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ASSET PURCHASE AGREEMENT
by and among
TRIANGLE PACIFIC CORP.,
▇▇▇▇▇▇▇ HARDWOOD FLOORING, INC.
as Buyer
and
▇▇▇▇▇▇▇, INC.,
and
SEARCY FLOORING, INC.
as Sellers
March 28, 1997
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TABLE OF CONTENTS
Page
ASSET PURCHASE AGREEMENT ................................................. 1
ARTICLE I. .............................................................. 1
TERMS OF THE TRANSACTION ................................................ 1
1.1 Assets to be Transferred .................................... 1
1.2 Purchase Price .............................................. 4
1.3 Cash Payment ................................................ 4
1.4 Liabilities Assumed by Buyer ................................ 4
1.5 Estimated Cash Payment ...................................... 4
1.6 Certain Closing Adjustments ................................. 6
1.7 Final Price Adjustment ...................................... 6
1.8 Allocation of Purchase Price Among Sellers; Seller
Representative. ............................................. 7
1.9 Allocation of Purchase Price Among Assets ................... 8
1.10 Liabilities Not Assumed by Buyer ............................ 8
1.11 Definitions ................................................. 9
ARTICLE II. ............................................................. 9
CLOSING ................................................................. 9
2.1 Time and Place of Closing ................................... 9
2.2 Effectiveness ............................................... 9
ARTICLE III. ............................................................ 9
REPRESENTATIONS AND WARRANTIES OF SELLERS ............................... 9
3.1 Corporate Organization and Qualification .................... 9
3.2 Authority Relative to This Agreement ........................ 10
3.3 Noncontravention ............................................ 10
3.4 Governmental Approvals ...................................... 10
3.5 Operation and Ownership of Business ......................... 10
3.6 Title to Assets ............................................. 11
3.7 Financial Statements ........................................ 11
3.8 Liabilities ................................................. 12
3.9 Absence of Certain Changes .................................. 12
3.10 Tax Matters ................................................. 12
3.11 Compliance With Laws ........................................ 13
3.12 Legal Proceedings ........................................... 13
3.13 Real Property ............................................... 13
3.14 Tangible Personal Property .................................. 15
3.15 Leased Property ............................................. 15
3.16 Inventory ................................................... 15
3.17 Receivables ................................................. 15
3.18 Intellectual Property ....................................... 16
3.19 Permits ..................................................... 16
3.20 Contracts and Agreements .................................... 17
3.21 ERISA; Accrued Compensation ................................. 19
3.22 Environmental Matters ....................................... 20
3.23 Labor Relations ............................................. 22
3.24 Customers and Suppliers ..................................... 23
3.25 Insurance .................................................. 23
3.26 Books and Records ........................................... 23
3.27 Brokerage Fees .............................................. 24
3.28 Insider Interests ........................................... 24
3.29 Disclosure .................................................. 24
3.30 Representations and Warranties on Closing Date .............. 24
ARTICLE IV. ............................................................. 24
REPRESENTATIONS AND WARRANTIES OF TRIANGLE AND BUYER .................... 24
4.1 Corporate Organization ...................................... 24
4.2 Authority Relative to This Agreement ........................ 25
4.3 Noncontravention ............................................ 25
4.4 Governmental Approvals ...................................... 25
4.5 Legal Proceedings ........................................... 26
4.6 Brokerage Fees .............................................. 26
4.7 Disclosure .................................................. 26
4.8 Representations and Warranties on Closing Date .............. 26
ARTICLE V. .............................................................. 26
CONDUCT OF BUSINESS PENDING CLOSING ..................................... 26
5.1 Conduct and Preservation of Business ........................ 26
5.2 Restrictions on Certain Actions ............................. 27
ARTICLE VI. ............................................................. 28
ADDITIONAL AGREEMENTS ................................................... 28
6.1 Access to Information; Confidentiality ...................... 28
6.2 Acquisition Proposals ....................................... 29
6.3 Third Party Consents ........................................ 30
6.4 Reasonable Best Efforts ..................................... 30
6.5 Employee and Employee Benefit Plan Matters .................. 30
6.6 Title Insurance and Surveys ................................. 34
6.7 Payment of Liabilities ...................................... 35
6.8 Public Announcements ........................................ 35
6.9 Environmental Provisions .................................... 35
6.10 Notice of Litigation ........................................ 36
6.11 Notification of Certain Matters ............................. 36
6.12 Amendment of Schedules ...................................... 37
6.13 Fees and Expenses ........................................... 37
6.14 Survival of Covenants ....................................... 37
6.15 Dispute Resolution .......................................... 37
6.16 Preparation of Closing Balance Sheet ........................ 38
6.17 Access to Records After Closing ............................. 39
6.18 Taxes; Other Charges ........................................ 40
6.19 Escrow; Liquidated Damages .................................. 40
ARTICLE VII. ............................................................ 40
CONDITIONS TO OBLIGATIONS OF SELLERS .................................... 40
7.1 Representations and Warranties True ......................... 40
7.2 Covenants and Agreements Performed .......................... 40
7.3 Certificate ................................................. 41
7.4 Opinion of Counsel to Buyer ................................. 41
7.5 Legal Proceedings ........................................... 41
7.6 Approval of Counsel to Seller ............................... 41
ARTICLE VIII. ........................................................... 41
CONDITIONS TO OBLIGATIONS OF TRIANGLE AND BUYER ......................... 41
8.1 Representations and Warranties True ......................... 41
8.2 Covenants and Agreements Performed .......................... 41
8.3 Certificate ................................................. 41
8.4 Preliminary Closing Statements .............................. 41
8.5 Payoff Letters. ............................................. 42
8.6 Opinion of Counsel to Seller ................................ 42
8.7 Legal Proceedings ........................................... 42
8.8 No Material Adverse Change .................................. 42
8.9 Noncompetition Agreements ................................... 42
8.10 Data Processing Agreement ................................... 42
8.11 International Distribution Agreement ........................ 42
8.12 Unacceptable Encumbrances; Title Insurance .................. 42
8.13 Due Diligence ............................................... 42
8.14 Environmental Matters ....................................... 43
8.15 Other Documents ............................................. 43
8.16 Approval of Counsel to Triangle and Buyer ................... 44
ARTICLE IX. ............................................................. 44
CONDITIONS TO OBLIGATIONS OF ALL PARTIES ................................ 44
9.1 Governmental and Third Party Consents and Approvals ......... 44
9.2 Trademark Agreement ......................................... 44
9.3 Equipment ▇▇▇▇ of Sale ...................................... 44
9.4 Real Estate and Equipment Agreement ......................... 44
9.5 Supply Agreement ............................................ 44
ARTICLE X. .............................................................. 45
TERMINATION, AMENDMENT, AND REMEDIES .................................... 45
10.1 Termination ................................................. 45
10.2 Effect of Termination ....................................... 45
10.3 Amendment ................................................... 46
10.4 Waiver ...................................................... 46
10.5 Remedies Not Exclusive ...................................... 46
ARTICLE XI. ............................................................. 46
SURVIVAL OF REPRESENTATIONS ............................................. 46
11.1 Survival .................................................... 46
ARTICLE XII. ............................................................ 46
MISCELLANEOUS ........................................................... 46
12.1 Notices ..................................................... 46
12.2 Entire Agreement ............................................ 47
12.3 Binding Effect; Assignment; No Third Party Benefit .......... 48
12.4 Severability ................................................ 48
12.5 GOVERNING LAW ............................................... 48
12.6 Descriptive Headings ........................................ 48
12.7 Gender ...................................................... 48
12.8 References .................................................. 48
12.9 Further Assurances .......................................... 49
12.10 Counterparts ................................................ 49
12.11 Injunctive Relief ........................................... 49
ARTICLE XIII. ........................................................... 49
DEFINITIONS ............................................................. 49
13.1 Certain Defined Terms ....................................... 49
13.2 Certain Additional Defined Terms ............................ 51
LIST OF EXHIBITS AND SCHEDULES ........................................ S-i
Exhibit 7.4 - Opinion of Counsel to Buyer ............................. E-
Exhibit 8.6 - Opinion of Counsel to Seller ............................ E-
Exhibit 8.9 - Noncompetition Agreement ................................ E-
Exhibit 8.10 - Data Processing Agreement .............................. E-
Exhibit 9.2 - Trademark Agreement ..................................... E-
Exhibit 9.3 - Individual Assignment to ▇▇▇▇▇▇▇ ........................ E-
Exhibit 9.4 - Individual Assignment to Searcy ......................... E-
Exhibit 9.5 - Supply Agreement ........................................ E-
Schedule 1.1(a) - Real Property ....................................... S-
Schedule 1.1(b)(i) - Equipment and Machinery .......................... S-
Schedule 1.1(b)(ii) - Excluded Equipment and Machinery ................ S-
Schedule 1.1(c)(i) - Purchased Inventory .............................. S-
Schedule 1.1(c)(ii) - Retained Inventory .............................. S-
Schedule 1.1(e)(i) - Purchased Software ............................... S-
Schedule 1.1(g) - Contracts and Agreements ............................ S-
Schedule 1.1(h)(i) - Prepaid Expenses ................................. S-
Schedule 1.1(h)(ii) - Excluded Prepaid Expenses ....................... S-
Schedule 1.1(j) - Other Assets ........................................ S-
Schedule 1.5(a) - Preliminary Closing Settlement Statement ............ S-
Schedule 1.5(c) - Liabilities Assumed ................................. S-
Schedule 1.7(a) - Final Closing Settlement Statement .................. S-
Schedule 3.1 - Jurisdictions .......................................... S-
Schedule 3.3 - Noncontravention ....................................... S-
Schedule 3.4 - Governmental Approvals ................................. S-
Schedule 3.5 - Ownership of Business .................................. S-
Schedule 3.6 - Title to Assets ........................................ S-
Schedule 3.8 - Seller Liabilities ..................................... S-
Schedule 3.9 - Absence of Certain Changes ............................. S-
Schedule 3.10 - Tax Matters ........................................... S-
Schedule 3.12 - Legal Proceedings ..................................... S-
Schedule 3.13 - Real Property ......................................... S-
Schedule 3.14 - Tangible Personal Property ............................ S-
Schedule 3.15 - Leased Property ....................................... S-
Schedule 3.16 - Inventory Exceptions .................................. S-
Schedule 3.17 - Receivables Exceptions ................................ S-
Schedule 3.18 - Intellectual Property ................................. S-
Schedule 3.19 - Permits ............................................... S-
Schedule 3.20 - Contracts and Agreements .............................. S-
Schedule 3.21 - ERISA ................................................. S-
Schedule 3.22 - Environmental Matters ................................. S-
Schedule 3.23 - Labor Relations ....................................... S-
Schedule 3.24 - Customers and Suppliers ............................... S-
Schedule 3.28 - Insider Interests ..................................... S-
Schedule 6.16(a) - Inventory Schedule ................................. S-
Schedule 6.16(b) - Receivables Schedule ............................... S-
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 28,
1997, by and among (1) TRIANGLE PACIFIC CORP., a Delaware corporation
("Triangle'), (2) ▇▇▇▇▇▇▇ HARDWOOD FLOORING, INC., a Delaware corporation
("Buyer"), (3) ▇▇▇▇▇▇▇, INC., an Ohio corporation ("▇▇▇▇▇▇▇") and (4) SEARCY
FLOORING, INC., an Ohio corporation ("Searcy") (▇▇▇▇▇▇▇ and Searcy, are
sometimes referred to herein collectively as "Sellers" and individually as a
"Seller").
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, upon the terms and subject to the conditions herein set forth,
substantially all the assets of Sellers associated with the business of
developing, manufacturing and selling residential flooring (the "Business"),
as conducted by Sellers at and from the three manufacturing plants located on
the Real Property (hereinafter defined);
WHEREAS, it is the intent of the parties hereto that the acquisition
include all of the goodwill associated with the conduct of the Business;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Buyer and Sellers hereby agree as follows:
TERMS OF THE TRANSACTION
0 Assets to be Transferred. At the Closing, and on the terms and
subject to the conditions set forth in this Agreement, Sellers shall sell,
assign, transfer, deliver, and convey (collectively, "transfer"), or cause to
be transferred, to Buyer, and Buyer shall purchase from Sellers, all assets
and properties of every kind, character, and description, whether tangible,
intangible, real, personal, or mixed, located on the Real Property (or
otherwise identified on the Schedules to this Agreement) that are owned by
Sellers or in which any Seller has any right, title, or interest, and that are
used or held for use by any Seller in the conduct of the Business, or that are
associated with the Business, as the same shall exist on the Closing Date,
including, without limitation, the following assets and properties of Sellers
existing on the Closing Date:
( ) Property and Plant. All those certain plots, tracts, or
parcels of land located in ▇▇▇▇▇▇▇ County, Arkansas and White County,
Arkansas and more particularly described on Schedule 1.1(a) (the "Real
Property"), and all plants, factories, warehouses, storage facilities,
laboratories, buildings, works, structures, fixtures, landings,
construction in progress, improvements, betterments, installations, and
additions constructed, erected, or located on or attached or affixed to
the Real Property.
(a) Equipment and Machinery. All furniture, equipment,
machinery, materials, vehicles, rolling stock, apparatus, tools, dies,
implements, appliances, spare parts, supplies, and other tangible
personal property of every kind, character, and description owned by
Sellers, both jointly and individually, or in which any Seller has any
right, title or interest, and located on, or used at or primarily in
connection with, the Real Property, or located elsewhere if used
primarily in, or necessary for the efficient operation of, the Business,
as of the Closing, including without limitation all the assets described
on Schedule 1.1(b)(i), and excluding only the personal property
identified on Schedule 1.1(b)(ii).
(b) Inventories. All of Sellers' inventories, as of the
Closing, located on the Real Property or otherwise identified on Schedule
1.1(c)(i), including without limitation finished goods, work-in-process,
raw materials, supply and samples inventories, and other inventories,
excluding only the Retained Inventory (hereinafter defined) described on
Schedule 1.1(c)(ii).
(c) Accounts Receivable. All accounts receivable of Sellers and
all other rights of Sellers to payment for goods sold or leased or for
services rendered, arising from the operation of the Business, including
without limitation those included on the Receivables Schedules
(hereinafter defined), and those that are not evidenced by instruments or
chattel paper, whether or not earned by performance or written off or
reserved against as a bad debt or doubtful account in any financial
statements; together with all instruments and documents of title
representing any of the foregoing, all rights in any merchandise or goods
that any of the same represent, and all rights, title, security, and
guaranties in favor of Sellers with respect to any of the foregoing,
including without limitation any right of stoppage in transit.
(d) Intellectual Property. All right, title, and interest of
Sellers into and under all patents, trademarks, service marks, trade
names, service names, brand names, copyrights, trade secrets, know-how,
proprietary processes, inventions, computer software (including
documentation and object and source codes if owned by Sellers and
described on Schedule 1.1(e)(i)), and similar rights, and all
registrations, applications, licenses, claims, causes of action, and
rights with respect to any of the foregoing, to the extent they are or
have been used primarily in connection with the operation of, the
Business, and all rights to recover for infringement thereof, including
without limitation all rights in and to the use of the ▇▇▇▇ "▇▇▇▇▇▇▇" and
variations thereof in connection with the Business, and all the goodwill
associated therewith, and excluding only the trademarks "Continuous
Strip," "Monogram", Monogram XL", "Squar-Edge" and "Next Step ES" (the
"Intellectual Property"); provided, however, that Sellers shall retain
all rights with respect to the name "▇▇▇▇▇▇▇" and variations thereof and
all rights with respect to the patents, trade secrets, and other items of
intellectual property in connection with all uses other than the
Business; provided further, that if any item of intellectual property
retained by Sellers is necessary to continue operation of the Business,
Sellers shall grant to Buyer a perpetual, royalty-free license to use the
same.
(e) Permits. All right, title, and interest of Sellers in, to,
and under all Permits relating to, or used in connection with the
operation of, the Business or relating to the construction, use,
operation, or enjoyment of the Assets, as such Permits can be lawfully
conveyed.
(f) Contracts and Agreements. All right, title, and interest of
Sellers in, to, and under the contracts and agreements, including
personal property leases, described on Schedule 1.1(g), and all rights
(including rights of refund and offset), privileges, deposits, claims,
causes of action, and options in favor of Sellers relating or pertaining
to such contracts and agreements.
(g) Prepaid Expenses. All right, title, and interest of Sellers
in and to all prepaid rentals and other prepaid expenses arising from
payments made by Sellers in the ordinary course of the operation of the
Business prior to the close of business on the Closing Date for goods or
services where such goods or services have not been received by Sellers
by the close of business on the Closing Date, including without
limitation all prepaid expenses described on Schedule 1.1(h)(i), and
excluding only those prepaid expenses described on Schedule 1.1(h)(ii).
(h) Books and Records. All books, records, papers, and
instruments of Sellers of whatever nature and wherever located that
relate to the Assets or the operation of the Business, including without
limitation all financial and accounting records and all books and records
relating to employees, the purchase of materials, supplies, and services,
product research and development, the manufacture and sale of products,
and dealings with customers, vendors, and suppliers of the Business, and
including computerized books and records and other computerized storage
media and the software used in connection therewith, provided that
Sellers shall be entitled to retain copies of any such books and records
that are necessary for its tax, accounting, or legal purposes.
(i) Other Assets. Whether or not enumerated above, (i) all
assets located on the Real Property, (ii) all assets used exclusively in
or exclusively supporting the manufacturing and other operations
conducted at the plants located on the Real Property, (iii) all assets
used exclusively in the marketing, sale and distribution of residential
flooring, and (iv) all assets to which any value is attributed on the
Closing Balance Sheet (hereinafter defined), including without limitation
all rights of Sellers in the accounts and funds described on Schedule
1.1(j) and in any other escrow, trust or other account or fund
containing, or otherwise relating to, proceeds of any financing included
in the Liabilities (hereinafter defined).
All the assets and properties described in this Section 1.1 and to be
transferred to Buyer pursuant to this Agreement are collectively referred to
herein as the "Assets." Notwithstanding anything otherwise in this Agreement
to the contrary, the Assets shall not include any assets or properties of
Sellers used primarily in or associated with any business activity of Sellers
other than the Business, including without limitation the developing,
manufacturing and selling of recreational flooring and sports surfaces,
provided that all assets located on the Real Property other than those set
forth on Schedule 1.1(c)(ii) shall be conclusively deemed to be used primarily
in the Business.
1 Purchase Price. The total purchase price paid by Buyer (or by
Triangle for the benefit of Buyer) in consideration of the transfer by Sellers
to Buyer of the Assets (the "Purchase Price") shall consist of (i) a cash
payment equal to the Net Book Value (hereinafter defined) of the Assets as of
the Closing Date, plus $39,000,000 (the "Cash Payment"), and (ii) the
assumption of the Liabilities (hereinafter defined) as herein provided.
2 Cash Payment. The cash portion of the Purchase Price shall be paid
as follows:
( ) an amount equal to the Estimated Cash Payment (hereinafter
defined) shall be paid at the Closing, in immediately available funds by
confirmed wire transfer to a bank account to be designated by Sellers
(such designation to occur no later than three (3) business days prior to
the Closing Date (hereinafter defined)); and
(a) the amount of any Final Price Adjustment (hereinafter
defined) shall be paid by the party, and on or before the date, specified
in Section 1.7(c), in immediately available funds by confirmed wire
transfer to a bank account to be designated by the party to whom such
Final Price Adjustment is payable (such designation to occur no later
than two (2) business days prior to the date such payment is due).
3 Liabilities Assumed by Buyer. As partial consideration for the
transfer of the Assets to Buyer, Buyer agrees, upon the terms and subject to
the conditions set forth herein, to assume, at the Closing, and thereafter to
pay, perform, and discharge, the Liabilities (hereinafter defined), but only
the Liabilities and all liabilities arising after the Closing relating to
Buyer's operation of the Business. Any Liabilities that constitute Payoff
Indebtedness (hereinafter defined) shall be paid by Buyer (or by Triangle for
the benefit of Buyer) at the Closing, in immediately available funds by
confirmed wire transfer to a bank account to be designated by the creditor to
whom such Payoff Indebtedness is payable (such designation to occur no later
than two (2) business days prior to the Closing Date).
4 Estimated Cash Payment. The "Estimated Cash Payment" shall be
equal to the Net Book Value of the Assets as of the date of the Latest Balance
Sheet (hereinafter defined), plus $39,000,000, and shall be determined as
follows:
( ) Not later than fifteen (15) days prior to the Closing Date,
Sellers shall deliver to Buyer an unaudited, combined balance sheet
reviewed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, as of January 25, 1997, with respect to
(i) ▇▇▇▇▇▇▇, (ii) Searcy and (iii) ▇▇▇▇▇▇▇ International, Inc., (the
"Latest Balance Sheet"), together with a preliminary calculation of the
Estimated Cash Payment presented in the format set forth on Schedule
1.5(a) (the "Preliminary Closing Settlement Statement", and together with
the Latest Balance Sheet, the "Preliminary Closing Statements"). In
connection with Buyer's review of the Preliminary Closing Statements,
Sellers shall give Buyer and its representatives full access to all
personnel, books and records of Sellers pertaining to the Business or the
Preliminary Closing Statements, including without limitation all work
papers of Sellers and their accountants and all pertinent accounting and
other records of Sellers, and shall provide all other information
pertaining to the Business or the Preliminary Closing Statements
reasonably requested by Buyer and its representatives. The Latest
Balance Sheet shall be prepared in accordance with generally accepted
accounting principles in the United States of America as in effect from
time to time applied on a basis - as to the substance of the principles
applied (including application of the last-in, first-out method of
inventory valuation), the manner of application and the estimation
techniques used - with the Annual Financial Statements (hereinafter
defined) ("U.S. GAAP"). The Preliminary Closing Settlement Statement
shall be prepared in accordance with (i) the Latest Balance Sheet and
(ii) the terms and provisions of this Agreement; provided, that solely
for purposes of determining the Estimated Cash Payment, the amount of
accounts payable and accrued expenses included in the Liabilities shall
be as set forth in Annex II to the Preliminary Closing Settlement
Statement. The Preliminary Closing Statements shall be accompanied by
certificates signed by the chief executive officer and the chief
financial officer of each of ▇▇▇▇▇▇▇ and Searcy, respectively, stating
that the Preliminary Closing Statements have been prepared as described
in the immediately preceding two sentences.
(a) Sellers and Buyer shall assist and cooperate with each other
and otherwise use their best efforts to obtain the Preliminary Closing
Settlement Statement. Unless Buyer gives written notice of a Dispute
(hereinafter defined) to Sellers within ten (10) days after receipt by
Buyer of the Preliminary Closing Statements, the Preliminary Closing
Statements shall be deemed accepted by Buyer in the form in which
delivered by Sellers. If Buyer does not agree with the amount of any of
the assets or liabilities set forth on the Latest Balance Sheet, or any
of the calculations set forth on the Preliminary Closing Settlement
Statement, written notice of its disagreement therewith (a "Dispute," as
further defined in Section 6.15) shall be given by Buyer to Sellers
within ten (10) days after receipt by Buyer of the Preliminary Closing
Statements, and Buyer and Sellers shall attempt to resolve such Dispute
and agree in writing upon the final content of the Preliminary Closing
Settlement Statement prior to the Closing Date. If Sellers and Buyer are
unable to resolve any such Dispute within such time period, such Dispute
shall be resolved pursuant to Section 6.15.
(b) As used in this Agreement, the following terms have the
meanings given to them below:
( ) "Liabilities" means (A) all obligations of Sellers
accruing from and after the Closing Date under the contracts and
agreements described on Schedule 1.1(g) (but only to the extent that
such liabilities and obligations arise from the operation of the
Assets or the Business after the Closing Date), and (B) accounts
payable, accrued expenses, product warranty and product liability
claims, and obligations for borrowed money (except obligations under
any bank credit agreement to which any Seller is a party), that are:
(1) listed on Schedule 1.5(c), as amended pursuant to Section
1.7(a), and reflected on the Final Closing Settlement Statement, (2)
not dischargeable or discharged in the ordinary course of the
Business prior to the Closing, (3) not excluded liabilities under
Section 1.10, and (4) properly classified under U.S. GAAP as
liabilities of the Business as of the Closing Date.
(i) "Net Book Value" means (i) the book value of the
Assets as determined in accordance with U.S. GAAP and the terms of
this Agreement, net of all reserves and valuation allowances, less
(ii) the Liabilities.
(ii) "Payoff Indebtedness" means any of the Liabilities
that either (A) must be repaid upon consummation of the transactions
contemplated by this Agreement to prevent a default with respect
thereto or to release any Encumbrances securing payment thereof, or
(B) Buyer notifies Sellers, not less than five (5) business days
prior to the Closing Date, is to be repaid at the Closing.
5 Certain Closing Adjustments. The Purchase Price, as reflected on
the Preliminary Closing Settlement Statement and on the Final Closing
Settlement Statement, shall be adjusted as necessary to reflect the proration
of ad valorem taxes provided for in Section 6.18.
6 Final Price Adjustment. The amount of any "Final Price Adjustment"
shall be determined as follows:
( ) Not later than thirty (30) days after the Closing Date,
Buyer shall deliver to Sellers an unaudited balance sheet, prepared so as
to reflect the Assets and Liabilities as of the Closing (the "Closing
Balance Sheet"), together with a calculation of the final Purchase Price
pursuant to Section 1.2 and of whether a Final Price Adjustment is
payable pursuant to Section 1.7(c) (the "Final Closing Settlement
Statement", and together with the Closing Balance Sheet, the "Final
Closing Statements"), presented in the format set forth on Schedule
1.7(a). The Final Closing Statements shall also include an amended
Schedule 1.5(c), revised to include a detailed listing of the accounts
payable and accrued expenses included in the Liabilities. In connection
with Sellers' review of the Final Closing Statements, Buyer shall give
Sellers and their representatives full access to all personnel, books and
records pertaining to the Business, including without limitation all
corresponding work papers of Buyer and its accountants and all pertinent
accounting and other records of Buyer, and shall provide all other
information reasonably requested by Sellers. The Closing Balance Sheet
shall be prepared in accordance with U.S. GAAP. The Final Closing
Settlement Statement shall be prepared in accordance with (i) the Closing
Balance Sheet and (ii) the provisions of this Agreement. The Final
Closing Statements shall be prepared in accordance with the immediately
preceding two sentences.
(a) Sellers and Buyer shall assist and cooperate with each other
and otherwise use their best efforts to obtain the Final Closing
Settlement Statement. If Sellers do not give written notice of a Dispute
to Buyer within twenty (20) days after receipt by Sellers of the Final
Closing Statements, the Final Closing Statements shall be deemed accepted
by Sellers in the form in which delivered by Buyer. If Sellers do not
agree with the amount of any of the assets or liabilities set forth on
the Closing Balance Sheet, or any of the calculations set forth on the
Final Closing Settlement Statement, written notice of their disagreement
therewith shall be given by Sellers to Buyer within twenty (20) days
after receipt by Sellers of the Final Closing Statements, and Buyer and
Sellers shall attempt to resolve such Dispute and agree in writing upon
the final content of the Final Closing Settlement Statement within twenty
(20) days after receipt by Buyer of such notice of a Dispute. If Sellers
and Buyer are unable to resolve any such Dispute within such time period,
such Dispute shall be resolved pursuant to Section 6.15. The Final
Closing Settlement Statement in the form delivered by Buyer to Sellers,
if Sellers do not give notice of a Dispute, or as adjusted by written
agreement of the parties or by the procedure specified in Section 6.15,
shall constitute the "Final Closing Settlement Statement" under this
Agreement.
(b) The Final Price Adjustment, if any, shall be equal to the
difference between the Estimated Cash Payment and the final Cash Payment
(pursuant to Section 1.2 and Section 1.7(b)), and shall be:
( ) payable to Sellers, if the Estimated Cash Payment is
lower than the final Cash Payment; or
(i) payable to Buyers, if the Estimated Cash Payment is
higher than the final Cash Payment; and
(ii) in either case, payable within two (2) business days
after the date the Final Closing Settlement Statement is determined
pursuant to Section 1.7(b).
7 Allocation of Purchase Price Among Sellers; Seller Representative.
(a) The portion of the Purchase Price payable in respect of the Net
Book Value of the Assets shall be allocated among Sellers based on the
respective Net Book Value of the Assets conveyed by each Seller, as
reflected on the Preliminary Closing Settlement Statement and the Final
Closing Settlement Statement, and the $39,000,000 payment provided for in
Section 1.2 shall be allocated as follows: $31,750,000 to ▇▇▇▇▇▇▇ and
$7,250,000 to ▇▇▇▇▇▇. Any Final Price Adjustment shall be allocated
among the Sellers based on the difference, if any, between the Net Book
Value of the Assets conveyed by each Seller as reflected on the
Preliminary Closing Settlement Statement and as reflected on the Final
Closing Settlement Statement.
(b) Each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, by its execution of this Agreement,
hereby designates and appoints ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. as its agent and
attorney-in-fact, with full power of substitution, to serve as its
"Seller Representative" for purposes of this Agreement and to take all
actions required or permitted to be taken by Sellers, and to give and
receive all notices required to be given by or to Sellers, after the
Closing under the terms and provisions of this Agreement. Any action
required or permitted to be taken by Sellers after the Closing, and any
notice required to be given by or to Sellers after the Closing, shall be
taken by or given by or to the Seller Representative, and any such action
taken by, or notice given by or to, the Seller Representative shall be
conclusively deemed to be validly taken or given in accordance with this
Agreement.
8 Allocation of Purchase Price Among Assets. Sellers and Buyer will
mutually determine the appropriate allocation of the Purchase Price among the
Assets pursuant to Section 1060 of the Code, not less than sixty (60) days
after Buyer's receipt of the Final Closing Settlement Statement. If Buyer and
Sellers are not able to mutually determine such allocation within such period,
it shall be determined by binding arbitration pursuant to Section 6.15.
Sellers and Buyer shall report the transactions contemplated hereby on all Tax
Returns (including information returns and supplements thereto required to be
filed by the parties under Section 1060 of the Code) in a manner consistent
with such allocation.
9 Liabilities Not Assumed by Buyer. Buyer shall not assume or take
title to the Assets subject to, nor shall Triangle or Buyer in any way be
liable or responsible for, any liabilities or obligations of Sellers (whether
or not referred to in any Schedule or Exhibit hereto), except as specifically
provided in Section 1.4, it being expressly acknowledged that it is the
intention of the parties hereto that all liabilities and obligations that
Sellers have or may have in the future (whether accrued, absolute, contingent,
unliquidated, or otherwise, whether or not known to Sellers, and whether due
or to become due), other than the Liabilities, shall be and remain the
liabilities and obligations of Sellers. Without limiting the generality of
the foregoing, and except as specifically provided in Section 1.4, Buyer shall
not assume or take title to the Assets subject to, or in any way be liable or
responsible for:
( )any liabilities or obligations of Sellers whether or not relating
to the Assets or the Business, and whether or not arising or asserted
prior to the Closing,
(a) any liability or obligation of Sellers under any mortgage,
deed of trust, security agreement, or financing statement, or any note,
bond, or other instrument or obligation secured thereby,
(b) any liability or obligation of Sellers existing at or
arising after the Closing Date under any leases, contracts, agreements,
or Permits included in the Assets that results from the material breach,
default, or wrongful action or inaction of Sellers prior to the close of
business on the Closing Date,
(c) any liability or obligation of Sellers resulting from or
relating to the employment relationship between any Seller and any
Seller's present or former employees engaged in connection with the
ownership or operation of the Assets or the Business or the termination
of any such employment relationship, including without limitation
severance pay and other similar benefits, if any, and any claims filed on
or prior to the Closing Date or that may thereafter be filed by or on
behalf of any such present or former employee relating to the employment
or termination of employment of any such employee by a Seller, including
without limitation any claim for wrongful discharge, breach of contract,
unfair labor practice, employment discrimination, unemployment
compensation, or workers' compensation,
(d) any liability or obligation of Sellers in respect of any
agreement, trust, plan, fund, or other arrangement under which benefits
or employment is provided for any Seller's present or former employees
engaged in connection with Sellers' ownership or operation of the Assets
or the Business, and
(e) any liabilities or deficiencies for any Taxes, to the extent
applicable to periods (or portions thereof) ending on or prior to the
Closing Date.
For purposes of this Section 1.10, references to Sellers shall include
predecessors in title.
10 Definitions. All capitalized terms used in this Agreement and not
otherwise defined are defined in Article XIII of this Agreement.
I.
CLOSING
0 Time and Place of Closing. The consummation of the transactions
contemplated hereby shall take place (i) at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
P.C. at 10:00 a.m., local time, on March 28, 1997, or (ii) at such other time
or place or on such other date as Buyer and Sellers shall agree (the
"Closing"). The date on which the Closing is required to take place is herein
referred to as the "Closing Date." All Closing transactions shall be deemed
to have occurred simultaneously when all the conditions set forth in Articles
VII, VIII and IX have been satisfied.
1 Effectiveness. The transactions contemplated by this Agreement
shall all become effective as of the close of business on the Closing Date.
II.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Triangle and Buyer that:
0 Corporate Organization and Qualification. Each of ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite
corporate power and corporate authority to own, lease, and operate its
properties and to carry on its business as now being conducted. No actions or
proceedings to dissolve either ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ are pending or to Sellers'
knowledge, threatened. Each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is duly qualified or
licensed to do business as a foreign corporation and is in good standing in
each of the jurisdictions indicated on Schedule 3.1, which are all the
jurisdictions in which the indicated entity owns, leases, or operates its
properties or in which such qualification or licensing is required for the
conduct of its business and the failure to so qualify or license would have a
Material Adverse Effect.
1 Authority Relative to This Agreement. Each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
has full corporate power and corporate authority to execute, deliver, and
perform this Agreement and the Ancillary Documents to which it is a party and
to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ of this
Agreement and the Ancillary Documents to which it is a party, and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action. This Agreement has
been duly executed and delivered by each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and
constitutes, and each Ancillary Document executed or to be executed by each of
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ has been, or when executed will be, duly executed and
delivered by each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ and constitutes, or when executed and
delivered will constitute, a valid and legally binding obligation of each of
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, enforceable against each of ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ in
accordance with its terms, except that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors' rights generally and (ii) equitable principles that
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances and (iii) public policy considerations with
respect to the enforceability of rights of indemnification.
2 Noncontravention. The execution, delivery, and performance by
Sellers of this Agreement and the Ancillary Documents to which each is party
and the consummation by them of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or result in a violation of any
provision of the Articles of Incorporation or Code of Regulations of or other
governing instruments of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a material default under, or give rise
(with or without the giving of notice or the passage of time or both) to any
right of termination, cancellation, or acceleration under, or require any
consent, approval, authorization, or waiver of, or notice to, any party to,
any bond, debenture, note, mortgage, indenture, lease, contract, agreement, or
other instrument or obligation to which any Seller is a party or by which
Sellers, or any of their respective properties, may be bound or any Permit
held by Sellers, (iii) result in the creation or imposition of any Encumbrance
upon the Assets, (iv) result in the loss of any material benefit to, or
privilege or right of, the Business or otherwise attributable to any of the
Assets, or (v) violate any Applicable Law binding upon Sellers, the Business
or any of the Assets except, in the case of clause (ii) above, for (A) such
consents, approvals, authorizations, and waivers that have been obtained and
are unconditional and in full force and effect and such notices that have been
duly given, and (B) such consents, approvals, authorizations, waivers, and
notices disclosed on Schedule 3.3.
3 Governmental Approvals. Except as disclosed on Schedule 3.4, no
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any Governmental Entity is required to be obtained or made
by Sellers in connection with the execution, delivery, or performance by
Sellers of this Agreement and the Ancillary Documents to which any of them is
a party or the consummation by them of the transactions contemplated hereby or
thereby.
4 Operation and Ownership of Business. No Seller has any direct or
indirect equity or ownership interest in any corporation, partnership, joint
venture, or other entity that is or whose assets are involved or used,
directly or indirectly, in the conduct of the Business, and the Business is
conducted exclusively by Sellers. No person who is an active employee of a
Seller has greater than a three percent equity or ownership interest in any
Seller except as indicated on Schedule 3.5. The Assets constitute all the
material assets used primarily in, or necessary to continue, the operation of
the Business in the ordinary course consistent with past practice.
5 Title to Assets. In the aggregate, Sellers are the owners of, and
have good and marketable title to, all the Assets, free and clear of all
Encumbrances other than the Permitted Encumbrances. Upon Sellers' transfer of
the Assets to Buyer pursuant to this Agreement, Buyer will have good and
marketable title to all the Assets, free and clear of all Encumbrances other
than the Permitted Encumbrances. Except as disclosed on Schedule 3.6, no
financing statement (or other instrument sufficient or effective as a
financing statement) under the Uniform Commercial Code with respect to any of
the Assets has been filed and is effective in any jurisdiction, and no Seller
has signed any such financing statement (or other instrument) or any mortgage
or security agreement granting any mortgage or security interest in any of the
Assets or authorizing any secured party thereunder to file any such mortgage
or financing statement (or other instrument).
6 Financial Statements. Sellers have delivered to Buyer accurate and
complete copies of (i) the audited balance sheets as of October 31, 1992,
1993, 1994, 1995 and 1996, and the related audited statements of income,
stockholders' equity and cash flows of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ for each of the
periods then ended, and the notes and schedules thereto, together with the
unqualified reports thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, independent public
accountants (the "Annual Financial Statements"), and (ii) the Latest Balance
Sheet and the related unaudited, combined statements of income, stockholders'
equity and cash flows of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ International, Inc. and ▇▇▇▇▇▇ for
the period then ended, reviewed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP and certified by the
chief financial officer and the chief executive officer of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇,
as appropriate (the "Interim Financial Statements") (the Annual Financial
Statements and the Interim Financial Statements are collectively referred to
as the "Financial Statements"). The Financial Statements (i) represent actual
bona fide transactions, (ii) have been prepared from the books and records of
Sellers in conformity with U.S. GAAP applied on a basis consistent (as to the
substance of the principles applied, the manner of application and the
estimation techniques used) with preceding years throughout the periods
involved, and (iii) accurately, completely, and fairly present in all material
respects the financial position of each of the Sellers and of the Business as
of the respective dates thereof and their respective results of operations and
cash flows for the periods then ended, except that the Interim Financial
Statements are subject to normal year-end adjustments, which will not be
material in the aggregate. Other than as expressly set forth therein, the
statements of income included in the Financial Statements do not contain any
items of special or nonrecurring income, and the balance sheets included in
the Financial Statements do not reflect any write-up or revaluation increasing
the book value of any assets, nor have there been any transactions since
November 1, 1994 giving rise to special or nonrecurring income or any such
write-up or revaluation. All financial projections, forecasts, and other
forward-looking information provided by Sellers to Triangle or Buyer were, as
of their respective dates, prepared in good faith and on a basis that
management of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ believed to be reasonable. The Financial
Statements include all liability, valuation and other reserves and allowances
required by U.S. GAAP and by this Agreement, including without limitation,
reserves for Environmental Liabilities, employee benefit obligations
(including accrued vacation and sick leave) and product warranty and product
liability claims, and all such reserves and allowances (collectively,
"Reserves") are adequate.
7 Liabilities.
( ) To their knowledge, Sellers have no material liabilities or
obligations (whether accrued, absolute, contingent, unliquidated, or
otherwise, whether or not known to Sellers, and whether due or to become
due), except (i) liabilities reflected on the Latest Balance Sheet, (ii)
liabilities described in the notes accompanying the Financial Statements,
(iii) liabilities that have arisen since the date of the Latest Balance
Sheet in the ordinary course of business (none of which is a liability
for breach of contract, breach of warranty, tort, or infringement), (iv)
liabilities arising under executory contracts entered into in the
ordinary course of business (none of which is a liability for breach of
contract), and (v) liabilities specifically set forth on Schedule 3.8.
(a) Sellers' liabilities and obligations (whether accrued,
absolute, contingent, unliquidated, or otherwise, whether or not known to
Sellers, and whether due or to become due) for product warranty and
product liability claims do not exceed the amount of Reserves therefor
reflected in the Financial Statements.
8 Absence of Certain Changes. Except as disclosed on Schedule 3.9,
since November 1, 1996, (i) to Sellers' knowledge, there has not been any
material adverse change in, or any event or condition that might reasonably be
expected to result in any material adverse change in, the business, assets,
results of operations, condition (financial or otherwise), or prospects of the
Business or the ownership or operation of the Assets or any material portion
thereof except for general industry conditions; (ii) the Business has been
conducted only in the ordinary course consistent with past practice; (iii)
Sellers have not, in respect of the Business, incurred any material liability,
engaged in any material transaction, or entered into any material agreement
outside the ordinary course of business consistent with past practice; (iv)
none of the 10 largest customers (including distributors) of any Seller has
discontinued or significantly reduced its purchases from the Company, nor has
any such customer given any notice or other indication it anticipates doing
so; (v) there has not occurred any material loss, damage, destruction, or
other casualty to any of the Assets (whether or not covered by insurance); and
(vi) no Seller has, in respect of the Business, taken any of the actions set
forth in Section 5.2 except as permitted thereunder.
9 Tax Matters. Except as disclosed on Schedule 3.10:
( ) each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ has duly filed all Tax Returns
required to be filed by or with respect to it with the IRS or other
applicable authority, and no extensions with respect to such Tax Returns
have been requested or granted;
(a) there are no Encumbrances with respect to Taxes (except for
liens with respect to real property Taxes not yet due) upon any of the
Assets;
(b) Sellers have duly and timely withheld from salaries, wages,
and other compensation and paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over under
all Applicable Laws; and
(c) Sellers have complied in all material respects with all
requirements of Applicable Law as necessary to qualify all industrial
revenue bond financing included in the Liabilities for tax-free treatment
and all such financing is so qualified.
10 Compliance With Laws. Sellers have complied in all material
respects with all Applicable Laws relating to the ownership or operation of
the Assets or the operation of the Business (including without limitation
Applicable Laws relating to securities, properties, business operations,
products, manufacturing processes, advertising and sales practices, employment
practices, terms and conditions of employment, wages and hours, product
safety, and civil rights), the failure to comply with which would result in a
Material Adverse Effect. No Seller has received any written notice, that has
not been dismissed or otherwise disposed of, that a Seller has not so
complied. No Seller is charged with, or to the knowledge of Sellers
threatened with or under investigation with respect to, any alleged violation
of any Applicable Law relating to any aspect of the ownership of the Assets or
operation of the Business.
11 Legal Proceedings. Except as set forth on Schedule 3.12, there are
no Proceedings pending, or to the knowledge of Sellers threatened, against or
involving Sellers (or any of ▇▇▇▇▇▇▇' or ▇▇▇▇▇▇'▇ directors or officers) in
connection with the Assets or the Business. No judgment, order, writ,
injunction, or decree of any Governmental Entity has been issued or entered
against Sellers or any of their affiliates that continues to be in effect with
respect to or affecting the Assets or the operation of the Business. There
are no Proceedings pending, or to the knowledge of Sellers threatened, seeking
to restrain, prohibit, or obtain damages or other relief in connection with
this Agreement or the transactions contemplated hereby.
12 Real Property.
( ) Sellers own, or as of the Closing will own, and have good
and marketable title to all the Real Property, which is all the real
property owned or leased by Sellers and used or held for use in the
Business. There are no persons (other than Sellers) in possession of any
portion of the Real Property as lessees, tenants at sufferance, or
trespassers, nor does any person (other than Sellers) have a lease,
tenancy, or other right of occupancy or use of any portion of the Real
Property, except as specified on Schedule 3.13. Unless otherwise
disclosed on Schedule 3.13, any lease, tenancy, or other right of
occupancy or use disclosed on Schedule 3.13 may be terminated by Sellers
at any time upon giving not more than thirty (30) days written notice,
and, if directed by Buyer, Sellers shall give notice of termination at
the Closing. The Real Property has full and free access to and from
public highways, streets, and roads, and Sellers have no knowledge of any
pending or threatened Proceeding that would limit or result in the
termination of such access. To Sellers' knowledge, there exists no
Proceeding or court order, or building code provision, deed restriction,
or restrictive covenant (recorded or otherwise), or other private or
public limitation, that might in any way have a Material Adverse Effect
upon the continued use of the Real Property by Sellers in the manner it
is currently used.
(a) All buildings, improvements, and fixtures situated on the
Real Property conform to all Applicable Laws, the failure of which would
have a Material Adverse Effect. All the Real Property is zoned for the
various purposes for which such Real Property is being used, and there
exists no pending or, to the knowledge of Sellers, threatened Proceeding
that might adversely affect the validity of such zoning.
(b) The Real Property is connected to and serviced by water,
sewage disposal, gas, telephone, and electric facilities that are
adequate for the current use of the Real Property and, to the knowledge
of Sellers, are in compliance with all Applicable Laws. All public
utilities required for the operation of the Real Property enter the Real
Property through adjoining public streets or, if they pass through
adjoining private land, do so in accordance with valid public easements,
and all utility lines and mains located on the Real Property have been
properly dedicated to, and are serviced and maintained by, the
appropriate public or quasi-public entity.
(c) Except as set forth on Schedule 3.13, (i) the buildings,
improvements, and fixtures situated on the Real Property are in operating
condition (excepting ordinary wear and tear), (ii) Sellers have performed
all maintenance thereon in the ordinary course consistent with past
practice, and (iii) to Sellers' knowledge, the buildings, improvements,
and fixtures situated on the Real Property are free of any latent or
patent structural defects.
(d) Neither the whole nor any part of the Real Property is
subject to any pending Proceeding for condemnation or other taking by any
Governmental Entity, and, to the knowledge of Sellers, no such
condemnation or other taking is contemplated or threatened.
(e) There are no delinquent Taxes, assessments, charges, debts,
liabilities, claims, or obligations arising from the construction,
occupancy, ownership, use, or operation of the Real Property, or the
buildings, improvements, or fixtures situated thereon, or the business
operated thereon, which could give rise to any mechanic's or
materialmen's or other statutory lien against the Real Property, or the
buildings, improvements, or fixtures situated thereon, or any part
thereof, or for which Buyer will be responsible.
(f) Sellers have delivered to Buyer accurate and complete copies
of all title insurance policies, title reports, other title documents,
surveys, certificates of occupancy, and Permits in the possession of
Sellers relating to the Real Property or the buildings, improvements, or
fixtures situated thereon.
(g) No Seller is a "foreign person" within the meaning of
Sections 1445 and 7701 of the Code.
13 Tangible Personal Property. Set forth on Schedule 3.14 is a list,
as of the most recent practicable date, of all furniture, equipment,
machinery, computer hardware, materials, motor vehicles, rolling stock,
apparatus, tools, implements, appliances, and other tangible personal property
(other than spare parts, supplies, and inventories) owned or leased by Sellers
and used or held for use in the Business.
14 Leased Property. Set forth on Schedule 3.15 is a list of all leases
(copies of which have been provided to Buyer) under which Sellers are lessees
of real or personal property used or held for use in the Business. Sellers
have good and valid leasehold interests in all such properties held by them
under lease. Sellers have been in peaceable possession (or remedied any
claims relating thereto) of the property covered by each such leases since the
commencement of the original term of such lease. No waiver, indulgence, or
postponement of Sellers' obligations under any such lease has been granted by
the lessor or of the lessor's obligations thereunder by Sellers. No Seller is
in breach of or in default under, and no event has occurred that (with or
without the giving of notice or the passage of time or both) would constitute
a default under, any of such leases, and Sellers have not received any notice
from, or given any notice to, any lessor indicating that a Seller or such
lessor is in breach of or in default under any of such leases. To the
knowledge of Sellers, none of the lessors under any of such leases is in
breach thereof or in default thereunder. Sellers have full right and power to
occupy or possess, as the case may be, all the property covered by each such
lease.
15 Inventory. Other than as described in Schedule 3.16, all inventory
(including raw materials, work-in-process, and finished goods) included in the
Assets is merchantable, or suitable and usable for the production or
completion of merchantable products, for sale in the ordinary course of the
Business. Other than as described in Schedule 3.16, none of such inventory is
obsolete, discontinued, returned, damaged, overage, or of below standard
quality or merchantability, except for items that have been written down to
realizable market value. Each item of such inventory is reflected in Sellers'
books and records, has been properly classified as to quality, and is valued
in accordance with U.S. GAAP consistently applied using the last-in, first-out
method of inventory valuation. Finished goods in such inventory conform to
the applicable specifications of Sellers, including all applicable warranties,
whether express or implied, given in connection with the sales of such goods
and under Applicable Law, and are free from defects in design, workmanship,
and material. Sellers also maintain sufficient inventories of spare and
replacement parts to meet any repair and replacement obligations in the
ordinary course of the Business, under applicable warranties or otherwise.
16 Receivables. Except as set forth on Schedule 3.17, all receivables
(including accounts and notes receivable, employee advances, and accrued
interest receivables) of Sellers as reflected on the Latest Balance Sheet and
the Receivables Schedules or arising since the respective dates thereof
generated by the Business are valid obligations of the respective makers
thereof, have arisen in the ordinary course of the Business, are not subject
to any valid defenses, counterclaims, or set offs, and are collectible in full
at their recorded amounts in the ordinary course of the Business without
resort to litigation or other extraordinary collection efforts, net of all
cash discounts and doubtful accounts as reflected on the Latest Balance Sheet
and the Receivables Schedules (in the case of receivables so reflected) or on
the books of Sellers included in the Assets (in the case of receivables
arising since the date thereof). The allowances for doubtful accounts
reflected in the Latest Balance Sheet and on the books of Sellers were
determined in accordance with U.S. GAAP and were and are reasonable in light
of historical data and other relevant information.
17 Intellectual Property.
( ) Set forth on Schedule 3.18 is a list of all patents, trade
secrets and trademarks included in the Intellectual Property used or held
for use in the Business. Schedule 3.18 specifies, as applicable: (i) the
nature of such patents, trade secrets and trademarks; (ii) the owner of
such patents, trade secrets and trademarks; (iii) the jurisdictions by or
in which such patents, trade secrets and trademarks are recognized
without regard to registration or has been issued or registered or in
which an application for such issuance or registration has been filed,
including the respective registration or application numbers; and (iv)
all licenses, sublicenses, and other agreements to which Sellers are
parties and pursuant to which Sellers or any other person is authorized
to use such patents, trade secrets and trademarks, including the identity
of all parties thereto, a description of the nature and subject matter
thereof, the applicable royalty, and the term thereof.
(a) The listed Intellectual Property constitutes all
Intellectual Property necessary for or, to Sellers' knowledge, otherwise
of value in connection with the operation of the Business as presently or
historically conducted. Sellers have good and marketable title to or are
validly licensed (as disclosed in Schedule 3.18) to use all such
Intellectual Property. To Sellers' knowledge, each item of such
Intellectual Property is in full force and effect, Sellers are in
compliance with all their obligations with respect thereto, and, to the
knowledge of Sellers, no event has occurred that permits, or upon the
giving of notice or the passage of time or otherwise would permit, the
revocation or termination of any thereof. There are no Proceedings
pending, or to the knowledge of Sellers threatened, against Sellers
asserting that the use by Sellers of any of such Intellectual Property
infringes the rights of any other person or seeking revocation,
termination, or concurrent use of any of such Intellectual Property, and
there is, to the knowledge of Sellers, no basis for any such Proceeding.
To the knowledge of Sellers, none of such Intellectual Property is being
infringed upon by any other person. None of such Intellectual Property
is subject to any outstanding judgment, order, writ, injunction, or
decree of any Governmental Entity, or any agreement, arrangement, or
understanding, written or oral, restricting the scope or use thereof. To
the knowledge of Sellers, the conduct of the Business at any time prior
to the Closing Date did not infringe upon or otherwise misappropriate any
Intellectual Property of any other person.
18 Permits. Set forth on Schedule 3.19 is a list of all Permits held
by Sellers that relate to the Assets or the Business. Such Permits constitute
all the Permits necessary or required for the ownership and operation of the
Assets and the conduct of the Business, the failure of which would have a
Material Adverse Effect. Each of such Permits is in full force and effect,
Sellers are in material compliance with all their obligations with respect
thereto, and, to the knowledge of Sellers, no event has occurred that permits,
or with or without the giving of notice or the passage of time or both would
permit, the revocation or termination of any thereof. Except as disclosed on
Schedule 3.19, no notice has been issued by any Governmental Entity and no
Proceeding is pending or, to the knowledge of Sellers, threatened with respect
to any alleged failure by Sellers to have any Permit or any alleged failure by
Sellers to comply with any Permit.
19 Contracts and Agreements.
( ) Set forth on Schedule 3.20 is a list of all the following
leases, contracts, agreements, practices, arrangements, and
understandings (written or oral, formal or informal) (collectively, for
purposes of this Section 3.20, "agreements") to which Sellers are parties
or by which Sellers are otherwise bound that relate to the Assets or the
Business:
( ) collective bargaining agreements and similar agreements
with employees as a group;
(i) employee benefit agreements, trusts, plans, funds, or
other arrangements of any nature, including those referred to in
Section 5.2(c)(i);
(ii) agreements with any director, officer, employee,
consultant, or advisor of Sellers or any of their affiliates;
(iii) agreements between or among Sellers and any of their
affiliates;
(iv) indentures, mortgages, security agreements, notes, loan
or credit agreements, or other agreements relating to the borrowing
of money by Sellers or to the direct or indirect guarantee or
assumption by Sellers of any obligation of others, including any
agreement that has the economic effect, although not the legal form,
of any of the foregoing;
(v) agreements relating to the acquisition or disposition
of assets (other than sales of inventory in the ordinary course of
business), including agreements relating to product returns by
customers;
(vi) agreements with respect to the lease of real or
personal property;
(vii) agreements concerning the management or operation of
any real property;
(viii) broker, distributor, dealer, manufacturer's
representative, sales, agency, sales promotion, advertising, market
research, marketing, consulting, research and development,
maintenance, service, and repair agreements, except for any
maintenance, service or repair agreements which are terminable
without penalty on less than thirty (30) days notice or involve
payments of less than $1,000 per month;
(ix) license, royalty, or other agreements relating to
Intellectual Property;
(x) partnership, joint venture, and profit sharing
agreements;
(xi) agreements with any Governmental Entity;
(xii) agreements relating to the release or disposal of
hazardous material (as such term is defined in Section 3.22);
(xiii) agreements in the nature of a settlement or a
conciliation agreement arising out of any claim asserted by any
other person;
(xiv) agreements containing any covenant limiting the freedom
of Sellers to engage in any line of business or compete with any
other person in any geographic area or during any period of time;
and
(xv) powers of attorney granted by Sellers in favor of any
person.
(a) Sellers have delivered to Triangle or Buyer accurate and
complete copies of the agreements listed on Schedule 3.20. Each of such
agreements is a valid and binding agreement of the Sellers who are
parties thereto and, to Sellers' knowledge, of the other party or parties
thereto, enforceable against Sellers and such other party or parties in
accordance with its terms except as such enforcement may be affected by
bankruptcy or equitable principles. Sellers are not in breach of or in
default under, nor has any event occurred that (with or without the
giving of notice or the passage of time or both) would constitute a
default by Sellers under, any material provision of any of such
agreements, and Sellers have not received any notice from, or given any
notice to, any other party indicating that Sellers are in breach of or in
default under any of such agreements. To the knowledge of Sellers, no
other party to any of such agreements is in breach of or in default under
such agreements, nor has any assertion been made by Sellers of any such
breach or default. Except as disclosed on Schedule 3.20, each of such
agreements is freely and fully assignable to Buyer without penalty or
other adverse consequence.
(b) Sellers have not received notice of any plan or intention of
any other party to any agreement to exercise any right of offset with
respect to, or any right to cancel or terminate, any agreement, and
Sellers do not know of any fact or circumstance that would justify the
exercise by any such other party of such a right other than the automatic
termination of such agreement in accordance with its terms. Sellers do
not currently contemplate, or have reason to believe any other person
currently contemplates, any amendment or change to any agreement that
could have a Material Adverse Effect.
20 ERISA; Accrued Compensation.
( ) Set forth on Schedule 3.21 is a list of all employee benefit
plans (as defined in Section 3(3) of ERISA), that are maintained by or
contributed to by Sellers for employees who are employed in connection
with the Assets or the Business. During the past five years, no Seller
and no affiliate of any Seller has made or been required to make
contributions to any "multiemployer plan", as defined in Section 3(37) of
ERISA. Sellers and all the affiliates of Sellers have paid and
discharged promptly when due all liabilities and obligations arising
under ERISA or the Code of a character that if unpaid or unperformed
might result in the imposition of a lien against any of the Assets. For
purposes of this Section 3.21 only, an "affiliate" of any person means
any other person that, together with such person, would be treated as a
single employer under Section 414 of the Code. The only plans set forth
on Schedule 3.21 which individually or collectively would constitute an
"employee pension benefit plan" as defined in Section 3(2) of ERISA are
identified as such on Section 3.21. Such plans are referred to in this
Section as the "Pension Plans".
(a) The Sellers have delivered to Triangle or Buyer or its
representatives accurate and complete copies of the Pension Plans as
currently in effect (and the related trust agreements) and all amendments
thereto, the most recent summary plan descriptions for such Plans, the
three most recent annual reports (form 5500 or 5500C/R including, if
applicable, Schedule B thereto) filed with the IRS for such Plans, and
the most recent favorable IRS determination letters for such Plans (the
dates of which are set forth in Schedule 3.21).
(b) Except to the extent that amendments may be required to be
adopted as a result of the Uniformed Services Employment and Reemployment
Rights Act of 1994 and the Small Business Job Protection Act of 1996, the
▇▇▇▇▇▇ Flooring, Inc. Profit Sharing Plan as amended and restated
effective as of March 1, 1989 (the "Profit Sharing Plan"), is a qualified
plan within the meaning of Section 401(a) of the Code as of the Closing
Date and for prior plan years for which the statute of limitations has
not expired (the "Open Period") and the trust forming a part thereof is
exempt from taxes pursuant to Section 501(a) of the Code for the Open
Period. This representation does not extend to the qualifications of the
Profit Sharing Plan either with respect to amendments that may be adopted
by the Buyer subsequent to the Closing Date that may have an effective
date prior to the Closing Date or to the operations of the Profit Sharing
Plan subsequent to the Closing Data as such operations may impact the
qualification of the Profit Sharing Plan for current plan year. With
respect to the Open Period, nothing done or omitted to be done and no
transaction or holding of any asset under or in connection with the
▇▇▇▇▇▇ Flooring, Inc. Profit Sharing Plan through the Closing Date has or
will make Triangle or Buyer (or any affiliate thereof) or any director or
officer thereof subject to any liability under Title I of ERISA or liable
for on behalf of the Profit Sharing Plan, or by an participant therein,
alleging a breach or breaches of fiduciary duties or violations of ERISA
or the Code which could result in liability on the part of Triangle or
Buyer (or any affiliate thereof), its officers or directors or such
Profit Sharing Plan, under ERISA or the Code and, to the best knowledge
of Sellers, there is no basis for any such claim. The Profit Sharing
Plan has been maintained in substantial compliance with its terms and the
requirements presented by ERISA and the Code.
(c) Except to the extent that amendments may be required to be
adopted as a result of the Uniformed Services Employment and Reemployment
Rights Act of 1994 and the Small Business Job Protection Act of 1996, the
Employees' Retirement Savings Plan as amended and restated effective as
of November 1, 1989, (the "401(k) Plan") is a qualified plan within the
meaning of Section 401(a) of the Code as of the Closing Date and prior
plan years for which the statute of limitations has not expired, and, as
such the plan assets being transferred (the "Transferred Assets") to the
similar plan being established by Buyer are being transferred from a
qualified plan. There are not threatened or pending claims by or on
behalf of the Transferred Assets, or by any participant having an
interest in the Transferred Assets, alleging a breach or breaches of
fiduciary duties or violations of ERISA or the Code which could result in
liability on the part of Triangle or Buyer (or any affiliate thereof),
its officers or directors or such Transferred Assets under ERISA or the
Code and, to the best knowledge of the Sellers, there is no basis for
such claim.
(d) Sellers have calculated and accrued all Compensation earned by
all Employees under all Employment Arrangements relating to any Employees
of the Business, including without limitation all plans and arrangements
identified on Schedules 3.20 and 3.21, for all periods through and
including the Closing Date (and for salaried Employees of ▇▇▇▇▇▇▇,
through and including March 31, 1997), except for the accrued
Compensation under the Profit Sharing Plan for the period November 1,
1996 through the Closing Date, which shall be accrued in accordance with
Section 6.5(e). All such Compensation has been calculated as required by
the terms of said plans and arrangements, or if not fixed by the existing
terms of the plans and arrangements, in a manner no less favorable to
participants therein than the manner in which such Compensation was
calculated during the fiscal year ended October 31, 1997. All such
Compensation required to be paid prior to the Closing Date pursuant to
Section 6.5 has been paid in full.
21 Environmental Matters.
( ) Except as disclosed on Schedule 3.22:
( ) to Sellers' knowledge, the Business and the Assets
currently comply with Applicable Environmental Laws (as defined
below);
(i) the Business and the Assets are not subject to any
existing, pending, or to the knowledge of Sellers threatened,
Proceeding under, or to any remedial obligations under, any
Applicable Environmental Laws;
(ii) all Permits, if any, required to be obtained by Sellers
under any Applicable Environmental Laws in connection with any
aspect of the Business, including without limitation those relating
to the treatment, storage, disposal, or release of a hazardous
material (as defined below), have been duly obtained and are in full
force and effect, and Sellers are in material compliance with the
terms and conditions of all such Permits;
(iii) Sellers, with respect to the Business and the Assets,
have at all times materially satisfied all Applicable Environmental
Laws, and Sellers have not received any notice of noncompliance with
any Applicable Environmental Laws;
(iv) to Sellers' knowledge, there are no physical or
environmental conditions existing on the Real Property or resulting
from Sellers' operations or activities, past or present, at any
location, that would give rise to any on-site (at the Real Property)
or off-site (from the Real Property) remedial obligations under any
Applicable Environmental Laws;
(v) since the effective date of the relative requirements
of Applicable Environmental Laws, all hazardous materials generated
by Sellers in connection with the Business or the Assets have been
transported only by carriers authorized under Applicable
Environmental Laws to transport such materials, and have been
disposed of only at treatment, storage, and disposal facilities
authorized under Applicable Environmental Laws to treat, store, or
dispose of such materials, and, to the knowledge of Sellers, such
carriers and facilities have been and are operating in compliance
with such authorizations and are not the subject of any existing,
pending, or threatened Proceeding in connection with any Applicable
Environmental Laws;
(vi) to Sellers' knowledge, there has been no exposure of
any person or property to hazardous materials in violation of
Applicable Environmental Laws , nor has there been any release of
hazardous materials into the environment in violation of Applicable
Environmental Laws, by Sellers in connection with the Business or
the Assets that could reasonably be expected to give rise to any
claim for damages or compensation; and
(vii) Sellers have made available to Triangle or Buyer all
internal and external environmental audits and studies and all
correspondence on substantial environmental matters in the
possession of Sellers relating to the Business or the Assets;
provided, that any privileged portion of such correspondence may
have been redacted therefrom.
(a) Irrespective of any other provision contained in this
Agreement, all representations and warranties made by Sellers in this
Agreement pertaining to hazardous materials, Applicable Environmental
Laws, and any other environmental, health or safety matters are set forth
solely in this Section 3.22.
(b) For purposes of this Agreement:
( ) "Applicable Environmental Laws" means any and all
Applicable Laws pertaining to health, safety, occupational safety,
or the environment currently in effect in any and all jurisdictions
in which Sellers have conducted the Business or owned or leased the
Assets, including, without limitation, the Clean Air Act, as
amended, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Rivers and Harbors Act of
1899, as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended,
the Resource Conservation and Recovery Act of 1976, as amended, the
Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous Materials Transportation Act, as
amended, any regulations promulgated under such laws and any state
law and other environmental conservation or protection laws; and
(i) "hazardous material" means (A) any substance that is
now listed, defined, considered or classified as hazardous, toxic or
a solid waste pursuant to any Applicable Environmental Laws, (B)
petroleum (including crude oil and any fraction thereof), natural
gas, and natural gas liquids, (C) asbestos and asbestos containing
materials, in any form, whether friable or non-friable, and (D)
radon gas.
22 Labor Relations.
( ) Except as disclosed on Schedule 3.23, with respect to the
Business at the plants operated on the Real Property, (i) there are no
collective bargaining agreements, labor union contracts or similar
agreements applicable to any employee to or by which a Seller is a party
or is bound, no such agreement or contract has been requested by any
employee or group of employees of any Seller, and no discussions have
occurred with respect thereto by the management of either ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇ with any such employee; (ii) no employee of any Seller is
represented by any labor organization, collective bargaining
representative, or group of employees; (iii) no labor organization,
collective bargaining representative, or group of employees claims to
represent a majority of the employees of any Seller in an appropriate
unit of a Seller; (iv) no Seller is aware of or involved with any
representational campaign or other organizing activities by any union or
other organization or group seeking to become the collective bargaining
representative of any of the employees of any Seller; (v) no Seller is
obligated to bargain collectively with respect to wages, hours, and other
terms and conditions of employment with any recognized or certified labor
organization, collective bargaining representative, or group of employees
representing employees of any Seller; and (vi) no Seller is aware of any
strike, work stoppage, work slowdown, or lockout or any threat thereof,
except for routine grievance matters, by or with respect to any employee
of any Seller, and since November 1, 1994, there has been no significant
labor dispute, strike, work stoppage, work slowdown, lockout, or similar
matter involving any of the employees of any Seller.
(a) With respect to the employees engaged in the Business, Sellers
are in compliance with all Applicable Laws pertaining to employment and
employment practices and wages, hours, and other terms and conditions of
employment in respect of their employees and have no accrued liability
for any arrears of wages or any Taxes or penalties for failure to comply
with any thereof. With respect to the employees engaged in the Business,
no Seller is engaged in any unfair labor practice or unlawful employment
practice. There is no pending, or to the knowledge of Sellers
threatened, Proceeding against or involving Sellers by or before, and
Sellers are not subject to any judgment, order, writ, injunction, or
decree of or inquiry from, the National Labor Relations Board, the Equal
Employment Opportunity Commission, the Department of Labor, or any other
Governmental Entity in connection with any current, former, or
prospective employee of any Seller.
(b) Sellers, to their knowledge, believe that their respective
relations with the employees of the Business are satisfactory.
23 Customers and Suppliers. Set forth on Schedule 3.24 is a list of
(i) the names of, and the dollar volume and percentage of products or services
purchased by Sellers from, each Seller's 10 largest suppliers of products and
services with respect to the Business (in terms of purchases) during each of
the fiscal years ended October 31, 1995 and October 31, 1996, (ii) the dollar
volume and percentage of sales by Sellers to each Seller's 25 largest
customers of products and services with respect to the Business (in terms of
sales) during each of such periods. Other than as set forth on Schedule 3.24,
(i) none of such current customers or suppliers has refused, or communicated
that it will or may refuse, to purchase or supply products or services from or
to Sellers or has communicated that it will or may substantially reduce the
amount of products or services that it is willing to purchase from or supply
to Sellers, (ii) no Seller is past due (in accordance with the stated invoice
terms) with respect to any amounts owed to any of the suppliers listed or
required to be listed on Schedule 3.24, and (iii) there has not been any
material adverse change in the business relationship of any Seller with any
customer or supplier listed or required to be listed on Schedule 3.24.
24 Insurance. Sellers maintain with sound and reputable insurers, and
there are currently in full force and effect, policies of insurance with
respect to the Assets and the Business against such casualties and
contingencies of such types and in such amounts as are customary for
corporations of similar size engaged in similar lines of business. All
premiums due and payable with respect to such policies have been timely paid.
No notice of cancellation of, or indication of an intention not to renew, any
such policy has been received by any Seller.
25 Books and Records. All the books and records of Sellers relating to
the Assets or the Business, including all personnel files, employee data, and
other materials relating to employees of the Business, are substantially
complete and correct, have been maintained in accordance with good business
practice and all Applicable Laws, and, in the case of the books of account,
have been prepared and maintained in accordance with generally accepted
accounting principles consistently applied. Such books and records accurately
and fairly reflect, in reasonable detail, all transactions, revenues,
expenses, assets, and liabilities of Sellers with respect to the Business.
26 Brokerage Fees. Sellers and their affiliates have not retained any
financial advisor, broker, agent, or finder or paid or agreed to pay any
financial advisor, broker, agent, or finder on account of this Agreement or
any transaction contemplated hereby. Sellers shall indemnify and hold
harmless Triangle and Buyer from and against any and all losses, claims,
damages, and liabilities (including legal and other expenses reasonably
incurred in connection with investigating or defending any claims or actions)
with respect to any finder's fee, brokerage commission, or similar payment in
connection with any transaction contemplated hereby asserted by any person on
the basis of any act or statement made or alleged to have been made by Sellers
or any of their affiliates.
27 Insider Interests. Except as disclosed on Schedule 3.28, no Insider
(hereinafter defined) is presently directly, or to the knowledge of Sellers
indirectly, a party to any transaction or agreement with any Seller,
including, without limitation, any agreement, arrangement, or understanding,
written or oral, providing for the employment of, furnishing of services by,
rental of real or personal property from, use of real or personal property by,
or requiring payments to, any Insider. As used herein, "Insider" means any
shareholder, director, officer, or management employee of any Seller or any
former owner of an interest in either ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇. To the knowledge of
Sellers, no director, officer, or management employee of any Seller owns any
interest in, or serves as a director, officer, or management employee of, any
customer, supplier, or competitor of Sellers (other than an interest in a
public corporation that does not exceed one percent (1%) of its outstanding
securities).
28 Disclosure. No representation or warranty made by any Seller in
this Agreement, and no statement of any Seller contained in any document,
certificate, or other writing furnished or to be furnished by Sellers pursuant
hereto or in connection herewith, contains or will contain, at the time of
delivery, any untrue statement of a material fact or omits or will omit, at
the time of delivery, to state any material fact necessary in order to make
the statements contained therein, in light of the circumstances under which
they are made, not misleading, the statement or omission of which will have a
Material Adverse Effect.
29 Representations and Warranties on Closing Date. The representations
and warranties made in this Article III will be true and correct on and as of
the Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date, except that any such
representations and warranties that expressly relate only to an earlier date
shall be true and correct on the Closing Date as of such earlier date.
III.
REPRESENTATIONS AND WARRANTIES OF TRIANGLE AND BUYER
Triangle and Buyer each represents and warrants to Sellers that:
0 Corporate Organization. Each of Triangle and Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority to own, lease, and operate its properties and to carry on
its business as now being conducted.
1 Authority Relative to This Agreement. Each of Triangle and Buyer
has full corporate power and corporate authority to execute, deliver, and
perform this Agreement and the Ancillary Documents to which it is a party and
to consummate the transactions contemplated hereby and thereby. The
execution, delivery, and performance by each of Triangle and Buyer of this
Agreement and the Ancillary Documents to which it is a party, and the
consummation by it of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action of each of Triangle and
Buyer. This Agreement has been duly executed and delivered by Triangle and
Buyer and constitutes, and each Ancillary Document executed or to be executed
by Triangle or Buyer has been, or when executed will be, duly executed and
delivered by Triangle or Buyer and constitutes, or when executed and delivered
will constitute, a valid and legally binding obligation of Triangle or Buyer,
enforceable against Triangle or Buyer in accordance with its respective terms,
except that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and similar laws affecting creditors'
rights generally and (ii) equitable principles that may limit the availability
of certain equitable remedies (such as specific performance) in certain
instances and (iii) public policy considerations with respect to the
enforceability of rights of indemnification.
2 Noncontravention. The execution, delivery, and performance by each
of Triangle and Buyer of this Agreement and the Ancillary Documents to which
it is a party and the consummation by it of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or result in a
violation of any provision of the charter or bylaws of Triangle or Buyer, (ii)
conflict with or result in a violation of any provision of, or constitute
(with or without the giving of notice or the passage of time or both) a
default under, or give rise (with or without the giving of notice or the
passage of time or both) to any right of termination, cancellation, or
acceleration under, or require any consent, approval, authorization, or waiver
of any party to, any bond, debenture, note, mortgage, indenture, lease,
contract, agreement, or other instrument or obligation to which either
Triangle or Buyer is a party or by which either Triangle or Buyer or any of
its properties may be bound or any Permit held by either Triangle or Buyer,
(iii) result in the creation or imposition of any Encumbrance upon the
properties of either Triangle or Buyer, or (iv) violate any Applicable Law
binding upon either Triangle or Buyer.
3 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity is required to be obtained or made by either Triangle or
Buyer in connection with the execution, delivery, or performance by either
Triangle or Buyer of this Agreement and the Ancillary Documents to which it is
a party or the consummation by it of the transactions contemplated hereby or
thereby, other than (i) compliance with any applicable requirements of the
Exchange Act; (ii) filings with Governmental Entities to occur in the ordinary
course following the consummation of the transactions contemplated hereby; and
(iii) such consents, approvals, orders, or authorizations that, if not
obtained, and such declarations, filings, or registrations that, if not made,
would not, individually or in the aggregate, have a Material Adverse Effect on
the business, assets, results of operations, condition (financial or
otherwise), or prospects of Triangle and its subsidiaries considered as a
whole or on the ability of either Triangle or Buyer to consummate the
transactions contemplated hereby.
4 Legal Proceedings. There are no Proceedings pending, or to the
knowledge of either Triangle or Buyer threatened, seeking to restrain,
prohibit, or obtain damages or other relief in connection with this Agreement
or the transactions contemplated hereby.
5 Brokerage Fees. Neither Triangle nor any of its affiliates has
retained any financial advisor, broker, agent, or finder or paid or agreed to
pay any financial advisor, broker, agent, or finder on account of this
Agreement or any transaction contemplated hereby. Triangle shall indemnify
and hold harmless Sellers from and against any and all losses, claims,
damages, and liabilities (including legal and other expenses reasonably
incurred in connection with investigating or defending any claims or actions)
with respect to any finder's fee, brokerage commission, or similar payment in
connection with any transaction contemplated hereby asserted by any person on
the basis of any act or statement made or alleged to have been made by
Triangle or any of its affiliates.
6 Disclosure. No representation or warranty made by either Triangle
or Buyer in this Agreement, and no statement of either Triangle or Buyer
contained in any document, certificate, or other writing furnished or to be
furnished by either Triangle or Buyer pursuant hereto or in connection
herewith, contains or will contain, at the time of delivery, any untrue
statement of a material fact or omits, or will omit, at the time of delivery,
to state any material fact necessary in order to make the statements contained
therein, in the light of the circumstances under that they are made, not
misleading.
7 Representations and Warranties on Closing Date. The representations
and warranties made in this Article IV will be true and correct on and as of
the Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the Closing Date, except that any such
representations and warranties that expressly relate only to an earlier date
shall be true and correct on the Closing Date as of such earlier date.
IV.
CONDUCT OF BUSINESS PENDING CLOSING
Sellers hereby covenant and agree with Triangle and Buyer as follows:
0 Conduct and Preservation of Business. Except as expressly provided
in this Agreement, during the period from the date hereof to the Closing,
Sellers (i) shall conduct the Business only in the ordinary course consistent
with past practice and in compliance with this Agreement and all Applicable
Laws; (ii) shall use their reasonable efforts consistent with past practice to
preserve, maintain, and protect the Assets; and (iii) shall use their
reasonable efforts consistent with past practice to preserve intact the
business organization of the Business, to keep available the services of the
employees conducting the Business, and to maintain existing relationships with
suppliers, contractors, distributors, customers, and others having business
relationships with the Business.
1 Restrictions on Certain Actions. Without limiting the generality of
the foregoing, and except as otherwise expressly provided in this Agreement,
prior to the Closing, Sellers shall not, without the prior written consent of
Buyer:
( ) create, incur, guarantee, or assume any liability or obligation
in respect of the Business, except current liabilities incurred in the
ordinary course of the Business, to the extent necessary to preserve and
maintain the Business consistent with past practice;
(a) mortgage or pledge any of the Assets or create or suffer to
exist any Encumbrance thereupon, other than those existing in connection
with the Permitted Encumbrances;
(b) (i) enter into, adopt, or (except as may be required by law)
amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock purchase, pension, retirement, deferred
compensation, employment, collective bargaining, severance, or other
employee benefit agreement, trust, plan, fund, or other arrangement for
the benefit or welfare of any employee of the Business; (ii) increase in
any manner the compensation or fringe benefits of any employee of the
Business other than in the ordinary course of business, consistent with
prior practice; or (iii) pay to any employee of the Business any benefit
not required by any employee benefit agreement, trust, plan, fund, or
other arrangement as in effect on the date hereof;
(c) sell, lease, transfer, or otherwise dispose of, directly or
indirectly, any of the Assets, other than in the ordinary course of the
Business consistent with past practice;
(d) make any capital expenditure or expenditures relating to the
Business that are not in the ordinary course of business or that in the
aggregate are in excess of $500,000;
(e) pay, discharge, or satisfy any claims, liabilities, or
obligations relating to the Business (whether accrued, absolute,
contingent, unliquidated, or otherwise, and whether asserted or
unasserted), including without limitation any loans or other amounts
payable to shareholders or affiliates, other than the payment, discharge,
or satisfaction in the ordinary course of the Business consistent with
past practice, or in accordance with their terms, of liabilities
reflected or reserved against in the Latest Balance Sheet or incurred
since the date thereof in the ordinary course of the Business consistent
with past practice;
(f) enter into, or amend, modify, or change, any lease, contract,
agreement, commitment, arrangement, or transaction relating to the
Business, except in the ordinary course of the Business consistent with
past practice;
(g) delay payment of any account payable or other liability of
Sellers relating to the Business beyond its due date or the date when
such liability would have been paid in the ordinary course of the
Business consistent with past practice;
(h) allow the levels of raw materials, work-in-process, finished
goods, supplies, and other materials included in the inventory of the
Business to vary in any material respect from the levels customarily
maintained by Sellers in the ordinary course of the Business consistent
with past practice;
(i) permit any current insurance or reinsurance policies to be
cancelled or terminated or any of the coverages thereunder to lapse if
such policy covers Assets or insures risks, contingencies, or liabilities
of the Business, unless simultaneously with such cancellation,
termination, or lapse, replacement policies providing coverage equal to
or greater than the coverage cancelled, terminated, or lapsed are in full
force and effect and written copies thereof have been provided to
Triangle or Buyer;
(j) authorize, declare, pay, or effect any dividend or liquidating
or other distribution in respect of its capital stock (other than in cash
for (i) payment of tax liabilities for tax periods ending prior to the
Closing resulting from the subchapter S corporation status of a Seller)
or (ii) payment of any obligations under any shareholder agreements or
any direct or indirect redemption, purchase, or other acquisition of any
of such stock (other than under any shareholder agreements);
(k) deliberately take any action that would make any of the
representations or warranties of any Seller contained in this Agreement
untrue or inaccurate as of any time from the date of this Agreement to
the Closing or would or might result in any of the conditions set forth
in this Agreement not being satisfied;
(l) enter into or amend any contract, agreement, or other
commitment that would have a Material Adverse Effect; or
(m) authorize or propose, or agree in writing or otherwise to take,
any of the actions described in this Section 5.2.
V.
ADDITIONAL AGREEMENTS
0 Access to Information; Confidentiality.
( ) Between the date hereof and the Closing, Sellers shall, and
shall cause ▇▇▇▇▇▇▇ International, Inc. to, (i) give Buyer and its
authorized representatives reasonable access to all employees, all
plants, offices, warehouses, and other facilities, and all books and
records, including work papers and other materials prepared by Sellers'
accountants, of Sellers and ▇▇▇▇▇▇▇ International relating to the Assets,
the Liabilities or the Business, (ii) permit Buyer and its authorized
representatives to make such inspections as they may reasonably require,
with respect to the Business or the Assets, and (iii) furnish Buyer and
its authorized representatives with such financial and operating data and
other information with respect to the Assets, the Liabilities and the
Business as Buyer may from time to time reasonably request; provided,
however, that no investigation pursuant to this Section 6.1 shall affect
any representation or warranty of Sellers contained in this Agreement or
in any agreement, instrument, or document delivered pursuant hereto or in
connection herewith; provided further, that, any such representation or
warranty shall be modified or waived by such investigation to the extent
Buyer obtains actual knowledge in the course thereof that Sellers are in
violation or default under any such representation or warranty, and Buyer
does not immediately bring such violation or default to the attention of
Sellers and provide reasonable time for the cure thereof by Sellers.
(a) Sellers acknowledge and agree that irreparable damage would
occur in the event any confidential information regarding the Assets or
the Business is disclosed to or utilized on behalf of any person that is
in competition with the Business. Accordingly, Sellers covenant and
agree that they will not, and that they will cause their affiliates not
to, directly or indirectly, without the prior written consent of Buyer,
use or disclose any of such confidential information, except in the
normal course of operations of the Business or to authorized
representatives of Buyer; provided, however, that confidential
information shall not be deemed to include information that (i) was or
becomes generally available to the public other than as a result of
disclosure by Sellers or their affiliates or (ii) becomes available to
Sellers after the Closing on a nonconfidential basis from a source other
than Buyer, provided that such source is not known by Sellers to be bound
by a confidentiality agreement with respect to such confidential
information. Notwithstanding the foregoing provisions of this paragraph,
Sellers and their affiliates may disclose any confidential information to
the extent that, in the written opinion of counsel for Sellers, such
person is legally compelled to do so, provided that, prior to making such
disclosure, such person advises and consults with Buyer regarding such
disclosure and provided further that such person discloses only that
portion of such confidential information as is legally required. Buyer
acknowledges and agrees that the Confidentiality Agreement dated December
20, 1996 between Triangle and Sellers shall remain in effect as provided
therein.
1 Acquisition Proposals. From and after the date of this Agreement
until the earlier of the Closing or the termination of this Agreement, neither
Sellers nor any affiliate, director, officer, employee, agent, or
representative of Sellers shall, directly or indirectly, (i) solicit,
initiate, or knowingly encourage any Acquisition Proposal (as defined below)
or (ii) engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Assets or the Business to, any person that is
considering making or has made an Acquisition Proposal. Sellers shall
immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any persons conducted heretofore with
respect to any Acquisition Proposal and shall promptly request each such
person who has heretofore entered into a confidentiality agreement in
connection with an Acquisition Proposal to return to Sellers all confidential
information heretofore furnished to such person by or on behalf of Sellers.
The term "Acquisition Proposal", as used in this Section 6.2, means any offer
or proposal for, or any indication of interest in, the acquisition of the
Assets or the Business or any portion thereof, other than the transactions
contemplated or expressly permitted by this Agreement, by virtue of a merger,
sale of assets or stock, or other acquisition of any of the stock of ▇▇▇▇▇▇▇
or ▇▇▇▇▇▇ or the assets of any of Sellers' residential flooring operations.
2 Third Party Consents. Each of the Sellers and Buyer shall use their
reasonable best efforts to obtain all consents, approvals, orders,
authorizations, and waivers of, and to effect all declarations, filings, and
registrations with, all third parties (including Governmental Entities) that
are necessary, required, or deemed by Buyer to be desirable to enable Sellers
to transfer the Assets to Buyer as contemplated by this Agreement and to
otherwise consummate the transactions contemplated hereby. All costs and
expenses of obtaining or effecting any and all of the consents, approvals,
orders, authorizations, waivers, declarations, filings, and registrations
referred to in this Section 6.3 shall be borne by the party incurring the
same.
3 Reasonable Best Efforts. Each party hereto agrees that it will not
voluntarily undertake any course of action inconsistent with the provisions or
intent of this Agreement and will use its reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper, or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement. Sellers shall cooperate with
and assist Buyer and its authorized representatives in order to provide an
efficient and orderly transfer of the control and management of the Assets and
the Business to Buyer, to permit Buyer to assume the Liabilities without any
changes in their repayment terms and conditions, and to avoid any undue
interruption in the ongoing operations of the Assets and the Business
following the Closing. Sellers agree to take all necessary and reasonable
action pursuant to Ark. Code ▇▇▇. - ▇▇-▇▇-▇▇▇ and other Applicable Law so that
Buyer will be issued all permits necessary to continue to conduct the
Business.
4 Employee and Employee Benefit Plan Matters.
( ) Sellers shall terminate the employment of all employees of the
Business effective as of the close of business on the Closing Date.
Buyer contemplates offering employment, effective the day after the
Closing Date, to substantially all of such employees upon such terms and
conditions as Buyer, in its sole discretion, determines. At Buyer's
request, Sellers have not issued any notice required, if any is required,
by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101,
et seq., or any state statute requiring notice to terminated or laid off
employees ("WARN"), whether such notice is required to be given before or
after the Closing Date. Buyer agrees to and does hereby indemnify and
hold Sellers harmless from any damages, claims, fees, penalties, costs,
liabilities, compensation or any payments whatsoever required by WARN or
any state statute requiring notice to terminated or laid off employees
(collectively, the "WARN Compensation"), Sellers having refrained from
issuing said notice at the request of Buyer. Sellers acknowledge and
agree that they, and not Buyer, are and shall remain solely responsible
for payment of any and all wages, salary, compensation, commission,
bonuses, severance pay, insurance, supplement, pension, deferred
compensation, retirement and any other benefits, premiums and claims, and
all federal, state and local withholding, social security and other Taxes
and governmental levies in connection therewith, other than the WARN
Compensation (collectively, "Compensation"), due, to become due,
committed, earned, accrued or otherwise promised to any person
(collectively, "earned") who, as of the Closing Date, is a retiree,
former employee, or current employee of any Seller (collectively,
"Employees") relating to the period prior to and including the Closing
Date, including without limitation all Compensation earned under the
plans and arrangements identified on Schedules 3.20 and 3.21, and with
respect to salaried Employees of ▇▇▇▇▇▇▇, all Compensation relating to
the period through and including March 31, 1997, excepting only all
accrued vacation, sick pay, hourly wages (for March 27 and 28, 1997 for
▇▇▇▇▇▇ Employees), and Profit Sharing Plan contributions (for the plan
year commencing November 1, 1996) included in the Liabilities. Sellers
shall pay all such Compensation earned by all Employees as follows:
( ) for hourly Employees of ▇▇▇▇▇▇▇, all Compensation
earned through March 21, 1997 shall be paid on March 27, 1997, and
all unpaid Compensation earned through March 28, 1997 shall be paid
on or before April 4, 1997;
(i) for salaried Employees of ▇▇▇▇▇▇▇, all Compensation
earned through March 31, 1997 shall be paid on March 27, 1997; and
(ii) for all Employees of ▇▇▇▇▇▇, all Compensation earned
through March 26, 1997 shall be paid on or before March 27, 1997,
and all unpaid Compensation earned through March 28, 1997 shall be
paid on or before March 27, 1997; provided, that unpaid hourly wages
earned (and related Taxes) for March 27 and 28, 1997 may be accrued
on or before March 27 but not paid.
(a) Other than as provided in Section 6.5(g) and in the proviso at
the end of this sentence, Buyer is not hereby, and at no time hereafter
will be, adopting, accepting, or assuming any employee benefit plan or
collective bargaining agreement of any Seller relating to any Seller's
employees or any other agreement, trust, plan, fund, or other arrangement
of Sellers that provides for employee benefits or perquisites
(collectively, "Employment Arrangements"), and Buyer shall have no
liability or obligation whatsoever under any Employment Arrangement to
Sellers or to any employees of Sellers, whether or not any of such
employees are offered employment by or become employees of Buyer;
provided, however, that Buyer shall credit such employees who do become
Buyer's employees for all accrued vacation and sick pay included in the
Liabilities. Buyer is not obligated to replace any of the Employment
Arrangements for any employees of Sellers who become employees of Buyer,
nor is Buyer obligated to provide such persons with any similar
agreements, plans, or arrangements.
(b) Sellers will comply after the Closing Date with the
requirements of Sections 601 through 608 of ERISA and Section 4980B of
the Code with respect to any employee or former employee of Sellers (and
any dependent or former dependent thereof) whose employment with Sellers
terminates in connection with or prior to Buyer's purchase of the Assets.
It is the express intention of the parties hereto that to the extent
necessary for Sellers to meet their obligations under this Section
6.5(c), Sellers shall cause one of their affiliates that maintains a
group health plan after the Closing Date to extend group health plan
coverage that complies with such requirements to any employee or former
employee of Sellers (and any dependent or former dependent thereof) whose
employment with Sellers terminates in connection with or prior to Buyer's
purchase of the Assets.
(c) All employer contributions to the Employees' Retirement Savings
Plan (the "401(k) Plan") and the ▇▇▇▇▇▇ Flooring, Inc. Profit Sharing
Plan (the "Profit Sharing Plan") for employees of the Business for the
plan year ending October 31, 1996, shall be accrued and paid by Sellers
on or before the Closing Date. To the extent the amount of contributions
required to be accrued and paid by this Section 6.5(d) for either the
401(k) Plan or the Profit Sharing Plan is not fixed by the existing terms
of said Plan, the amount of contributions accrued and paid for said Plan
shall be calculated in a manner no less favorable to participants of said
Plan than the manner in which was calculated the amount of the
contributions made to said Plan for its plan year ending October 31,
1995.
(d) To the extent employer contributions for employees of the
Business are not made on or before the Closing Date to the 401(k) Plan
and the Profit Sharing Plan for the plan year commencing November 1,
1996, Sellers agree to accrue such contributions on their books in the
amounts required by the terms of said Plans, but only for the period of
time from November 1, 1996 through the Closing Date for the Profit
Sharing Plan and from November 1, 1996 through March 31, 1997 for the
401(k) Plan, (i) with respect to the 401(k) Plan, on or before the
Closing Date, and (ii) with respect to the Profit Sharing Plan, on or
before the date the Final Closing Statements are required to be delivered
pursuant to Section 1.7(a). To the extent the amount of contributions
required to be accrued by this Section 6.5(e) for either the 401(k) Plan
or the Profit Sharing Plan is not fixed by the existing terms of said
Plan, the amount of contributions accrued for said Plan shall be
calculated in a manner no less favorable to participants of said Plan
than the manner in which was calculated the amount of the contributions
made to said Plan for its plan year ending October 31, 1995. On or
before April 15, 1997, ▇▇▇▇▇▇▇ shall remit all employee contributions and
pay all accrued employer contributions payable by it to the 401(k) plan
for the period through the close of business on March 31, 1997,
determined as if participants employed by ▇▇▇▇▇▇▇ on the Closing Date are
employed by ▇▇▇▇▇▇▇ on March 31, provided that such contributions for the
period March 22 through March 31, 1997 shall be paid by May 15, 1997.
(e) Certain salaried and hourly employees of the Sellers currently
participate in the 401(k) Plan. Prior to the Closing Date, Buyer agrees
to take all action as may be necessary or appropriate to cause to be
established a similar plan and related trust. Sellers agree to take all
such action as may be necessary or appropriate to cause the trustee of
the trust for the 401(k) Plan to effect an in kind transfer to the new
trust of the assets making up the accounts of and equal in value to the
account balances for those employees of the Business participating in the
401(k) Plan as of the close of business on the Closing Date who are
employed by Buyer on the first business day following the Closing Date
(including any earnings for periods through the close of business on the
Closing Date and contributions and loan repayments deducted from payrolls
issued on or before the Closing Date, but not yet credited as of the
close of business on the Closing Date), with such transfer to be effected
as soon as administratively practicable after the Closing Date, but in no
event later than 60 days after the Closing Date. Sellers agree to make
available to Buyer the new plan all such data and other information as
may be necessary or appropriate for Buyer to properly maintain and
administer the new plan on and after the Closing Date. Buyer agrees to
cause to be provided to the transferring trustee appropriate receipts and
accounting for the assets transferred to such trustee as may be
reasonably requested by such trustee. Buyer agrees to file a timely
application for a determination letter from the Internal Revenue Service
to evidence that the new plan qualifies under Section 401(a) of the Code.
(f) Certain hourly employees of the Sellers currently participate
in the Profit Sharing Plan. Buyer and Sellers agree to take all such
action as may be necessary or appropriate to cause Buyer (or an affiliate
thereof) to assume the Profit Sharing Plan and be substituted for ▇▇▇▇▇▇
Flooring, Inc., including being named as the sponsoring employer,
effective as of the Closing Date. Sellers agree to make available to the
new sponsoring employer for the Profit Sharing Plan all such data and
other information as may be necessary or appropriate for such employer to
properly maintain and administer the Profit Sharing Plan on and after the
Closing Date. Sellers agree to prepare and file timely the IRS Form 5500
series return required for the Profit Sharing Plan for its plan year
ending October 31, 1996 and to provide a copy of the same to Buyer.
Buyer agrees to prepare and file timely the IRS Form 5500 series return
required for the Profit Sharing Plan for its plan year commencing
November 1, 1996 and to provide a copy of the same to Sellers. Sellers
agree to cause to be filed timely an IRS Form 1099-R (or any successor
form) reporting every distribution made from the Profit Sharing Plan
during 1997 and on or before the Closing Date, and Buyer agrees to cause
to be filed timely an IRS Form 1099-R (or any successor form) reporting
every distribution made from the Profit Sharing Plan during 1997 and
after the Closing Date.
(g) Sellers shall pay all claims incurred on or before the Closing
Date under the medical plan covering employees of the ▇▇▇▇▇▇▇ Southern
Division, as and when those claims become due and payable.
(h) The provisions of Section 11.1 to the contrary notwithstanding,
the representations and warranties of the Sellers contained in Section
3.21 shall survive the Closing, regardless of any investigation made by
or on behalf of Triangle or Buyer, until the expiration of the limitation
period under the applicable statute of limitations. Sellers, jointly and
severally, shall indemnify, defend, and hold harmless Triangle and Buyer,
each director, officer, employee, representative or agent of Triangle and
Buyer, and each affiliate thereof, and their respective heirs, legal
representatives, successors, and assigns (collectively, the "Buyer
Group") from and against any and all claims, actions, causes of action,
demands, assessments, losses, damages, liabilities, judgments,
settlements, penalties, costs, and expenses (including reasonable
attorneys' fees and expenses), of any nature whatsoever, whether actual
or consequential, asserted against, imposed upon, or incurred by any
member of the Buyer Group, directly or indirectly, by reason of or
resulting from any inaccuracy or breach of any representation or warranty
of any Seller contained in Section 3.21 or in any certificate,
instrument, or document delivered pursuant thereto.
5 Title Insurance and Surveys.
( ) Buyer shall obtain an owner's policy of title insurance ("Title
Insurance") in a form and amount and from a title insurance company
reasonably acceptable to Buyer (the "Title Company") relating to each
parcel of Real Property described on Schedule 1.1(a).
(a) Within three (3) days after the execution and delivery of this
Agreement, Buyer shall obtain a commitment for Title Insurance from the
Title Company with respect to the Real Property ("Title Binders") showing
fee title to such Real Property in Sellers, and committing to issue the
Title Insurance with respect to such Real Property, such Title Binders to
show all Encumbrances with respect to such Real Property.
(b) Within three (3) days after the execution and delivery of this
Agreement, Buyer shall obtain currently dated surveys (the "Surveys") of
each parcel of Real Property, each of which Surveys shall be in form and
substance, and prepared by a licensed professional engineer or surveyor,
reasonably acceptable to Buyer and to the Title Company. The Surveys
shall contain a statement on the face thereof certifying whether any part
of the Real Property lies within a flood plain or flood prone area or a
flood way of any body of water. The Surveys shall also show the zoning
classifications of the Real Property under local zoning ordinances.
(c) Within ten (10) days after the receipt of the Title Binders and
copies of all exceptions shown therein and of the Surveys and copies of
all applicable provisions of the local zoning ordinances, Buyer shall
deliver to Sellers a notice (the "Objection Notice") if it reasonably
believes that Seller's title to any Real Property is not as represented
herein or that any of the Encumbrances reflected in the Title Binders or
Surveys are not Permitted Encumbrances and the reasons for such belief
(any such Encumbrances specified in the Objection Notice being referred
to herein as "Unacceptable Encumbrances"). Sellers may, but shall not be
obligated to, take such steps as shall be necessary to eliminate or
modify the Unacceptable Encumbrances in a manner reasonably acceptable to
Buyer. Sellers shall notify Buyer within ten (10) days after their
receipt of the Objection Notice whether they intend to so eliminate or
modify the Unacceptable Encumbrances. In the event Buyer shall not
deliver an Objection Notice within such time period, all Encumbrances
reflected in the Title Binders and Surveys shall be deemed to be
Permitted Encumbrances. Any and all matters disclosed in the Title
Binders or the Surveys as to which Buyer objects by timely delivery of
the Objection Notice that are thereafter cured to the satisfaction of
Buyer or waived by Buyer in writing shall also be deemed to be Permitted
Encumbrances. In the event Sellers fail or are unable to cure the
Unacceptable Encumbrances prior to the Closing Date (provided it is at
least three (3) days after receipt of the Objection Notice), Buyer shall,
in its discretion, have the right to terminate this Agreement by notice
in writing to Sellers, or may accept such title to the Real Property as
Seller can deliver.
(d) The cost of obtaining Title Binders, Title Insurance, and
Surveys shall be borne by Buyer.
6 Payment of Liabilities. Sellers shall pay, perform, and discharge
prior to the Closing all of Sellers' liabilities that become due prior to the
Closing and all of Sellers' liabilities that are due after the Closing, other
than the Liabilities, as and when the same become due and payable.
7 Public Announcements. Except as may be required by Applicable Law
or the National Association of Securities Dealers, Inc., neither Triangle,
Buyer nor Sellers shall issue any press release or otherwise make any public
statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party (which consent shall not
be unreasonably withheld). Any such press release or public statement
required by Applicable Law or by the National Association of Securities
Dealers, Inc. shall only be made after reasonable notice to the other party.
8 Environmental Provisions.
(a) Buyer shall have the opportunity to have the Real Property
inspected for environmental matters by a qualified consultant of its
choosing pursuant to Sections 6.1 and 8.14 of this Agreement. The cost
of any and all such inspections of the property shall be borne solely by
Buyer. Buyer shall provide a copy of any report of any such inspections
to Sellers within five days of Sellers' request therefore, but such
report, if any, shall be provided to Sellers only in the event Sellers
make such request.
(b) In addition, Sellers shall promptly after the execution of this
Agreement, provide to Buyer, on a confidential basis, copies of any
reports of environmental investigations of the Real Property authorized
by or available to Sellers (the "Environmental Reports"). Buyer agrees
and acknowledges that Sellers make no representations or warranties
regarding the accuracy or completeness of the Environmental Reports.
(c) If Buyer notifies the Sellers prior to the Closing Date that
the results of its inspection of the Real Property or its review of the
Environmental Reports are not acceptable to Buyer, then this Agreement
shall be terminated and Buyer shall return all copies of the
Environmental Reports to Sellers, and Sellers shall return all copies of
inspection reports to Buyer.
(d) Buyer and Sellers agree to ensure the confidentiality of the
Environmental Reports and the results of Buyer's inspection in accordance
with Section 6.1 above. Buyer and Sellers shall defend, hold harmless
and indemnify each other from, for and against any and all claims,
damages, liabilities and costs, known or unknown (including without
limitation, cleanup cost, consulting and legal fees) (hereinafter,
collectively "Losses") proximately caused by their breach of their
obligations pursuant to the above confidentiality provision.
(e) In the event Buyer determines in its sole discretion that the
results of its review of the Environmental Reports and of its inspection
of the Real Property are satisfactory and closes the transactions
contemplated hereunder, each of Triangle and Buyer, on behalf of itself,
its successors and assigns, agrees to release, discharge and covenant not
to ▇▇▇ ▇▇▇▇▇▇▇ and each of their respective officers, directors,
employees, agents, shareholders, successors and assigns and all persons
referenced in Sections 9.3 and 9.4 from those Losses proximately caused
by past, present or future presence of hazardous material on, in or under
the Real Property including, without limitation, Losses arising under the
Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 USC 9601 et seq., the Resource Conservation and Recovery
Act, as amended, 42 USC - 6901 et seq. regulations and other Applicable
Environmental Laws, but excluding any Losses or portions of Losses
involving the presence of hazardous materials on, in or under any
property other than the Real Property. By way of example and not by
limitation, claims relating to Losses arising from hazardous material on,
in or under the Real Property on or before the time of Closing that moves
to adjacent property are not released.
9 Notice of Litigation. Until the Closing, (i) Buyer, upon learning
of the same, shall promptly notify Sellers of any Proceeding that is commenced
or threatened against Buyer and that affects this Agreement or the
transactions contemplated hereby and (ii) Sellers, upon learning of the same,
shall promptly notify Buyer of any Proceeding that is commenced or threatened
against Sellers and that affects this Agreement or the transactions
contemplated hereby and any Proceeding that is commenced or threatened against
Sellers and that would have been listed on Schedule 3.12 if such Proceeding
had arisen prior to the date hereof.
10 Notification of Certain Matters. Sellers upon learning of same,
shall give prompt notice to Buyer of (i) the occurrence or nonoccurrence of
any event the occurrence or nonoccurrence of which would be likely to cause
any representation or warranty contained in Article III to be untrue or
inaccurate in any material respect at or prior to the Closing and (ii) any
material failure of Sellers to comply with or satisfy any covenant, condition,
or agreement to be complied with or satisfied by such person hereunder, and
(iii) any notice or other communication from any person alleging that the
consent or approval of such person is or may be required in connection with
the transactions contemplated by this Agreement (other than those consents and
approvals indicated as required on Schedule 3.3). Buyer shall give prompt
notice to Sellers of (i) the occurrence or nonoccurrence of any event the
occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in Article IV to be untrue or inaccurate
in any material respect at or prior to the Closing and (ii) any material
failure of Buyer to comply with or satisfy any covenant, condition, or
agreement to be complied with or satisfied by such person hereunder. The
delivery of any notice pursuant to this Section 6.11 shall not be deemed to
(i) modify the representations or warranties hereunder of the party delivering
such notice, (ii) modify the conditions set forth in Articles VII, VIII and
IX, or (iii) limit or otherwise affect the remedies available hereunder to the
party receiving such notice; provided, however, that if the Closing shall
occur, then all matters disclosed pursuant to this Section 6.11 at or prior to
the Closing shall be waived and no party shall be entitled to make a claim
thereon pursuant to the terms of this Agreement.
11 Amendment of Schedules. Each party hereto agrees that, with respect
to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Closing
to supplement or amend promptly the Schedules hereto with respect to any
matter hereafter arising or discovered that, if existing or known at the date
of this Agreement, would have been required to be set forth or described in
the Schedules. For all purposes of this Agreement, including without
limitation for purposes of determining whether the conditions set forth in
Sections 7.1 and 8.1 have been fulfilled, the Schedules hereto shall be deemed
to include only that information contained therein on the date of this
Agreement and shall be deemed to exclude all information contained in any
supplement or amendment thereto; provided, however, that if the Closing shall
occur, then all matters disclosed pursuant to any such supplement or amendment
at or prior to the Closing shall be waived and no party shall be entitled to
make a claim thereon pursuant to the terms of this Agreement.
12 Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel,
financial advisors, and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fee or expense, whether or not the Closing shall have occurred;
provided, however, that if this Agreement shall have been terminated pursuant
to Section 10.1 as a result of the willful breach by a party of any of its
representations, warranties, covenants, or agreements set forth in this
Agreement, such breaching party shall pay the costs and expenses of the other
parties in connection with the transactions contemplated by this Agreement.
13 Survival of Covenants. Except for any covenant or agreement that by
its terms expressly terminates as of a specific date, the covenants and
agreements of the parties hereto contained in this Agreement shall survive the
Closing without contractual limitation.
14 Dispute Resolution. If any dispute or disagreement arises between
Buyer and Sellers under this Agreement, including without limitation any
disagreement under Section 1.5(b) or Section 1.7(b) (any such dispute or
disagreement being referred to as a "Dispute"), and Buyer and Sellers are
unable to resolve such Dispute within the time period prescribed elsewhere in
this Agreement (or if no such time period is prescribed, within thirty (30)
days after the date written notice of the Dispute is given by Buyer or
Sellers), an arbitrator agreed upon by Buyer and Sellers (the "Arbitrator")
shall be employed hereunder to settle such Dispute as soon as practicable. In
the event that the parties are unable to agree upon the appointment of such an
arbitrator within five (5) business days, then each of Buyer and Sellers shall
within three (3) calendar days appoint an independent arbitrator, which
independent arbitrators shall agree within three (3) business days on the
appointment of a third independent arbitrator to whom the Dispute shall be
submitted. Buyer and Sellers shall submit the Dispute to the Arbitrator
within three (3) business days of its appointment and shall cooperate with
each other and otherwise use their reasonable best efforts to cause the
Arbitrator to make its decision within sixty (60) days after referral of a
Dispute to it. The Arbitrator shall have access to all documents and
facilities necessary to perform its function as arbitrator. The Arbitrator's
determination with respect to any Dispute shall be final and binding upon the
parties hereto. The non-prevailing party as determined by the Arbitrator
shall pay all of the fees and expenses of the Arbitrator for such services.
15 Preparation of Closing Balance Sheet.
( ) For purposes of preparing the Closing Balance Sheet, the
inventory acquired by Buyer pursuant to this Agreement (the "Inventory")
shall be valued in accordance with the following procedures:
( ) Physical Count. Not more than seven (7) days after the
Closing Date, a physical count of the Inventory shall be conducted
by Sellers and Buyer and a schedule thereof (an "Inventory
Schedule") prepared by Sellers and verified by representatives of
Buyer.
(i) Valuation. Each item of the Inventory, other than
Excluded Inventory Items (hereinafter defined), shall be priced in
accordance with Section 3.16 of this Agreement. Such price shall be
multiplied by the physical count for each item and the total sum
thus determined for all items of the entire Inventory, after being
reduced by (A) the total amount of payments received and accounts
receivable recorded by Sellers in respect of sales of Inventory
listed on the Inventory Schedule(s), and (B) any Reserves determined
in accordance with U.S. GAAP consistently applied, shall constitute
the "Inventory Value" of the Inventory for purposes of this
Agreement.
(ii) Excluded Inventory Items. In making such physical count
and determining the Inventory Value, the following items of the
Inventory shall be excluded or adequately reserved for (the
"Excluded Inventory Items"):
( ) All items which are damaged or otherwise defective;
(A) All items which are discontinued or obsolete or which
are no longer listed in Sellers' catalogues or are otherwise
not currently being manufactured;
(B) Any items listed on Schedule 1.1(c)(ii)
(collectively, the "Retained Inventory");
(C) All items which are not owned by Sellers but instead,
are held on consignment from third parties; and
(D) All items in which any third party has any security
or other interest that is not released at or prior to the
Closing.
(a) For purposes of preparing the Closing Balance Sheet, the
accounts receivable acquired by Buyer pursuant to this Agreement (the
"Receivables") shall be valued in accordance with the following
procedures:
( ) Preparation of Receivables Schedules. Each Seller shall
deliver to Buyer together with the Latest Balance Sheet, a schedule
of its Receivables, each of which shall be separately identified and
properly accrued on its books as of the close of business on the
date of the Latest Balance Sheet. Such schedules are referred to
herein as the "Receivables Schedules". The Receivables Schedules
shall be certified as complete and correct by the principal
executive and financial officers of each Seller. Each Receivables
Schedule shall set forth the respective dates as of which each of
the Receivables identified therein was accrued on the books of the
Seller, the total amount and number of each of the invoices to which
such Receivable relates, the total amount paid through the date of
the Receivables Schedule with respect to each of such invoices, the
total amounts remaining to be paid under each of such invoices, the
total amount of customer credits and uncollected service charges
existing with respect to the customer owing such Receivable, and the
total amount of any reserve or allowance accrued on the Seller's
books with respect to such Receivable. On or before the delivery to
Buyer of its Receivables Schedule, each Seller shall have invoiced
each of the customers owing a Receivable for the respective amounts
owing by such customers as of the date of the Receivables Schedule.
(i) Valuation. The Receivables shall be priced based on the
total value of the Receivables as shown on the Receivables
Schedules, and such value shall constitute the "Receivables Value"
of the Receivables for purposes of this Agreement, subject to
adjustment as provided in the next two sentences. The Receivables
Value shall be reduced by the amount of (i) all payments of
Receivables made by customers prior to the Closing, and (ii) all
valuation and other reserves and allowances required by U.S. GAAP
consistently applied with the Annual Financial Statements. The
Receivables Value shall be increased by the value of all Receivables
arising between the date of the Receivable Schedules and the
Closing, as reflected on supplemental Receivables Schedules prepared
in accordance with this Section 6.16 and delivered at the Closing or
within seven (7) days thereafter.
16 Access to Records After Closing.
( ) For a period of five (5) years from and after the Closing Date,
Sellers and their representatives shall have reasonable access to inspect
and copy all books and records relating to the Assets, the Liabilities or
the Business transferred to Buyer hereunder to the extent that such
access may reasonably be required by Sellers in connection with matters
relating to or affected by the operation of the Assets or the Business
prior to the Closing Date. Such access shall be afforded by Buyer upon
receipt of reasonable advance notice and during normal business hours.
If Buyer shall desire to dispose of any of such books and records prior
to the expiration of such five (5) year period, Buyer shall, prior to
such disposition, give Sellers a reasonable opportunity, at Sellers'
expense, to segregate and remove such books and records as Sellers may
select. Sellers shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 6.17.
(a) For a period of five (5) years from and after the Closing Date,
Buyer and its representatives shall have reasonable access to inspect and
copy all books and records relating to the Assets, the Liabilities or the
Business that Sellers or any of their affiliates may retain after the
Closing Date. Such access shall be afforded by Sellers and their
affiliates upon receipt of reasonable advance notice and during normal
business hours. If Sellers or any of their affiliates shall desire to
dispose of any of such books and records prior to the expiration of such
five (5) year period, Sellers shall, prior to such disposition, give
Buyer a reasonable opportunity, at Buyer's expense, to segregate and
remove such books and records as Buyer may select. Buyer shall be solely
responsible for any costs and expenses incurred by it pursuant to this
Section 6.17.
17 Taxes; Other Charges. All sales, use and gross receipts Taxes
resulting from the consummation of the transactions contemplated hereby shall
be borne by Sellers and the parties shall cooperate in obtaining all
exemptions from such Taxes. All other excise, registration, transfer,
recording, and deed and stamp Taxes and fees incurred in connection with the
consummation of the transactions contemplated hereby shall be borne by
Sellers. Sellers shall file all necessary documentation with respect to, and
make all payments of, such Taxes and fees on a timely basis. All ad valorem
or similar Taxes attributable to the Assets for the 1997 calendar year shall
be pro-rated between Buyer and Sellers on a daily basis, and the Purchase
Price shall be adjusted to reflect such proration.
18 Escrow; Liquidated Damages. Triangle has deposited $500,000 with an
escrow agent mutually agreeable to Triangle and Sellers. Such amount
(together with any earnings thereon) will be credited to the Estimated Cash
Payment and paid to Sellers at the Closing. If Triangle properly terminates
this Agreement pursuant to the terms hereof due to the breach or default by
Sellers, then such $500,000 (together with any earnings thereon) shall be
promptly released to Triangle; otherwise, such $500,000 (together with any
earnings thereon) shall be released to Sellers as liquidated damages.
VI.
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligations of Sellers to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment or waiver by Sellers on or
prior to the Closing Date of each of the following conditions:
0 Representations and Warranties True. All the representations and
warranties of Triangle and Buyer contained in this Agreement, and in any
agreement, instrument, or document delivered pursuant hereto or in connection
herewith on or prior to the Closing Date, shall be true and correct as of the
date made and (having been deemed to have been made again on and as of the
Closing Date in the same language) shall be true and correct on and as of the
Closing Date.
1 Covenants and Agreements Performed. Triangle and Buyer shall have
performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
2 Certificate. Sellers shall have received a certificate executed on
behalf of each of Triangle and Buyer by the chief executive and chief
financial officers of each of Triangle and Buyer, dated the Closing Date,
representing and certifying, in such detail as Sellers may reasonably request,
that the conditions set forth in Sections 7.1 and 7.2 have been fulfilled.
3 Opinion of Counsel to Buyer. Sellers shall have received an opinion
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., legal counsel to Triangle and Buyer, dated the
Closing Date, in the form of Exhibit 7.4.
4 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit, or obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
5 Approval of Counsel to Seller. All legal matters in connection with
the consummation of the transactions contemplated hereby and all agreements,
instruments, and documents delivered in connection therewith shall be
reasonably satisfactory in form and substance to ▇▇▇▇▇▇▇, Head & ▇▇▇▇▇▇▇,
legal counsel to Sellers.
VII.
CONDITIONS TO OBLIGATIONS OF TRIANGLE AND BUYER
The obligations of Triangle and Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver
by Triangle and Buyer on or prior to the Closing Date of each of the following
conditions:
0 Representations and Warranties True. All the representations and
warranties of Sellers contained in this Agreement, and in any agreement,
instrument, or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct as of the date made
and (having been deemed to have been made again on and as of the Closing Date
in the same language) shall be true and correct on and as of the Closing Date.
1 Covenants and Agreements Performed. Sellers shall have performed
and complied with all covenants and agreements required by this Agreement to
be performed or complied with by them on or prior to the Closing Date.
2 Certificate. Buyer shall have received certificates executed on
behalf of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ by the chief executive officer of each company
and by ▇▇. ▇▇▇▇▇▇ as Seller Representative, each dated the Closing Date,
representing and certifying, in such detail as Buyer may reasonably request,
that the conditions set forth in Sections 8.1 and 8.2 have been fulfilled.
3 Preliminary Closing Statements. Buyer shall have received the
Preliminary Closing Statements required by Section 1.3, prepared and delivered
in accordance with the requirements thereof.
4 Payoff Letters. Buyer shall have received from each creditor to
whom any Payoff Indebtedness is owing a writing setting forth the exact
amount, including principal, interest and any other amount, of all Payoff
Indebtedness owed by Sellers to such creditor as of the Closing Date.
5 Opinion of Counsel to Seller. Triangle and Buyer shall have
received an opinion of ▇▇▇▇▇▇▇, Head & ▇▇▇▇▇▇▇, legal counsel to Sellers,
dated the Closing Date, in the form of Exhibit 8.6.
6 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit, or obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
7 No Material Adverse Change. Since November 1, 1996 there shall not
have been any material adverse change in the business, assets, results of
operations, condition (financial or otherwise), or prospects of the Business
or the ownership or operation of the Assets or any material portion thereof.
8 Noncompetition Agreements. Sellers, their affiliates (including
without limitation ▇▇▇▇▇▇▇ International, Inc.), and all holders of voting
stock of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ (other than any shareholder who is neither an
active employee of or who owns less than three percent (3%) of the outstanding
equity of either company) shall have each entered into a Noncompetition
Agreement with Triangle and Buyer in the form of Exhibit 8.9.
9 Data Processing Agreement. Buyer and Sellers shall have entered
into a Data Processing Agreement in the form of Exhibit 8.10.
10 International Distribution Agreement. Buyer shall have entered into
a satisfactory agreement with ▇▇▇▇▇▇▇ International, Inc. or ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ to continue international sales and marketing efforts on behalf of the
Business.
11 Unacceptable Encumbrances; Title Insurance.
( ) Buyer shall not have delivered to Sellers within the time
period specified in Section 6.6 an Objection Notice describing an
Unacceptable Encumbrance, or if it has so delivered an Objection Notice
describing an Unacceptable Encumbrance, such Unacceptable Encumbrance
shall have been eliminated or modified to the reasonable satisfaction of
Buyer or waived by Buyer.
(a) Buyer shall have received the Title Insurance described in
Section 6.6.
12 Due Diligence. The due diligence conducted by Triangle, Buyer and
their representatives in connection with the proposed transactions
contemplated hereby shall not have caused Triangle, Buyer or their
representatives to become aware that any representation or warranty of Sellers
of this Agreement is not true and correct.
13 Environmental Matters. Buyer shall have received from an
independent firm selected by it a report confirming that all environmental
assessments and testing requested by Buyer, which shall be paid for by Buyer,
have been completed, and the results thereof shall be satisfactory to Buyer.
14 Other Documents. Buyer shall have received the certificates,
instruments, and documents listed below, all of which shall be in form and
substance reasonably satisfactory to Buyer:
( ) Special warranty deeds in recordable and locally customary form
describing the Real Property and all appurtenances, easements, rights of
way and uses that benefit the Real Property and sufficient to transfer to
Buyer good and marketable title to the Real Property, subject only to the
Permitted Encumbrances.
(a) Bills of sale, certificates of title and other instruments of
assignment, transfer, and conveyance sufficient to transfer to Buyer and
effectively vest in Buyer all right, title, and interest of Seller in and
to the Business and good and marketable title to the Assets, subject only
to the Permitted Encumbrances.
(b) Executed copies of all consents and approvals of third parties
required to be obtained by or on the part of Sellers for the consummation
of the transactions contemplated hereby.
(c) A tax clearance letter, certificate or receipt from the State
of Arkansas, dated not more than ten (10) days prior to the Closing Date,
stating that no amount of Tax, penalty or interest is due by Sellers
under the Arkansas Tax laws or showing that all such amounts have been
paid.
(d) Lien search reports showing that, except those relating to
Payoff Indebtedness and Permitted Encumbrances, no financing statements
or other liens (or notices with respect to liens) affecting any of the
Assets naming Sellers (by corporate or fictitious name or otherwise), any
of their subsidiaries, affiliates, or predecessors, or the Business as
debtor are on file in the Uniform Commercial Code or other relevant
records of the office of the Secretary of State of Arkansas or the county
clerk's office of any county in which any of the Real Property is
located.
(e) Releases of all liens, except those relating to Permitted
Encumbrances, affecting any of the Assets.
(f) All certificates of occupancy, if any, relating to the use or
operation of the Real Property.
(g) Sellers shall deliver to Buyer a non-foreign certificate
required by Section 1445 of the Code and applicable regulations.
(h) Such other certificates, instruments, and documents as may be
reasonably requested by Buyer to carry out the intent and purposes of
this Agreement.
15 Approval of Counsel to Triangle and Buyer. All legal matters in
connection with the consummation of the transactions contemplated hereby and
all agreements, instruments, and documents delivered in connection therewith
shall be reasonably satisfactory in form and substance to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, a
Professional Corporation, legal counsel to Triangle and Buyer.
VIII.
CONDITIONS TO OBLIGATIONS OF ALL PARTIES
The obligations of all parties to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver
by all parties on or prior to the Closing Date of each of the following
conditions:
0 Governmental and Third Party Consents and Approvals. Favorable
orders, consents, and approvals in the form required to consummate this
Agreement, the Ancillary Documents, and all transactions contemplated thereby,
including but not limited to such required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), shall have been received (if
required) from necessary governmental agencies and third parties, or, in the
case of the HSR Act, the waiting period under such act shall have expired.
1 Trademark Agreement. Buyer and ▇▇▇▇▇▇▇ shall have entered into an
agreement in the form of Exhibit 9.2, pursuant to which Buyer shall have the
exclusive right to use the names, trademarks, service marks and brand names
consisting in whole or in part of "▇▇▇▇▇▇▇" in connection with residential
flooring, and ▇▇▇▇▇▇▇ shall retain the exclusive right to use all names,
trademarks, service marks and brand names consisting in whole or in part of
"▇▇▇▇▇▇▇" for all other purposes.
2 Equipment ▇▇▇▇ of Sale. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall have
entered into an Equipment ▇▇▇▇ of Sale in the form of Exhibit 9.4, for the
sale to ▇▇▇▇▇▇▇ of certain machinery and equipment located on the Real
Property and owned by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and the transactions contemplated
thereby shall have been consummated.
3 Real Estate and Equipment Agreement. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III shall have
entered into an Agreement in the form of Exhibit 9.5, for the sale to ▇▇▇▇▇▇
of certain land, buildings and equipment leased to and used by ▇▇▇▇▇▇
Flooring, Inc., and the transactions contemplated thereby shall have been
consummated.
4 Supply Agreement. Buyer and Sellers shall have entered into a
supply agreement in the form of Exhibit 9.5.
IX.
TERMINATION, AMENDMENT, AND REMEDIES
0 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the
following manner:
( ) by mutual written consent of Sellers, Triangle and Buyer; or
(a) by either Sellers or Buyer, if:
( ) the Closing shall not have occurred on or before April 5,
1997 (unless the delay in completing the Closing is solely the
result of compliance with the HSR Act, in which case the applicable
date shall be April 30, 1997), unless such failure to close shall be
due to a breach of this Agreement by the party seeking to terminate
this Agreement pursuant to this clause (i); or
(i) there shall be any statute, rule, or regulation that makes
consummation of the transactions contemplated hereby illegal or
otherwise prohibited or a Governmental Entity shall have issued an
order, decree, or ruling or taken any other action permanently
restraining, enjoining, or otherwise prohibiting the consummation of
the transactions contemplated hereby, and such order, decree,
ruling, or other action shall have become final and nonappealable;
or
(b) by Sellers, if (i) any of the representations and warranties of
Buyer contained in this Agreement shall not be true and correct when made
or at any time prior to the Closing as if made at and as of such time, or
(ii) Buyer or Triangle shall have failed to fulfill any of its
obligations under this Agreement, and, in the case of each of clauses (i)
and (ii), such misrepresentation, breach of warranty, or failure
(provided it can be cured) has not been cured within thirty (30) days of
actual knowledge thereof by Buyer or Triangle; or
(c) by Buyer, if (i) any of the representations and warranties of a
Seller contained in this Agreement shall not be true and correct when
made or at any time prior to the Closing as if made at and as of such
time, or (ii) Sellers shall have failed to fulfill any of their
obligations under this Agreement, and, in the case of each of clauses (i)
and (ii), such misrepresentation, breach of warranty, or failure
(provided it can be cured) has not been cured within thirty (30) days of
actual knowledge thereof by Sellers.
1 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 10.1 by Sellers or Buyer, written notice thereof
shall forthwith be given by specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, except that the agreements contained in this Section 10.2, in Sections
6.8, 6.13 and 6.19, and in Articles XII and XIII shall survive the termination
hereof. Nothing contained in this Section 10.2 shall relieve any party from
liability for any breach of this Agreement. No termination of this Agreement
shall affect the obligations of the parties pursuant to the confidentiality
agreement referred to in Section 6.1, except to the extent specified in such
confidentiality agreement.
2 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
3 Waiver. Sellers, on the one hand, or Triangle and Buyer, on the
other, may (i) waive any inaccuracies in the representations and warranties of
the other contained herein or in any document, certificate, or writing
delivered pursuant hereto or (ii) waive compliance by the other with any of
the other's agreements or fulfillment of any conditions to obligations
contained herein. Any agreement on the part of a party hereto to any such
waiver shall be valid only if set forth in an instrument in writing signed by
or on behalf of such party or parties. No failure or delay by a party hereto
in exercising any right, power, or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power,
or privilege.
4 Remedies Not Exclusive. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law. The rights and remedies of any party based upon, arising out of, or
otherwise in respect of any inaccuracy in or breach of any representation,
warranty, covenant, or agreement contained in this Agreement 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 contained in this Agreement (or in any other agreement between the
parties) as to which there is no inaccuracy or breach.
X.
SURVIVAL OF REPRESENTATIONS
0 Survival. The representations and warranties of the parties
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto shall expire at the Closing.
XI.
MISCELLANEOUS
0 Notices. All notices, requests, demands, and other communications
required or permitted to be given or made hereunder by any party hereto shall
be in writing and shall be deemed to have been duly given or made if delivered
personally, or transmitted by first class registered or certified mail,
postage prepaid, return receipt requested, or sent by prepaid overnight
delivery service, or sent by cable, telegram, telefax, or telex, to the
parties at the following addresses (or at such other addresses as shall be
specified by the parties by like notice):
If to Triangle or Buyer:
Triangle Pacific Corp.
▇▇▇▇▇▇▇ Hardwood Flooring, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and
General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
copy to:
▇▇▇▇▇▇▇▇ & Knight, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sellers:
▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇▇ Flooring, Inc.
c/o ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
copy to:
▇▇▇▇▇▇▇, Head & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Such notices, requests, demands, and other communications shall be effective
(i) if delivered personally or sent by courier service, upon actual receipt by
the intended recipient, (ii) if mailed, upon the earlier of five days after
deposit in the mail or the date of delivery as shown by the return receipt
therefor, or (iii) if sent by telecopy or facsimile transmission, when the
answer back is received.
1 Entire Agreement. This Agreement, together with the Schedules,
Exhibits, Annexes, and other writings referred to herein or delivered pursuant
hereto, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
2 Binding Effect; Assignment; No Third Party Benefit. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Except as otherwise expressly
provided in this Agreement, neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties, except that
either Triangle or Buyer may assign to Triangle or any affiliate of Triangle
any of Triangle's or Buyer's rights, interests, or obligations hereunder, upon
notice to Sellers, provided that no such assignment shall relieve either
Triangle or Buyer of its obligations hereunder. Except as specifically
provided in Section 6.5, nothing in this Agreement, express or implied, is
intended to or shall confer upon any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, benefits, or
remedies of any nature whatsoever under or by reason of this Agreement.
3 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by Applicable Law.
4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARKANSAS, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
5 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only, do not constitute a part of this Agreement,
and shall not affect in any manner the meaning or interpretation of this
Agreement.
6 Gender. Pronouns in masculine, feminine, and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context
otherwise requires.
7 References. All references in this Agreement to Articles, Sections,
and other subdivisions refer to the Articles, Sections, and other subdivisions
of this Agreement unless expressly provided otherwise. The words "this
Agreement", "herein", "hereof", "hereby", "hereunder", and words of similar
import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes", and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Each reference
herein to a Schedule, Exhibit, or Annex refers to the item identified
separately in writing by the parties hereto as the described Schedule,
Exhibit, or Annex to this Agreement. All Schedules, Exhibits, and Annexes are
hereby incorporated in and made a part of this Agreement as if set forth in
full herein.
8 Further Assurances. From time to time, at the request of either
party hereto and without further consideration, the parties hereto agree that
each will execute and deliver to the other any and all documents in addition
to those expressly provided for in this Agreement that may be reasonably
necessary or appropriate to carry out the purposes of this Agreement and the
transactions contemplated hereby, whether at or after the Closing. Sellers
further agree that from time to time after the Closing they will execute and
deliver to Buyer or its designee such further conveyances, assignments, or
other written assurance, and take such further necessary actions, as Buyer may
reasonably request in writing to perfect and protect Buyer's title to the
Assets, and to secure to Buyer the benefit of the Business.
9 Counterparts. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. Each counterpart
may consist of a number of copies hereof each signed by less than all, but
together signed by all, the parties hereto.
10 Injunctive Relief. The parties hereto acknowledge and agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement, and shall be entitled to enforce specifically the
provisions of this Agreement, in any court of the United States or any state
thereof having jurisdiction, in addition to any other remedy to which the
parties may be entitled under this Agreement or at law or in equity.
XII.
DEFINITIONS
0 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"affiliate" means, with respect to any person, any other person
that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such person.
For the purposes of this definition, "control", when used with respect to
any person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities, by contract,
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Ancillary Documents" means each agreement, instrument, and document
(other than this Agreement) executed or to be executed by Sellers or
Buyer in connection with the transactions contemplated by this Agreement.
"Applicable Laws" means any statute, law, rule, or regulation or any
judgment, order, writ, injunction, or decree of any Governmental Entity
to which a specified person or property is subject.
"Code" means the Internal Revenue Code of 1986, as amended.
"Encumbrances" means liens, charges, pledges, options, mortgages,
deeds of trust, security interests, claims, restrictions, easements, and
other encumbrances of every type and description, whether imposed by law,
agreement, understanding, or otherwise.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any court or tribunal in any
jurisdiction or any federal, state, municipal, or other governmental
body, agency, authority, department, commission, board, bureau, or
instrumentality.
"IRS" means the Internal Revenue Service.
"Knowledge" means actual knowledge of any officer or plant manager
of any Seller.
"Material Adverse Effect" means any change, development, or effect
(individually or in the aggregate) that is, or is reasonably likely to
be, materially adverse (i) to the business, assets, results of
operations, condition (financial or otherwise), or prospects of the
Business or to the ownership or operation of the Assets or any material
portion thereof or (ii) to the ability of Sellers to perform on a timely
basis any material obligation of Sellers under this Agreement or any
agreement, instrument, or document entered into or delivered in
connection herewith.
"Permits" means material licenses, permits, franchises, consents,
approvals, variances, exemptions, and other authorizations of or from
Governmental Entities.
"Permitted Encumbrances" means (i) Encumbrances created by Buyer,
(ii) liens for Taxes not yet due and payable, (iii) statutory liens
(including materialmen's, mechanic's, repairmen's, landlord's, purchase
money security interests and other similar liens) arising in connection
with the ordinary course of the Business securing Liabilities being
assumed and payments for which are not yet due and payable, (iv) the
Encumbrances designated as "Permitted Encumbrances" on Schedule 3.6, and
(v) such imperfections or irregularities of title, if any, as (A) are not
substantial in character, amount, or extent and do not materially detract
from the value of the property subject thereto, (B) do not materially
interfere with either the present or intended use of such property, and
(C) do not, individually or in the aggregate, materially interfere with
the conduct of the normal operations of the Business; provided, however,
that at the Closing "Permitted Encumbrances" shall not include any liens
for Taxes or statutory liens filed of record against the Assets.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization, or Governmental Entity.
"Proceedings" means all proceedings, actions, claims, suits,
investigations, and inquiries by or before any arbitrator or Governmental
Entity.
"reasonable efforts" means a party's reasonable efforts in good
faith in accordance with reasonable commercial practice and without the
incurrence of unreasonable expense.
"Securities Act" means the Securities Act of 1933, as amended.
"Taxes" means any income taxes or similar assessments or any sales,
gross receipts, excise, occupation, use, ad valorem, property,
production, severance, transportation, employment, payroll, franchise, or
other tax imposed by any United States federal, state, or local (or any
foreign or provincial) taxing authority, including any interest,
penalties, or additions attributable thereto.
"Tax Return" means any return or report, including any related or
supporting information, with respect to Taxes.
"U.S. GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time applied on a
basis - as to the substance of the principles applied (including
application of the last-in, first-out method of inventory valuation), the
manner of application and the estimation techniques used - with the
Annual Financial Statements.
1 Certain Additional Defined Terms. In addition to such terms as are
defined in the opening paragraph of and the recitals to this Agreement and in
Section 13.1, the following terms are used in this Agreement as defined in the
Sections set forth opposite such terms:
Defined Term Section Reference
------------ -----------------
Acquisition Proposal .................................. Section 6.2
Agreement ............................................. Preamble
Annual Financial Statements ........................... Section 3.7
Applicable Environmental Laws ......................... Section 3.22(b)(i)
Arbitrator ............................................ Section 6.15
Assets ................................................ Section 1.1
Business .............................................. Preamble
Buyer ................................................. Preamble
Buyer Group ........................................... Section 6.5(i)
Cash Payment .......................................... Section 1.2
Closing ............................................... Section 2.1
Closing Balance Sheet ................................. Section 1.7(a)
Closing Date .......................................... Section 2.1
Compensation .......................................... Section 6.5(a)
Dispute ............................................... Section 6.15
earned ................................................ Section 6.5(a)
Employees ............................................. Section 6.5(a)
Employment Arrangements ............................... Section 6.5(b)
Environmental Liabilities ............................. Section 3.22(b)(iii)
Estimated Cash Payment ................................ Section 1.5
Excluded Inventory Items .............................. Section 6.16(a)(iii)
Final Closing Settlement Statement .................... Section 1.7(a)
Final Closing Statements .............................. Section 1.7(a)
Final Price Adjustment ................................ Section 1.7
Financial Statements .................................. Section 3.7
hazardous material .................................... Section 3.22(b)(ii)
HSR Act ............................................... Section 9.1
Insider ............................................... Section 3.28
Intellectual Property ................................. Section 1.1(e)
Interim Financial Statements .......................... Section 3.7
Inventory ............................................. Section 6.16(a)
Inventory Schedule .................................... Section 6.16(a)(i)
Inventory Value ....................................... Section 6.16(a)(ii)
Latest Balance Sheet .................................. Section 1.5(a)
Liabilities ........................................... Section 1.5(c)(i)
Net Book Value ........................................ Section 1.5(c)(ii)
Objection Notice ...................................... Section 6.6(d)
Payoff Indebtedness ................................... Section 1.5(c)(iii)
Preliminary Closing Settlement Statement .............. Section 1.5(a)
Preliminary Closing Statements ........................ Section 1.5(a)
Profit Sharing Plan ................................... Section 6.5(c)
Purchase Price ........................................ Section 1.2
Real Property ......................................... Section 1.1(a)
Receivables ........................................... Section 6.16(b)
Receivables Schedules ................................. Section 6.16(b)(i)
Receivables Value ..................................... Section 6.16(b)(ii)
Reserves .............................................. Section 3.7
Retained Inventory .................................... Section 6.16(a)(iii)
▇▇▇▇▇▇▇ ............................................... Preamble
▇▇▇▇▇▇ ................................................ Preamble
Sellers ............................................... Preamble
Seller Representative ................................. Section 1.8(b)
Surveys ............................................... Section 6.6(c)
Title Binders ......................................... Section 6.6(b)
Title Company ......................................... Section 6.6(a)
Title Insurance ....................................... Section 6.6(a)
transfer .............................................. Section 1.1
Triangle .............................................. Preamble
Unacceptable Encumbrances ............................. Section 6.6(d)
U.S. GAAP ............................................. Section 1.5(a)
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives, all as of the day and year first
above written.
TRIANGLE PACIFIC CORP. ▇▇▇▇▇▇▇, INC.
By: ------------------------------ By: ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
Chairman of the Board and President
Chief Executive Officer
▇▇▇▇▇▇▇ HARDWOOD FLOORING, INC. ▇▇▇▇▇▇ FLOORING, INC.
By: ------------------------------ By: ---------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Vice President and Treasurer Chairman of the Board
The undersigned, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., hereby accepts appointment as the
Seller Representative to act in accordance with the provisions of Section 1.8
of the foregoing Agreement.
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
LIST OF EXHIBITS AND SCHEDULES
Exhibit 7.4 - Opinion of Counsel to Buyer .......................... E-
Exhibit 8.6 - Opinion of Counsel to Seller ......................... E-
Exhibit 8.9 - Noncompetition Agreement ............................. E-
Exhibit 8.10 - Data Processing Agreement ........................... E-
Exhibit 9.2 - Trademark Agreement .................................. E-
Exhibit 9.3 - Individual Assignment to ▇▇▇▇▇▇▇ ..................... E-
Exhibit 9.4 - Individual Assignment to ▇▇▇▇▇▇ ...................... E-
Exhibit 9.5 - Supply Agreement ..................................... E-
Schedule 1.1(a) - Real Property .................................... S-
Schedule 1.1(b)(i) - Equipment and Machinery ....................... S-
Schedule 1.1(b)(ii) - Excluded Equipment and Machinery ............. S-
Schedule 1.1(c)(i) - Purchased Inventory ........................... S-
Schedule 1.1(c)(ii) - Retained Inventory ........................... S-
Schedule 1.1(e)(i) - Purchased Software ............................ S-
Schedule 1.1(g) - Contracts and Agreements ......................... S-
Schedule 1.1(h)(i) - Prepaid Expenses .............................. S-
Schedule 1.1(h)(ii) - Excluded Prepaid Expenses .................... S-
Schedule 1.1(j) - Other Assets ..................................... S-
Schedule 1.5(a) - Preliminary Closing Settlement Statement ......... S-
Schedule 1.5(c) - Liabilities Assumed .............................. S-
Schedule 1.7(a) - Final Closing Settlement Statement ............... S-
Schedule 3.1 - Jurisdictions ....................................... S-
Schedule 3.3 - Noncontravention .................................... S-
Schedule 3.4 - Governmental Approvals .............................. S-
Schedule 3.5 - Ownership of Business ............................... S-
Schedule 3.6 - Title to Assets ..................................... S-
Schedule 3.8 - Seller Liabilities .................................. S-
Schedule 3.9 - Absence of Certain Changes .......................... S-
Schedule 3.10 - Tax Matters ........................................ S-
Schedule 3.12 - Legal Proceedings .................................. S-
Schedule 3.13 - Real Property ...................................... S-
Schedule 3.14 - Tangible Personal Property ......................... S-
Schedule 3.15 - Leased Property .................................... S-
Schedule 3.16 - Inventory Exceptions ............................... S-
Schedule 3.17 - Receivables Exceptions ............................. S-
Schedule 3.18 - Intellectual Property .............................. S-
Schedule 3.19 - Permits ............................................ S-
Schedule 3.20 - Contracts and Agreements ........................... S-
Schedule 3.21 - ERISA .............................................. S-
Schedule 3.22 - Environmental Matters .............................. S-
Schedule 3.23 - Labor Relations .................................... S-
Schedule 3.24 - Customers and Suppliers ............................ S-
Schedule 3.28 - Insider Interests .................................. S-
Schedule 6.16(a) - Inventory Schedule .............................. S-
Schedule 6.16(b) - Receivables Schedule ............................ S-