYMENT.....................................................35
ARTICLE VII - FOREIGN ACQUISITION AGREEMENT; COOPERATION.....................35
7.1 FOREIGN ACQUISITION AGREEMENTS; FOREIGN CLOSINGS.....................35
7.2 COOPERATION..........................................................35
ARTICLE VIII - CONDITIONS TO OBLIGATIONS OF EACH PARTY.......................36
8.1 HSR ACT NOTIFICATION.................................................36
8.2 NO INJUNCTION, ETC...................................................36
ARTICLE IX - CONDITIONS TO OBLIGATIONS OF THE BUYER..........................36
9.1 REPRESENTATIONS; PERFORMANCE, ETC....................................36
9.2 FOREIGN CLOSINGS.....................................................37
9.3 CONSENTS.............................................................37
9.4 NO MATERIAL ADVERSE EFFECT...........................................37
9.5 CONSULTING AND NON-COMPETITION AGREEMENTS............................37
9.6 SUBSEQUENT FINANCIAL STATEMENTS......................................37
9.7 OPINION OF COUNSEL...................................................37
9.8 CORPORATE PROCEEDINGS................................................38
9.9 U.S. TRANSFER DOCUMENTS..............................................38
9.10 ENVIRONMENTAL ASSESSMENT............................................38
9.11 TITLE POLICIES......................................................39
9.12 SURVEYS.............................................................39
9.13 CONSENTS AND ESTOPPELS..............................................39
9.14 FIRPTA CERTIFICATE..................................................40
9.15 OPTION TO PURCHASE ADJACENT LOT.....................................40
ARTICLE X - CONDITIONS TO OBLIGATIONS OF THE SELLER..........................40
10.1 REPRESENTATIONS, PERFORMANCE. ETC...................................40
10.2 ASSUMPTION AGREEMENT................................................41
10.3 OPINION OF COUNSEL..................................................41
10.4 CORPORATE PROCEEDINGS...............................................41
10.5 FOREIGN CLOSINGS....................................................41
10.6 CONSENTS AND APPROVALS..............................................41
10.7 COLLATERAL AGREEMENTS...............................................41
10.8 RECEIPT OF PURCHASE PRICE...........................................41
ARTICLE XI - EMPLOYEES AND EMPLOYEE BENEFIT PLANS............................41
11.1 EMPLOYMENT OF THE COMPANY'S EMPLOYEES...............................41
11.2 PENSION BENEFIT PLANS...............................................42
11.3 EMPLOYMENT TAXES....................................................42
ARTICLE XII - TERMINATION....................................................43
12.1 TERMINATION.........................................................43
12.2 EFFECT OF TERMINATION...............................................43
ARTICLE XIII - REMEDIES......................................................44
13.1 REMEDIES............................................................44
13.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.....................45
ARTICLE XIV - DEFINITIONS, MISCELLANEOUS.....................................45
14.1 DEFINITION OF CERTAIN TERMS.........................................45
ARTICLE XV - MISCELLANEOUS...................................................56
15.1 EXPENSES............................................................56
15.2 SEVERABILITY........................................................56
15.3 NOTICES.............................................................56
15.4 HEADINGS............................................................57
15.5 ENTIRE AGREEMENT....................................................58
15.6 COUNTERPARTS........................................................58
15.7 GOVERNING LAW, ETC..................................................58
15.8 BINDING EFFECT......................................................58
15.9 ASSIGNMENT..........................................................58
15.10 NO THIRD PARTY BENEFICIARIES.......................................58
15.11 AMENDMENT; WAIVERS, ETC............................................58
15.12 FOREIGN CURRENCIES.................................................59
15.13 BULK SALES COMPLIANCE..............................................59
15.14 ARBITRATION........................................................59
SCHEDULES AND EXHIBITS
Schedule 1.2 Excluded Assets
Schedule 2.5(a) Liabilities and Obligations (Indebtedness)
Schedule 3.1 Organization
Schedule 3.2 Authorized Capitalization; Outstanding Stock
Schedule 3.3 Subsidiaries
Schedule 3.5 Non-Contravention
Schedule 3.6(a) Audited Financial Statements
Schedule 3.6(b) Interim Financial Statements
Schedule 3.6(c) Other Liabilities as of December 31, 1996
Schedule 3.7 Interim Changes
Schedule 3.8(a) Good Title
Schedule 3.8(b) Leases
Schedule 3.8(d) Owner Property
Schedule 3.8(e) Title Insurance Policies, Surveys, Flood Hazard
Schedule 3.8(g) Right of First Refusal
Schedule 3.9(a) Environmental Matters (Permits)
Schedule 3.9(b) Environmental Matters (No Violations)
Schedule 3.9(c) Environmental Matters (No Actions)
Schedule 3.9(d) Environmental Matters (Other)
Schedule 3.10(a) Intellectual Property Rights (Title)
Schedule 3.10(d) Intellectual Property Rights (Licensing Arrangements)
Schedule 3.10(e) Intellectual Property Rights (No Litigation)
Schedule 3.11 Litigation
Schedule 3.12(a) Taxes
Schedule 3.12(c) Taxes
Schedule 3.12(d) Taxes (Governmental Authority)
Schedule 3.12(f) Taxes (Litigation)
Schedule 3.13(b) Compliance with Applicable Law
Schedule 3.14(a) Contracts
Schedule 3.14(c) Contracts (Defaults)
Schedule 3.15 Benefit Plans
Schedule 3.15(f) Benefit Plans (Parachute Payment)
Schedule 3.15(g) Benefit Plans (Enhanced Benefit)
Schedule 3.16 Transactions with Affiliates
Schedule 3.17 Insurance
Schedule 3.18(a) Labor Relations
Schedule 3.18(b) Labor Relations
Schedule 3.19 Off-site Assets
Schedule 3.20 Inventories
Schedule 3.21 Customers
Schedule 3.22 Suppliers; Raw Materials
Schedule 3.23 Absence of Certain Business Practices
Schedule 3.24 Confidentiality
Schedule 3.25 Letters of Credit, etc.
Schedule 3.28 Business Description
Schedule 3.31 Receivables
Schedule 3.33(a) Warranty and Product Liability Claims
Schedule 3.33(b) Warranty and Product Liability Claims
Schedule 3.36 Officers; Directors and Key Employees
Schedule 14 Senior Management Employees; Excluded Employees
Exhibit A Form of Escrow Agreement
Exhibit B Form of Consulting and Non-Competition Agreement
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of December 31, 1997, between Bacou USA
Safety, Inc., a Delaware corporation (the "Buyer") and a wholly-owned subsidiary
of Bacou USA, Inc. ("Bacou"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates, Inc., a
California corporation ("Seller" or "Company"), d/b/a ▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries,
Inc.
W I T N E S S E T H:
WHEREAS, Seller is in the business of manufacturing and marketing hearing
protection and other products in the United States and throughout the world,
directly and through domestic and foreign subsidiaries of Seller, identified on
Schedule 3.3 hereto, which Foreign Subsidiaries are to transfer Foreign Assets
(as such term and each other capitalized term used herein without definition is
defined in Article 14) to the Buyer (or another Buyer Party) pursuant to a
Foreign Acquisition Agreement (the "Subsidiaries" and together with Seller, the
"Sellers"); and
WHEREAS, the Buyer wishes to purchase or acquire (directly or indirectly
through subsidiaries) from Sellers and the Foreign Subsidiaries, and Sellers
wish to sell, assign and transfer to the Buyer, substantially all of the assets
and properties of Sellers, other than the Excluded Assets, held in connection
with, necessary for, or material to the business and operations of the Sellers
and the Buyer has agreed to assume (directly or indirectly through its
subsidiaries) the Assumed Liabilities, all for the purchase price and upon the
terms and subject to the conditions hereinafter set forth; and
WHEREAS, concurrently with or as promptly as practicable following the
execution and delivery of this Agreement, each of the Foreign Subsidiaries will
enter into a Foreign Acquisition Agreement and certain related agreements with
one or more of the Buyer Parties collectively providing for the purchase or
acquisition, directly or indirectly, of all of the Foreign Assets, for the
provision of certain transitional services and for certain other arrangements
between the Foreign Subsidiaries and one or more of the Buyer Parties;
NOW, THEREFORE, in consideration of the mutual covenants, representations
and warranties made herein, and of the mutual benefits to be derived hereby, the
parties hereto agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE ASSETS
1.1 ASSETS. Subject to and upon the terms and conditions set forth in this
Agreement, at the respective Closings, the Sellers will sell, transfer, convey,
assign and deliver to the Buyer Parties, and the Buyer Parties will purchase or
acquire from the Sellers, all right, title and interest of the Sellers in and to
the properties, assets and rights of every nature, kind and description,
tangible and intangible (including goodwill), whether real, personal or mixed,
whether accrued, contingent or otherwise and whether now existing or hereinafter
acquired which are owned by the Sellers or its Affiliates and utilized in the
Operations (other than the Excluded Assets) as the same may exist on the Closing
Date (collectively, the "Assets"), including without limitation all those items
in the following categories:
(a) all machinery, equipment, furniture, furnishings,
automobiles, trucks, vehicles, tools, dies, molds and parts and
similar property (including, but not limited to, any of the
foregoing subject to any conditional sales or title retention
agreements in favor of any other Person);
(b) all inventories of raw materials, work in process,
finished products, goods, spare parts, replacement and component
parts, and office and other supplies (collectively, the
"Inventories"), including Inventories held at any location
controlled by any Seller and Inventories previously purchased and
in transit to any Seller at such locations;
(c) all rights in and to products sold or leased (including,
but not limited to, products hereafter returned or repossessed
and unpaid sellers' rights of recision, replevin, reclamation and
rights to stoppage in transit);
(d) all rights (including but not limited to any and all
Intellectual Property rights) in and to the products sold or
leased and in and to any products or other Intellectual Property
rights under research or development prior to or on the Closing
Date;
(e) all of the rights of the Sellers under all contracts,
arrangements, licenses, leases and other agreements, including,
without limitation, any right to receive payment for products
sold or services rendered, and to receive goods and services,
pursuant to such agreements and to assert claims and take other
rightful actions in respect of breaches, defaults and other
violations of such contracts, arrangements, licenses, leases and
other agreements and otherwise;
(f) all credits, prepaid expenses, deferred charges, advance
payments, security deposits and prepaid items;
(g) all notes and accounts receivable held by the Sellers
and all notes, bonds and other evidences of indebtedness of and
rights to receive payments from any Person held by the Sellers;
(h) all Intellectual Property and all rights thereunder or
in respect thereof, including, but not limited to, rights to ▇▇▇
for and remedies against past, present and future infringements
thereof, and rights of priority and protection of interests
therein under the laws of any jurisdiction worldwide and all
tangible embodiments thereof (together with all Intellectual
Property rights included in the other clauses of this Section
1.1, the "Intellectual Property Assets");
(i) all books, records, manuals and other materials (in any
form or medium), including, without limitation, all records and
materials maintained at the headquarters of Seller, advertising
matter, catalogues, price lists, correspondence, mailing lists,
lists of customers, distribution lists, photographs, production
data, sales and promotional materials and records, purchasing
materials and records, personnel records, manufacturing and
quality control records and procedures, blueprints, research and
development files, records, data and laboratory books,
Intellectual Property disclosures, media materials and plates,
accounting records, sales order files and litigation files;
(j) to the extent their transfer is permitted by law, all
Governmental Approvals, including all applications therefor;
(k) all Real Property and all licenses, permits, approvals
and qualifications relating to any Real Property issued to any
Seller by any Governmental Authority;
(l) all rights to causes of action, lawsuits, judgment,
claims and demands of any nature available to or being pursued by
the Sellers with respect to the Business or the ownership, use,
function or value of any Asset, whether arising by way of
counterclaim or otherwise;
(m) all guarantees, warranties, indemnities and similar
rights in favor of the Sellers with respect to any Asset; and
(n) all assets of ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Europe) Limited
Subject to the terms and conditions hereof and of the respective Foreign
Acquisition Agreements, at the respective Closings, the Assets shall be
transferred or otherwise conveyed to the Buyer Parties subject to all
liabilities, obligations, liens and encumbrances excepting the Excluded
Liabilities.
1.2 EXCLUDED ASSETS. The Sellers will retain and not transfer, and none of
the Buyer Parties will purchase or acquire, the assets listed on Schedule 1.2
(which will include Seller's German Subsidiary (collectively, the "Excluded
Assets"):
1.3 FOREIGN ACQUISITIONS. Subject to the terms and conditions hereof,
Seller will cause the respective Foreign Subsidiaries to, and the Buyer will or
will cause one or more of its subsidiaries to, enter into the various Foreign
Acquisition Agreements, providing for the sale, transfer, assignment or other
direct or indirect conveyance of the Foreign Assets to be transferred by the
respective Foreign Subsidiaries to one or more of the Buyer Parties. Each
Foreign Acquisition Agreement will be consistent with the provisions of this
Agreement, including, without limitation, Knowledge qualifications, but with
such variations as may be required to satisfy the requirements of local law, to
adapt such agreement to the particular circumstances confronted in each country
or to cover such additional matters as may be agreed upon by Seller and the
Buyer, in each case as may be negotiated in good faith by Seller and the Buyer.
Buyer may elect to purchase the stock of one or more of the Foreign
Subsidiaries. The representations and covenants on the part of the Sellers in
each Foreign Acquisition Agreement will not be more onerous to Sellers than
those which are provided in this Agreement with respect to the Domestic Assets
in any material respect.
1.4 HEREOF, HEREIN, ETC. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified herein, the term "or" has the inclusive meaning
represented by the term "and/or" and the term "including" is not limiting. All
references as to "Sections", "Subsections", "Articles", "Schedules" and
"Exhibits" shall be to Section, Subsections, Articles, Schedules and Exhibits,
respectively, of this Agreement unless otherwise specifically provided.
1.5 COMPUTATION OF TIME PERIODS. In the computation of periods of time from
a specified date to a later specified date, unless otherwise specified herein
the words "commencing on" mean "commencing on and including", the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding".
1.6 ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all accounting terms shall be construed in accordance with GAAP. Except
as otherwise specifically provided herein, all financial statements required to
be delivered hereunder shall be prepared, and all accounting determinations and
calculations shall be made, in accordance with GAAP.
ARTICLE II
THE CLOSING
2.1 PLACE AND DATE. The closing of the sale and purchase of the Domestic
Assets (the "DOMESTIC CLOSING") shall take place within 10 business days
following receipt by Buyer of Seller's 1997 Financial Statements at 10:00 A.M.
local time (but in no event prior to February 27, 1998) at the offices of the
Seller; or such other time and place upon which the parties may agree. The day
on which the Closing actually occurs is herein sometimes referred to as the
"CLOSING DATE". The closings of the sale of the Foreign Assets (the "FOREIGN
CLOSINGS") shall also take place on the Closing Date or as soon as possible
thereafter subject to foreign approvals. Representatives of Buyer and Seller
will have a preliminary closing at least two days before the scheduled Closing
Date.
2.2 PURCHASE PRICE. On the terms and subject to the conditions set forth in
this Agreement and the Foreign Acquisition Agreements, the Buyer agrees to pay
or cause to be paid to Seller and to the Foreign Subsidiaries an aggregate of
U.S. One Hundred Twenty Million Dollars ($120,000,000) (the "PURCHASE PRICE")
and to assume or cause one of the Buyer Parties to assume the Assumed
Liabilities as provided in Section 2.5. The following portions of the Purchase
Price shall be payable at the respective Closings, in separate payments
determined in accordance with Section 2.4, as follows:
(a) By the wire transfer of U.S. One Hundred Eighteen
Million Dollars ($118,000,000) in immediately available funds to
such bank account or accounts as per written instructions of
Seller and the respective Foreign Subsidiaries, given to the
Buyer at least five days prior to the Closing; and
(b) By the wire transfer delivery of U.S. Two Million
Dollars ($2,000,000) in immediately available funds to the Escrow
Agent pursuant to the Escrow Agreement which will be in effect
for two years. Interest on Escrow Funds not subject to claims
shall be payable to Seller periodically. At the end of the first
year, $1,000,000 of the funds held by Escrow Agent less the
amount of claims, if any, made by Buyer under Section 13.1 of
this Agreement, shall be returned to Seller in accordance with
the Escrow Agreement.
2.3 CONTINGENT PURCHASE PRICE. In addition, if the world-wide consolidated
sales of ▇▇▇▇▇▇ ▇▇▇▇▇▇ hearing protection products by Buyer and its Affiliates,
for the calendar year 2000 exceed U.S. $80,959,000, Buyer shall pay Seller an
additional U.S. $2,000,000 on or before March 31, 2001. If such year 2000 sales
are in excess of $65,000,000 but less than $80,959,000, said contingent payment
shall be the product of $2,000,000 multiplied by a fraction, the numerator of
which shall be the amount of such excess, and the denominator of which shall be
15,959,000. If requested by Seller, Buyer will furnish to Seller its calculation
of such worldwide consolidated sales for calendar years 1998 (a partial year)
and 1999.
2.4 ALLOCATION OF PURCHASE PRICE.
(a) The parties agree to allocate the aggregate of the
Purchase Price and the Assumed Liabilities (collectively, the
"AGGREGATE PURCHASE PRICE"), among the respective portions of the
Operations grouped by country in accordance with an allocation
schedule to be prepared by the Buyer at its expense. Such
allocation schedule shall be prepared in accordance with section
1060 of the Code and shall be based on an appraisal or appraisals
conducted by an independent appraiser or appraisers chosen by the
Buyer. Notwithstanding the provisions of any Foreign Acquisition
Agreement, no Seller shall be entitled to receive from any Buyer
Party any amount in excess of the respective amounts set forth on
such allocation schedule on account of the sale to the Buyer
Parties of such Seller's Operations.
(b) The Aggregate Purchase Price allocated to the Domestic
Operations pursuant to Section 2.4(a) shall be allocated among
the Domestic Assets in accordance with an allocation schedule to
be prepared by the Buyer and approved by Seller which will not be
unreasonably withheld. Such allocation schedule shall be prepared
in accordance with section 1060 of the Code and shall be based on
the appraisal or appraisals provided for in Section 2.4(a). The
Aggregate Purchase Price allocated to the Foreign Operations in
each country pursuant to Section 2.4(a) shall be allocated among
the Foreign Assets in such country in accordance with an
allocation schedule to be prepared by the Buyer. Such allocation
schedule shall be prepared in accordance with the requirements of
the applicable tax law of such country and shall be based on the
appraisal or appraisals provided for in Section 2.4(a).
(c) In connection with the determination of the foregoing
appraisal or appraisals and allocation schedules, the parties
shall cooperate with each other and provide such information as
any of them shall reasonably request. The parties will each
report the federal, state and local and other Tax consequences of
the purchase and sale contemplated hereby (including the filing
of Internal Revenue Service Form 8594) in a manner consistent
with such allocation schedules.
(d) In no event shall the allocation change the Purchase
Price as provided in Section 2.2.
2.5 ASSUMPTION OF LIABILITIES.
(a) Subject to the terms and conditions set forth herein and in the
respective Foreign Acquisition Agreements, at the respective Closings the Buyer
Parties shall assume and agree to pay, honor and discharge when due all of the
liabilities of the Sellers and of ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Europe) Limited relating to the
Operations unasserted and existing at or arising on or after the Closing Date,
including but not limited to Taxes other than Income Taxes (collectively, the
"ASSUMED LIABILITIES"), except that Buyer shall not assume nor shall the term
"ASSUMED LIABILITIES" include the "EXCLUDED LIABILITIES" as defined in Section
2.6 below.
(b) At the Domestic Closing, the Buyer shall, or shall cause one of the
Buyer Parties to, assume the Assumed Liabilities relating to the Domestic
Operations by executing and delivering an assumption agreement in a form
reasonably satisfactory to Seller (the "ASSUMPTION AGREEMENT"). At each Foreign
Subsidiary Closing, the respective Buyer Party purchasing or otherwise acquiring
Foreign Subsidiary Assets shall assume the related Foreign Subsidiary Assumed
Liabilities in accordance with the respective Foreign Acquisition Agreement.
2.6 EXCLUDED LIABILITIES.
Notwithstanding the provisions of Section 2.5 or any other provision hereof
or any Schedule or Exhibit hereto and regardless of any disclosure to the Buyer,
neither the Buyer nor any Buyer Party shall be obligated to assume or become
liable for any of the liabilities, obligations, debts, contracts or other
commitments of any of the Sellers of any kind whatsoever, known or unknown,
fixed or contingent, now existing or hereafter arising, which shall relate to:
(a) liabilities and obligations for federal, state, local, foreign or other
income taxes arising in connection with the Operations for periods ending on or
prior to the Closing Date or arising as a result of the transactions
contemplated by this Agreement and the Collateral Agreements, (b) liabilities
and obligations of which any of the Sellers had Knowledge, or relating to or
arising out of any facts or circumstances of which Sellers had Knowledge, (c)
liabilities and obligations arising out of or in connection with the purchase,
sale, lease, use, storage, maintenance of any of the assets described on
Schedule 2.6(c), (d) liabilities and obligations of or arising with respect to
▇▇▇▇▇▇ ▇▇▇▇▇▇ Co. GmbH Optac OHG, ▇▇▇▇▇▇ ▇▇▇▇▇▇ GmbH, and ▇▇▇▇▇▇ ▇▇▇▇▇▇
International, Inc., (e) liabilities and obligations in excess of those which
are reasonable in the context of the transactions contemplated hereby incurred
in connection with the preparation of this Agreement, the Collateral Agreements
and the consummation of the transactions contemplated hereby, including, but not
limited to, legal and accounting fees, (f) liabilities and obligations based
upon illegal conduct, (g) liabilities and obligations arising under any
agreement with employees as a result of the consummation of the transactions
contemplated by this Agreement and the Collateral Agreements, and (h) any
liabilities and obligations with respect to those employees of Seller listed in
Schedule 2.6(h).
2.7 CONSENT OF THIRD PARTIES.
Notwithstanding anything to the contrary in this Agreement, this Agreement
shall not constitute an agreement to assign or transfer any Governmental
Approval, instrument, contract, lease, permit or other agreement or arrangement
or any claim, right or benefit arising thereunder or resulting therefrom if an
assignment or transfer or an attempt to make such an assignment or transfer
without the consent of a third party would constitute a breach or violation
thereof or affect adversely the rights of the Buyer or Seller thereunder; and
any transfer or assignment to the Buyer by Seller of any interest under any such
instrument, contract, lease, permit or other agreement or arrangement that
requires the consent of a third party shall be made subject to such consent or
approval being obtained. In the event any such consent or approval is not
obtained on or prior to the Closing Date, Seller shall continue to use all
reasonable efforts to obtain any such approval or consent after the Closing Date
until such time as such consent or approval has been obtained, and Seller will
cooperate with the Buyer in any lawful and economically feasible arrangement to
provide that the Buyer shall receive the interest of any such instrument,
contract, lease or permit or other agreement or arrangement, including
performance by Seller, as the case may be, as agent, if economically feasible,
PROVIDED that the Buyer shall undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefit to the extent the Buyer would have
been responsible therefor hereunder if such consent or approval had been
obtained. Nothing in this Section 2.7 shall be deemed a waiver by the Buyer of
its right to have received on or before the Closing an effective assignment of
all of the Assets nor shall this Section 2.7 be deemed to constitute an
agreement to exclude from the Assets any assets described under Section 1.1.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller hereby represents and warrants the following to Buyer, which
representations and warranties shall be true and correct as of the date hereof
and as of the Closing as if made on and as of the Closing:
3.1 ORGANIZATION. The Seller and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its State or
Country of incorporation as set forth on SCHEDULE 3.1 and has the corporate
power and authority to own or lease its properties and carry on its business as
now being conducted. To the Knowledge of Sellers, each of the Seller and the
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in every jurisdiction in which the operation of its business
requires such qualification. The Seller has, prior to the execution and delivery
of this Agreement, made available to Buyer, certified copies of the Articles of
Incorporation and bylaws of the Seller and each Subsidiary, each as in effect on
the date hereof. The minute books, stock certificate books and stock transfer
ledgers of the Seller and each Subsidiary (collectively, the "Corporate Books"),
copies of which have been provided by the Seller to Buyer as provided in SECTION
3.35, are complete and correct and properly reflect all material transactions
involving the business and operations of the Seller and each Subsidiary,
provided that the representation in this sentence shall be qualified to the
Knowledge of Sellers, except with respect to said stock certificate books and
stock transfer ledgers.
3.2 AUTHORIZED CAPITALIZATION; OUTSTANDING STOCK. The authorized capital
stock of the Seller and each Subsidiary is set forth on SCHEDULE 3.2. SCHEDULE
3.2 sets forth the number and class of shares of capital stock of the Seller and
each Subsidiary that are issued and outstanding, the name of the legal and
beneficial holder thereof together with the certificate number and the number of
outstanding shares evidenced thereby and the percentage of the aggregate issued
and outstanding shares of such class of capital stock so held by such holder.
Such shares are owned beneficially and of record by such holders and each such
holder has good and valid title to such shares so owned by it/him/her free and
clear of all Liens. Such shares have been duly authorized, are validly issued
and are fully paid and non-assessable and free of preemptive rights and have not
been issued in violation of any securities laws. There are no outstanding
rights, warrants, options or agreements with respect to any class of capital
stock of the Seller or any Subsidiary.
3.3 SUBSIDIARIES. Except as set forth on SCHEDULE 3.3, the Seller has no
Subsidiaries. Neither the Seller or any Subsidiary is a party to any partnership
agreement or understanding or joint venture agreement or understanding.
3.4 AUTHORITY; BINDING EFFECT. Each of the Seller and the Subsidiaries has
full power, authority and capacity to execute and deliver this Agreement and the
Collateral Documents to which the Seller or such Subsidiary is a party and to
perform the transactions required of the Seller or such Subsidiary thereunder
and at the Closing. Each of this Agreement and the Collateral Documents to which
the Seller or any Subsidiary is a party has been duly authorized, executed and
delivered by the Seller or such Subsidiary, as the case may be, and constitutes
the legal, valid and binding obligations of the Seller or such Subsidiary, as
the case may be, enforceable against the Seller or such Seller, as the case may
be, in accordance with the terms and provisions thereof, subject to general
equity principles and to applicable bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium and other similar laws from time to time in effect
affecting the enforcement of creditors' rights generally (regardless of whether
such enforcement is considered in a proceeding in equity or at law).
3.5 NON-CONTRAVENTION. Except as set forth in Schedule 3.5, neither the
execution and delivery by the Seller or any Subsidiary of this Agreement or any
Collateral Agreement to which the Seller or such Subsidiary is a party nor the
consummation by the Seller or such Subsidiary of the transactions contemplated
thereby (a) will violate any provision of the Articles of Incorporation or
bylaws of the Seller or any Subsidiary, (b) to the Knowledge of Sellers will
violate or conflict with any applicable statute, law, ordinance, rule,
regulation, order, writ, injunction, award, judgment or decree applicable to the
Seller or any Subsidiary, (c) to the Knowledge of Sellers will conflict with or
constitute a violation of or a default (or an event which with notice or lapse
of time or both, would constitute a default) under, or will result in the
termination of, or accelerate performance required by, any contract to which the
Seller or any Subsidiary is a party or to which any of the assets or properties
of the Seller or any Subsidiary are subject, or (d) will result in the creation
of any Lien upon any of the capital stock, property or assets of the Seller or
any Subsidiary. Except for the HSR Approval, neither the execution or delivery
by the Seller or any Subsidiary of this Agreement or any Collateral Agreement to
which the Seller or such Subsidiary is a party nor the consummation of the
transactions contemplated thereby will require the consent, authorization or
approval of, or notice to or filing or registration with, any Person.
3.6 FINANCIAL STATEMENTS.
(a) The Audited Financial Statements (true, correct and complete copies of
which are attached hereto as SCHEDULE 3.6(A)) (i) have been, or when delivered
will be, prepared in accordance with GAAP, (ii) are, or when delivered will be,
true, accurate and complete, and (iii) fairly and accurately present or, when
delivered will fairly and accurately present, the properties, assets,
liabilities, financial positions and results of operations of the Seller and
each Subsidiary as of the respective dates and for the respective periods
covered thereby.
(b) The Interim Financial Statements (attached hereto as Schedule 3.6(b))
and the Subsequent Monthly Financial Statements delivered pursuant to Section
5.4 (i) are, or when delivered will be, true, accurate and complete, and (ii)
fairly and accurately present, or when delivered will fairly and accurately
present, the properties, assets, liabilities, financial positions and results of
operations of the Seller and each Subsidiary as of the respective dates and for
the respective periods covered thereby (subject to normal year-end adjustments).
(c) To the Knowledge of Sellers, as of December 31, 1996, neither the
Seller nor any Subsidiary had any liabilities or obligations (whether secured or
unsecured, accrued, absolute, contingent or otherwise) which, under GAAP, should
have been but which were not reflected or reserved against in the 1996 Financial
Statements. To the Knowledge of Sellers, since December 31, 1996 neither the
Seller nor any Subsidiary has incurred any liabilities or obligations (whether
secured or unsecured, accrued, absolute, contingent or otherwise), including,
without limitation, any items of litigation, except any such liabilities or
obligations (i) arising under and in compliance with the Contracts to which the
Seller or any Subsidiary is a party, (ii) incurred in the ordinary course of
business of the Seller or any Subsidiary, and (iii) such other liabilities or
obligations as are set forth in SCHEDULE 3.6(C).
(d) The accounting books and records of the Seller and each Subsidiary (i)
are accurate, correct and complete, (ii) are current in a manner consistent with
past practice, and (iii) have recorded therein all of the properties, assets and
liabilities of the Seller and each Subsidiary (except where the failure to so
record would not violate GAAP).
(e) The Seller will use its best efforts to deliver to the Buyer the 1997
Financial Statements on or before February 15, 1998. In connection with the end
of such fiscal year, each Seller will conduct its business in the ordinary
course and will not accelerate shipments or delay the purchase of goods or
services in an effort to increase operating earnings for such year. The balance
sheet included in the 1997 Financial Statements, on a combined basis with the
balance sheets for such period for ▇▇▇▇▇▇ ▇▇▇▇▇▇ de Mexico S.A. de C.V. and
▇▇▇▇▇▇ ▇▇▇▇▇▇ (Europe) Ltd., shall reflect a combined net worth (excluding from
the computation of net worth for this purpose cash in excess of $1,000,000) of
at least US $10,716,000 and combined working capital (consisting of combined
current assets (excluding from such assets for this purpose cash in excess of
$1,000,000) less combined current liabilities) (the "1997 Working Capital") of
at least $5,495,000, including at least $1,000,000 in cash.
3.7 INTERIM CHANGES. Since December 31, 1996, the business of the Seller
and each Subsidiary has been operated in the ordinary course consistent with
prior practice and, except as set forth on SCHEDULE 3.7, neither the Seller nor
any Subsidiary has (nor has it authorized or proposed or entered into any
contract, agreement, commitment or arrangement to do any of the following):
(i) suffered any Material Adverse Effect;
(ii) incurred any obligation or liability, absolute, accrued
or otherwise, whether due or to become due, except current
liabilities for trade or business obligations incurred in
connection with the purchase of goods or services in the ordinary
course of business consistent with prior practice, none of which
liabilities, in any case or in the aggregate, could have a
Material Adverse Effect;
(iii) discharged or satisfied any Lien other than those then
required to be discharged or satisfied, or paid any obligation or
liability, absolute, accrued, contingent or otherwise, whether
due or to become due, other than current liabilities shown on the
Audited Balance Sheet and current liabilities incurred since the
date thereof in the ordinary course of business consistent with
prior practice;
(iv) mortgaged, pledged or subjected to Lien, any property,
business or assets, tangible or intangible, held in connection
with the Business;
(v) sold, transferred, leased to others or otherwise
disposed of any of the assets used in the Operations, except for
inventory sold in the ordinary course of business, or canceled or
compromised any debt or claim, or waived or released any right of
substantial value;
(vi) received any notice of termination of any contract,
lease or other agreement or suffered any damage, destruction or
loss (whether or not covered by insurance) which, in any case or
in the aggregate, has had a Material Adverse Effect;
(vii) transferred or granted any rights under, or entered
into any settlement regarding the breach or infringement of, any
Intellectual Property, or modified any existing rights with
respect thereto;
(viii) made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration
payable, or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, incentive, retention or
other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any shareholder,
director, officer, employee, salesman, distributor or agent of
any Seller relating to the Business;
(ix) encountered any labor union organizing activity, had
any actual or threatened employee strikes, work stoppages,
slowdowns or lockouts, or had any material change in its
relations with its employees, agents, customers or suppliers;
(x) failed to replenish its inventories and supplies in a
normal and customary manner consistent with its prior practice
and prudent business practices prevailing in the industry, or
made any purchase commitment in excess of the normal, ordinary
and usual requirements of its business or at any price in excess
of the then current market price or upon terms and conditions
more onerous than those usual and customary in the industry, or
made any change in its selling, pricing, advertising, or
personnel practices inconsistent with its prior practice and
prudent business practices prevailing in the industry;
(xi) made any capital expenditures or capital additions or
improvements in excess of an aggregate of $100,000;
(xii) instituted, settled or agreed to settle any
litigation, action or proceeding before any court or governmental
body relating to the Business or the Assets other than in the
ordinary course of business consistent with past practices but
not in any case involving amounts in excess of $10,000;
(xiii) entered into any transactions, contract or commitment
other than in the ordinary course of business or paid or agreed
to pay any legal, accounting, brokerage, finder's fee, Taxes or
other expenses in connection with, or incurred any severance pay
obligations by reason of, this Agreement or the transactions
contemplated hereby; or
(xiv) taken any action or omitted to take any action that
would result in the occurrence of any of the foregoing.
3.8 OWNED AND LEASED PROPERTY.
(a) Except as disclosed in Schedule 3.8(a), the Sellers have good title to
all the Assets free and clear of any and all Liens other than Permitted Liens.
The Assets comprise all assets and services required for the continued conduct
of the Business by the Buyer as now being conducted. The Assets, taken as a
whole, constitute all the properties and assets relating to or used or held for
use in connection with the Business during the past twelve months (except
Inventory sold, cash disposed of, accounts receivable collected, prepaid
expenses realized, Contracts fully performed, properties or assets replaced by
equivalent or superior properties or assets, in each case in the ordinary course
of business, employees not hired by the Buyer, and the Excluded Assets). Except
for Excluded Assets, there are no assets or properties used in the operation of
the Business and owned by any Person other than the Sellers that will not be
leased or licensed to the Buyer under valid, current leases or license
arrangements. The Assets are in all material respects adequate for the purposes
for which such assets are currently used or are held for use, and are in
reasonably good repair and operating condition (subject to normal wear and tear)
and, to the Knowledge of the Sellers, there are no facts or conditions affecting
the Assets which could, individually or in the aggregate, interfere in any
material respect with the use, occupancy or operation thereof as currently used,
occupied or operated, or their adequacy for such use.
(b) All leases and subleases pursuant to which the Seller or any Subsidiary
(i) leases (whether as lessee or lessor) its Tangible Personal Property, or (ii)
leases or has leased any real property as lessor or lessee (the "Leased Real
Property") are set forth on SCHEDULE 3.8(B). Such leases and subleases (other
than the leases identified on SCHEDUlE 3.8(B) as no longer in effect) are in
good standing and are valid and binding against the Seller or such Subsidiary,
as the case may be, and, to the Knowledge of the Seller, the other parties
thereto in accordance with their respective terms, subject to general equity
principles and to applicable bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium and other similar laws from time to time in effect
affecting creditors' rights generally (whether considered in a proceeding in
equity or at law), and there is not under any of such leases or subleases any
existing default, event of default or event which with notice or lapse of time
or both would constitute a default, by the Seller or any Subsidiary or, to the
Knowledge of the Seller, any Person from or to whom the Seller or any Subsidiary
leases or subleases such Tangible Personal Property or Leased Real Property.
None of the rights of the Seller or any Subsidiary under any of such leases or
subleases is subject to termination or modification as the result of the
transactions contemplated by this Agreement or any Collateral Agreement.
(c) To the Knowledge of Sellers, all components of all buildings,
structures and other improvements included within the Properties (the
"Improvements"), including but not limited to the roofs and structural elements
thereof and the heating, ventilation, air conditioning, plumbing, electrical,
mechanical, sewer, waste water, storm water, waste treatment, paving and parking
equipment, systems and facilities included therein, are in compliance with all
laws, rules, regulations, ordinances and legal and insurance requirements and
are in good working order and repair (ordinary wear and tear excepted). To the
Knowledge of Sellers, all potable water and all gas, electrical, steam,
compressed air, telecommunication, and other similar systems serving or
necessary to serve all or any part of the Properties are installed and operating
and are sufficient to enable such Properties to continue to be used and operated
in the manner currently being used and operated and any associated charges have
been fully paid. To the Knowledge of Sellers, each such utility or other service
is provided by a public utility and enters the applicable Property from an
adjacent public street. To the Knowledge of Sellers, each Improvement has direct
access to a public street adjoining the Property on which such Improvement is
situated and no existing access-way crosses or encroaches upon any property or
property interest not owned by the Seller or a Subsidiary. To the Knowledge of
Sellers, no Improvement or portion thereof is dependent for its access,
operation or utility on any land, building or other improvement not included in
the Properties.
(d) All real property owned by the Seller or any Subsidiary on or prior to
the date hereof is set forth on Schedule 3.8(d) (the "Owned Real Property").
(e) To the Knowledge of Sellers, the Properties and the use thereof are
both in compliance with all applicable laws, by-laws, zoning or use ordinance,
rules, regulations and legal and insurance requirements (collectively, "Real
Property Laws"). To the Knowledge of Sellers, neither the Seller nor any
Subsidiary has received any work orders or notice of any defect in the
construction or state of repair of any of the Properties or notice of any
violation or claimed violation of any Real Property Law or of any changes or
proposed changes to Real Property Laws which will adversely affect the current
use of any of the Properties. To the Knowledge of Sellers, the Properties and
their continued use, occupancy and operation as currently used, occupied and
operated do not constitute a nonconforming use under any Real Property Law and
the continued existence, use, occupancy and operation of each Improvement, and
the right and ability to repair and/or rebuild such Improvement in the event of
casualty, is not dependent on any special permit, exception, approval or
variance. To the Knowledge of any Seller there is no pending or anticipated
change in any Real Property Law which would have an adverse effect upon the
ownership, alteration, use, occupancy or operation of any of the Properties or
any portion thereof, or upon the reconstruction of any Improvement in the event
of a casualty. No dispute currently exists with any Governmental Authority with
respect to any Real Property Law or the application thereof to any of the
Properties. There are no encroachments upon any of the Properties and the
Improvements situated upon such Properties do not encroach upon or violate any
rights or way, easements or the lands of others unless otherwise set forth in
the title insurance policy or survey attached hereto as Schedule 3.8(e). There
are no violations of law or rule with respect to water supply, sewage or waste
disposal facilities. No portion of any of the Properties has suffered any damage
by fire or other casualty which has not heretofore been completely repaired and
restored to its original condition. Except as set forth on Schedule 3.8(e), no
portion of any of the Properties is located in a special flood hazard area as
designated by federal governmental authorities nor is any portion of the
Properties subject to conservation authority regulation.
(f) To the Knowledge of Sellers, neither the Seller nor any Subsidiary has
received any notice of any special assessment or condemnation from a
Governmental Authority with respect to any of the Properties.
(g) Except as set forth on Schedule 3.8(g), neither the Seller nor any
Subsidiary owns, holds or is obligated under, or is a party to, any option,
right of first refusal or other contractual right to purchase, acquire, sell or
dispose of all or any part of the Properties or any interest therein. Except as
set forth on SCHEDULE 3.8(G) neither the Seller nor any Subsidiary is a lessor,
sublessor or grantor under any contract granting to another Person any right to
the possession, use, occupancy or enjoyment of all or any part of the Properties
or any interest therein.
3.9 ENVIRONMENTAL MATTERS.
(a) PERMITS. To the Knowledge of Sellers, all Environmental Permits are
identified in Schedule 3.9(a), and the Sellers currently hold, and at all times
have held, all such Environmental Permits necessary to the Business, and all
such Environmental Permits shall be validly transferred to the Buyer on the
Closing Date. No Seller has been notified by any relevant Governmental Authority
that any Environmental Permit will be modified, suspended, canceled or revoked,
or cannot be renewed in the ordinary course of business.
(b) NO VIOLATIONS. To the Knowledge of Sellers and their respective
Affiliates (other than family members), the Sellers and their Affiliates (other
than family members) have complied and are in compliance in all material
respects with all Environmental Permits and all applicable Environmental Laws
pertaining to the Real Property (and the use, ownership or transferability
thereof) and the Business. To the Knowledge of Sellers, no Person has alleged
any violation by any Seller and their respective Affiliates (other than family
members) of any Environmental Permits or any applicable Environmental Law
relating to the conduct of the Business or the use, ownership or transferability
of the Real Property.
(c) NO ACTIONS. Except as set forth in Schedule 3.9(c), to the Knowledge of
Sellers, none of the Sellers or any of their respective Affiliates (other than
family members) has caused or taken any action that has resulted or may result
in, or has been or is subject to, any liability or obligation relating to (i)
the environmental conditions on, under, or about any Real Property, the Assets
or other properties or assets owned, leased or used by the Sellers held for use
in connection with, necessary for the conduct of, or otherwise material to, the
Business, or (ii) the past or present use, management, handling, transport,
treatment, generation, storage or Release of any Hazardous Substances, except
for any such liabilities and obligations that, individually and in the
aggregate, are not material to the Business and have not had or resulted in, and
will not have or result in, a Material Adverse Effect.
(d) OTHER. Except as set forth in Schedule 3.9(d) and to the Knowledge of
Sellers:
(i) None of current or past operations, or any by-product
thereof, and none of the currently or formerly owned property or
assets of any Seller used in the Business, including without
limitation the Assets and the Real Property, is related to or
subject to any investigation or evaluation by any Governmental
Authority, as to whether any Remedial Action is needed to respond
to a Release or threatened Release of any Hazardous Substances.
(ii) No Seller is subject to any outstanding order,
judgment, injunction, decree or writ from, or contractual or
other obligation to or with, any Governmental Authority or other
Person in respect of which the Buyer may be required to incur any
Environmental Liabilities and Costs arising from the Release or
threatened Release of a Hazardous Substance.
(iii) None of the Real Property is, and no Seller nor any of
their respective Affiliates (other than family members) has
transported or arranged for transportation (directly or
indirectly) of any Hazardous Substances relating to the Assets or
the Real Property to any location that is, listed or proposed for
listing under CERCLA, or on any similar state list, or the
subject of federal, state or local enforcement actions or
investigations or Remedial Action.
(iv) No work, repair, construction or capital expenditure is
required or planned in respect of the Assets pursuant to or to
comply with any Environmental Law, nor have any of the Sellers
and their respective Affiliates (other than family members)
received any notice of any such requirement, except for such
work, repair, construction or capital expenditure as is not
material to the Business and is in the ordinary course of
business.
(e) FULL DISCLOSURE. To the Knowledge of Sellers, the Sellers have
disclosed and made available to the Buyer all information, including without
limitation all studies, analyses and test results, in the possession, custody or
control of any Seller and their respective Affiliates other than family members
relating to (i) the environmental conditions on, under or about the Real
Property, and (ii) Hazardous Substances used, managed, handled, transported,
treated, generated, stored or Released by any Seller or any other Person at any
time on any Real Property, or otherwise in connection with the use or operation
of the properties or assets used in or held for use in connection with the
Business.
(f) USTS. To the Knowledge of Sellers, there are no underground or
above-ground storage tanks (whether or not currently in use) located on or under
any real property currently owned, operated or leased by the Seller or any
Subsidiary, and no underground tank previously located on any real property
currently owned, operated or leased by the Seller or any Subsidiary has been
removed from that property.
(g) LITIGATION. Neither the Seller, any Subsidiary nor any of the currently
or formerly owned or operated property used by the Seller or any Subsidiary is
the subject of any pending or, to the Knowledge of the Seller, threatened
federal, state or local enforcement action, investigation, remedial action,
litigation, claim or notice by any Person under any Environmental Laws.
3.10 INTELLECTUAL PROPERTY RIGHTS.
(a) TITLE. Schedule 3.10(a) contains a complete and correct list of all
Intellectual Property that is owned by any Seller and primarily related to, used
in, held for use in connection with, or necessary for the conduct of, or
otherwise material to the Business (the "OWNED INTELLECTUAL PROPERTY") other
than (i) inventions, trade secrets, processes, formulas, compositions, designs
and confidential business and technical information and (ii) Intellectual
Property that is both not registered or subject to application for registration
and not material to the Business. The Sellers own or have the exclusive right to
use pursuant to license, sublicense, agreement or permission all Intellectual
Property Assets, free from any Liens (other than Permitted Liens) and free from
any requirement of any past, present or future royalty payments, license fees,
charges or other payments, or conditions or restrictions whatsoever. To the
Knowledge of Sellers, the Intellectual Property Assets comprise all of the
Intellectual Property necessary for the Buyer to conduct and operate the
Business as now being conducted by the Sellers.
(b) TRANSFER. At the Closing, Seller shall assign all rights Seller has
with respect to the Owned Intellectual Property and Buyer will then have a right
to use all other Intellectual Property Assets, free from any Liens (other than
Permitted Liens) and on the same terms and conditions as in effect prior to the
Closing. On or prior to the Closing Date, Seller shall have obtained the right
to transfer any Intellectual Property Assets to Buyer held by third parties.
Buyer will be responsible for recording fees.
(c) NO INFRINGEMENT. To the Knowledge of the Sellers, the conduct of the
Business does not infringe or otherwise conflict with any rights of any Person
in respect of any Intellectual Property. To the Knowledge of the Sellers, none
of the Intellectual Property Assets is being infringed or otherwise used or
available for use, by any other Person.
(d) LICENSING ARRANGEMENTS. Schedule 3.10(d) sets forth all agreements,
arrangements or laws (i) pursuant to which any Seller has licensed Intellectual
Property Assets to, or the use of Intellectual Property Assets is otherwise
permitted (through non-assertion, settlement or similar agreements or otherwise)
by, any other Person and (ii) pursuant to which any Seller has had Intellectual
Property licensed to it, or has otherwise been permitted to use Intellectual
Property (through non-assertion, settlement or similar agreements or otherwise).
All of the agreements or arrangements set forth on Schedule 3.10(d) (x) are in
full force and effect in accordance with their terms and no default exists
thereunder by any Seller, or to the Knowledge of any Seller by any other party
thereto, (y) are free and clear of all Liens, and (z) do not contain any change
in control or other terms or conditions that will become applicable or
inapplicable as a result of the consummation of the transactions contemplated by
this Agreement. The Seller has delivered to the Buyer true and complete copies
of all licenses and arrangements (including amendments) set forth on Schedule
3.10(d). All royalties, license fees, charges and other amounts payable by, on
behalf of, to, or for the account of, the Sellers in respect of any Intellectual
Property are disclosed in the Audited Financial Statements.
(e) NO INTELLECTUAL PROPERTY LITIGATION. Except as set forth in Schedule
3.10(e), no claim or demand of any Person has been made nor is there any
proceeding that is pending, or to the knowledge of the Sellers threatened which
(i) challenges the rights of the Sellers in respect of any Intellectual Property
Assets, (ii) asserts that any Seller is infringing or otherwise in conflict
with, or is, required to pay any royalty, license fee, charge or other amount
with regard to, any Intellectual Property, or (iii) claims that any default
exists under any agreement or arrangement listed on Schedule 3.10(d). Except as
set forth in Schedule 3.10(e), none of the Intellectual Property Assets is
subject to any outstanding order, ruling, decree, judgment or stipulation by or
with any court, arbitrator, or administrative agency, or has been the subject of
any litigation within the last five years, whether or not resolved in favor of
the Sellers.
(f) DUE REGISTRATION, ETC. To the Knowledge of Sellers, the Owned
Intellectual Property has been duly registered with, filed in or issued by, as
the case may be, the United States Patent and Trademark Office, United States
Copyright Office or such other filing offices, domestic or foreign, and to the
Knowledge of Sellers, the Sellers or their agents have taken such other actions,
to ensure full protection under any applicable laws or regulations, and such
registrations, filings, issuances and other actions remain in full force and
effect, in each case to the extent material to the Business.
(g) USE OF NAME AND ▇▇▇▇. There are, and immediately after the Closing will
be, no contractual restriction or limitations pursuant to any orders, decisions,
injunctions, judgments, awards or decrees of any Governmental Authority on the
Buyer's right to use the name and ▇▇▇▇ "▇▇▇▇▇▇ ▇▇▇▇▇▇" in the conduct of the
Business as presently carried on by the Sellers or as such Business may be
extended by the Buyer.
3.11 LITIGATION. Except as set forth on Schedule 3.11, there is no action,
claim, demand, suit, proceeding, arbitration, grievance, citation, summons,
subpoena, inquiry or investigation of any nature, civil, criminal, regulatory or
otherwise, in law or in equity, pending or, to the Knowledge of Sellers,
threatened against or relating to any Seller in connection with the Assets or
the Business or against or relating to the transactions contemplated by this
Agreement. To the Knowledge of Sellers, except as set forth in such Schedule
3.11, no citations, fines or penalties have been asserted against any Seller
since December 31, 1993, under any Environmental Law or any foreign, federal,
state or local law relating to occupational health or safety.
No Seller is subject to any order, writ, injunction, judgment or decree. To
the Knowledge of Sellers, all notices required to have been given to any
insurance company insuring against any action, suit, order, award, judgment,
injunction, decree, claim or other proceeding in connection with the Assets or
any Seller have been timely and duly given and, no insurance company has
asserted, orally or in writing, that any such action, suit, order, award,
judgment, injunction, decree, claim or other proceeding is not covered by the
applicable policy relating thereto.
3.12 TAXES.
(a) For the purposes of this Section 3.12(a) only, the term "Taxes" shall
exclude Withholding Taxes and Income Taxes. To the Knowledge of Sellers, each of
the Sellers has (or by the Closing will have) duly and timely filed all Tax
Returns relating to the Business with respect to Taxes required to be filed on
or before the Closing Date. Except for Taxes set forth on Schedule 3.12(a),
which are being contested in good faith and by appropriate proceedings, the
following Taxes have (or by the Closing Date will have) been duly and timely
paid: (i) all Taxes shown to be due on the Tax Returns, (ii) all deficiencies
and assessments of Taxes of which notice has (or by the Closing Date will have)
been received by any Seller that are or may become payable by the Buyer or
another Buyer Party or chargeable as a lien upon the Business, and (iii) all
other Taxes due and payable on or before the Closing Date for which neither
filing of Tax Returns nor notice of deficiency or assessment is required, of
which any Seller has Knowledge that are or may become payable by the Buyer or
another Buyer Party or chargeable as a lien upon the Business.
(b) Each of the Sellers has (or by the Closing will have) duly and timely
filed all Tax Returns relating to the Business with respect to Income Taxes
required to be filed on or before the Closing Date ("Income Tax Returns"). The
following Income Taxes have (or by the Closing Date will have) been duly and
timely paid: (i) all Income Taxes shown to be due on the Income Tax Returns, and
(ii) all deficiencies and assessments of Income Taxes of which notice has (or by
the Closing Date will have) been received by any Seller.
(c) Except as set forth on Schedule 3.12(c), To the Knowledge of Sellers no
agreement or other document extending, or having the effect of extending, the
period of assessment or collection of any Taxes, Income Taxes, and no power of
attorney with respect to any such Taxes, has been filed with the IRS or any
other Governmental Authority.
(d) Except as set forth on Schedule 3.12(d), to the Knowledge of Sellers
(i) there are no Taxes asserted in writing by any Governmental Authority to be
due and (ii) no issue has been raised in writing by any Governmental Authority
in the course of any audit with respect to Taxes. Except as set forth on
Schedule 3.12(d), no Taxes are currently under audit by any Governmental
Authority. Except as set forth on Schedule 3.12(d), neither the IRS nor any
other Governmental Authority is now asserting or, to the best knowledge of any
Seller, threatening to assert against any Seller any deficiency or claim for
additional Taxes or any adjustment of Taxes that would, if paid by the Buyer,
have a Material Adverse Effect, and there is no reasonable basis for any such
assertion of which any Seller is or reasonably should be aware.
(e) No Buyer Party will be required to deduct and withhold any amount
pursuant to Section 1445(a) of the Code upon the transfer of the Business to
such Buyer Party.
(f) Except as set forth on Schedule 3.12(f), there is no litigation or
administrative appeal pending or, to the Knowledge of any Seller, threatened
against or relating to any Seller in connection with Taxes.
(g) To the Knowledge of Sellers, all Taxes required to be withheld by or on
behalf of the Sellers in connection with amounts paid or owing to any employee,
independent contractor, creditor or other party with respect to the Business
("WITHHOLDING TAXES") have been withheld, and such withheld taxes have either
been duly and timely paid to the proper Governmental Authorities or set aside in
accounts for such purpose.
3.13 COMPLIANCE WITH APPLICABLE LAW.
(a) To the Knowledge of Seller, the Seller and each Subsidiary has all
licenses, permits, approvals and other authorizations as are required or are
necessary in order to enable it to own and occupy its Properties and conduct its
business as currently conducted and each such license, permit, approval and
other authorization is in full force and effect or will be by the Closing Date
and no violations are or have been recorded in respect thereof and no proceeding
is pending or threatened to revoke or limit any such license, permit, approval
or other authorization. To the Knowledge of Sellers, neither the Seller nor any
Subsidiary has violated or failed to comply with any, and the operations of the
business of the Seller and each Subsidiary is in compliance with all, federal,
state, foreign and/or local laws, statutes, codes, orders, writs, injunctions,
judgments, awards, plans, decrees, ordinances, rules and regulations or any
other requirement of any Governmental Authority. Neither the Seller nor any
Subsidiary has received notice of any violation of, or liability or
responsibility under, any applicable federal, state, foreign, or local law,
statute, code, order, writ, injunction, judgment, awards, plan, ordinance,
decree, rule or regulation or any other requirement of any Governmental
Authority and neither the Seller nor any Subsidiary has received notice of any
threatened claim of such a violation, liability or responsibility (including any
investigations relating thereto).
(b) Schedule 3.13(b) sets forth all Contracts with any Governmental
Authority.
3.14 CONTRACTS.
(a) To the Knowledge of Sellers, Schedule 3.14(a) contains a complete and
correct list of all agreements, contracts, commitments and other instruments and
arrangements (whether written or oral) of the types described below (x) by which
any of the Assets are bound or affected or (y) to which any Seller is a party or
by which it is bound in connection with the Business or the Assets (the
"CONTRACTS"):
(i) leases, licenses, permits, franchises, insurance
policies, Governmental Approvals and other contracts concerning
or relating to the Real Property;
(ii) employment, consulting, agency, collective bargaining
or other similar contracts, agreements, and other instruments and
arrangements relating to or for the benefit of current, future or
former employees, officers, directors, sales representatives,
distributors, dealers, agents, independent contractors or
consultants;
(iii) loan agreements, indentures, letters of credit,
mortgages, security agreements, pledge agreements, deeds of
trust, bonds, notes, guarantees, and other agreements and
instruments relating to the borrowing of money or obtaining of or
extension of credit;
(iv) licenses, licensing arrangements and other contracts
providing in whole or in part for the use of, or limiting the use
of, any Intellectual Property;
(v) brokerage or finder's agreements;
(vi) joint venture, partnership and similar contracts
involving a sharing of profits or expenses (including but not
limited to joint research and development and joint marketing
contracts);
(vii) asset purchase agreements and other acquisition or
divestiture agreements, including but not limited to any
agreements relating to the sale, lease or disposal of any Assets
other than sales of inventory in the ordinary course of business)
or involving continuing indemnity or other obligations;
(viii) orders and other contracts for the purchase or sale
of materials, supplies, products or services arising other than
in the ordinary course of business consistent with past
practices;
(ix) contracts with respect to which the aggregate amount
that could reasonably expected to be paid or received thereunder
in the future exceeds $100,000 per annum or $200,000 in the
aggregate;
(x) sales agency, manufacturer's representative, marketing
or distributorship agreements;
(xi) contracts, agreements or arrangements with respect to
the representation of the Business in foreign countries;
(xii) master lease agreements providing for the leasing of
both (A) personal property primarily used in, or held for use
primarily in connection with, the Business and (B) other personal
property;
(xiii) contracts, agreements or commitments with any
employee, director, officer, stockholder or Affiliate of any
Seller; and
(xiv) any other contracts, agreements or commitments that
are material to the Business.
(b) To the Knowledge of Sellers, the Sellers have delivered to the Buyer
complete and correct copies of all written Contracts, together with all
amendments thereto, and accurate descriptions of all material terms of all oral
Contracts, set forth or required to be set forth in Schedule 3.14(a).
(c) All Contracts are in full force and effect and enforceable against each
party thereto. There does not exist under any Contract any event of default or
event or condition that, after notice or lapse of time or both, would constitute
a material violation, breach or event of default thereunder on the part of any
Seller or, to the best knowledge of any Seller, any other party thereto except
as set forth in Schedule 3.14(c) and except for such events or conditions that,
individually and in the aggregate, (i) has not had or resulted in, and will not
have or result in, a Material Adverse Effect and (ii) has not and will not
materially impair the ability of any Seller to perform their respective
obligations under the Foreign Acquisition Agreements and under the Collateral
Agreements. Except as set forth in Schedule 3.14(c), no consent of any third
party is required under any Contract as a result of or in connection with, and
the enforceability of any Contract will not be affected in any manner by, the
execution, delivery and performance of this Agreement, any of the Foreign
Acquisition Agreements or any of the Collateral Agreements or the consummation
of the transactions contemplated thereby.
3.15 BENEFIT PLANS.
(a) SCHEDULE 3.15 contains a list of all "employee pension benefit plans"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA), employment, consulting, severance or similar contracts,
arrangements or policies and each agreement, commitment, plan, policy or
arrangement (written or oral) providing for severance benefits, insurance
coverage (including any self-insured arrangements), workers' compensation,
medical benefits, dental benefits, disability benefits, sick leave, cafeteria or
flexible spending, dependent care, supplemental unemployment benefits, vacation
benefits, retirement benefits, life, health, disability or accident benefits
(including, without limitation, any "voluntary employees' benefit association"
as defined in Section 501(c)(9) of the Code providing for the same or other
benefits), deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation rights, post-retirement benefits or other forms of incentive
compensation or benefits, social security and other employee fringe benefit
plans, domestic or foreign, entered into or maintained (or required to be
maintained under any governmental law or regulation), or contributed to, by
Seller, any Subsidiary or any other corporation, trade or business which is now,
or at the relevant times was, a member of a controlled group of corporations,
trades or businesses with the Seller or any Subsidiary, as defined in Sections
414(b) or (c) of the Code ("ERISA Affiliate") for the benefit of its employees
or former employees (all of the foregoing being herein called "Benefit Plans").
(b) The Seller has delivered to Buyer true and complete copies of all such
Benefit Plans (or a written description of any unwritten Benefit Plan), any
related trust agreements and insurance contracts, and all amendments thereto and
any written interpretations thereof together with, where applicable, (i) the
most recent summary plan description, (ii) the three most recent annual reports
(Form 5500 series, including all schedules thereto) prepared in connection with
any such Benefit Plan, and (iii) the three most recent actuarial valuation
reports prepared in connection with any such Benefit Plan.
(c) Each Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been so qualified and no event has occurred since the date of
such determination that would adversely affect such qualification; each trust
created under any such Benefit Plan is exempt from tax under Section 501(a) of
the Code and has been so exempt during the period from creation to date. The
Seller has provided Buyer with the most recent determination letters from the
Internal Revenue Service relating to such Benefit Plans and such determination
letter includes any new or modified requirements under the Tax Reform Act of
1986 and subsequent legislation enacted thereafter. Each Benefit Plan is and has
been administered in all respects in accordance with its terms, and ERISA, the
Code and any other applicable statute, order or governmental rule or regulation.
There are no investigations by any governmental authority, termination
proceedings or other claims (except claims for benefits payable in the normal
operation of the Benefit Plans), suits or proceedings pending, or to the
knowledge of the Seller, threatened or anticipated, against or involving any
Benefit Plan or asserting any rights or claims to benefits under Benefit Plan
that could give rise to any liability on the part of the Seller or any
Subsidiary.
(d) No Benefit Plan listed on SCHEDULE 3.15 is (i) a plan subject to the
minimum funding requirements of Title I of ERISA or Section 412 of the Code or
Title IV of ERISA or (ii) a "multiemployer plan"(within the meaning of Section
3(37) of ERISA.), (iii) a "multiple employer plan" within the meaning of Section
4063 or 4064 of ERISA. Neither the Seller nor any Subsidiary or ERISA Affiliate
has ever contributed to or had an obligation to contribute to any multiemployer
plan or multiple employer plan.
(e) With respect to any Benefit Plan which is an "employee benefit plan"
(as defined in Section 3(3) of ERISA), whether or not terminated, currently or
formally maintained or contributed to by the Seller, any Subsidiary or any ERISA
Affiliate, no liability currently exists and no event has occurred and no
condition exists, which could subject the Seller or any Subsidiary, directly or
indirectly (through an indemnification agreement or otherwise), to any
liability, including, without limitation, any liability for prohibited
transactions (as defined in Section 4975 of the Code or Section 406 of ERISA) or
breach of fiduciary duty under Title I of ERISA or any liability under Title IV
of ERISA (including, but not limited to, Section 409 or 502(i) of ERISA) or
Section 412, 4971, 4975 or 4980B of the Code. The Seller has not engaged in, or
is a successor or parent corporation to an entity that has engaged in, a
transaction described in Section 4069 of ERISA.
(f) Except as set forth on SCHEDULE 3.15(F), neither the Seller nor any
Subsidiary is a party to any contract, agreement, plan or arrangement covering
any employee or former employee that, individually or collectively could give
rise to the payment of, nor is the Seller or any Subsidiary otherwise required
or obligated to make any payment, that would constitute an "excess parachute
payment" within the meaning of Section 280G of the Code.
(g) Except as set forth in SCHEDULE 3.15(G), no Benefit Plan or other
agreement of the Seller or any Subsidiary entitles any employee or other person
to any bonus, retirement, severance, job security or similar benefit or any
enhanced benefit of such type solely as a result of the transactions
contemplated by this Agreement. Neither the Seller or any Subsidiary has
communicated to employees or other persons any additional Benefit Plan not set
forth in SCHEDULE 3.15(G) or any change in or termination of any existing
Benefit Plans.
3.16 TRANSACTIONS WITH AFFILIATES. Except as set forth in SCHEDULE 3.16,
neither the Seller nor any Subsidiary is a party to any contract, agreement or
other arrangement with any of its shareholders, officers, directors, employees
or Affiliates.
3.17 INSURANCE. To the Knowledge of Sellers, each insurance policy which is
currently in effect that insures the business, property (whether real or
personal), operations, employees, directors or officers of the Seller or any
Subsidiary is listed on SCHEDULE 3.17 (collectively, the "Insurance Policies")
and is in full force and effect, the premiums due thereunder have been paid as
they became due and payable and neither the Seller nor any Subsidiary has
received any notice of cancellation or termination in respect of any such policy
or is in default thereunder. To the Knowledge of Sellers, such policies are
sufficient for compliance with all requirements of law. SCHEDULE 3.17 sets forth
all claims made by any Seller under any Insurance Policy during the past three
years and to the Knowledge of the Seller there is no basis on which a claim
should or could be made under any such policy with respect to any Seller.
Neither the Seller nor any Subsidiary has received any notice from any of its
insurance carriers that any insurance premiums will be materially increased in
the future or that any insurance coverage listed on SCHEDULE 3.17 will not be
available in the future on substantially the same terms as now in effect.
3.18 LABOR RELATIONS.
(a) No work stoppage against the business of the Seller or any Subsidiary
is pending or, to the Knowledge of the Seller, is threatened. Neither the Seller
nor any Subsidiary is involved in or, to the Knowledge of the Seller, threatened
with any labor dispute, arbitration, lawsuit or administrative proceeding
relating to labor matters involving any of the employees of the Seller or any
Subsidiary with respect to their respective businesses. Other than those
described on SCHEDULE 3.18(A), there are no unwritten personnel policies, rules,
practices or procedures applicable to employees of the Seller or any Subsidiary,
and no employee of the Seller or any Subsidiary is on long-term disability
leave, extended absence leave or is receiving workers' compensation benefits.
(b) Except as set forth on SCHEDULE 3.18(B), neither the Seller nor any
Subsidiary:
(i) is liable for any accrued bonus compensation, vacation
pay, severance pay or arrears of wages except as reflected on the
Financial Statements;
(ii) is currently involved in or has had any activity or
proceedings by a labor union or representative thereof to
organize any of its employees and no such activity or proceeding
is or has been threatened against the Seller or any Subsidiary;
(iii) is subject to any pending or, to the Knowledge of the
Seller, threatened complaints or investigations involving the
Seller or any Subsidiary by any Person responsible for the
investigation and enforcement of any foreign, federal, state or
local labor, employment or discrimination laws, statutes, public
policies, orders, regulations, ordinances or other requirements
respecting any labor, employment and employment practices,
discrimination, terms and conditions of employment, or wages and
hours; or
(iv) is bound by or is party to any collective bargaining or
similar agreement.
3.19 LOCATION OF OFF SITE ASSETS. Except as set forth on Schedule 3.19, all
of the Tangible Personal Property owned or leased by the Seller or any
Subsidiary is located on the Properties owned or leased by the Seller or any
Subsidiary as of the date hereof.
3.20 INVENTORIES. All inventory of each of the Sellers has been and will be
acquired in the ordinary course of business and consistent with its prior
practice. All of the inventory of each of the Sellers is reflected in the
Financial Statements, has been, and as of the Closing will be valued at the
lower of cost (determined on a first-in first-out basis) or market value in
accordance with GAAP. Schedule 3.20 sets forth the standard inventory write-down
policy for the Sellers as reflected on and consistently applied with respect to
the Financial Statements. None of the Sellers is under any liability or
obligation with respect to the return or repurchase of any goods in the
possession of customers except for amounts which are not material and are
consistent with historical levels of returns and allowances.
3.21 CUSTOMERS. SCHEDULE 3.21 sets forth (a) the names and addresses of all
customers of each Seller that ordered goods and services from such Seller with
an aggregate value for each such customer of $100,000 or more during the
twelve-month period ended October 31, 1997 and (b) the amount for which each
such customer was invoiced during such period. To the Knowledge of Sellers, no
Seller has received any notice or has any reason to believe that any significant
customer of such Seller (i) has ceased, or will cease, to use the products,
goods or services of such Seller, (ii) has substantially reduced or will
substantially reduce, the use of products, goods or services of such Seller or
(iii) has sought, or is seeking, to reduce the price it will pay for products,
goods or services of such Seller, including in each case after the consummation
of the transactions contemplated hereby. To the Knowledge of the Sellers, no
customer described in clause (a) of the first sentence of this section has
otherwise threatened to take any action described in the preceding sentence as a
result of the consummation of the transactions contemplated by the Foreign
Acquisition Agreements and the Collateral Agreements.
3.22 SUPPLIERS; RAW MATERIALS. SCHEDULE 3.22 sets forth (a) the names and
addresses of all suppliers from which any Seller ordered raw materials,
supplies, merchandise and other goods and services with an aggregate purchase
price for each such supplier of $100,000 or more during the twelve-month period
ended October 31, 1997 and (b) the amount for which each such supplier invoiced
such Seller during such period. No Seller has received any notice or has any
reason to believe that there has been any material adverse change in the price
of such raw materials, supplies, merchandise or other goods or services, or that
any such supplier will not sell raw materials, supplies, merchandise and other
goods to the Buyer at any time after the Closing Date on terms and conditions
similar to those used in its current sales to such Seller, subject to general
and customary price increases. To the Knowledge of the Sellers, no supplier
described in clause (a) of the first sentence of this section has otherwise
threatened to take any action described in the preceding sentence as a result of
the consummation of the transactions contemplated by the Foreign Acquisition
Agreements and the Collateral Agreements.
3.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. Except as set forth on Schedule
3.23, to the Knowledge of Sellers, none of the Sellers, any officer, employee or
agent of any Seller, or any other person acting on their behalf, has, directly
or indirectly, within the past five years given or agreed to give any gift or
similar benefit to any customer, supplier, governmental employee or other person
who is or may be in a position to help or hinder the Business (or assist any
Seller in connection with any actual or proposed transaction relating to the
Business) (i) which subjected or might have subjected any Seller to any damage
or penalty in any civil, criminal or governmental litigation or proceeding, (ii)
which if not given in the past, might have had a Material Adverse Effect, (iii)
which if not continued in the future, might have a Material Adverse Effect or
subject any Seller to suit or penalty in any private or governmental litigation
or proceeding, (iv) for any of the purposes described in Section 162(c) of the
Code or (v) for the purpose of establishing or maintaining any concealed fund or
concealed bank account.
3.24 CONFIDENTIALITY. Except as set forth on SCHEDULE 3.24, the Sellers
have taken all steps necessary to preserve the confidential nature of all
material confidential information (including, without limitation, any
proprietary information) with respect to the Business, including but not limited
to the manufacturing or marketing of any of the Sellers' products or services.
3.25 NO GUARANTEES. None of the obligations or liabilities of the Business
or of the Sellers incurred in connection with the operation of the Business is
guaranteed by or subject to a similar contingent obligation of any other Person.
No Seller has guaranteed or become subject to a similar contingent obligation in
respect of the obligations or liabilities of any other Person. Except as set
forth in Schedule 3.25, there are no outstanding letters of credit, surety bonds
or similar instruments of any Seller or any of its Affiliates in connection with
the Business or the Assets.
3.26 RECORDS. The books of account of the Sellers, insofar as they relate
to or affect the Business and the Assets, are sufficient to prepare the
Financial Statements in accordance with GAAP.
3.27 BROKERS, FINDERS, ETC. All negotiations relating to this Agreement,
the Foreign Acquisition Agreements, the Collateral Agreements, and the
transactions contemplated thereby, have been carried on without the
participation of any Person acting on behalf of any Seller or their respective
Affiliates in such manner as to give rise to any valid claim against the Buyer
or any of its subsidiaries for any brokerage or finder's commission, fee or
similar compensation, or for any bonus payable to any officer, director,
employee, agent or sales representative of or consultant to any Seller or their
respective Affiliates upon consummation of the transactions contemplated hereby
or thereby.
3.28 BUSINESS DESCRIPTION. SCHEDULE 3.28 attached hereto contains an
accurate and substantially complete summary description of Business and the
general development of such business during the past five years, including,
without limitation, (i) the percentage of total sales and revenues and income
attributable to each line of business for its last two fiscal years which
accounted for 10% or more of the Seller's consolidated total sales, and (ii) the
extent to which any Seller makes sales to or derives revenues or makes purchases
from sources located in foreign countries.
3.29 DISCLOSURE. No representation or warranty by the Company contained in
this Agreement nor any statement or certificate furnished or to be furnished by
or on behalf of any Seller to the Buyer or its representatives in connection
herewith or pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact required to make
the statements contained herein or therein not misleading. To the Knowledge of
Sellers, there is no fact (other than matters of a general economic or political
nature which do not affect the Business uniquely) known to the Company that has
not been disclosed by the Company to the Buyer that might reasonably be expected
to have or result in a Material Adverse Effect.
3.30 FOREIGN SUBSIDIARIES. Any additional representations and warranties of
any Seller contained in each Foreign Acquisition Agreement will be true in all
material respects (a) at and as of the date of such Foreign Acquisition
Agreement and (b) at and as of the Closing Date thereunder with the same effect
as though made at and as of such Closing Date (except as affected by the
transactions contemplated thereby).
3.31 RECEIVABLES. All receivables of any Seller (including accounts
receivable, loans receivable and advances) which are reflected in the 1997
Financial Statements and outstanding as of the Closing Date, and all such
receivables which will have arisen since December 31, 1997, shall have arisen
only from bona fide transactions in the ordinary course of such Seller's
business and shall, to the knowledge of Seller be fully collectible when due in
the aggregate face amounts thereof except to the extent of the normal allowance
for doubtful accounts with respect to accounts receivable computed consistent
with Seller's prior practices as reflected on the 1996 Financial Statements.
3.32 AGENTS. Except for agents for service of process, patent attorneys and
customs brokers, neither the Seller nor any Subsidiary has designated or
appointed any Person to act for it or on its behalf pursuant to any power of
attorney or agency which is presently in effect.
3.33 WARRANTY AND PRODUCT LIABILITY CLAIMS.
(a) Except as disclosed on SCHEDULE 3.33, to the Knowledge of Sellers,
there are no warranties or guaranties under the laws under which the Sellers
operate, expressed or implied, written or oral with respect to any products
manufactured or sold or services rendered in connection with the Business, and
no claims are pending or asserted or, to the Knowledge of the Seller, threatened
that any product of the Seller or any Subsidiary was defective or caused any
injury or harm to any Person or property, including all such claims or
allegations relating to returns, express or implied warranty violations, failure
to warn or similar matters. To the Knowledge of each Company no Person has any
basis upon which to make any such claims. All pending or, to the Knowledge of
any Seller, threatened or asserted claims set forth on SCHEDULE 3.33(A) are
covered by insurance and are not subject to any deductibles other than the
amount of the deductible set forth opposite such claim on such Schedule. There
are no statements, citations or decisions by any Governmental Authority stating
that any product manufactured, marketed or distributed at any time by the Seller
or any Subsidiary is defective or unsafe or fails to meet any standards
promulgated by any such Governmental Authority. There have been no recalls with
respect to any product manufactured, marketed or distributed at any time by the
Seller or any Subsidiary and, to the Knowledge of any Seller, no such recall is
threatened.
(b) SCHEDULE 3.33(B) sets forth all incidents since January 1, 1995 that
have alleged to have been, or that, to the Knowledge of the Seller, could be
alleged to have been, caused by any product manufactured or sold by the Seller
or any Subsidiary or by any services rendered by the Seller or any Subsidiary,
regardless of whether a claim therefor has been asserted or threatened against
any Person.
3.34 NO OTHER AGREEMENTS TO SELL. Neither the Seller nor any Subsidiary is
a party to any agreement to sell all or a portion of any of the capital stock of
the Seller or any Subsidiary or any of its assets (other than the sale of
inventory in the ordinary course of business) to any Person other than Buyer.
3.35 COPIES OF DOCUMENTS. Seller has delivered or will deliver to Buyer and
its advisers on or before January 31, 1998, true, complete and correct copies of
all documents referred to in this ARTICLE III or in any Schedule attached
hereto.
3.36 OFFICERS, DIRECTORS AND KEY EMPLOYEES. To the Knowledge of Sellers,
SCHEDULE 3.36 sets forth the name and total compensation of each person who is
now an officer or director of the Seller or any Subsidiary or an employee,
consultant, agent or other representative of the Seller. Except as set forth on
SCHEDULE 3.36 and as contemplated hereby, none of such persons whose annual rate
of compensation (excluding bonuses and commissions) exceeds $50,000 currently
holding such a position has indicated that he or she will cancel or otherwise
terminate such person's relationship with the Seller or the applicable
Subsidiary. Except as disclosed on Schedule 3.36, the consummation of the
transactions contemplated by the Collateral Agreements will not increase any
liability or benefit right or accelerate any payment under any of the employment
arrangements with persons listed in SCHEDULE 3.36.
3.37. YEAR 2000 COMPATIBILITY. To the Knowledge of Seller, all of the
computer-based systems of each Seller have been upgraded as of the Date hereof
so that such systems operating and effectively processing data for dates on and
after January 1, 2000, including without limitation the processing, accepting,
calculating, storing and outputting of times or dates on or after such date and
any time periods determined or to be determined based on such times or dates.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants the following to the Company, which
representations and warranties shall be true and correct as of the date hereof
and as of the Closing as if made on and as of the Closing, and no specific
representation or warranty shall limit the generality or applicability of a more
general representation or warranty:
4.1 ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power and authority to carry on its business as now being conducted.
Buyer is duly qualified to do business as a foreign corporation and is in good
standing in every jurisdiction in which the operation of its business requires
such qualification, except for failures, if any, to be so qualified and in good
standing which would not have a Material Adverse Effect on it.
4.2 AUTHORITY; BINDING EFFECT. Buyer has full power, authority and capacity
to execute and deliver each of this Agreement and the Collateral Agreements to
which Buyer is a party and to perform the transactions required of Buyer
thereunder and at the Closing. Each of this Agreement and the Collateral
Agreements to which Buyer is a party has been duly authorized, executed and
delivered by Buyer and constitutes the legal, valid and binding obligations of
Buyer enforceable against Buyer in accordance with the terms and provisions
thereof, subject to general equity principles and to applicable bankruptcy,
fraudulent transfer, insolvency, reorganization, moratorium and other similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
4.3 BROKERS, FINDERS, ETC. All negotiations relating to this Agreement and
the transactions contemplated hereby have been carried on without the
participation of any Person acting on behalf of the Buyer Parties in such manner
as to give rise to any valid claim against the Company for any brokerage or
finder's commission, fee or similar compensation.
4.4 FINANCING. To the Knowledge of Buyer, Buyer has the ability to obtain
financing adequate to consummate the transactions contemplated hereby and Buyer
will use its best efforts to deliver to Sellers a comfort letter from a
financial institution relating thereto on or before January 25, 1998 and a
commitment letter from a financial institution on or before February 10, 1998.
ARTICLE V
FURTHER AGREEMENTS OF THE COMPANY.
5.1 CONDUCT OF BUSINESS. From the date hereof to the Closing Date, except
as expressly permitted or required by this Agreement or as otherwise consented
to by the Buyer in writing, the Company will:
(a) carry on the Business in, and only in, the ordinary
course, in substantially the same manner as heretofore conducted
(e.g. not increase the extent of sales promotions and
incentives), and use all reasonable efforts to preserve intact
its present business organization, maintain its properties in
good operating condition and repair, keep available the services
of its present officers and significant employees, and preserve
its relationship with customers, suppliers and others having
business dealings with it, to the end that its goodwill and going
business shall be in all material respects unimpaired following
the Closing;
(b) pay accounts payable and other obligations of the
Business when they become due and payable in the ordinary course
of business consistent with prior practice;
(c) perform in all material respects all of its obligations
under all Contracts and other agreements and instruments relating
to or affecting the Business or the Assets, and comply in all
material respects with all Applicable Laws applicable to it, the
Assets or the Business;
(d) not enter into or assume any material agreement,
contract or instrument relating to the Business, or enter into or
permit any material amendment, supplement, waiver or other
modification in respect thereof;
(e) except as set forth on Schedule 5.1(e), not grant (or
commit to grant) any increase in the compensation (including
incentive or bonus compensation) of any employee employed in the
operation of the Business or institute, adopt or amend (or commit
to institute, adopt or amend) any compensation or benefit plan,
policy, program or arrangement or collective bargaining agreement
applicable to any such employee;
(f) make, declare or pay, after December 31, 1997, any
distributions, or dividends to shareholders of Seller except that
one cash distribution, if made prior to February 1, 1998, shall
be permitted in an aggregate amount not to exceed the amount of
cash reflected in the 1997 Working Capital in excess of
$1,000,000, provided, however, that: (i) the relative mix of
cash, inventory, accounts receivable, accounts payable and other
components of Working Capital at the Closing Date shall not
differ materially from such relative mix at December 31, 1997 and
(ii) the rate of capital expenditures, depreciation and repayment
of long-term indebtedness for the period ending on the Closing
Date shall not differ materially from such rates during 1997;
and.
(g) not take any action or omit to take any action, which
action or omission would result in a breach of any of the
representations and warranties set forth in Section 3.7.
5.2 NO SOLICITATION. During the term of this Agreement, none of the
Sellers, any of their Affiliates or any Person acting on their behalf shall (i)
solicit or encourage any inquiries or proposals for, or enter into any
discussions with respect to, the acquisition of any properties and assets held
for use in connection with, necessary for the conduct of, or otherwise material
to, the Business or (ii) furnish or cause to be furnished any non-public
information concerning the Business to any Person (other than the Buyer and its
agents and representatives), other than in the ordinary course of business or
pursuant to Applicable Law and after prior written notice to the Buyer. No
Seller shall sell, transfer or otherwise dispose of, grant any option or proxy
to any Person with respect to, create any Lien upon, or transfer any interest
in, any Asset, other than in the ordinary course of business and consistent with
this Agreement.
5.3 ACCESS AND INFORMATION.
(a) So long as this Agreement remains in effect and subject to the
provisions of the existing Confidentiality Agreement between Seller and Bacou,
each Seller will (and will cause each of their Affiliates and their and their
Affiliates' respective accountants, counsel, consultants, employees and agents)
give the Buyer, the Buyer's prospective lenders and investors, and their
respective accountants, counsel, consultants, employees and agents, full access
during normal business hours to, and furnish them with all documents, records,
work papers and information with respect to, all of such Person's properties,
assets, books, contracts, commitments, reports and records relating to the
Business, as the Buyer shall from time to time reasonably request. In addition,
the Sellers will permit the Buyer, the Buyer's prospective lenders and
investors, and their respective accountants, counsel, consultants, employees and
agents, reasonable access to such personnel of the Sellers during normal
business hours as may be necessary or useful to the Buyer, provided that access
shall have been approved by Seller, in its review of the properties, assets and
business affairs of the Business and the above-mentioned documents, records and
information. The Sellers will keep the Buyer generally informed as to the
affairs of the Business.
(b) The Company will, and will cause each other Seller to, transfer to the
Buyer at the Closing all books and records relating to the Business.
5.4 FINANCIAL STATEMENTS. Until the Closing, on or before the 21st day of
each month, the Sellers shall deliver to the Buyer unaudited consolidated
financial statements of the Business as at and for the monthly period ending the
last day of the preceding month (the "SUBSEQUENT MONTHLY FINANCIAL STATEMENTS"),
which shall include a balance sheet and statement of income, except that such
monthly financial statements for the month of December will only be available on
an informal basis until the delivery of the 1997 Financial Statements. At the
time that the Subsequent Monthly Financial Statements are delivered to the
Buyer, the Sellers shall by such delivery be deemed to have made the
representations and warranties to the Buyer with respect to such Subsequent
Monthly Financial Statements set forth in Section 5.4.
5.5 PUBLIC ANNOUNCEMENTS. Except as required by Applicable Law, the Sellers
shall not, and they shall not permit any Affiliate to, make any public
announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of the Buyer.
5.6 FURTHER ACTIONS.
(a) The Sellers agree to use all reasonable good faith efforts to take all
actions and to do all things necessary, proper or advisable to consummate the
transactions contemplated hereby by the Expected Closing Date.
(b) The Sellers will, as promptly as practicable, file or supply, or cause
to be filed or supplied, all applications, notifications and information
required to be filed or supplied by any of them pursuant to Applicable Law in
connection with the Foreign Acquisition Agreements, the Collateral Agreements,
the sale and transfer of the Assets pursuant to the Foreign Acquisition
Agreements and the consummation of the other transactions contemplated thereby,
including but not limited to filings pursuant to the HSR Act.
(c) The Sellers, as promptly as practicable, will use all reasonable
efforts to obtain, or cause to be obtained, all Consents (including, without
limitation, all Governmental Approvals and any Consents required under any
Contract) necessary to be obtained by any of them in order to consummate the
sale and transfer of the Assets pursuant to the Foreign Acquisition Agreements
and the consummation of the other transactions contemplated thereby.
(d) The Sellers will, and will cause each of their Affiliates to,
coordinate and cooperate with the Buyer in exchanging such information and
supplying such assistance as may be reasonably requested by the Buyer in
connection with the filings and other actions contemplated by Section 6.2.
(e) At all times prior to the Closing, the Sellers shall promptly notify
the Buyer in writing of any fact, condition, event or occurrence that will or
may result in the failure of any of the conditions contained in Article VIII and
IX to be satisfied, promptly upon either of them becoming aware of the same.
5.7 FURTHER ASSURANCES. Following the Closing, the Sellers shall, and shall
cause each of their Affiliates to, from time to time, execute and deliver such
additional instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise reasonably requested by the Buyer,
without expense to Sellers, to confirm and assure the rights and obligations
provided for in this Agreement, the Foreign Acquisition Agreements and in the
Collateral Agreements and render effective the consummation of the transactions
contemplated thereby.
5.8 LIABILITY FOR TRANSFER TAXES. The Buyer shall be responsible for the
timely payment of, and shall indemnify and hold harmless the Sellers against,
all sales (including, without limitation, bulk sales), use, value added,
documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes and fees ("TRANSFERS TAXES"), arising
out of or in connection with or attributable to the transactions effected
pursuant to this Agreement, the Foreign Acquisition Agreements and the
Collateral Agreements. The Buyer shall prepare and either the Seller or Buyer
(as may be required by law) shall timely file all Tax Returns required to filed
in respect of Transfer Taxes. The Buyer's preparation of any such Tax Returns
shall be subject to the Company's approval, which approval shall not be withheld
unreasonably.
5.9 CERTIFICATES OF TAX AUTHORITIES. On or before the Closing Date, the
Seller shall use its best efforts to provide to the Buyer copies of certificates
from the appropriate taxing authority stating that no Taxes are due to any state
or other taxing authority for which the Buyer could have liability to withhold
or pay Taxes with respect to the transfer of the Assets or the Business,
PROVIDED that any failure to provide such certificates to the Buyer which is not
the fault of the Sellers shall not relieve the Buyer of its obligations to enter
into and complete the Closing.
5.10 USE OF BUSINESS NAME. After the Closing, no Seller will, directly or
indirectly, use or do business, or allow any Affiliate to use or due business,
or assist any third party in using or doing business, under the name and ▇▇▇▇
"▇▇▇▇▇▇ ▇▇▇▇▇▇" (or any other name confusingly similar to such name and ▇▇▇▇);
provided, however, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ may use this name in a business totally
unrelated to the safety or security business for so long as such business is
controlled by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, provided that for the purposes of this Agreement
security shall not include any activity related to financings, insurance or
property management.
5.11 ENVIRONMENTAL ASSESSMENT. The Buyer may retain environmental
consultants, including Seller's environmental consultants, to conduct an
environmental assessment of the Real Property and the other assets, equipment
and facilities owned, leased, operated or used by the Sellers in the Business
(the "ENVIRONMENTAL ASSESSMENT"), to include physical inspections of the Real
Property and such assets, equipment and facilities, review of all relevant
records in the possession or custody or under the control of any Seller, review
of relevant governmental agency records and contact with governmental agency
personnel, conduct of sampling activities and any other investigatory activities
of a scope satisfactory to the Buyer. The costs of the Environmental Assessment
shall be borne by the Buyer.
5.12 BANK ACCOUNTS. At least two weeks prior to the Closing the Company
shall deliver to Buyer a list of setting forth all banks and other financial
institutions with which the Company or any Subsidiary maintains an account or a
safe deposit box, showing the account numbers of all such accounts and the names
of the persons authorized as signatories thereon or to act or deal in connection
therewith. The Company and each Subsidiary shall cooperate with Buyer and
execute all necessary documentation to effect fully any changes desired, as of
the Closing, by Buyer in the persons authorized as signatories thereon or to act
or deal in connection therewith.
ARTICLE VI
FURTHER AGREEMENTS OF THE BUYER
6.1 PUBLIC ANNOUNCEMENTS. Prior to the Closing, except as required by
Applicable Law, the Buyer shall not, and shall not permit its Affiliates to,
make any public announcement in respect of this Agreement or the transactions
contemplated hereby without the prior written consent of the Company.
6.2 FURTHER ACTIONS.
(a) The Buyer agrees to use all reasonable good faith efforts to take all
actions and to do all things necessary, proper or advisable to consummate the
transactions contemplated hereby by the Expected Closing Date.
(b) The Buyer will, as promptly as practicable, file or supply, or cause to
be filed or supplied, all applications, notifications and information required
to be filed or supplied by the Buyer Parties pursuant to Applicable Law in
connection with this Agreement, the Foreign Acquisition Agreements, the
Collateral Agreements, the Buyer Parties' acquisition of the Assets pursuant to
this Agreement the Foreign Acquisition Agreements and the consummation of the
other transactions contemplated thereby, including but not limited to filings
pursuant to the HSR Act.
(c) The Buyer will coordinate and cooperate with the Sellers in exchanging
such information and supplying such reasonable assistance as may be reasonably
requested by the Sellers in connection with the filings and other actions
contemplated by Section 5.6.
(d) At all times prior to the Closing, the Buyer shall promptly notify the
Company in writing of any fact, condition, event or occurrence that will or may
result in the failure of any of the conditions contained in Articles VIII and X
to be satisfied, promptly upon becoming aware of the same.
6.3 FURTHER ASSURANCES. Following the Closing, the Buyer shall, and shall
cause its Affiliates to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other actions as
shall be necessary, or otherwise reasonably requested by the Sellers, to confirm
and assure the rights and obligations provided for in this Agreement the Foreign
Acquisition Agreements and in the Collateral Agreements and render effective the
consummation of the transactions contemplated thereby.
6.4 POST CLOSING PAYMENT. As soon as possible following the Closing, Seller
shall furnish to Buyer its internally prepared financial statements which shall
be for the period commencing January 1, 1998 and ending on the Closing Date (the
"Short Period"), prepared in accordance with GAAP applied on a consistent basis,
which financial statements shall be prepared without giving effect to the sale
of the assets to, and the assumption of the Assumed Liabilities by Buyer, which
financial statements shall include the assets, liabilities and results of
operations of Seller, ▇▇▇▇▇▇ ▇▇▇▇▇▇ de Mexico S.A. de C.V. and ▇▇▇▇▇▇ ▇▇▇▇▇▇
(Europe) Ltd. on a combined basis and which financial statements shall be
subject to approval by Buyer, which approval shall not be unreasonably withheld.
Buyer will pay to the Seller the amount of the net income of Seller for the
Short Period reflected on such financial statements. In the event that Buyer and
Seller disagree about the amount to be paid by Buyer to Seller pursuant to this
Section 6.4, the parties shall follow the dispute resolution process specified
in the Escrow Agreement.
ARTICLE VII
FOREIGN ACQUISITION AGREEMENTS; COOPERATION.
7.1 FOREIGN ACQUISITION AGREEMENTS; FOREIGN CLOSINGS. Subject to the terms
and conditions hereof and of the respective Foreign Acquisition Agreements, the
Seller will, and will cause each other Seller to, and the Buyer will, and will
cause each other Buyer Party to, perform all of its agreements and obligations
under, and use all commercially reasonable efforts to consummate the
transactions contemplated by, each Foreign Acquisition Agreement and each other
Collateral Agreement to which it is now or hereafter a party, in each case by
the Closing Date. It is the intention of the parties to this Agreement,
notwithstanding the provisions of any Foreign Acquisition Agreement, that no
purchase and sale contemplated by any Foreign Acquisition Agreement shall be
consummated earlier than simultaneously with the Domestic Closing. Accordingly,
each of the parties hereto will take such action as may be necessary to ensure
that no Closing under any Foreign Acquisition Agreement occurs prior to the
Domestic Closing. The representations and covenants on the part of the Sellers
in each Foreign Acquisition Agreement will not be more onerous to Sellers than
those which are provided in this Agreement with respect to the Domestic Assets
in any material respect.
7.2 COOPERATION. Each party shall provide the other with such cooperation
as may reasonably be requested, at the expense of the requesting party (unless
the requesting party is to be indemnified with respect thereto, in which case
such cooperation shall be given at the expense of the indemnifying party), in
connection with the post-Closing matters contemplated by this Agreement,
including, without limitation, the defense of any claims whether existing on the
Closing Date or arising thereafter out of, or relating to, an occurrence or
event happening before, on or after the Closing Date, including without
limitation, by making available all books and records relating thereto and
employees having knowledge of the matters in controversy; PROVIDED, HOWEVER,
Buyer and Seller shall only be required to make available their employees to a
reasonable extent.
ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF EACH PARTY
The obligations of the parties to consummate the transactions contemplated
hereby shall be subject to the fulfillment on or prior to the Closing Date of
the following conditions:
8.1 HSR ACT NOTIFICATION. In respect of the notifications of the Buyer and
the Company pursuant to the HSR Act, the applicable waiting period and any
extensions thereof shall have expired or been terminated.
8.2 NO INJUNCTION, ETC. Consummation of the transactions contemplated
hereby shall not have been restrained, enjoined or otherwise prohibited by any
Applicable Law, including any order, injunction, decree or judgment of any court
or other Governmental Authority. No court or other Governmental Authority shall
have determined any Applicable Law to make illegal the consummation of the
transactions contemplated hereby or by the Foreign Acquisition Agreements or the
Collateral Agreements, and no proceeding with respect to the application of any
such Applicable Law to such effect shall be pending.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF THE BUYER
The obligations of the Buyer to consummate the transactions contemplated
hereby shall be subject to the fulfillment (or waiver by the Buyer) on or prior
to the Closing Date of the following additional conditions, which the Company
agrees to use reasonable good faith efforts to cause to be fulfilled:
9.1 REPRESENTATIONS; PERFORMANCE, ETC. The representations and warranties
of the Sellers contained in this Agreement and in the Collateral Agreements (i)
shall be true and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material respects
(in the case of any representation or warranty without any materiality
qualification) at and as of the date hereof, and (ii) shall be repeated and
shall be true and correct in all respects (in the case of any representation or
warranty containing any materiality qualification) or in all material respects
(in the case of any representation or warranty without any materiality
qualification) on and as of the Closing Date. Each Seller shall have duly
performed and complied in all material respects with all agreements and
conditions required under this Agreement and each of the Collateral Agreements
to be performed or complied with by it prior to or on the Closing Date. Each
Seller shall have delivered to the Buyer a certificate, dated the Closing Date
and signed by its duly authorized officers, to the foregoing effect.
9.2 FOREIGN CLOSINGS. The conditions to the obligations of the Buyer
Parties to consummate the transactions contemplated by the Foreign Acquisition
Agreements shall have been fulfilled (or waived by the Buyer) and the respective
Sellers and the respective Buyer Parties shall have, concurrently with the
Domestic Closing, consummated the transactions contemplated by the Foreign
Acquisition Agreements.
9.3 CONSENTS. The Company shall have obtained and shall have delivered to
the Buyer copies of (i) all Governmental Approvals required to be obtained by
the Company in connection with the execution and delivery of the Foreign
Acquisition Agreements and the Collateral Agreements and the consummation of the
transactions contemplated hereby or thereby and (ii) all Consents (including,
without limitation, all Consents required under any Contract) necessary to be
obtained in order to consummate the sale and transfer of the Assets pursuant to
the Foreign Acquisition Agreements and the consummation of the other
transactions contemplated thereby and by the Collateral Agreements, unless the
failure to obtain such Consent would not, individually or in the aggregate, have
a Material Adverse Effect.
9.4 NO MATERIAL ADVERSE EFFECT. Except as set forth in Schedule 3.11, no
event, occurrence, fact, condition, change, development or effect shall have
occurred, exist or come to exist since September 30, 1997, that, individually or
in the aggregate, has constituted or resulted in, or could reasonably be
expected to constitute or result in, a Material Adverse Effect.
9.5 CONSULTING AND NON-COMPETITION AGREEMENTS. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have
entered into a Consulting and Non-Competition Agreement, in the form attached
hereto as Exhibit B, pursuant to which such Person agrees not, to engage, either
directly or indirectly, in any business competitive with the Business anywhere
in the world for a period of five years.
9.6 SUBSEQUENT FINANCIAL STATEMENTS. The Buyer shall have received the
Subsequent Monthly Financial Statements. The Subsequent Monthly Financial
Statements shall (a) contain no liabilities different in kind or in scope from
the liabilities set forth in the Audited Balance Sheet, (b) confirm and be
consistent with the information concerning the Business (including the projected
results of operations) previously provided to the Buyer by the Sellers prior to
the date hereof and (c) otherwise be satisfactory to the Buyer. The 1997
Financial Statements shall reflect consolidated earnings before interest and
taxes of at least $10,500,000 and consolidated net worth of at least
$10,716,000, such consolidated numbers to also include the results of United
Kingdom operations in 1997.
9.7 OPINION OF COUNSEL. The Buyer shall have received an opinion, addressed
to it and dated the Closing Date, from counsel to the Company, who shall be
reasonably acceptable to Buyer in substance and form reasonably satisfactory to
the Buyer.
9.8 CORPORATE PROCEEDINGS. All corporate and other proceedings of the
Sellers in connection with the Foreign Acquisition Agreements and the Collateral
Agreements and the transactions contemplated thereby, and all documents and
instruments incident thereto, shall be reasonably satisfactory in substance and
form to the Buyer and its counsel, and the Buyer and its counsel shall have
received all such documents and instruments, or copies thereof, certified if
requested, as may be reasonably requested.
9.9 U.S. TRANSFER DOCUMENTS. The Company shall have delivered to the Buyer
at the Closing all documents, certificates and agreements necessary to transfer
to the Buyer good and marketable title to the Domestic Assets, free and clear of
any and all Liens thereon, other than Permitted Liens, including without
limitation:
(a) a ▇▇▇▇ of sale, assignment and general conveyance, in
form and substance reasonably satisfactory to the Buyer, dated
the Closing Date, with respect to the Domestic Assets (other than
any Domestic Asset to be transferred pursuant to any of the
instruments referred to in any other clause of this Section 9.9);
(b) assignments of all Contracts, Intellectual Property and
any other agreements and instruments constituting Domestic
Assets, dated the Closing Date, assigning to the Buyer all of the
Company's right, title and interest therein and thereto, with any
required Consent endorsed thereon;
(c) a general warranty deed, or its equivalent in the
jurisdiction where the property is located, dated as of the
Closing Date, with respect to each parcel of Owned Real Property
reasonably satisfactory to Buyer, together with any necessary
transfer declarations or other filings;
(d) an assignment of lease, dated as of the Closing Date,
with respect to each Lease in form reasonably satisfactory to
Buyer, together with any necessary transfer declarations or other
filings; and
(e) certificates of title to all motor vehicles included in
the Domestic Assets to be transferred to the Buyer hereunder,
duly endorsed for transfer to the Buyer as of the Closing Date.
9.10 ENVIRONMENTAL ASSESSMENT. Any Environmental Assessment or report
obtained at Buyer's expense shall be in form and substance satisfactory to the
Buyer and each of the financial institutions and investors providing financing
to the Buyer in connection with the acquisition of the Assets and the
consummation of the other transactions contemplated by this Agreement.
9.11 TITLE POLICIES. The Buyer shall have received at Buyer's expense from
a nationally recognized title insurance company (the "TITLE COMPANY")
satisfactory to the Buyer (a) a fee owner's title insurance policy issued to the
Buyer, and a mortgagee's policy issued to one or more lenders designated by the
Buyer, with respect to each Designated Property that is an Owned Real Property,
and (b) a leasehold title insurance policy issued to the Buyer, and a
mortgagee's policy issued to one or more lenders designated by the Buyer, with
respect to each Designated Property that is a Leased Real Property, in each case
in form and substance satisfactory to the Buyer and the Buyer's lenders,
together with endorsements reasonably requested by the Buyer, including, without
limitation, access, zoning, comprehensive, nonimputation and contiguity
endorsements, in an amount determined by the Buyer, insuring the Buyer and the
Buyer's lenders and issued as of the Closing Date by the Title Company, showing
the Buyer or one of the other Buyer Parties to have a fee simple title to each
Designated Property that is an Owned Real Property, and a valid leasehold estate
in each Designated Property that is a Leased Real Property, in each case subject
only to Permitted Liens. The Company shall have delivered to the Title Company
any affidavits or indemnities required by the Title Company in connection with
the delivery of the owner's title policies, leasehold title policies and any
mortgagee title policies issued to the Buyer's lenders.
9.12 SURVEYS. The Buyer shall have received at Buyer's expense a survey of
each Designated Property, dated within 30 days of the Closing Date, prepared by
a certified or registered surveyor reasonably acceptable to the Buyer and the
Title Company and certified to the Buyer, the Title Company and the Buyer's
lenders, in form and substance satisfactory to the Buyer, the Title Company and
the Buyer's lenders, complying with the current Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys and (a) setting forth an accurate
description of each parcel of Designated Property, (b) locating all
improvements, Liens (setting forth the recording information of any recorded
instruments), setback lines, alleys, streets and roads, (c) showing any
encroachments upon or by any improvements on the Designated Property, and (d)
showing all dedicated public streets providing access to the Designated Property
and the municipal address of any improvements located on the Designated
Property.
9.13 CONSENTS AND ESTOPPELS. The Buyer shall have received consents from
the lessor of each Lease listed on Schedule 3.8(b) to the assignment of such
Lease to the Buyer and consents from the lessor of each Lease listed on Schedule
9.13 to the mortgaging of the tenant's interest under such Lease to the Buyer's
lenders but no such lessor shall be required to subordinate its interest in such
lease. The Buyer shall also have received estoppel certificates addressed to the
Buyer and the Buyer's lenders from the lessor of each Lease, dated within 30
days of the Closing Date, identifying the Lease documents and any amendments
thereto, stating that the Lease is in full force and effect and, to the best
knowledge of the lessor, that the tenant is not in default under the Lease and
no event has occurred that, with notice or lapse of time or both, would
constitute a default by the tenant under the Lease and containing any other
information reasonably requested by the Buyer or the Buyer's lenders. The rental
payment under the Kentucky lease shall have been reduced to fair market rental
(including a CPI formula if it is customary in the marketplace and reflected in
the calculation of such fair market rental), provided that monthly rental at the
commencement of any term shall not be less than the last months' rent prior to
the commencement of such option term based on comparable rentals for a five year
term, and such lease shall be revised to contain customary lease terms with
respect to structural repairs and two five year renewal options at fair market
rentals, provided that the monthly rental at the commencement of any option term
shall not be less than the last months' rent prior to the commencement of such
option term.
9.14 FIRPTA CERTIFICATE. The Buyer shall have received a certificate of the
Company, dated the Closing Date and sworn to under penalty of perjury, setting
forth the name, address and federal tax identification number of the Company and
stating that the Company is not a "foreign person" within the meaning of Section
1445 of the Code, such certificate to be in the form set forth in the Treasury
Regulations thereunder.
9.15 OPTION TO PURCHASE ADJACENT LOT. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have entered
into an agreement with Buyer, granting Buyer an option to acquire that certain
parcel of land owned by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ adjacent to Seller's San Diego facility
during the three year period ending December 15, 2002 for a fair market price
(but not less than $750,000) to be determined by appraisals if the parties do
not agree, Buyer will cooperate with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in arranging for a like
kind exchange. Buyer will also have sixty (60) day right of refusal if ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ decides to sell or transfer the property at any time. If exercise of this
option would have a materially adverse tax consequence to ▇▇. ▇▇▇▇▇▇ (other than
normal capital gain or income taxes), Buyer will cooperate with ▇▇. ▇▇▇▇▇▇ in
attempting to mitigate such adverse tax consequences.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF THE SELLER
The obligation of the Seller to consummate the transactions contemplated
hereby shall be subject to the fulfillment (or waiver by the Seller), on or
prior to the Closing Date, of the following additional conditions, which the
Buyer agrees to use reasonable good faith efforts to cause to be fulfilled.
10.1 REPRESENTATIONS, PERFORMANCE. ETC. The representations and warranties
of the Buyer Parties contained in this Agreement and in the Collateral
Agreements (i) shall be true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or in all
material respects (in the case of any representation or warranty without any
materiality qualification) at and as of the date hereof and (ii) shall be
repeated and shall be true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or in all
material respects (in the case of any representation or warranty without any
materiality qualification) on and as of the Closing Date with the same effect as
though made at and as of such time. Each Buyer Party shall have duly performed
and complied in all material respects with all agreements and conditions
required under this Agreement and each of the Collateral Agreements to be
performed or complied with by it prior to or on the Closing Date. Each Buyer
Party shall have delivered to the Company a certificate, dated the Closing Date
and signed by its duly authorized officer, to the foregoing effect.
10.2 ASSUMPTION AGREEMENT. The Company shall have received from the Buyer
the Assumption Agreement.
10.3 OPINION OF COUNSEL. The Company shall have received an opinion,
addressed to it and dated the Closing Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, special counsel
for the Buyer, in form and substance reasonably satisfactory to the Company.
10.4 CORPORATE PROCEEDINGS. All corporate proceedings of each Buyer Party
in connection with the Foreign Acquisition Agreements and the Collateral
Agreements and the transactions contemplated thereby, and all documents and
instruments incident thereto, shall be reasonably satisfactory in substance and
form to the Company, and its counsel, and the Company and its counsel shall have
received all such documents and instruments, or copies thereof, certified if
requested, as may be reasonably requested.
10.5 FOREIGN CLOSINGS. The conditions to the obligations of the Sellers to
consummate the transactions contemplated by the Foreign Acquisition Agreements
shall have been fulfilled (or waived by the Sellers) and the respective Sellers
and the respective Buyer Parties shall have, concurrently with the Domestic
Closing, consummated the transactions contemplated by the Foreign Acquisition
Agreements.
10.6 CONSENTS AND APPROVALS. The Sellers shall have obtained all
Governmental Approvals necessary to consummate the transactions contemplated
hereby.
10.7 COLLATERAL AGREEMENTS. The Buyer shall have entered into each of the
Collateral Agreements to which it is a party.
10.8 RECEIPT OF PURCHASE PRICE. Seller and Escrow Agent shall have received
the payment of the Purchase Price as described in Section
2.2.
ARTICLE XI
EMPLOYEES AND EMPLOYEE BENEFIT PLANS
11.1 EMPLOYMENT OF THE COMPANY'S EMPLOYEES.
(a) The Seller will, and will cause each other Seller to, use all
reasonable efforts to cause its employees to make available their employment
services to the Buyer Parties. For a period of two years from the Closing Date,
the Seller will not, and will not permit any of its Affiliates to, solicit,
offer to employ or retain the services of or otherwise interfere with the
relationship of any Buyer Party with any Person employed by or otherwise engaged
to perform services for any Buyer Party in connection with the operation of the
Business.
(b) Effective as of the Closing Date, Buyer shall offer employment to all
employees who are employed by the Sellers at the same wage or salary levels
(other than executive employees and the Excluded Employees), as applicable, and
with employee benefits that are substantially equivalent to those now
applicable. Those employees who accept such offers of employment effective as of
the Closing Date shall be referred to herein as the "TRANSFERRED EMPLOYEES".
Effective as of the Closing Date, the Buyer shall assume all liabilities of the
Sellers in respect of the Transferred Employees, except as provided in Section
2.6. Nothing in this Article XI or in this Agreement shall be construed to in
any way limit or restrict the ability or authority of the Buyer or any of its
Affiliates to terminate the employment of any employee or to change the benefit
afforded to any employee at any time.
11.2 PENSION BENEFIT PLANS.
Effective as of the Closing Date, the Buyer shall assume the defined
contribution plan of Seller.
11.3 EMPLOYMENT TAXES.
(a) The Company will, and the Buyer will and will cause the other Buyer
Parties to, (i) treat the Buyer Parties as a "successor employer" and the
Company as a "predecessor," within the meaning of sections 3121(a)(1) and
3306(b)(1) of the Code, with respect to Transferred Employees who are employed
by the Buyer Parties for purposes of Taxes imposed under the United States
Federal Unemployment Tax Act ("FUTA") or the United States Federal Insurance
Contributions Act ("FICA") and (ii) cooperate with each other to avoid, to the
extent possible, the filing of more than one IRS Form W-2 with respect to each
such Transferred Employee for the calendar year within which the Closing Date
occurs.
(b) At the request of the Buyer with respect to any particular applicable
Tax law relating to employment, unemployment insurance, social security,
disability, workers' compensation, payroll, health care or other similar Tax
other than Taxes imposed under FICA and FUTA, the Company will, and will cause
the other Sellers (if applicable) to, and the Buyer will and will cause the
other Buyer Parties (if applicable) to, (i) treat the Buyer Parties as a
successor employer and the Company or the other Sellers (if applicable) as a
predecessor employer, within the meaning of the relevant provisions of such Tax
law, with respect to Transferred Employees who are employed by the Buyer (or, if
applicable, the other Buyer Parties) and (ii) cooperate with each other to
avoid, to the extent possible, the filing of more than one individual
information reporting form pursuant to each such Tax law with respect to each
such Transferred Employee for the calendar year within which the Closing Date
occurs.
(c) Buyer and the Buyer Parties shall be responsible for any employment
taxes payable to Transferred Employees with respect to their employment after
the Closing Date.
ARTICLE XII
TERMINATION
12.1 TERMINATION. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by the written agreement of the Buyer and the Company;
(b) by the Buyer by written notice to Seller following
thirty days notice and opportunity to cure or such fewer days as
may be left prior to March 31, 1998 following Buyer's Receipt of
Notice of such matter if (i) the representations and warranties
of Seller shall not have been true and correct in all respects
(in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the
case of any representation or warranty without any materiality
qualification) as of the date when made or (ii) if any of the
conditions set forth in Article IX shall not have been, or if it
becomes apparent that any of such conditions will not be,
fulfilled by 5:00 p.m. San Diego time on March 31, 1998, unless
such failure shall be due to the failure of the Buyer to perform
or comply with any of the covenants, agreements or conditions
hereof to be performed or complied with by it prior to the
Closing; or
(c) by Seller by written notice to the Buyer following
thirty days notice and opportunity to cure or such fewer days as
may be left prior to March 31, 1998 following Seller's Receipt of
Notice of such matter if (i) the representations and warranties
of the Buyer shall not have been true and correct in all respects
(in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the
case of any representation or warranty without any materiality
qualification) as of the date when made or (ii) if any of the
conditions set forth in Article X shall not have been, or if it
becomes apparent that any of such conditions will not be,
fulfilled by 5:00 p.m. San Diego time on March 31, 1998, unless
such failure shall be due to the failure of Seller to perform or
comply with any of the covenants, agreements or conditions hereof
to be performed or complied with by it prior to the Closing.
12.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to the provisions of Section 12.1, this Agreement shall
become void and have no effect, without any liability to any Person in respect
hereof or of the transactions contemplated hereby on the part of any party
hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or Affiliates, except as specified in
Section 15.1 and except for any liability resulting from such party's breach of
this Agreement.
ARTICLE XIII
REMEDIES
13.1 REMEDIES
(a) BY SELLER. Seller covenants and agrees to defend, indemnify and hold
harmless the Buyer, its officers, directors, employees, agents, advisers,
representatives and Affiliates (collectively, the "BUYER INDEMNITIES") from and
against, and pay or reimburse the Buyer Indemnitees for, any and all claims,
liabilities, obligations, losses, fines, costs, royalties, proceedings,
deficiencies or damages (whether absolute, accrued, conditional or otherwise and
whether or not resulting from third party claims), including out-of-pocket
expenses and reasonable attorneys' and accountants' fees incurred in the
investigation or defense of any of the same or in asserting any of their
respective rights hereunder (collectively, "Losses"), resulting from or arising
out of:
(i) any material breach of any representation or warranty
made by any Seller herein or under any Collateral Agreement or in
connection herewith or therewith;
(ii) any failure of any Seller to perform any covenant or
agreement made or contained herein or in any Collateral Agreement
or fulfill any other obligation in respect hereof or of any
Collateral Agreement; and
(iii) any Excluded Liabilities or Excluded Assets;
provided, however, Buyer shall only be entitled to payment or reimbursement by
Seller of Losses pursuant to this Section 13.1(a) if the aggregate amount of all
Losses is at least $50,000, in which event Buyer shall be entitled to payment of
all Losses, and provided further, however, except with respect to Losses
incurred by any Buyer Indemnitee relating to or arising out of Excluded
Liabilities, as to which there is no limitation ("Excluded Losses"), Seller
shall not be required to make payments pursuant to this Section 13.1(a) to the
extent the aggregate of all amounts paid to Buyer Indemnitees, excluding
payments for Excluded Losses, shall exceed the sum of $2,000,000 reduced by any
amounts previously paid to Seller from the Escrow Account.
(b) BY THE BUYER. The Buyer covenants and agrees to defend, indemnify and
hold harmless Seller and its officers, directors, employees, agents, advisers,
representatives and Affiliates (collectively, the "SELLER INDEMNITIES") from and
against, and pay or reimburse Seller Indemnities for, any and all Losses
resulting from or arising out of:
(i) any material breach of any representation or warranty by
any Buyer Party made or contained herein in any Collateral
Agreement or in connection herewith or therewith; or
(ii) any failure of any Buyer Party to perform any covenant
or agreement made or contained herein or in any Collateral
Agreement or fulfill any other obligation in respect hereof or of
any Collateral Agreement; and
(iii) the Assumed Liabilities;
provided, however, Seller shall only be entitled to payment or
reimbursement by Buyer of Losses pursuant to this Section 13.1(a) if the
aggregate amount of all Losses is at least $50,000, in which event Seller shall
be entitled to payment of all Losses.
13.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. The representations
and warranties contained in this Agreement shall survive the execution and
delivery of this Agreement, any examination by or on behalf of the parties
hereto and the completion of the transactions contemplated herein, but only to
the extent specified below:
(a) except as set forth in clauses (b) and (c) below, the
representations and warranties contained in Articles III and IV
shall survive for a period of two years following the Closing
Date.
(b) the representations and warranties contained in Sections
3.1, 3.4, 4.1 and 4.2 shall survive without limitation; and
(c) the representations and warranties of Seller contained
in Section 3.12 shall survive as to any Tax covered by such
representations and warranties for so long as any statute of
limitations for such Tax remains open, in whole or in part,
including with out limitation by reason of waiver of such statute
of limitations.
ARTICLE XIV
DEFINITIONS, MISCELLANEOUS
14.1 DEFINITION OF CERTAIN TERMS. The terms defined in this Section 14.1,
whenever used in this Agreement (including in the Schedules), shall have the
respective meanings indicated below for all purposes of this Agreement. All
references herein to a Section, Article or Schedule are to a Section, Article or
Schedule of or to this Agreement, unless otherwise indicated.
ACT: the Securities Act of 1933, as amended.
FOREIGN ACQUISITION AGREEMENTS: this Agreement and the Foreign Acquisition
Agreements.
AFFILIATE: means, as to any Person (the "First Person"), any other Person
that is a Family Member of the First Person or that, directly or indirectly,
controls, is under common control with or is controlled by, the First Person,
including, without limitation, all directors, officers and shareholders of the
First Person. "Control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.
AGGREGATE PURCHASE PRICE: as defined in Section 2.4.
AGREEMENT: this Asset Purchase Agreement, including the Schedules hereto.
APPLICABLE LAW: all applicable provisions of all (i) constitutions,
treaties, statutes, laws (including the common law), rules, regulations,
ordinances, codes or orders of any Governmental Authority, (ii) Governmental
Approvals and (iii) orders, decisions, injunctions, judgments, awards and
decrees of or agreements with any Governmental Authority.
ASSETS: as defined in Section 1.1.
ASSUMED LIABILITIES: as defined in Section 2.5.
ASSUMPTION AGREEMENT: as defined in Section 2.5(b).
AUDITED BALANCE SHEET: the balance sheet contained in the 1996 Financial
Statements.
AUDITED FINANCIAL STATEMENTS: each of the 1994, 1995, 1996 and 1997
Financial Statements.
BUSINESS: the business acquired or to be acquired by the Buyer and the
Buyer Parties pursuant to this Agreement, consisting of the Assets, and the
Assumed Liabilities, but not including the Excluded Assets.
BUSINESS DAY: shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in the State of California are authorized or required
to close.
BUYER: as defined in the first paragraph of this Agreement.
BUYER INDEMNITIES: as defined in Section 13.1(a).
BUYER PARTY: each of the Buyer and each of its direct or indirect
subsidiaries to be parties to the Foreign Acquisition Agreements.
BUYER'S ACCOUNTANTS: KPMG Peat Marwick.
CERCLA: the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C.ss.9601 ET SEQ.
CLOSINGS: the Domestic Closing and the Foreign Closings.
CLOSING DATE: as defined in Section 2.1.
C&L: means Coopers & ▇▇▇▇▇▇▇ L.L.P.
CODE: the Internal Revenue Code of 1986, as amended.
COLLATERAL AGREEMENTS: the Escrow Agreement, the Foreign Acquisition
Agreements, the Consulting and Non-Competition Agreement and the Employment
Agreements.
COMPANY: another term for Seller.
CONSENT: any consent, approval, authorization, waiver, permit, grant,
franchise, concession, agreement, license, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to, any Person,
including but not limited to any Governmental Authority.
CONSULTING AND NON-COMPETITION AGREEMENT: as defined in Section 9.5.
CONTRACT: as defined in Section 3.14.
CORPORATE BOOKS: as defined in SECTION 3.1.
DAMAGES: has the meaning set forth in SECTION 7.1(A).
DESIGNATED PROPERTIES: the Real Property listed on Schedule 8.1(a).
$ or DOLLARS: lawful money of the United States.
DOMESTIC ASSETS: the Assets other than the Foreign Assets, including
without limitation, all Intellectual Property of the Sellers.
DOMESTIC CLOSING: as defined in Section 2.1.
DOMESTIC OPERATIONS: the Operations of the Business conducted in the United
States by Seller or one of its Subsidiaries.
EMPLOYMENT AGREEMENT: the Employment Agreements to be entered into between
Buyer and each of ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
substantially in the form delivered to the Seller's management on December 5,
1997.
ENVIRONMENTAL ASSESSMENT: as defined in Section 5.11.
ENVIRONMENTAL LAWS: all Applicable Laws relating to the protection of the
environment, to human health and safety, or to any emission, discharge,
generation, processing, storage, holding, abatement, existence, Release,
threatened Release or transportation of any Hazardous Substances, including,
without limitation, (i) CERCLA, the Resource Conservation and Recovery Act, and
the Occupational Safety and Health Act, (ii) all other requirements pertaining
to reporting, licensing, permitting, investigation or remediation of emissions,
discharges, releases or threatened releases of Hazardous Materials into the air,
surface water, groundwater or land, or relating to the manufacture, processing,
distribution, use, sale, treatment, receipt, storage, disposal, transport or
handling of Hazardous Substances, and (iii) all other requirements pertaining to
the protection of the health and safety of employees or the public.
ENVIRONMENTAL LIABILITIES AND COSTS: all Losses, whether direct or
indirect, known or unknown, current or potential, past, present or future,
imposed by, under or pursuant to Environmental Laws, including, without
limitation, all Losses related to Remedial Actions, and all fees, disbursements
and expenses of counsel, experts, personnel and consultants based on, arising
out of or otherwise in respect of: (i) the ownership or operation of the
Business, Real Property or Other Leases or any other real properties, assets,
equipment or facilities, by any Seller, or any of their predecessors or
Affiliates; (ii) the environmental conditions existing on the Closing Date on,
under, above, or about any Real Property or property subject to Other Leases or
any other real properties, assets, equipment or facilities currently or
previously owned, leased or operated by the any Seller, or any of their
predecessors or Affiliates; and (iii) expenditures necessary to cause any Real
Property or any aspect of the Business to be in compliance with any and all
requirements of Environmental Laws as of the Closing Date, including, without
limitation, all Environmental Permits issued under or pursuant to such
Environmental Laws, and reasonably necessary to make full economic use of any
Real Property.
ENVIRONMENTAL PERMITS: any federal, state and local permit, license,
registration, consent, order, administrative consent order, certificate,
approval or other authorization with respect to the any Seller necessary for the
conduct of the Business as currently conducted or previously conducted under any
Environmental Law.
ERISA: the Employee Retirement Income Security Act of 1974, as amended.
ESCROW ACCOUNT: as defined in the Escrow Agreement.
ESCROW AGENT: as defined in the Escrow Agreement.
ESCROW AGREEMENT: that certain Escrow Agreement in substantially the form
of Exhibit A hereto, dated as of the Closing Date, by and between Seller, Buyer
and Sanwa Bank (or other bank of equal stature approved by Buyer, which approval
will not unreasonably be withheld), in its capacity as escrow agent, as the same
may be amended, supplemented, restated or otherwise modified, in each case from
time to time and whether in whole or in part.
EXCLUDED ASSETS: as defined in Section 1.2.
EXCLUDED EMPLOYEES: as listed on Schedule 14(a).
EXCLUDED LIABILITIES: as defined in Section 2.6.
FAMILY MEMBER: as to any Person, such Person's spouse, child (including a
stepchild or an adopted child), grandchildren and any trust for the exclusive
benefit of any one or more of them and a Person controlled at all times by such
Person and beneficially owned by such Person and any one or more of them.
FINANCIAL STATEMENTS: each of the financial statements required to be
provided by Section 3.6.
FOREIGN ACQUISITION AGREEMENT: an asset or stock purchase agreement
relating to a Foreign Operation.
FOREIGN ASSETS: those Assets which are owned or leased or held for use by
or in connection with any Foreign Operation, but not including any Intellectual
Property, all of which constitute Domestic Assets.
FOREIGN CLOSING: as defined in Section 2.1.
FOREIGN OPERATION: any Operation of the Business conducted by a Foreign
Subsidiary.
FOREIGN SUBSIDIARIES: as defined in the first WHEREAS clause of this
Agreement.
GAAP: generally accepted accounting principles as in effect in the United
States applied on a consistent basis.
GERMAN SUBSIDIARY: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co. GmbH, Optac OHG.
GOVERNMENTAL APPROVAL: any Consent of, with or to any Governmental
Authority.
GOVERNMENTAL AUTHORITY: any nation or government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including, without limitation, any government authority, agency, department,
board, commission or instrumentality of the United States, any State of the
United States or any political subdivision thereof, and any tribunal or
arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
HAZARDOUS SUBSTANCES: any substance that: (i) is or contains asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or
petroleum-derived substances or wastes, radon gas or related materials (ii)
requires investigation, removal or remediation under any Environmental Law, or
is defined, listed or identified as a "hazardous waste," "hazardous material" or
"hazardous substance" thereunder, or (iii) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is regulated by any Governmental Authority or Environmental Law.
HSR APPROVAL: means the expiration or early termination of the waiting
period (including extensions thereof) and the waiver or withdrawal of any
objections, if applicable, under the HSR Act.
HSR ACT: the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-trust Improvements Act of 1976, as
amended.
IMPROVEMENTS: has the meaning set forth in SECTION 3.8(C).
INCOME TAX OR INCOME TAXES: any federal, state, local, foreign or other
income tax (including all interest and penalties thereon and additions thereto
whether disputed or not).
INDEBTEDNESS: all obligations, contingent (to the extent required to be
reflected in financial statements prepared in accordance with GAAP) and
otherwise, which in accordance with GAAP should be classified on the obligor's
balance sheet as liabilities, including without limitation, in any event and
whether or not so classified: (i) all debt and similar monetary obligations,
whether direct or indirect; (ii) all liabilities secured by any mortgage,
pledge, security interest, lien, charge or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; (iii) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of Indebtedness or
performance of others, including any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness against loss, through an
agreement to purchase goods, supplies or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise,
and (iv) obligations to reimburse issuers of any letters of credit.
INDEMNIFIED PARTY: as defined in Section 8.2(d).
INDEMNIFYING PARTY: as defined in Section 8.2(d).
INTERIM FINANCIAL STATEMENTS: the consolidated unaudited balance sheet of
the Seller for the nine month period ending on September 30, 1997 and the
related consolidated unaudited statements of earnings, and stockholders' equity,
including the supporting schedules thereto, of the Seller and each Subsidiary
for such period, certified by the Chief Financial Officer of the Seller as
having been prepared in accordance with GAAP and fairly presenting the financial
position, assets and liabilities of the Seller and each Subsidiary as at such
date and the results of operations of the Seller and each Subsidiary for the
nine months then ended (subject to normal year-end adjustments).
INSURANCE POLICIES: as defined in SECTION 3.17.
INTELLECTUAL PROPERTY: any and all United States and foreign: (a) patents
(including design patents, industrial designs and utility models) and patent
applications (including docketed patent disclosures awaiting filing, reissues,
divisions, continuations-in-part and extensions), patent disclosures awaiting
filing determination, inventions and improvements thereto; (b) trademarks,
service marks, trade names, trade dress, logos, business and product names,
slogans, and registrations and applications for registration thereof (provided
that the name "▇▇▇▇▇▇ ▇▇▇▇▇▇" shall be limited to uses and applications relating
to safety and security products); (c) copyrights (including software) and
registrations thereof; (d) inventions, processes, designs, formulae, trade
secrets, know-how, industrial models, confidential and technical information,
manufacturing, engineering and technical drawings, product specifications and
confidential business information; (e) mask work and other semiconductor chip
rights and registrations thereof; (f) intellectual property rights similar to
any of the foregoing; (g) copies and tangible embodiments thereof (in whatever
form or medium, including electronic media).
INTELLECTUAL PROPERTY ASSETS: as defined in Section 1.1(h).
INTERIM PERIOD: as defined in Section 4.3.
INVENTORY NOTICE DATE: as defined in SECTION 5.17.
INVENTORIES: as defined in Section 1.1(b).
IRS: the Internal Revenue Service.
KNOWLEDGE: Any of the Sellers shall be deemed to have knowledge if any
officer, director, shareholder or Senior Management Employee (a "Knowledge
Individual") of such Seller shall be deemed to have Knowledge as defined in the
following sentence. A Knowledge Individual will be deemed to have Knowledge of a
particular fact or other matter if: (a) such individual is actually aware of
such fact or other matter; or (b) such individual received written notice
thereof; or (c) such individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of the performance of
his or her duties in a reasonable manner and only if such fact or matter comes
within the customary purview of such duties.
LEASED REAL PROPERTY: as described in SECTION 3.8(B).
LEASED REAL PROPERTY: means all interests leased pursuant to the Leases.
LEASES: means the real property leases, subleases, licenses and occupancy
agreements pursuant to which any Seller is the lessee, sublessee, licensee or
occupant.
LIEN: any mortgage, pledge, hypothecation, right of others, claim, security
interest, encumbrance, lease, sublease, license, occupancy agreement, adverse
claim or interest, easement, covenant, encroachment, burden, title defect, title
retention agreement, voting trust agreement, interest, equity, option, lien,
right of first refusal, charge or other restrictions or limitations of any
nature whatsoever, including but not limited to such as may arise under any
Contracts.
LOSSES: as defined in Section 13.1.
MATERIAL ADVERSE CHANGE: a change that has a Material Adverse Effect.
MATERIAL ADVERSE EFFECT: with respect to any Person, any event, occurrence,
fact, condition, change or effect that is or series of effects that are, in the
aggregate, materially adverse, determined in accordance with past and ongoing
Sellers' business practices, to the business, operations, prospects, results of
operations, condition (financial or otherwise), properties (including intangible
properties), assets (including intangible assets) or liabilities of such Person.
MAXIMUM AMOUNT: as defined in SECTION 7.1(C).
MULTIEMPLOYER PLAN: as defined in Section 3.15(d).
OPERATIONS: each portion of the Business conducted by Seller or any of the
Subsidiaries or their Affiliates.
OWNED INTELLECTUAL PROPERTY: as defined in Section 3.10(a).
OWNED REAL PROPERTY: as defined in SECTION 3.8(D).
OWNED REAL PROPERTY: the real property owned by any Seller, together with
all other structures, facilities, improvements, fixtures, systems, equipment and
items of property presently or hereafter located thereon attached or appurtenant
thereto or owned by any Seller and located on Leased Real Property and all
easements, licenses, rights and appurtenances relating to the foregoing other
than owned real property included in Excluded Assets.
PERMITTED LIENS: (i) Liens reserved against in the Audited Balance Sheet,
to the extent so reserved, (ii) Liens for Taxes not yet due and payable or which
are being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on Seller's books in accordance
with GAAP, or (iii) Liens that, individually and in the aggregate, do not and
would not materially detract from the value of any of the property or assets of
the Business or materially interfere with the use thereof as currently used or
contemplated to be used or otherwise.
PERSON: any natural person, firm, partnership, association, corporation,
company, trust, business trust, Governmental Authority or other entity.
PLAN OR BENEFIT PLAN: as defined in Section 3.15.
PROPERTY OR PROPERTIES: collectively, the Owned Real Property and the
Leased Real Property.
PURCHASE PRICE: as defined in Section 2.2.
REAL PROPERTY: the Owned Real Property and the Leased Real Property.
REAL PROPERTY LAWS: as defined in Section 3.8(e).
RELATED PERSONS: as defined in Section 11.1.
RELEASE: any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like, including without
limitation, the moving of any materials through, into or upon, any land, soil,
surface water, ground water or air, or otherwise entering into the environment.
REMEDIAL ACTION: all actions required to (i) clean up, remove, treat or in
any other way remediate any Hazardous Substances; (ii) prevent the release of
Hazardous Substances so that they do not migrate or endanger or threaten to
endanger public health or welfare or the environment; or (iii) perform studies,
investigations and care related to any such Hazardous Substances.
SELLER: as defined in the first paragraph of this Agreement.
SELLER INDEMNITEES: as defined in Section 13.1(b).
SELLERS: as defined in the first WHEREAS clause of this Agreement.
SELLER'S ACCOUNTANTS: Coopers & ▇▇▇▇▇▇▇ L.L.P.
SENIOR MANAGEMENT EMPLOYEE: any employee of any of the Sellers who is
listed on Schedule 14 (b).
SUBSEQUENT MONTHLY FINANCIAL STATEMENTS: as defined in Section 5.4.
SUBSIDIARY: each corporation or other Person in which Seller owns or
controls, directly or indirectly, capital stock or other equity interests
representing at least 50% of the outstanding voting stock or other equity
interests.
TANGIBLE PERSONAL PROPERTY: furniture, fixtures, equipment, machinery,
vehicles, supplies, inventories, materials, apparatus, tools, implements,
appliances and other tangible personal property of every kind and description.
TAX: any federal, state, provincial, local, foreign or other income,
estimated income, alternative minimum, accumulated earnings, personal holding
company, franchise, capital stock, net worth, capital, profits, deemed profits,
windfall profits, gross receipts, value added, license, sales, use, goods and
services, excise, customs duties, transfer, conveyance, mortgage, registration,
stamp, documentary, recording, premium, severance, environmental, real property,
personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers' compensation, payroll, health care, withholding, estimated or other
similar tax, duty, tariff, levy, fee or other governmental charge or assessment
or deficiencies thereof (including all interest and penalties thereon and
additions thereto whether disputed or not).
TAX RETURN: any return, report, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
TRANSACTION EXPENSES: as defined in Section 15.1.
TRANSFERRED EMPLOYEES: as defined in Section 11.1.
TRANSFER TAXES: as defined in Section 5.8.
TREASURY REGULATIONS: the regulations prescribed pursuant to the Code.
WITHHOLDING TAXES: as defined in Section 3.12(a).
1994, 1995 AND 1996 FINANCIAL STATEMENTS: the consolidated audited balance
sheet of the Seller for its fiscal years commencing in January and ending on
December 31, 1994, 1995 and 1996, respectively and the related audited
statements of earnings, stockholders' equity and changes in financial position,
including the footnotes thereto, of the Seller and each Subsidiary for such
period, certified by C&L as having been prepared in accordance with GAAP and
fairly presenting the financial position, assets and liabilities of the Seller
and each Subsidiary as at such date and the results of operations of the Seller
and each Subsidiary for such period.
1997 FINANCIAL STATEMENTS: the consolidated audited balance sheet of the
Seller for its fiscal year commencing on January 1, 1997 and ending on December
31, 1997 and the related audited statements of earnings, stockholders' equity
and changes in financial position, including the footnotes thereto, of the
Seller and each Subsidiary for such period, certified by C&L as having been
prepared in accordance with GAAP and fairly presenting the financial position,
assets and liabilities of the Seller and each Subsidiary as at such date and the
results of operations of the Seller and each Subsidiary for such period, which
financial statements will be delivered by Seller to Buyer on or before February
15, 1998.
1997 WORKING CAPITAL: as defined in Section 3.6(e)
ARTICLE XV
MISCELLANEOUS
15.1 EXPENSES. Except as otherwise specifically provided in this Agreement
and the Collateral Agreements, Seller, on the one hand, and the Buyer, on the
other hand, shall bear their respective expenses, costs and fees (including
attorneys, auditors' and financing commitment fees) in connection with the
transactions contemplated hereby, including the preparation, execution and
delivery of this Agreement and compliance herewith (the "TRANSACTION EXPENSES"),
whether or not the transactions contemplated hereby shall be consummated.
15.2 SEVERABILITY. If any provision of this Agreement, including any
phrase, sentence, clause, Section or subsection is inoperative or unenforceable
for any reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatsoever.
15.3 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram.
(i) if to the Buyer to,
Bacou USA, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, III
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(ii) if to the Company,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇, CEO and ▇▇▇ ▇▇▇▇▇▇▇, CFO
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or, in each case, at such other address as may be specified in writing to
the other parties hereto.
All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.
15.4 HEADINGS. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
15.5 ENTIRE AGREEMENT. This Agreement (including the Schedules hereto) and
the Collateral Agreements (when executed and delivered) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.
15.6 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.
15.7 GOVERNING LAW, ETC. This Agreement shall be governed in all respects,
including as to validity, interpretation and effect, by the internal laws of the
State of California, without giving effect to the conflict of laws rules
thereof.
15.8 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns.
15.9 ASSIGNMENT. This Agreement shall not be assignable or otherwise
transferable by any party hereto without the prior written consent of the other
party hereto, PROVIDED that the Buyer may assign this Agreement to any
Subsidiary of the Buyer or to any lender to the Buyer or any Subsidiary or
Affiliate thereof as security for obligations to such lender in respect of the
financing arrangements entered into in connection with the transactions
contemplated hereby and any refinancings, extensions, refundings or renewals
thereof, PROVIDED, FURTHER, that no assignment to any such lender shall in any
way affect the Buyer's obligations or liabilities under this Agreement.
15.10 NO THIRD PARTY BENEFICIARIES. Except as provided in Article XIII with
respect to indemnification of Indemnified Parties hereunder, nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.
15.11 AMENDMENT; WAIVERS, ETC. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise have at
law or in equity. The rights and remedies of any party based upon, arising out
of or otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant or agreement or failure to fulfill any condition shall in no
way be limited by the fact that the act, omission, occurrence or other state of
facts upon which any claim of any such inaccuracy or breach is based may also be
the subject matter of any other representation, warranty, covenant or agreement
as to which there is no inaccuracy or breach. The representations and warranties
of Seller shall not be affected or deemed waived by reason of any investigation
made by or on behalf of the Buyer (including but not limited to by any of its
advisors, consultants or representatives) or by reason of the fact that the
Buyer or any of such advisors, consultants or representatives knew or should
have known that any such representation or warranty is or might be inaccurate.
15.12 FOREIGN CURRENCIES. Unless otherwise stated, all dollars specified in
the Foreign Acquisition Agreements and the Collateral Agreements shall be in
U.S. dollars. All foreign currency shall be converted to U.S. dollar equivalents
determined on the basis of the exchange rates published in The Wall Street
Journal on the date three days prior to the relevant Closing (or, if The Wall
Street Journal is not published on such date, the next preceding date on which
it is published).
15.13 BULK SALES COMPLIANCE. Buyer hereby waives compliance by Sellers with
the provisions of the Bulk Sales Law of any state, and Seller warrants and
agreed to pay and discharge when due all claims of creditors which could be
asserted against Buyer or any Buyer Party by reason of such noncompliance to the
extent that such liabilities are Excluded Liabilities, as defined in Section
2.6.
15.14 ARBITRATION. The parties shall make every effort to settle all
disputes arising in connection with this Agreement amicably by negotiations held
in good faith. Failing such amicable settlement, all disputes shall be settled
by one (1) arbitrator (selected by the Company and Buyer) by binding arbitration
in accordance with the laws of California and the rules, regulations and
procedures of the American Arbitration Association ("AAA") except with respect
to the selection of the arbitrator which shall be as provided in this SECTION
15.14. The Company and Buyer agree to appoint the arbitrator within thirty (30)
days of receipt of a notice delivered in accordance with SECTION 15.14 from the
other party setting forth a description of the claim and dispute and requesting
that the arbitrator be appointed. If the parties fail to select an arbitrator
within such thirty (30) day period, either party hereto may instruct the AAA to
appoint an arbitrator. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The site of the arbitration
shall be San Diego, California. The arbitrators shall award reimbursement of
attorneys' fees and other costs of arbitration to the prevailing party, in such
manner as the arbitrators shall deem appropriate. In addition, the losing party
shall reimburse the prevailing party for attorneys' fees and disbursements and
court costs incurred by the prevailing party in successfully seeking any
preliminary equitable relief or judicially enforcing any arbitration award.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
BACOU USA SAFETY, INC.
By:/s/ Philippe Bacou
--------------------------------------------
Name: Philippe Bacou
Title: Chairman
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President and CEO
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Executive Vice-President and CFO
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ASSOCIATES, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
By:/s/ ▇▇▇▇ ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Executive Vice-President and CEO
At the Closing of the transactions
contemplated by this Agreement, the
undersigned agrees to enter into a
Consulting Agreement with the Buyer in
the form attached hereto as Exhibit B:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually