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EXHIBIT 2(a)
EXECUTED COPY
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STOCK PURCHASE AGREEMENT
BETWEEN
EAGLE INDUSTRIAL PRODUCTS CORPORATION
AND
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
DATED NOVEMBER 1, 1995
RE: PURCHASE AND SALE OF STOCK OF
AMERACE CORPORATION
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TABLE OF CONTENTS
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ARTICLE I - PURCHASE AND SALE OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purchase and Sale of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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ARTICLE II - PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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2.2 Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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2.3 Calculation and Payment of Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . 1
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ARTICLE III - SELLER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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3.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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3.3 Transaction not a Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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3.4 Ownership of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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3.5 Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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3.6 Certain Contractual Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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3.7 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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3.8 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.9 Change in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.10 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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3.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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3.12 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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3.13 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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3.14 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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3.15 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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3.16 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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3.17 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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3.18 Bank Accounts and Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.19 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.20 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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3.21 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.22 Suppliers and Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.23 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.24 Brokers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.25 Product Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.26 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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ARTICLE IV - BUYER'S REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.2 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.3 Transaction not a Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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4.4 Financial Ability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.5 No Implied Representations or Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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ARTICLE V - OTHER AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.1 Continuing Operation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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5.2 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.3 Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.4 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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5.5 Filing Under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 . . . . . . . . . . . . . . . . . 26
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5.6 Chemical Bank Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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5.7 Outstanding Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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5.8 Repayment of Intercompany Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5.9 Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5.10 Pension and Savings Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5.11 Consents, Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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5.12 Responsibility for Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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5.13 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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5.14 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.15 Notices of Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.16 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.17 Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.18 Litigation Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.19 Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.20 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.21 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.22 Environmental Assessment Protocol; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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5.23 Medical Benefits; Retiree Welfare Benefit Coverage . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.24 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE VI - CONDITIONS TO OBLIGATIONS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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6.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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6.3 Non-Fulfillment of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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ARTICLE VII - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1 Time, Date and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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7.2 Deliveries by Seller at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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7.3 Deliveries by Buyer at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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7.4 Additional Action to be Taken at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE VIII - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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8.2 Indemnification of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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8.3 Indemnification of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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8.4 Terms of Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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8.5 Limitation of Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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8.6 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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8.7 Security for Seller's Indemnification Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 43
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ARTICLE IX - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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9.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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9.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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9.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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9.5 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.6 Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.9 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.10 Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.11 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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9.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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ARTICLE X - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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10.2 Certain Terms Defined in Text . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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EXHIBIT (2)(a)
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of the 1st day of
November, 1995 by and between Eagle Industrial Products Corporation, a Delaware
corporation ("Seller"), and ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, a New Jersey
corporation ("Buyer").
WHEREAS, Seller is the owner of all of the issued and outstanding
shares of capital stock (the "Stock") of Amerace Corporation, a Delaware
corporation ("Amerace").
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Stock, upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of the parties as hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as set forth below. Certain terms are defined in
Article X hereof.
ARTICLE I - PURCHASE AND SALE OF STOCK
1.1 PURCHASE AND SALE OF STOCK. Subject to the terms and
conditions set forth in this Agreement, Seller shall sell, assign, transfer and
deliver the Stock to Buyer at the Closing, and Buyer shall purchase the Stock
from Seller at the Closing, for the Purchase Price.
ARTICLE II - PURCHASE PRICE
2.1 PURCHASE PRICE. The purchase price for the Stock shall be Two
Hundred and Twenty Million Dollars ($220,000,000), less the Receivables
Purchase Price (the "Purchase Price"), subject to adjustment as provided in
Section 2.2 hereof. At the Closing, Buyer shall pay the Purchase Price to
Seller, by wire transfer of immediately available federal funds, to an account
designated by Seller in writing at least one business day prior to the Closing
Date, against delivery of certificates representing the Stock, duly endorsed
for transfer or accompanied by an appropriately executed assignment separate
from certificate.
2.2 PURCHASE PRICE ADJUSTMENT. The Purchase Price shall be
increased or decreased by the amount that the Net Worth as set forth on the
Closing Balance Sheet is greater than or less than $226,690,000. The "Closing
Balance Sheet" is identified in Section 2.3(a).
2.3 CALCULATION AND PAYMENT OF PURCHASE PRICE ADJUSTMENT. Since
the financial data required to determine the Closing Balance Sheet will not be
available at the Closing, any adjustment to the Purchase Price will be
calculated and paid in accordance with the following provisions:
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(a) Within forty-five (45) days following the Closing,
Seller shall prepare and deliver to Buyer an unaudited Combining Balance Sheet
of Amerace and its Subsidiaries as of the Closing Date, which balance sheet
(the "Closing Balance Sheet") shall be prepared consistently with the
principles applied in the preparation of the unaudited Pro Forma Combining
Balance Sheet of Amerace and its Subsidiaries as of June 30, 1995 attached
hereto as Exhibit A (the "Reference Balance Sheet") (including the same
actuarial assumptions utilized to calculate retiree medical and pension plan
liabilities), except notwithstanding the foregoing, (i) the reserves for
Environmental Liabilities on the Closing Balance Sheet will be $16.3 million
(less any amounts actually paid by the Companies in connection with reserved
Environmental Liabilities from June 30, 1995 to the Closing Date), (ii) the
Closing Balance Sheet shall reflect an accrued expense equal to the amount to
be transferred by the Companies to Seller after the Closing Date pursuant to
the provisions of Section 5.10 (d), (iii) as provided in Section 5.9, and (iv)
the Closing Balance Sheet shall reflect a product warranty reserve to the
extent required by GAAP.
(b) If Buyer agrees with the proposed Closing Balance
Sheet prepared by Seller, then the parties shall execute the Closing Balance
Sheet and proceed to make any payment required pursuant to Section 2.3(c)
below, if applicable. If Buyer disagrees with the proposed Closing Balance
Sheet prepared by Seller, then Buyer may deliver written notice ("Objection
Notice") to Seller objecting to the proposed Closing Balance Sheet. Such
Objection Notice shall (i) be delivered within forty-five (45) days after Buyer
receives the proposed Closing Balance Sheet, (ii) identify those items on the
proposed Closing Balance Sheet to which Buyer objects, and (iii) state in
reasonable detail the reasons for such objection. Any items contained in the
proposed Closing Balance Sheet to which Buyer does not set forth an objection
in such Objection Notice shall be deemed accepted by Buyer. During the 45-day
period following delivery of the Objection Notice, each party will deliver to
the other party any supporting documentation reasonably requested and necessary
to verify disputed items set forth on the proposed Closing Balance Sheet,
calculate the Net Worth, and cooperate fully and in good faith to resolve any
disputes they may have with respect to the proposed Closing Balance Sheet. If
the parties cannot agree on the proposed Closing Balance Sheet within such
45-day period, any such dispute will be resolved within sixty (60) days of
submission by either party of a request for binding arbitration by a Big Six
accounting firm designated jointly by the accounting firms of Seller and Buyer
(which accounting firm shall not have maintained, within the preceding 12-month
period, a material professional relationship with either Buyer or Seller) (the
"Accounting Firm"). The Accounting Firm will calculate only those portions of
the proposed Closing Balance Sheet that have not been agreed upon by the
parties and its calculation will be based solely on the books, records and
other information relevant to the resolution of such disputes and available as
of the Closing Date, which information shall be submitted or made available to
the Accounting Firm by Seller or Buyer. Any fees or expenses payable to the
Accounting Firm will be shared by Seller and Buyer as shall be determined by
such Accounting Firm, taking into account the relative merits of the parties'
respective adjustment proposals.
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(c) Upon the final determination of the Closing Balance
Sheet, whether such determination is made by agreement of the parties or by the
Accounting Firm, in accordance with the foregoing, the parties will proceed as
follows:
(i) If such final determination results in an
increase in the Purchase Price in accordance with Section 2.2 above,
then within five (5) days after such final determination, Buyer will
pay to Seller the amount of such increase.
(ii) If such final determination results in a
decrease in the Purchase Price in accordance with Section 2.2 above,
then within five (5) days after such final determination, Seller will
pay to Buyer the amount of such decrease.
(d) Form of Payment. Payment of a Purchase Price
adjustment, if any, shall be made by wire transfer of immediately available
federal funds, together with interest thereon at LIBOR plus one percent (1%)
per annum from the Closing Date until the date of payment. If such adjustment
(including the interest component, if any) is not paid within five (5) business
days after final determination of the Purchase Price adjustment, then such
payment shall accrue interest at LIBOR plus three percent (3%) from the Closing
Date until the date of actual payment.
(e) Access to Books and Records. After the Closing,
Buyer shall permit Seller, the Accounting Firm (if applicable) and their
respective representatives, during normal business hours, to have reasonable
access to and to examine and make copies of any books and records of the
Companies which are reasonably required for purposes of preparing the Closing
Balance Sheet. After the Closing, Seller shall permit Buyer and their
representatives, during normal business hours, to have reasonable access to,
and to examine and make copies of, the books and records of Amerace and its
Subsidiaries which are in the possession of any of them and are necessary for
Buyer, the Accounting Firm, or their respective representatives to review the
Closing Balance Sheet.
ARTICLE III - SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer on the date of this Agreement
as follows:
3.1 ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
the Companies is a corporation duly organized, validly existing and in good
standing under the laws of its respective state of incorporation, and has all
requisite power and authority, corporate and otherwise, to enter into and
perform its obligations under each of the agreements to which it is a party, to
carry on its business as currently conducted, and to consummate the
transactions contemplated hereby. Each of the Companies is duly qualified or
licensed to do business as a foreign corporation, and is in
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good standing as such, in each jurisdiction in which it owns or leases real
property or in which the failure to be so qualified or licensed and in good
standing could have a Company Material Adverse Effect.
3.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by Seller have been (or shall be prior to Closing) duly and properly
authorized by proper corporate action in accordance with applicable law and
with its Certificate of Incorporation and By-Laws. This Agreement is, and the
other agreements and instruments to be executed and delivered by Seller in
connection with the transactions contemplated herein will be, the legal, valid
and binding obligation of Seller, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
from time to time affecting the enforcement of creditors' rights generally and
except that the enforceability of Seller's obligations is subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
3.3 TRANSACTION NOT A BREACH. Except as set forth in Schedule 3.3
hereof, neither the execution and delivery of this Agreement nor the
performance by Seller of its obligations hereunder does or will constitute,
result in or give rise to: (i) a breach of or default under the terms,
conditions or provisions of the Certificate of Incorporation or By-Laws of
Seller or of any of the Companies; (ii) a Material breach or violation or
default under any Legal Requirement applicable to the Seller or any of the
Companies; (iii) the acceleration of the time for performance of any obligation
under any Material Contractual Obligation of the Seller or any of the
Companies; (iv) the imposition of any Lien upon or the forfeiture of any Asset
(including, without limitation, any Asset held under a Material Contractual
Obligation of any of the Companies); (v) a breach of or a default under any
Material Contractual Obligation of the Seller or any of the Companies, or the
requirement that any consent under or waiver of any such Material Contractual
Obligation be obtained, except for items listed on Schedule 3.3 or Schedule
3.7(b), all of which shall have been obtained or made (to the extent Seller is
required to have obtained same pursuant to Section 5.11), and shall be in full
force and effect at the Closing, or (vi) any right of termination, or any other
Material right or cause of action under any such Material Contractual
Obligation. No approval, consent, waiver, authorization or other order of, and
no declaration, filing, registration, qualification or recording with, any
Governmental Authority is required to be obtained or made by or on behalf of
the Seller or any of the Companies in connection with the execution, delivery
or performance of this Agreement and the consummation of the transactions
contemplated hereby, except for items which shall have been obtained or made
and shall be in full force and effect at the Closing and copies of which shall
be delivered to Buyer on or prior to the Closing Date, and except for those
items the failure to obtain or make which would not have a Material Adverse
Effect.
3.4 OWNERSHIP OF STOCK. Except as set forth in Schedule 3.4: (i)
Seller is the beneficial and record owner of all of the issued and outstanding
Stock of Amerace and of such
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November 1, 1995
9
percentage of the capital stock of each Joint Venture as is set forth on
Schedule 3.4; (ii) Amerace is the beneficial and record owner, directly or
indirectly, of all of the capital stock of all of its Subsidiaries and of its
interests in each of the Joint Ventures, in each case, free and clear of all
Liens other than a Lien on the Stock (and the capital stock of certain of the
other Companies' Subsidiaries) held by Chemical, which Lien shall be released
at the Closing; (iii) the Stock (and the capital stock of each of Amerace's
Subsidiaries and of the Joint Ventures) is validly authorized, duly issued,
fully paid and non-assessable; and (iii) no person or entity has any rights by
way of stock option, convertible security, subscription, warrant, contract or
other agreement or arrangement, written or oral, to purchase or acquire any
capital stock of any Company or of any Joint Venture.
3.5 CORPORATE INFORMATION.
(a) Set forth on Schedule 3.5(a) is the following
information with respect to each of the Companies: (i) its employer
identification number; (ii) its state of incorporation and registered agent in
such state; (iii) the jurisdictions in which it is qualified to do business;
(iv) its authorized capital stock; (v) its issued and outstanding shares of
capital stock and holder thereof; (vi) the names of its directors and the names
and titles of its officers; and (vii) its fiscal year.
(b) Schedule 3.5(b) attached hereto sets forth true
copies of the By-Laws and Certificate of Incorporation of Amerace. Seller has
also delivered to Buyer a true and complete copy of the Certificates of
Incorporation and Bylaws of each of the other Companies, in each case in the
form currently in full force and effect.
3.6 CERTAIN CONTRACTUAL OBLIGATIONS. Set forth on Schedule 3.6 is
a true and complete list of all of the following Contractual Obligations to
which any of the Companies is a party:
(a) All collective bargaining agreements and other labor
agreements; all employment or Material consulting agreements (including,
without limitation, all contracts concerning the management or operation of any
real property owned by any Company) or forms thereof; all Employee Benefit
Plans and all other Material plans, agreements, arrangements or practices which
constitute Compensation or benefits to any of the directors, officers or
employees of the Companies (other than to any Eagle Employee), excluding any
such agreements that are terminable by Seller or any of the Companies within
one (1) year from the date hereof;
(b) All Contractual Obligations under which any of the
Companies is or may become obligated to pay any legal, accounting, brokerage,
finder's or similar fees or expenses in connection with, or incur any severance
pay or special Compensation obligations which would become payable by reason
of, this Agreement or the consummation of the transactions contemplated hereby;
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November 1, 1995
10
(c) All Contractual Obligations under which any of the
Companies will after the Closing be (i) restricted from carrying on any
business or other activities anywhere in the world or (ii) bound to participate
in any allocation or sharing of Taxes;
(d) All Contractual Obligations (including, without
limitation, options) to: (i) sell or otherwise dispose of any Material Assets
except in the Ordinary Course of Business or (ii) purchase or otherwise acquire
any Material property or properties except in the Ordinary Course of Business;
(e) All Contractual Obligations under which any of the
Companies will have after the Closing any liability or obligation to or for the
benefit of any Affiliate of Seller;
(f) All Contractual Obligations which will survive the
Closing under which any of the Companies has any liability or obligation for
Debt or constituting or giving rise to a Guarantee of any liability or
obligation of any Person (other than another Company), or under which any
Person (other than another Company) has any liability or obligation
constituting or giving rise to a Guarantee of any liability or obligation of
the Companies (including, without limitation, partnership and joint venture
agreements);
(g) All (i) distributorship agreements, requirements or
other similar supply agreements, and contracts with any Governmental Authority,
and (ii) all other Contractual Obligations with suppliers, vendors, customers,
or other purchasers or suppliers of goods or services, including, without
limitation, purchase or sales or service orders (representing a binding and
enforceable obligation to purchase or sell goods or services), which are by
their terms stated to involve payments by or on behalf of, or to, the Companies
in excess of $250,000 during the calendar year ended December 31, 1995 or
$500,000 over the remaining term of the contract;
(h) All Contractual Obligations constituting a
partnership or joint venture;
(i) All sales representative agreements to which any of
the Companies is party; and
(j) All Contractual Obligations of any of the Companies,
in addition to those set forth in subparagraphs (a) - (i) above, which are
Material to the Business of the Companies considered on a consolidated basis.
Seller has heretofore made available to Buyer (and as requested by Buyer has
delivered to Buyer) a true and complete copy (or, in the case of oral
Contracts, a full and accurate written summary, or in the case of "form"
agreements, a copy of the standard form) of each of the Contractual Obligations
listed on Schedule 3.6, each as in effect on the date hereof and (except as
otherwise required by this Agreement) as it will be in effect at the Closing,
including, without limitation,
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November 1, 1995
11
all amendments (such Contractual Obligations, together with the Leases,
Licenses, and Insurance Policies, but excluding the Employee Benefit Plans,
being referred to herein collectively as the "Contracts"). Each Contract is,
and after giving effect to the Closing hereunder and the consummation of the
transactions contemplated hereby will be, Enforceable by the Company party
thereto against each Person party thereto, except: (i) as otherwise required by
the terms of this Agreement, (ii) for such failures to be so enforceable as do
not and will not have a Company Material Adverse Effect and (iii) as such
enforceability may be limited by (A) bankruptcy, insolvency, reorganization or
other similar laws affecting creditors' rights generally and (B) general
principles of equity (whether considered in a proceeding at law or in equity).
No breach or default by the Companies under any of the Contracts has occurred
and is continuing, and no event has occurred which with notice or lapse of time
would constitute such a breach or default or permit termination, modification
or acceleration by any other Person under any of the Contracts, except in each
such case as has not had and will not have a Company Material Adverse Effect.
To the Knowledge of Seller, no breach or default by any other Person under any
of the Contracts has occurred and is continuing, and no default has occurred
which with notice or lapse of time would constitute such a breach or default or
permit termination, modification or acceleration by the Companies under any of
the Contracts, except in each such case as has not had and will not have a
Company Material Adverse Effect. None of the Companies has assigned any of its
rights or obligations under any of the Contracts (except for collateral
assignments to Chemical, if any, which will be released at Closing).
3.7 ASSETS. Except as set forth on Schedule 3.7:
(a) Title to Assets. The Companies have good and
marketable title to, or, in the case of property held under lease or other
Contractual Obligation, a valid and enforceable right to use under an
Enforceable Lease or License, all of their properties, rights and assets,
whether real, personal or intellectual and whether tangible or intangible
(collectively, the "Assets"), including, without limitation, all properties,
rights and assets reflected in the Reference Balance Sheet or in the Closing
Balance Sheet (except as sold or otherwise disposed of since the date of the
Reference Balance Sheet and the Closing Balance Sheet, respectively, in the
Ordinary Course of Business or as otherwise required by this Agreement). The
Assets are not subject to any Material Lien which will survive the Closing,
except as described in Schedule 3.7(a).
(b) Real Property and Equipment. Schedule 3.7(b) lists each lease
or other Contractual Obligation (including all amendments) under which any
Equipment having a cost or aggregate capital lease obligations in excess of
$50,000 is held or used or under which any Real Property (without regard to
cost or rental obligation) is leased or used by any of the Companies (the
"Leases") and whether any consents are required under such Lease in connection
with the transactions contemplated by this Agreement. The Seller has delivered
to Buyer true and complete copies of each Lease in effect on the date hereof
and (except as otherwise required by this Agreement) as it will be in effect at
the Closing, including, without limitation, all
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November 1, 1995
12
amendments. Schedule 3.7(b) lists (i) all of the Real Property that is owned
and, for each such property, the date acquired (if such information is
reasonably available), any Material Liens (which will survive the Closing)
encumbering such property and the principal amount of indebtedness secured by
each such Material Lien and (ii) the addresses of each other location, if any,
at which is located any Equipment or inventory (other than tooling).
(c) Permits, Certificates, etc. Set forth in Schedule 3.7(c) is a
list of all permits held by the Companies in connection with the present use
and operation of the Real Property and the occupancy thereof. None of the
Companies has received any written notice that any Governmental Authority or
other licensing authority or association will revoke, cancel, rescind, modify
in a Material manner or refuse to renew in the ordinary course any such
Material permits.
(d) Undisturbed Possession, etc. With respect to each parcel of
Real Property, one of the Companies is in possession of the property or the
estate under the applicable Lease, and Seller has no Knowledge of any other
Persons claiming any conflicting tenancy or occupancy rights.
(e) Absence of Certain Notices. Except as set forth in Schedule
3.7(e), and except with respect to any violations of Environmental Laws or any
violations of the Americans with Disabilities Act of 1990 and the rules and
regulations promulgated thereunder, or any similar state or local law, rule or
regulation, none of the Companies has received any written notice (i) of any
Material violation of any zoning restrictions and ordinances, health, building,
life, safety and fire codes and ordinances affecting any of the Real Property,
or (ii) of any eminent domain, condemnation or similar proceeding pending or
threatened, or any decree or order relating thereto, which matters described in
clauses (i) or (ii) above will materially affect the current use of any Real
Property, building or improvement by the Company.
(f) No Material Damages. None of the Companies has received any
written notice of, nor do any of the Companies have any Knowledge of, any
Material destruction, damage or casualty having occurred with respect to any of
the Real Property after June 30, 1995, in each case which will have a Material
Adverse Effect.
(g) Benefit of Leases. With respect to the Leases, to Seller's
Knowledge, no event has occurred which (with the giving of notice or the
passage of time or both), would impair any right of the Companies to exercise
and obtain the benefit of any options contained in any Lease; the Companies
have not received any written notices of any Material default under any Lease,
nor to Seller's Knowledge has any event occurred which (with the giving of
notice or the passage of time or both) would constitute a Material default or
termination of, any Lease; nor have the Companies received any written notice
of any Material default under any ground lease, prime lease, mortgage or deed
of trust of any lessor, any prime lessor or with respect to any Real
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November 1, 1995
13
Property which could ultimately result in a repossession under or termination
of any of the Leases or impair any right of the Companies under any of the
Leases.
3.8 FINANCIAL STATEMENTS.
Seller has delivered to Buyer the following unaudited
financial statements: Pro Forma Combining Balance Sheets of Amerace and its
Subsidiaries as of June 30, 1995 and September 30, 1995 and Pro Forma Combining
Statements of Earnings Before Interest and Taxes of Amerace and its
Subsidiaries for the year ended December 31, 1994, the six months ended June
30, 1995, and the nine months ended September 30, 1995, and accompanying notes
thereto, copies of which are attached hereto as Schedule 3.8 (the "Financial
Statements").
Except as otherwise indicated in the Financial Statements or
on Schedule 3.8, the Financial Statements have been prepared in accordance with
GAAP and the Companies' internal financial systems, using accounting methods
and procedures which have been consistently applied throughout the periods and
fairly present, in all material respects, the financial condition and results
of operations of the Companies as of and for the periods then ended.
3.9 CHANGE IN CONDITION. Except for the matters set forth in
Schedule 3.9, since June 30, 1995:
(a) The Business has been conducted only in the Ordinary
Course of Business (except as otherwise required by the terms of this
Agreement);
(b) None of the Companies has incurred or otherwise
become liable in respect of any Debt or become liable in respect of any
Guarantee which, in each case, will survive the Closing;
(c) Amerace has not declared or made any Distribution
except for distributions of Cash and the Distribution to Seller of shares of
common stock of Falcon Building Products, Inc.;
(d) None of the Companies has: (i) sold, leased to
others or otherwise disposed of any of its assets (except for sales of
inventory and receivables or other transactions in the Ordinary Course of
Business and except as otherwise required by the terms of this Agreement); (ii)
entered into any Contractual Obligation other than this Agreement relating to
(A) the purchase of any equity security of any Person, (B) the purchase of
assets constituting a business or (C) any merger, consolidation or other
business combination with any Person which is not a Company; (iii) cancelled or
compromised any Debt or claim (except in the Ordinary Course of Business); (iv)
sold, transferred, licensed or otherwise disposed of any Intangibles; (v)
waived or released any right of Material value except for fair consideration;
or (vi) instituted, settled or agreed to settle any Material Action.
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November 1, 1995
14
(e) None of the Companies has mortgaged, pledged or
subjected to any Material Lien any of its property, business or Assets other
than Liens disclosed on Schedule 3.9(f);
(f) Except as set forth on Schedule 3.12, none of the
Companies has (i) to Seller's Knowledge, encountered any labor union organizing
activities, (ii) had any actual or threatened employee strikes, work stoppages,
slow-downs or lock-outs, (iii) made any changes in the rate of Compensation
payable or paid or agreed or orally promised to pay, conditionally or
otherwise, any extra Compensation, or severance or vacation pay, to any
director, officer, manager, employee, consultant or agent of a Company (other
than in each case increases granted in the Ordinary Course of Business, which
increases will not have a Company Material Adverse Effect), or (iv) to Seller's
Knowledge, had any change in its relationships with its employees, customers or
suppliers, which would result in a Company Material Adverse Effect;
(g) None of the Companies has except in the Ordinary
Course of Business or as contemplated by this Agreement (i) made any change in
its customary methods of accounting or accounting practices (including its
establishment of reserves), or in its pricing, billing, payment, collection or
credit policies or practices or (ii) granted any extensions of credit or, (iii)
failed to pay any creditor any amount owed to such creditor when due;
(h) None of the Companies has made any Material gifts or
sold, leased, transferred or exchanged any Material property for less than the
fair value thereof;
(i) None of the Companies has committed to make any
capital expenditures, except for those contemplated by capital expenditure
budgets previously provided to Buyer or those which do not individually exceed
$500,000 or exceed, in the aggregate, $1,000,000.
(j) None of the Companies has entered into any
Contractual Obligation to do any of the things referred to in clauses (a)
through (i) above; and
(k) To the Knowledge of Seller, no Company Material
Adverse Effect or Material Adverse Effect has occurred, nor has any event or
series of events occurred which directly affect the Companies and which pose a
Material risk of a Company Material Adverse Effect or Material Adverse Effect.
3.10 LIABILITIES. After giving effect to the Closing hereunder and
the consummation of the transactions contemplated hereby, none of the Companies
will have as of the Closing Date any liabilities or obligations which have had
or resulted, or which to the Knowledge of Seller, are reasonably likely to have
or result in, any Company Material Adverse Effect and which would be required
to be disclosed in and reserved for in a balance sheet prepared in accordance
with GAAP, other than those liabilities or obligations which shall be disclosed
to Buyer and are set forth on and reserved for in the Closing Balance Sheet.
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November 1, 1995
15
3.11 COMPLIANCE WITH LAWS. The operations of the Business as
heretofore or currently conducted were not and are not in violation of, nor are
any of the Companies in default under, any Legal Requirement, except for such
violations or defaults listed on Schedules 3.6, 3.7(e), 3.11, 3.12, 3.13, 3.17
or 3.19 (or any of the other Schedules hereto which would require disclosure of
any such violations or defaults as a violation or default) or as have not had a
Company Material Adverse Effect. The Companies have been duly granted and
continue to hold, and at the Closing will hold, all licenses, permits,
consents, approvals, franchises and other authorizations under any Legal
Requirement or necessary for the conduct of the Business as currently conducted
or currently proposed to be conducted (the "Permits"), except such as will not
have a Company Material Adverse Effect. All of the Permits are now and after
giving effect to the Closing will be in full force and effect, except such as
will not have a Company Material Adverse Effect. Schedule 3.11 includes a list
of all Permits and applications therefor that are Material to the Business.
None of the Companies has received any notice that any Governmental Authority
or other licensing authority or association will revoke, cancel, rescind,
modify in a Material manner or refuse to renew in the Ordinary Course of
Business any of the Permits set forth on Schedule 3.11. The provisions of this
Section 3.11 shall not be deemed to apply to any Legal Requirements arising
under Environmental Laws or relating to the physical condition or other matters
affecting the real property owned or leased by the Companies or other matters
referred to in Section 3.7 hereof.
3.12 EMPLOYEES. To the Knowledge of the Seller, no executive or
key employee has given notice to a Company to the effect that such executive or
key employee plans to terminate employment with any of the Companies. To the
Knowledge of Seller, none of the Companies has committed any unfair labor
practice, nor experienced any strikes, grievances or other collective
bargaining disputes, except as set forth in Schedule 3.12. To the Knowledge of
Seller and except as set forth on Schedule 3.12, no facts, circumstances or
conditions exist that are reasonably likely to result in an Action alleging an
illegal employment practice. To the Knowledge of Seller and except as set
forth on Schedule 3.12, no organizational effort is presently being made or
threatened, by or on behalf of any labor union with respect to employees of any
of the Companies.
3.13 TAX MATTERS
Taxes
(a) Each of the Companies has filed all Tax Returns that
it was required to file and such Tax Returns were correct and complete in all
Material respects. All Taxes owed by any of the Companies shown on any such
Tax Return have been paid. Except as disclosed on Schedule 3.13(a), none of the
Companies currently is the beneficiary of any extension of time within which to
file any Tax Return. No notice has been received from an authority of a
jurisdiction where any of the Companies does not file Tax Returns that it is or
may be subject to taxation by that jurisdiction. Except as set forth on
Schedule 3.13(a), there are no Liens on
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November 1, 1995
16
any of the Assets of any of the Companies that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) Each of the Companies has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party.
(c) There is no dispute or claim (asserted in writing by
the applicable authority or as to which the Seller has Knowledge based upon
notice received from any agent of such authority) concerning any Tax liability
of any of the Companies.
(d) Except as set forth on Schedule 3.13(d), none of the
Companies has waived any statute of limitations in respect of any state, local
or foreign Income Taxes or other Taxes or agreed to any extension of time with
respect to any state, local or foreign Income Tax or other Tax assessment or
deficiency.
Income Taxes
(e) None of the Companies has filed a consent under Code
Sec. 341(f) concerning collapsible corporations. None of the Companies has
made any payments, is obligated to make any payments, or is a party to any
agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Sec. 280G. None of the
Companies has been a United States real property holding corporation within the
meaning of Code Sec. 897(c)(2) during the applicable period specified in Code
Sec. 897(c)(1)(A)(ii). Each of the Companies has disclosed on Ultimate
Parent's federal Income Tax Returns all positions taken therein that could give
rise to a substantial understatement of federal Income Tax within the meaning
of Code Sec. 6662. Except as set forth on Schedule 3.13(e) (which identifies
certain agreements which will terminate upon Closing), none of the Companies is
a party to any federal Income Tax allocation or sharing agreement. Except as
set forth on Schedule 3.13(e), none of the Companies has been since September
29, 1989 a member of an Affiliated Group filing a consolidated federal Income
Tax Return or any affiliated, combined or unitary group other than a group the
common parent of which was Ultimate Parent.
(f) Schedule 3.13(f) sets forth the following information
with respect to each of the Companies (or, in the case of clause (B) below,
with respect to each of the Subsidiaries) as of the most recent practicable
date (as well as on an estimated pro forma basis as of the Closing giving
effect to the consummation of the transactions contemplated hereby): (A) the
federal Income Tax basis of the Companies in their assets; and (B) the federal
Income Tax basis of the stockholder(s) of the Subsidiary in its stock (or the
amount of any excess loss account); and (C) the amount of any net operating
loss, net capital loss, unused investment or other credit, unused foreign tax,
or excess charitable contribution allocable to the Companies on July 31, 1994.
Seller will provide to Buyer within 45 days of the filing of Ultimate Parent's
consolidated
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November 1, 1995
17
federal Income Tax Returns for the period ending July 31, 1996, the amount of
these aforementioned attributes for the period ending July 31, 1996,
respectively.
(g) Each Affiliated Group has filed all federal Income
Tax Returns that it was required to file for each taxable period during which
any of the Companies was a member of the group. Seller has delivered (or shall
deliver to Buyer within 45 days of their filing if permitted to be filed after
the date hereof) to Buyer correct and complete copies of all pro forma federal
Income Tax Returns, of the Affiliated Group of which the Companies are members
since September 29, 1989. All such federal Income Tax Returns were correct and
complete in all respects. All federal Income Taxes owed since September 29,
1989 by any Affiliated Group (whether or not shown on any federal Income Tax
Return) have been paid for each taxable period during which any of the
Companies was a member of the Affiliated Group.
(h) Except as disclosed on Schedule 3.13(h), there is no
dispute or claim (asserted in writing by the Internal Revenue Service as to
which Seller has Knowledge based upon notice received from any agent of such
authority) concerning any federal Income Tax liability of any Affiliated Group
for any taxable period during which any of the Companies was a member of the
Affiliated Group. Except as disclosed on Schedule 3.13(h), no Affiliated Group
has waived any statute of limitations in respect of any federal Income Taxes or
agreed to any extension of time with respect to an federal Income Tax
assessment or deficiency for any taxable period during which any of the
Companies was a member of the Affiliated Group. There are no Liens on any of
the Assets of any of the Companies that arose in connection with any failure
(or alleged failure) to pay any federal Income Tax.
(i) Each of the Companies (or the affiliated, combined or
unitary group to which they now or previously belong) has filed all state,
local and foreign Income Tax Returns that it was required to file and such
Income Tax Returns were correct and complete in all respects. All state, local
and foreign Income Taxes owed by any of the Companies (or the affiliated,
combined or unitary group to which they now or previously belong) (whether or
not shown on any Tax Return) have been paid. Except as set forth on Schedule
3.13(i), none of the Companies currently is the beneficiary of any extension of
time within which to file any Income Tax Return for the period ending on or
before the Closing Date. No notice has been received from an authority
claiming jurisdiction where any of the Companies does not file Income Tax
Returns that it is or may be subject to taxation by that jurisdiction. Except
as set forth on Schedule 3.13(i) there are no Liens on any of the Assets of any
of the Companies that arose in connection with any failure (or alleged failure)
to pay any state, local or foreign Income Tax.
(j) There is no dispute or claim (asserted in writing by
the applicable authority or as to which the Seller has Knowledge based upon
notice received from any agent of such authority) concerning any state, local
or foreign Income Tax liability of any of the Companies (or the affiliated,
combined or unitary group to which they now or previously belong). Schedule
3.13(j) lists all federal, state, local and foreign Income Tax Returns filed
with respect to any of
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November 1, 1995
18
the Companies (or the affiliated, combined or unitary group to which they now
or previously belong) for taxable periods ended on or after September 29, 1989,
indicates those income Tax Returns that have been audited, and indicates those
Income Tax Returns that currently are the subject of audit. Seller has
delivered to Buyer correct and complete copies of all state, local, and foreign
Income Tax Returns of the Companies (or the affiliated, combined or unitary
group to which they now or previously belong) since September 29, 1989, and all
state, local and foreign examination reports, and statements of deficiencies
assessed against or agreed to by any of the Companies (or the affiliated,
combined or unitary group to which they now or previously belong), relating
thereto September 29, 1989, but only to the extent they pertain to the
Companies.
(k) None of the Companies has any liability for the Taxes
or Income Taxes of any Person other than the Companies (A) under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign law),
(B) as a transferee or successor, (C) by contract, or (D) otherwise.
3.14 LITIGATION. Except as disclosed on Schedule 3.14 and Schedule
3.19 attached hereto, there is no Action against any of the Companies pending
(or to the Knowledge of Seller, threatened), which if determined adversely to
any of the Companies would have a Company Material Adverse Effect. There is no
Action pending (or, to the Knowledge of the Seller, threatened), which seeks
rescission of, seeks to enjoin the consummation of, or otherwise relates to,
this Agreement or any of the transactions contemplated hereby. No Governmental
Order has been issued which has had or will have a Company Material Adverse
Effect.
3.15 INTELLECTUAL PROPERTY RIGHTS. Schedule 3.15 lists and
identifies all trade and product names; patents, patent applications, and
unpatented proprietary developmental records; trademarks, service marks, logos
and copyrights (including registrations and applications); trade secrets, trade
dress, know-how and other proprietary or confidential information; computer
software; and all other intellectual or intangible property and rights; in each
case that are directly or indirectly owned, licensed or otherwise used by the
Companies, in the conduct of the Business or otherwise (the "Intangibles");
provided, however, that there has been only generally described on such
Schedule 3.15 such of the Intangibles as are not readily susceptible to listing
(the "Unlisted Intangibles"). Schedule 3.15 also lists and identifies the term
of each Contractual Obligation (including all amendments) under which any
Intangible is held or used by the Companies, in the conduct of the Business or
otherwise (the "Licenses"). Except as disclosed on Schedule 3.15, all
Intangibles are owned solely by the Companies or licensed to them under a
perpetual License not requiring payment of any royalty or fee. Except as
disclosed on Schedule 3.15, there is no Material Contractual Obligation under
which the Companies are liable as licensor with respect to any Intangibles and
none of the Companies has granted licenses to any third party with respect to
any of the Intangibles. To the Knowledge of Seller, the manufacture, use or
sale by the Companies of any products in the Business and the use by the
Companies of the Intangibles does not and has not infringed any rights of any
third party, worldwide, and (to
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November 1, 1995
19
the Knowledge of Seller) no activity of any third party infringes upon the
rights of the Companies with respect to any of the Intangibles.
3.16 INSURANCE POLICIES. Schedule 3.16 sets forth the following
information with respect to each insurance policy (including policies providing
property, casualty, liability, auto and workers' compensation coverage and bond
and surety arrangements) to which any of the Companies has been a party, a
named insured, or otherwise the beneficiary of coverage at any time within the
past five (5) years to the extent the records of the Companies contain such
information:
(a) the name, address, and telephone number of the agent;
(b) the name of the insurer, the name of the policy
holder, and the name of each covered insured;
(c) the policy number and the period of coverage;
(d) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of how deductibles, sublimits and ceilings are
calculated and operate) of coverage; and
(e) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
Schedule 3.16 describes any self-insurance arrangements affecting any of the
Companies which will survive the Closing. Schedule 3.16 identifies those
insurance policies of which the insured entity is a Company, if any (the
"Insurance Policies"), which will continue in full force and effect following
the Closing Date with respect to occurrences, or claims made, during the
applicable policy period, in each case, as indicated on Schedule 3.16. Except
as set forth in Schedule 3.16, with respect to each such insurance policy: (i)
the policy is legal, valid, binding, enforceable, and in full force and effect;
(ii) the policy will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the consummation of the
transactions contemplated hereby, except as otherwise provided in this
Agreement; (iii) to Seller's Knowledge, none of the Companies nor any other
party to the policy is in Material breach or default (including with respect to
the payment of premiums or the giving of notices), and no event has occurred
which, with notice or the lapse of time, would constitute such a Material
breach or default, or permit termination, modification, or acceleration, under
the policy; and (iv) to Seller's Knowledge, no party to the policy has
repudiated any material provision thereof. Buyer acknowledges that coverage
under all insurance policies (to the extent maintained by Seller or its
Affiliates other than the Companies) will cease as of the Closing Date with
respect to occurrences after the Closing Date.
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3.17 EMPLOYEE BENEFIT PLANS.
(a) Plans. Except as and to the extent identified in
Schedule 3.17(a) attached hereto, the Companies do not maintain or contribute
to any Employee Benefit Plan. A true, correct and complete copy of each
Employee Benefit Plan, as amended, or an explanation of the material terms of
such plan if the plan is not in writing, has been delivered or made available
to the Buyer. With respect to each such plan, the Seller has previously
delivered or made available to Buyer copies of the following documents, as
applicable: (a) the trust agreement, as amended, (b) the most recent summary
plan description, (c) the most recent annual report (Form 5500 series), (d) the
most recent actuarial report, (e) insurance contracts, (f) policy statements,
and (g) the most recent Internal Revenue Service determination letter. Within
fifteen (15) days after Closing, Seller will also provide Buyer with the most
complete and accurate information in its possession regarding the age, salary,
service, and other relevant information as of a date satisfactory to Buyer for
each employee and former employee covered under any such plan. No such plan
has been or will be amended in any respect prior to the Closing Date that would
materially increase the expense of maintaining such plan.
(b) Pension Plans. Except as set forth in Schedule
3.17(b) attached hereto, each of the Pension Plans listed in Schedule 3.17(a)
intended to be qualified under Section 401(a) of the Code has received within
the last three (3) years a favorable determination letter from the Internal
Revenue Service to the effect that it is qualified under Section 401(a) of the
Code, or application has been or will be made for such determination letter
prior to the end of the remedial amendment period applicable to such plan, and
the plan sponsor will amend the plan as requested by the Internal Revenue
Service in connection with the determination request. Except as disclosed in
Schedule 3.17(b), with respect to each Pension Plan: (i) each such plan has
been administered and operated in all Material respects in accordance with its
terms and the provisions of ERISA and the Code (including regulations issued
thereunder) and other applicable laws; (ii) no determination letter has been
revoked or threatened to be revoked; (iii) no such plan has been amended since
the date of its most recent determination letter or application therefore in
any respect that could adversely affect its qualification or could materially
affect the cost of maintaining such plan; and (iv) other than claims for
benefits arising in the ordinary course of the administration and operation of
the plan, there are no claims, investigations, suits, audits or arbitrations
which are pending or, to the knowledge of Seller, threatened, against the plan
or any fiduciary of such plan, and there is no basis to anticipate any such
claim, investigation, suit or audit. Except as disclosed on Schedule 3.17(b),
with respect to any Pension Plan and any employee pension benefit plan (within
the meaning of Section 3(2) of ERISA) maintained by an entity which is treated
as a single employer with a Company pursuant to Section 414(b), (c), (m), or
(o) of the Code ("ERISA Affiliate"): (i) neither such plan nor any person
acting as a fiduciary with respect to such plan has engaged in a transaction
prohibited under Section 406 or 407 of ERISA or Section 4975 of the Code, which
could subject any such plan or fiduciary to any Material tax or penalty imposed
by Section 4975 of the Code or Section 502 of ERISA; (ii) to the Knowledge of
Seller, no person acting as a fiduciary with respect to such plan has
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November 1, 1995
21
participated in or is aware of a breach of fiduciary duty which could subject
any fiduciary to any Material liability or penalty under ERISA; (iii) none of
such plans has incurred any accumulated funding deficiency (whether or not
waived), as that term is defined in Section 302 of ERISA or Section 412 of the
Code; and (iv) all contributions required to be made to each such plan prior to
the Closing Date have been made on a timely basis.
(c) Title IV Plans. Except as disclosed on Schedule
3.17(c), with respect to each Pension Plan and each employee pension benefit
plan maintained by an ERISA Affiliate that is subject to Title IV of ERISA:
(i) no reportable event under Section 4043 of ERISA has occurred (other than a
reportable event for which the notice requirement has been waived by the PBGC);
(ii) all PBGC premiums due to date have been paid; (iii) no Company nor any
ERISA Affiliate has filed a notice of intent to terminate such plan nor adopted
any amendment to treat such plan as terminated; and (iv) the PBGC has not
instituted proceedings to terminate such plan.
(d) Welfare Plans. Each Welfare Plan has been maintained
in all material respects in accordance with its terms and the provisions of the
Code and ERISA (including regulations thereunder) and other applicable laws.
Other than claims for benefits arising in the ordinary course of the
administration and operation of the plans, there are no claims, investigations,
suits, audits or arbitrations which are pending or threatened against any plan
or any fiduciary of any plan. Except as disclosed on Schedule 3.17(d), with
respect to any plan, or any employee welfare benefit plan maintained by an
ERISA Affiliate, neither such plan nor any person acting as a fiduciary to such
plan, has engaged in a transaction prohibited under Section 406 or 407 of ERISA
or a breach of fiduciary duty under ERISA that could subject any such plan or
fiduciary to any Material tax, liability or penalty imposed by Section 409 or
502 of ERISA. Each plan which is a group health plan has complied at all times
and will continue to comply through the Closing Date with the health care
continuation coverage requirements of Section 4980B of the Code and Part 6 of
Title 1 of ERISA.
(e) Multi-Employer Plans. Except as disclosed in
Schedule 3.17(e), no Pension Plan is a multi-employer plan within the meaning
of Section 3(37) or 4001(a)(3) of ERISA. Except as disclosed in Schedule
3.17(e), neither any Company nor any ERISA Affiliate has any liability for
withdrawal liability demanded by any multi-employer plan for a complete or
partial withdrawal from such plan, and there is no basis to anticipate that any
such demand will be made. Except as disclosed in Schedule 3.17(e), the
Companies and all ERISA Affiliates have made all contributions due to any
multi-employer plan described in Schedule 3.17(e).
(f) Non-ERISA Plans. Except as disclosed in Schedule
3.17(f), with respect to each Employee Benefit Plan, other than a Pension Plan
or a Welfare Plan: (i) each such plan has been administered and operated in
all Material respects in accordance with its terms and applicable laws; and
(ii) other than claims for benefits arising in the ordinary course of the
administration and operation of the plan, there are no claims, investigations,
suits, audits or arbitrations which are pending or, to the Knowledge of Seller,
threatened, against the plan or
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November 1, 1995
22
any fiduciary of such plan, and there is no basis to anticipate any such claim,
investigation, suit or audit.
3.18 BANK ACCOUNTS AND LETTERS OF CREDIT. Attached hereto as
Schedule 3.18 is a list of each bank, savings and loan, trust company,
brokerage house or other financial institution in which any Company has an
account or lock-box management and the number of each such account, and a
description of all letters of credit for which such Company is the account
party.
3.19 ENVIRONMENTAL MATTERS.
(a) to the Knowledge of Seller, the reserves for
Environmental Liabilities to be set forth in the Closing Balance Sheet prepared
pursuant to Section 2.3(a) are adequate to cover the Companies' currently known
Environmental Liabilities;
(b) except for the Identified Environmental Matters
identified by Buyer pursuant to the Environmental Protocol set forth in
Schedule 5.22, neither Seller nor the Companies caused or contributed to or has
Knowledge of any Areas of Environmental Concern:
(i) at the New Mexico facility;
(ii) at the three (3) New Jersey facilities set
forth on Schedule 3.19 other than those which have been documented and
disclosed to the applicable Governmental Authority as part of Seller's
or the Companies' compliance with the New Jersey Environmental Cleanup
Responsibility Act ("ECRA") or the New Jersey Industrial Site Recovery
Act ("ISRA");
(iii) at the New Hampshire facility other than
those which have been documented and disclosed to the applicable
Governmental Authority as part of the investigation relating to the
Savage Municipal Well Superfund site;
(c) neither Seller nor the Companies have received notice
of any Environmental Liabilities relating to the Companies' Joint Ventures in
Belgium, Japan, and Taiwan from any Governmental Authority having jurisdiction
over environmental matters;
(d) except for the Identified Environmental Matters
identified by Buyer pursuant to the Environmental Protocol set forth in
Schedule 5.22, to the Knowledge of Seller, the Disclosed Environmental Matters
set forth in Schedule 3.19 represent a complete list of all Environmental
Liabilities of the Companies;
(e) the Seller and the Companies have provided to Buyer
the opportunity to review all substantial documentary information of which they
have Knowledge and possession
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November 1, 1995
23
or control regarding (x) the Disclosed Environmental Liabilities; (y)
Environmental Liabilities or Areas of Environmental Concern associated with the
properties and the businesses currently owned or operated by the Companies; and
(z) Environmental Liabilities or Areas of Environmental Concern associated with
the properties and the businesses formerly owned or operated by the Companies;
(f) except for the Disclosed Environmental Matters set
forth in Schedule 3.19 or the Identified Environmental Matters identified by
Buyer pursuant to the Environmental Protocol set forth in Schedule 5.22, to the
Knowledge of Seller, each of the currently owned or operated properties and
businesses of the Companies is in compliance with all applicable Environmental
Laws;
(g) except for the Disclosed Environmental Matters set
forth in Schedule 3.19 or the Identified Environmental Matters identified by
Buyer pursuant to the Environmental Protocol set forth in Schedule 5.22, to the
Knowledge of Seller, the Companies have complied with applicable Environmental
Laws in effect at the time in connection with the use, disposal or storage of
Hazardous Materials at off-site landfills or at other facilities, including
other properties currently owned or operated by the Companies.
(h) except for the Disclosed Environmental Matters set
forth in Schedule 3.19 or the Identified Environmental Matters identified by
Buyer pursuant to the Environmental Protocol set forth in Schedule 5.22, to the
Knowledge of Seller, there are no actual or threatened Environmental
Liabilities with respect to : (x) noncompliance with any applicable
Environmental Laws, or (y) the presence or Release or threatened Release of any
Hazardous Materials, or (z) personal injury, wrongful death, or other tortious
conduct relating specifically to any Hazardous Materials used, manufactured,
sold, or disposed of by or on behalf of the Companies;
(i) except for the Disclosed Environmental Matters set
forth in Schedule 3.19 or the Identified Environmental Matters identified by
Buyer pursuant to the Environmental Protocol set forth in Schedule 5.22, to the
Knowledge of Seller, no event has occurred or condition exists or operating
practice is being employed that will likely give rise to any Environmental
Liability of either the Companies or, after Closing, the Buyer, under any
Environmental Laws; and
(j) to the Knowledge of Seller, any asbestos containing
material contained in any of the buildings or structures currently used by the
Companies is either in good condition or is otherwise not causing airborne
concentrations of asbestos fibers above limits set by Environmental Laws.
3.20 TRANSACTIONS WITH AFFILIATES. Except for the matters set
forth on Schedule 3.6 pursuant to clause (e) of Section 3.6 and clearly
identified on such Schedule as an affiliate relationship (the "Affiliate
Relationships"), and except as contemplated by Section 5.8, no
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November 1, 1995
24
Affiliate of the Seller or Amerace (other than an Eagle Employee) is an
officer, director, employee, consultant, competitor, customer, distributor,
supplier or vendor of, or is party to any Material Contractual Obligation with,
the Companies. There are no operating Assets, including Real Property,
Equipment, Intangibles, franchises, know-how, or proprietary or confidential
knowledge that any such Affiliate (other than the Companies) owns or is
licensed or otherwise has the right to use which are used in, or necessary to
the conduct of the Business; it being acknowledged, however, that Seller or its
Affiliates currently provide various professional, administrative, accounting,
cash management, financial, insurance, and other similar services to or for the
benefit of the Companies and own certain assets related thereto.
3.21 POWERS OF ATTORNEY. There are no outstanding powers of
attorney executed on behalf of any of the Companies except to custom's brokers
and other powers of attorney set forth on Schedule 3.21.
3.22 SUPPLIERS AND CUSTOMERS. To Seller's Knowledge, none of the
Companies has received notice that any of its ten largest suppliers or ten
largest customers intends to cancel its relationship with it.
3.23 GUARANTIES. Except as set forth on Schedule 3.23, none of the
Companies has delivered a Guarantee of any Debt of any other Person other than
another Company.
3.24 BROKERS, ETC. Except as specified in Schedule 3.24, no
broker, finder, investment bank or similar agent is entitled to any brokerage,
finder's or other fee, Compensation or reimbursement of expenses in connection
with the transactions contemplated by this Agreement based upon agreements or
arrangements made by or on behalf of (or the conduct of) Amerace or any of its
Affiliates, and Seller shall bear all such fees, Compensation and reimbursement
of expenses.
3.25 PRODUCT WARRANTY. Seller has made available to Buyer and
shall deliver upon the request of Buyer true and complete copies of the
standard terms and conditions of sale or lease for each of the Companies
(containing applicable guaranty, warranty and indemnity provisions).
3.26 JOINT VENTURES. Except as set forth in Schedule 3.26, Seller
has no Knowledge of any fact that is likely to result, in the foreseeable
future, in a material impairment of the value of any Company's investment in a
Joint Venture.
3.27 DISCLOSURE. This Agreement and the Exhibits and Schedules
hereto (but excluding for these purposes any financial statements), considered
as a whole, does not and will not contain any untrue statement of a Material
fact relating to the Companies or Seller, and does not omit or will not omit to
state a Material fact necessary in order to make the statements contained
herein not misleading, in each case if such Material fact or omission (i) is
Known to Seller at
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November 1, 1995
25
the time of making (or omitting to make) such statement and (ii) would be
likely to result in a Material Adverse Effect. Notwithstanding the foregoing,
in the event any item or matter is set forth in a Schedule which requires
disclosure of certain "Material" matters, the inclusion of such item or matter
in such Schedule shall not cause such item or matter to be deemed "Material"
unless such item or matter otherwise satisfies the definition of "Material",
and in no event shall the inclusion of non-Material information in a Schedule
requiring disclosure of Material matters be deemed to be a breach of such
representation or of the representation set forth in this Section 3.27.
ARTICLE IV - BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to Seller on the date of this Agreement
as follows:
4.1 ORGANIZATION. Buyer is a corporation duly organized and
validly existing under the laws of the State of New Jersey and has all
requisite power and authority, corporate and otherwise, to enter into and
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby.
4.2 AUTHORITY. The execution, delivery, and performance of this
Agreement by Buyer have been (or shall be prior to Closing) duly and properly
authorized by proper corporate action in accordance with applicable law and
with the Articles of Incorporation and By-Laws of Buyer. This Agreement and
the other agreements and instruments to be executed and delivered by Buyer in
connection with the transactions contemplated hereby will be, the legal, valid
and binding obligations of Buyer, enforceable in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
from time to time affecting the enforcement of creditors' rights generally and
except that the enforceability of Buyer's obligations is subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.3 TRANSACTION NOT A BREACH. Except as specified in Schedule
4.3, hereof neither the execution and delivery of this Agreement nor the
performance by Buyer of its obligations hereunder does or will constitute,
result in or give rise to: (i) a breach of or default under the terms,
conditions or provisions of the Certificate of Incorporation or By-Laws of
Buyer; (ii) a Material breach or violation or default under any Legal
Requirement applicable to the Buyer; or (iii) a breach of or a default under
any Material Contractual Obligation of the Buyer, or the requirement that any
consent under or waiver of any such Contractual Obligation be obtained, except
for consents which shall have been obtained or made and shall be in full force
and effect at the Closing. No approval, consent, waiver, authorization or
other order of, and no declaration, filing, registration, qualification or
recording with, any Governmental Authority is required to be obtained or made
by or on behalf of the Buyer in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
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November 1, 1995
26
contemplated hereby, except for items which shall have been obtained or made
and shall be in full force and effect at the Closing and copies of which shall
be delivered to Buyer on or prior to the Closing Date, and except for those
items the failure to obtain or make which would not have a Material Adverse
Effect.
4.4 FINANCIAL ABILITY. Buyer has freely available to it
sufficient funds (or binding commitments to provide sufficient funds) to
perform all of its obligations under this Agreement, including the payment of
the Purchase Price and the Receivables Purchase Price when due. Upon Seller's
request, Buyer shall furnish Seller with proof of the sufficiency of its funds.
4.5 NO IMPLIED REPRESENTATIONS OR WARRANTIES. Except as
specifically and expressly provided in this Agreement, Buyer acknowledges that
Seller has not made, and Buyer is not relying on, any representation, warranty
or covenant with respect to the transactions contemplated hereby.
ARTICLE V - OTHER AGREEMENTS OF THE PARTIES
5.1 CONTINUING OPERATION OF BUSINESS. From the date hereof until
the Closing, the Seller will not cause or permit any of the Companies to engage
in any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business. Without limiting the generality of the foregoing,
the Seller will not cause or permit any of the Companies to (i) make any
Distribution (other than Distributions permitted pursuant to Section 3.9;
provided, however, that on the Closing Date foreign accounts of the Companies
shall contain sufficient cash to cover outstanding checks), (ii) issue or sell,
to grant options, warrants or rights to purchase or subscribe to, or enter into
any arrangement or contract with respect to the issuance or sale of any of its
capital stock or any securities or obligations convertible into or exchangeable
for any shares of its capital stock, or make changes in its capital structure;
(iii) acquire any equity or ownership interest in any businesses, and not to
merge with, liquidate into or otherwise combine with any other business, person
or entity, except in each case transactions solely among the Companies which
are either (A) fully disclosed in a Schedule 5.1 attached to this Agreement or
(B) fully disclosed in writing to, and approved in writing by, Buyer prior to
consummation of each transaction; (iv) make any capital expenditures, or commit
to make any capital expenditures, other than capital expenditures which are
contemplated by capital expenditure budgets previously provided to Buyer or
those which do not individually exceed $500,000 or exceed, in the aggregate,
$1,000,000; or (v) otherwise engage in any practice, take any action, or enter
into any transaction of the sort described in Section 3.9 above.
Notwithstanding the provisions of this Section 5.1, nothing herein shall limit
the right of the Seller or the Companies to take any action necessary or
appropriate to assure that the representations and warranties of Seller
hereunder shall be true as of the Closing Date or take action otherwise
permitted under any other provision of this Agreement.
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November 1, 1995
27
5.2 INSPECTION. From the date hereof until the Closing, Seller
will give Buyer and its representatives (upon reasonable advance notice and
during normal business hours) reasonable access to the Companies' properties,
books, and records for the purpose of making preparations for the continued
post-closing operation of the Companies, and Buyer will furnish to Seller and
its representatives all such information and documents relating to Buyer as
Seller may reasonably request. Each of the parties will treat, and will cause
its representatives to treat, all information that is received under this
Section 5.2, if not in the public domain, as Confidential Information in
accordance with Section 5.20 and the Confidentiality Agreement.
5.3 ACCESS TO RECORDS. Except as provided in Section 5.4(i)
below, Buyer shall cause each Company to retain its books and records as they
physically exist on the Closing Date for a period of five (5) years (or such
longer time period as typically maintained by similar companies or as may be
required by law), from the Closing Date. Seller shall have access to such
books and records on reasonable notice during normal business hours for any
reasonable and necessary purpose; provided that to the extent Seller's request
for access is made in connection with, or contemplation of, any litigation
between Seller and Buyer (or involving any of the Companies), Seller's right to
obtain such access shall be solely governed by the discovery provisions of the
applicable rules of civil procedure. If Seller desires copies of any such
books and records during or after such retention period, it shall notify Buyer
and will be permitted to ▇▇▇▇ copies or make copies of such books and records,
provided that Seller bears the costs and expenses of such copying.
5.4 TAX MATTERS.
(a) Tax Sharing Agreements. Any Tax or Income Tax
sharing agreement between Seller and its Affiliates (including the Ultimate
Parent) and any of the Companies is terminated as of the Closing Date and will
have no further effect for any taxable year (whether the current year, a future
year, or a past year).
(b) Tax and Income Tax Returns for Periods Through the
Closing Date. Seller will be responsible to prepare and file all Tax and
Income Tax Returns, and to pay all Taxes and Income Taxes for the Companies (or
the affiliated, combined or unitary group to which they now or previously
belong) through the Closing Date with respect to all periods ending on or
before the Closing Date. Seller and/or Ultimate Parent will include the income
of the Companies (including any deferred income triggered into taxable income
by Treas. Reg. Section 1.1502-13 and Treas. Reg. Section 1.1502-14 and any
Excess Loss Accounts taken into income under Treas. Reg. Section 1.1502-19) on
the consolidated federal Income Tax Return of the Ultimate Parent for all
periods through the Closing Date and pay any Income Taxes attributable to such
income. The Companies will furnish Income Tax information to Ultimate Parent
for inclusion in the consolidated federal Income Tax Return of the Ultimate
Parent for the period which includes the Closing Date in accordance with the
Companies' past custom and practice. Seller and Ultimate Parent will allow the
Buyer an opportunity to review and comment upon such Income Tax
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November 1, 1995
28
Returns (including any amended Income Tax Returns) to the extent that they
relate to the Companies. The income of the Companies will be allocated to the
period up to and including the Closing Date and the period after the Closing
Date by closing the books of the Companies as of the end of the Closing Date.
To the extent possible under applicable law, Seller and/or Ultimate Parent will
file all Income Tax Returns for the Companies for the period up to and
including the Closing Date by using a short tax year that ends on the Closing
Date, and Seller and/or Ultimate Parent shall pay all Income Taxes shown as due
on such Income Tax Returns.
(c) Audits. No party shall request a Tax or Income Tax
audit of Seller, or the Companies, or of any Affiliate of Seller or any of the
Companies, and Buyer shall not, without the prior written consent of Seller,
extend any statute of limitations with respect to Taxes or Income Taxes owed
by any of the foregoing entities. To the extent Buyer suffers or realizes an
Income Tax Detriment as a result of Income Tax audit adjustments made after the
Closing Date which pertain to the Companies for the periods up to or including
the Closing Date, Seller shall pay to Buyer the value of such Income Tax
Detriment within thirty (30) days of its determination. If Buyer and Seller
are unable to agree on the value of an Income Tax Detriment, the dispute shall
be submitted to the Accounting Firm, whose determination shall be binding.
(d) Carrybacks. Ultimate Parent will immediately pay to
the Buyer any Income Tax refund (or reduction in Income Tax liability)
resulting from a carryback of a post-acquisition Income Tax attribute of any of
the Companies into the Ultimate Parent consolidated Income Tax Return, when
such refund or reduction is realized by the Affiliated Group. Ultimate Parent
will cooperate with the Companies in obtaining such refunds (or reduction in
Income Tax liability), including through the filing of amended Income Tax
Returns or refund claims. The Buyer agrees to indemnify and hold harmless
Ultimate Parent for any Income Taxes resulting from the disallowance of such
post-acquisition Income Tax attributes on audit or otherwise.
(e) Retention of Carryovers. Ultimate Parent will not
elect to retain any net operating loss carryovers or capital loss carryovers of
the Companies under Treas. Reg. Section 1.1502-20(g).
(f) Tax Returns and Foreign Income Tax Returns for
Periods Beginning Before and Ending After the Closing Date. With respect to
all Tax Returns and Income Tax Returns (but specifically excluding federal,
state and local Income Tax Returns) for periods ending after the Closing Date
but relating to periods preceding the Closing Date (including without
limitation, all state and local Tax Returns for sales, use, payroll,
withholding, employment, excise, property, intangible and franchise taxes),
Buyer shall be responsible for causing the Companies to prepare and file such
Tax Returns, and the Companies shall be responsible for making any required
payments with respect to such Tax Returns and shall hold Seller harmless from
and against any such required payments. Seller will cause the estimated
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November 1, 1995
29
amount of such Tax liabilities through the Closing Date to be properly accrued
by the Companies and such amounts shall be reflected on the Closing Balance
Sheet.
(g) Refunds. Any refunds or credits of Income Taxes
attributable to a pre-Closing Tax period for which Ultimate Parent or Seller is
liable for Income Taxes under Section 5.4(b) shall be for the account of
Ultimate Parent or Seller, as applicable.
(h) Reimbursement for Income Tax Benefit. If any Adverse
Consequences for Income Taxes arise for which Seller has agreed to hold Buyer
harmless pursuant to paragraph (b) above, and if the adjustment giving rise to
such Adverse Consequences results in an Income Tax Benefit to Buyer or
Companies for any period after the Closing, Buyer or Companies, after receipt
of such benefit, will promptly pay to Seller the value of such Income Tax
Benefit, but only to the extent the aggregate of such adjustments exceeds
$500,000. If Buyer and Seller are unable to agree on the value of an Income
Tax Benefit, the dispute shall be submitted to the Accounting Firm, whose
determination shall be binding.
(i) Maintenance of Records and Assistance. Ultimate
Parent and Buyer shall each maintain (or, in the case of Buyer, cause the
Companies to maintain) the books and records that relate to any Tax Return or
Income Tax Return of a Company or any consolidated return of Ultimate Parent
for a period of not less than seven years following the filing date of such Tax
Return or Income Tax Return or consolidated return, shall thereafter give the
other party at least 30 days' notice of its intention to destroy any such
records and shall, at the other party's request and expense, to the extent such
records relate to a Company, turn over any such records to the other party
instead of destroying them. As soon as practicable after a request by Seller
or Buyer ("Requesting Party"), Seller or Buyer, as the case may be (the
"Delivering Party"), shall deliver to the Requesting Party such information and
data and make available such knowledgeable persons employed at the time of the
request by the Delivering Party as the Requesting Party may reasonably request,
in order to enable the Requesting Party to complete and file all Tax Returns or
Income Tax Returns which it is required to file with respect to the activities
or assets of a Company or to respond to audits by any taxing authorities with
respect to such activities or assets. The Delivering Party's obligation under
this paragraph to permit the Requesting Party access to and to review the
foregoing materials is conditioned upon the Requesting Party's execution of a
reasonable confidentiality agreement with respect thereto, together with an
undertaking that such access and review are requested solely for the purposes
described in this Section 5.4.
(j) Notice. If Buyer or a Company becomes aware of any
assessment, official inquiry, examination or proceeding that could result in an
official determination with respect to any Tax or Income Tax for which Seller
could be liable pursuant to this Agreement, Buyer shall promptly so notify
Seller in writing. If Seller becomes aware of any official inquiry,
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30
examination or proceeding that could result in an official determination with
respect to any Tax or Income Tax for which Buyer or a Company could be liable
pursuant to this Agreement, Seller shall promptly so notify Buyer in writing.
5.5 FILING UNDER ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST IMPROVEMENTS ACT OF
1976.
(a) General. Seller and Buyer acknowledge that the
transactions contemplated by this Agreement require filings with the FTC and
the Antitrust Division under the Antitrust Improvements Act.
(b) Filings. Seller and Buyer shall each promptly file
with the FTC and the Antitrust Division the notifications and reports required
to be filed pursuant to the Antitrust Improvements Act and shall undertake in
good faith to file promptly any supplemental information which may be requested
in connection therewith, which notifications and reports compiled and filing of
supplemental information will comply, in all material respects with the
requirements of such Antitrust Improvements Act. Seller and Buyer shall each
furnish the other with such information as either may reasonably request to
make such filings.
(c) Appeal. In the event that the Antitrust Division
brings suit seeking to prevent or restrain the transactions contemplated by
this Agreement or in the event the FTC issues a complaint or petitions a court
to enjoin the transactions contemplated by this Agreement, then Seller and
Buyer shall jointly determine whether to appeal or contest an adverse decision
or action of the FTC or the Antitrust Division or terminate this Agreement
without further liability or obligation to the Parties, except that the
obligations contained in Sections 9.8 and 9.9, the second sentence of Section
5.2, and Section 5.20 shall survive such termination.
5.6 CHEMICAL BANK FINANCING. The Stock and substantially all of
the Companies' Assets are subject to Liens held pursuant to the Chemical
Agreements which Seller shall cause to be released at the Closing. Seller also
shall cause Chemical to deliver a written confirmation that following such
release of Liens the Companies will have no liabilities to Chemical as of the
Closing.
5.7 OUTSTANDING LETTERS OF CREDIT. Buyer shall replace, as of the
Closing, outstanding letters of credit issued for the benefit of the Companies
based on the credit, or at the risk, of Seller or its Affiliates (other than
the Companies). With respect to those letters of credit Buyer is unable to
replace as of Closing, Buyer shall deliver at Closing a letter of credit (or
cash) in the amount of such outstanding letters of credit as security; Seller
will allow for a reduction in such letters of credit (or return cash to Buyer)
if after the Closing Date the requirement to provide such letters of credit is
reduced or eliminated. With respect to letters of credit provided relating to
the self-insured retention referenced in Section 5.12(a) hereof, Buyer shall
provide to Seller a letter of credit in an amount equal to the balance sheet
reserves of Seller, specific to the Companies, with respect to such retention,
as of the date immediately prior
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to the Closing Date, with such other terms as are contained in the letters of
credit provided by Seller (or its Affiliates) to its insurance carriers.
5.8 REPAYMENT OF INTERCOMPANY DEBT. Except as set forth in
Schedule 5.8(a), or as otherwise contemplated by this Agreement, concurrent
with or prior to the Closing, the entire amount of Debt owed by any Company to
the Seller and/or its Affiliates shall be deemed to constitute a capital
contribution of Seller to Amerace and the entire amount of Debt owed by the
Seller and/or its Affiliates to any Company, outstanding on the Closing Date,
shall be cancelled and/or forgiven without the further payment of any money in
connection therewith. Notwithstanding the foregoing, Intercompany payables
owed by the Companies to Seller and/or its Affiliates for goods or services
provided in the Ordinary Course of Business through the Closing Date and as set
forth in Schedule 5.8(b) shall not be cancelled at the Closing and shall be
reflected on the Closing Balance Sheet and the foregoing provisions shall not
be applicable to any obligations relating to Taxes or Environmental Laws which
shall be governed by the provisions of Sections 5.4 and 5.22 hereof. Certain
other obligations of the nature set forth on Schedule 5.8(b) may be incurred
after the Closing Date, and such obligations shall not be reflected on the
Closing Balance Sheet.
5.9 CASH AND CASH EQUIVALENTS. The parties acknowledge that Buyer
is not relying upon the existence of any Cash held by the Companies (or by
other entities in which the Companies hold interests) as of the Closing and
agrees that Seller may cause the Companies (or such other entities) to transfer
to Seller, prior to the Closing, all or a portion of the Cash (subject to the
provisions of Section 5.1(i)). Buyer agrees to fund Companies' outstanding
checks drawn on domestic accounts as of the Closing Date, as they are presented
for payment and the accounts payable on the Closing Balance Sheet shall include
the amount of such outstanding checks.
5.10 PENSION AND SAVINGS PLAN.
(a) Seller shall cause the trustee of the Savings Plan to
transfer, to the trustee of a qualified defined contribution plan maintained by
the Buyer or an entity which is treated as a single employer with the Buyer
pursuant to Section 414(b), (c) or (m) of the Code ("Buyer Affiliate"), either
currently existing or hereinafter established by the Buyer or a Buyer Affiliate
(the "Transferee Savings Plan"), in cash or in marketable securities acceptable
to the Buyer, the entire value of each Transferred Employee's accounts under
the Savings Plan as determined under the provisions of the Savings Plan.
"Transferred Employee" means each employee of a Company on the Closing Date who
is a participant in the Savings Plan. Unless otherwise agreed by Seller and
the Buyer, the transfer shall occur within ninety (90) calendar days after the
Buyer obtains and presents to Seller a determination letter issued by the
Internal Revenue Service evidencing that the Transferee Savings Plan is
qualified under the applicable provisions of the Code, or evidence reasonably
satisfactory to Seller that an application for a determination letter for the
Transferee Savings Plan has been filed with the Internal Revenue Service prior
to the end of the applicable remedial amendment period, or other evidence
satisfactory to Seller that the
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Transferee Savings Plan is qualified under the applicable provisions of the
Code. Such evidence of qualification shall be provided by the Buyer within
sixty (60) days of the Closing Date.
(b) After the transfers described above, none of the
Seller, its ERISA Affiliates, nor the Savings Plan shall have any liability or
obligation to pay or otherwise provide to the Transferred Employees any
benefits accrued or provided for under the Savings Plan, and the Buyer shall
assume full liability for such benefits; provided that the Buyer shall have no
liability whatsoever for any failure by Seller, its employees, agents or
affiliates to operate the Savings Plan on a qualified basis in compliance with
the terms of the plan and applicable law prior to the Closing Date. All
Transferred Employees shall cease active participation in the Savings Plan as
of the Closing Date.
(c) The Transferee Savings Plan (i) shall provide that
all benefits transferred to such plans pursuant to Sections 5.10(a) shall
remain fully vested; and (ii) shall recognize the service with the Companies of
the Transferred Employees who participated in the Savings Plan immediately
prior to the Closing Date for eligibility and vesting purposes under the
Transferee Savings Plan.
(d) Prior to the Closing, each Company shall pay to the
trustee of the Savings Plan all required Employer and Employee Contributions of
such Company to the Savings Plan for all calendar months ending twenty (20)
days or more prior to the Closing Date. Within forty-five (45) days after the
Closing, each Company shall pay to the trustee of the Savings Plan all required
Employer and Employee Contributions to the Savings Plan for any calendar month
ending less than twenty (20) days prior to the Closing Date and for the
calendar month in which the Closing Date occurs. For purposes of this
paragraph, the Employee Contributions shall be those amounts withheld or
required to be withheld from employees' compensation for the period prior to
and including the Closing Date, and Employer Contributions shall be the
Employer Contributions that would be required to be made with respect to such
Employee Contributions.
(e) The Parties agree that after the Closing Date the
Companies shall have no liability with respect to any unpaid contributions to
the Cash Balance Plan.
5.11 CONSENTS, RELEASES. Prior to or at the Closing, Seller shall:
(i) obtain the release of all Liens in the Stock and other Assets of the
Companies securing Debts of Seller or any Affiliate (other than a Company) of
Seller (including, without limitation Liens held by lenders pursuant to the
Chemical Agreements); and (ii) use commercially reasonable efforts to obtain
such Material consents or waivers from third parties necessary to consummate
the transactions contemplated hereunder as are set forth in Schedule 5.11.
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5.12 RESPONSIBILITY FOR INSURANCE COVERAGE.
(a) Liability and Workers Compensation Insurance. Some
or all of the Companies are insured parties under current general liability,
products liability, auto liability, employers' liability and workers'
compensation insurance policies of Seller or its Affiliates other than a
Company (a "Seller Insured Entity") as set forth on Schedule 5.12(a), which
provide coverage on an "occurrence" basis during the applicable policy period
(the "Current Insurance"). As between Seller Insured Entity and a Company,
Seller Insured Entity shall be responsible and liable for all claims associated
with occurrences prior to the Closing of a category or type subject to coverage
under the Current Insurance but only to the extent, it (or a third party on its
behalf) actually receives insurance proceeds or protection relating thereto (a
"Covered Claim"). To the extent such Covered Claim is subject to a deductible
or self-insured retention, or the liability exceeds the proceeds received, or
such insurance proceeds are not otherwise available, the applicable Company
shall be responsible and liable for said amount and shall reimburse Seller
Insured Entity within thirty (30) days of receipt of a request for
reimbursement, with interest accruing at the rate of 10% per annum for payments
not received within such thirty (30) day period. In the event Seller
determines to enter into a "buy-out agreement" with an insurance carrier
pursuant to which Seller pays consideration to eliminate the deductible or
self-insured retention with respect to all or a portion of a particular policy
period, then Seller shall notify Buyer of its intention to enter into such
transaction and the terms thereof. Buyer shall have thirty (30) days from the
receipt of such notice to elect to participate in such transaction by
irrevocably agreeing to pay its portion of the consideration paid by Seller.
If Buyer elects not to so participate, it will continue to be charged pursuant
to this Section 5.12(a) as though such buy- out transaction had not occurred.
(b) Seller Insured Entity or its insurer shall have sole
right to assume and conduct the defense of any Covered Claims; provided however
that in the event a Covered Claim could result in liability to any Company in
an amount exceeding $5,000, any decisions with respect to disposition of the
claim shall be made on a joint basis by Seller and Buyer, and Buyer shall have
the right to participate in the defense of such claim at its own expense.
Seller Insured Entity shall not be obligated to Buyer for any legal or other
expenses incurred with respect to the defense of Covered Claims. Buyer shall
cause the Companies to cooperate in the defense of the Covered Claims and to
provide records and other information necessary or appropriate to such defense,
as requested by Seller Insured Entity or its insurer. Buyer shall not take any
action, or omit to take any action, which may materially adversely affect the
availability of insurance coverage with respect to Covered Claims. At the
Closing, the Seller will provide Buyer with a Certificate of Insurance for all
Current Insurance of the Seller.
5.13 TRANSFER TAXES. Seller agrees to pay any documentary, stock
transfer, or other similar taxes, if any, and any other transfer taxes, if any,
imposed by reason of this transaction.
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5.14 FINANCING. Buyer shall use commercially reasonable efforts to
fulfill any conditions contained in any third party financing commitments
intended to satisfy Buyer's obligations hereunder.
5.15 NOTICES OF DEVELOPMENTS. Each Party will give prompt written
notice to the others of any Material adverse development of which it has
Knowledge causing a breach of any of its own representations and warranties
contained in this Agreement. No disclosure by any Party pursuant to this
Section 5.15, however, shall be deemed to amend or supplement the Schedules
hereto or to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant, except as provided in Section 8.5 hereof.
5.16 EXCLUSIVITY. The Seller will not (and the Seller will not
cause or permit any of the Companies to) (i) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to the
acquisition of any capital stock or other voting securities, or any substantial
portion of the assets of, any of the Companies (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate
in any discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner any
effort or attempt by any Person to do or seek any of the foregoing. The Seller
will not vote its Stock of Amerace in favor of any such acquisition structured
as a merger, consolidation, or share exchange.
5.17 TITLE INSURANCE. Within ten (10)business days after execution
of this Agreement, the Seller will cause the Companies to deliver to Buyer the
most current version in their possession, if any, of a title insurance policy
and survey for each parcel of Real Property that any of the Companies owns,
other than the Real Property located in Stillwater, Oklahoma and ▇▇▇▇▇▇▇▇
County, Ohio. To the extent reasonably requested by Buyer, Seller will provide
prior to Closing updated title insurance policies (including all endorsements
requested by Buyer) and surveys with respect to such owned Real Property, other
than the Real Property located in Stillwater, Oklahoma and ▇▇▇▇▇▇▇▇ County,
Ohio. The cost of such title insurance policies and surveys shall be shared
equally by Seller and Buyer.
5.18 LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
audit, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Companies, each Party will cooperate
with the other and its counsel in the contest or defense, make available its
personnel, and provide such testimony and access to its books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under Section 8 below).
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5.19 TRANSITION. The Seller will take no action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of any of the Companies from
maintaining the same business relationships with the Companies after the
Closing as it maintained with the Companies prior to the Closing, except for
those relationships maintained by the Companies indirectly through Seller or
its Affiliates (other than a Company) which are not intended to survive the
Closing. The Seller will refer all customer inquiries relating to the Business
of the Companies to the Buyer from and after the Closing.
5.20 CONFIDENTIALITY. The Seller will treat and hold as such all
of the Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly to
the Buyer or destroy, at the request and option of the Buyer, all tangible
embodiments (and all copies) of the Confidential Information which are in its
possession. In the event that the Seller is requested or required (by oral
question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information, Seller will notify the Buyer promptly of
the request or requirement so that the Buyer may seek an appropriate protective
order or waive compliance with the provision of this Section 5.20. If, in the
absence of a protective order or the receipt of a waiver hereunder the Seller
is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal or else stand liable for contempt, that Seller may
disclose the Confidential Information to such tribunal; provided, however, that
the Seller shall use its reasonable best efforts to obtain, at the reasonable
request of the Buyer, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be
disclosed as the Buyer shall designate. The foregoing provision shall not
apply to any Confidential Information which is generally available to the
public immediately prior to the time of disclosure. Notwithstanding the
foregoing, nothing herein shall require Seller to return or destroy, or prevent
Seller from using, any Confidential Information required by it in order to
perform any obligation, or defend against any liability, of the Companies
retained pursuant to the terms hereof, by operation of law, or otherwise.
5.21 COVENANT NOT TO COMPETE.
(a) Seller agrees that, during the period beginning on
the Closing Date and ending on the fifth anniversary thereof (the
"Non-Competition Period"), Seller will not, and will use its best efforts to
cause Seller's Subsidiaries not to, directly or indirectly, or by or through
any other Person, whether as a shareholder, partner, joint venturer or,
consultant, engage or invest in, or consult with or to, any business which
directly competes with the Business in the United States or in any other
geographic area in which the Companies conduct business as of the date hereof
or as of the Closing Date; provided, however, that ownership or acquisition by
the Seller and its Subsidiaries of an aggregate (calculated for the Seller and
its Subsidiaries, collectively) of less than five percent (5%) of the
outstanding stock of any publicly traded company shall not in itself constitute
a violation of this Section 5.21(a); and, provided, further,
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that nothing herein shall restrict the right of Seller or its Subsidiaries to
own an interest in (including an interest constituting control) or engage in
any other relationship with any Person, provided no more than ten percent (10%)
of the revenues of such Person are generated from businesses which directly
compete with the Business.
(b) Seller agrees that during the period beginning on the
Closing Date and ending on the second anniversary of the Closing Date, Seller
will not Knowingly, and will use its best efforts to cause Seller's
Subsidiaries not to, directly or indirectly, solicit or hire any key employee
of the Companies, assist in the solicitation or hiring of such key employee by
any other Person, or encourage any such key employee to terminate his or her
employment with the Companies.
(c) Seller acknowledges and agrees that, (i) it regards
the restrictions contained in Sections 5.20 and 5.21 as reasonable and designed
to provide the Buyer with limited, legitimate and reasonable protection against
subsequent diminution of the value of the Companies attributable to any actions
of any Seller or any of its Subsidiaries contrary to such covenants and (ii)
because the legal remedies of the Buyer may be inadequate in the event of a
breach of, or other failure to perform, any of the covenants and obligations
set forth in Sections 5.20 and 5.21, the Buyer may, in addition to obtaining
any other remedy or relief available to them (excluding consequential, indirect
and exemplary damages), obtain specific enforcement of Sections 5.20 and 5.21
and other equitable remedies. Seller also acknowledges and agrees that no
breach by the Buyer of, or other failure by the Buyer to perform, any of the
covenants or obligations of the Buyer under this Agreement or otherwise shall
relieve such Seller of any of its obligations under Sections 5.20 and 5.21.
(d) If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 5.21 is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.
5.22 ENVIRONMENTAL ASSESSMENT PROTOCOL; WAIVER.
(a) During the period after the date hereof and ending
not later than November 30, 1995, or such other date as is agreed to in writing
by the Seller, Buyer may conduct environmental Site assessments and
Environmental Laws compliance audits (collectively, "Environmental Assessment")
of the Real Property of the Companies and the operations of the Companies at
each such Site in accordance with the provisions of the Environmental
Assessment Protocol as set forth on Schedule 5.22.
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(b) Excepting only the specific contractual remedies
provided in this Agreement, Buyer hereby forever waives and releases Seller
from any and all claims, causes of action or remedies that Buyer may no have or
hereafter acquire against Seller, whether under any statute, ordinance,
regulation, theory or principle of common law or otherwise, for any
Environmental Liabilities arising from or related to conditions or past
practices on any properties currently owned or operated or previously owned or
operated by any of the Companies (including any subsidiaries, divisions or
operating units of the Companies), including, without limitation, any claims
under any Environmental Laws.
5.23 MEDICAL BENEFITS; RETIREE WELFARE BENEFIT COVERAGE.
(a) Medical Insurance. Buyer acknowledges that employees
of the Companies shall be ineligible to participate in any employee welfare
benefit plans maintained by Seller or its ERISA Affiliates after the Closing
and agrees that none of Seller, its ERISA Affiliates or any employee welfare
benefit plan (within the meaning of Section (3)(1) of ERISA) maintained by
Seller or its ERISA Affiliates shall be liable for any claim incurred by an
employee of the Companies after the Closing, and the Company shall bear all
such liability, if any. For purposes of the preceding sentence, a claim shall
be deemed incurred when the service which results in such claim is rendered,
irrespective of when the illness or injury giving rise to such services, was
first contracted or incurred.
(b) Retiree Welfare Benefits. Buyer acknowledges and
agrees that it is assuming as of the Closing Date all liability related to
retiree welfare benefits under the Employee Benefit Plans described in Schedule
3.17(a) for current or future retirees of the Companies, including retirees of
Amerace's predecessor entities or of businesses or companies previously owned
by a Company. Buyer agrees that none of Seller, its ERISA Affiliates or any
employee welfare benefit plan (within the meaning of Section (3)(1) of ERISA)
maintained by Seller or its ERISA Affiliates shall have any liability related
to retiree welfare benefits under the Employee Benefit Plans described in
Schedule 3.17(a) to which a current or future retiree of a Company, or of
Amerace's predecessor entities or of businesses or companies previously owned
by a Company may become entitled after the Closing Date. This Section 5.23(b)
is not intended to create any third-party beneficiary rights in any Persons not
a party to this Agreement.
5.24 SCHEDULES. As soon as reasonably practicable following the
execution of this Agreement and at least ten (10) days prior to the Closing,
Seller shall deliver to Buyer all Schedules required by this Agreement.
ARTICLE VI - CONDITIONS TO OBLIGATIONS OF THE PARTIES
6.1 CONDITIONS TO OBLIGATIONS OF BUYER. All obligations of Buyer
under this Agreement with respect to the Closing are subject to the fulfillment
of each of the following conditions:
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(a) Each and every representation and warranty of Seller
contained in this Agreement shall be true in all Material respects as of the
Closing Date.
(b) Seller shall have performed and complied in all
Material respects with all covenants required by this Agreement to be performed
or complied with by it prior to or at the Closing.
(c) No Action shall be pending before any Governmental
Authority which presents a substantial risk of the restraint or prohibition of
the transactions contemplated by this Agreement or the incurrence of Material
damages in connection therewith, or which might adversely affect the right of
the Buyer to own the Stock and control Amerace and its Subsidiaries, or
otherwise adversely affect the right of any of the Companies to own their
respective assets and operate their businesses (and no such Governmental Order
shall be in effect).
(d) The "waiting period" (as defined under the Antitrust
Improvements Act), shall have expired or been terminated.
(e) Since June 30, 1995, there shall not have occurred
any Material Adverse Effect with respect to the Companies.
(f) All consents and approvals required under the terms
of the Chemical Agreements with respect to the transaction contemplated by this
Agreement shall have been received and all Liens on the Stock or Assets of any
Company created or existing under the terms of the Chemical Agreements shall
have been (or concurrent with the Closing shall be) released.
(g) The results of Buyer's completed Environmental
Assessment shall be satisfactory to Buyer.
(h) Buyer shall have received the Schedules required to
be delivered by Seller pursuant to this Agreement, and such Schedules shall be
in form and substance acceptable to Buyer.
(i) The Board of Directors of Buyer shall have approved
the Buyer's execution, delivery and performance of this Agreement.
6.2 CONDITIONS TO OBLIGATIONS OF SELLER. All of the obligations
of Seller hereunder with respect to the Closing are subject to the fulfillment
of each of the following conditions:
(a) Each and every representation and warranty of Buyer
contained in this Agreement shall be true in all Material respects as of the
Closing Date.
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(b) Buyer shall have performed or complied in all
Material respects with all covenants required by this Agreement to be performed
or complied with by it prior to or at Closing.
(c) No Action shall be pending before any Governmental
Authority which presents a substantial risk of the restraint or prohibition of
the transactions contemplated by this Agreement or the obtaining of Material
damages in connection therewith (and no such Governmental Order shall be in
effect).
(d) The "waiting period" (as defined under the Antitrust
Improvements Act), shall have expired or been terminated.
(e) All consents and approvals required under the terms
of the Chemical Agreements with respect to the transaction contemplated by this
Agreement shall have been received and all Liens on the Stock or Assets of the
Companies created or existing under the terms of the Chemical Agreements shall
have been (or concurrent with the Closing shall be) released.
(f) Amerace shall have reassumed those environmental
obligations of the Companies previously assumed by Eagle Environmental
Management, Inc. pursuant to the terms of that certain Subscription Agreement
dated July 22, 1994.
(g) The results of Buyer's completed Environmental
Assessment shall be satisfactory to Seller.
(h) Seller and/or the Companies shall have taken the
actions described in Schedule 6.2(h) hereof.
(i) The Board of Directors of Seller shall have approved
the Seller's execution, delivery and performance of this Agreement.
6.3 NON-FULFILLMENT OF CONDITIONS.
(a) This Agreement may be terminated at any time prior to
the Closing:
(i) by mutual written consent of Buyer and
Seller; or
(ii) by Buyer by written notice to Seller if any
of the conditions set forth in Section 6.1 hereof shall not have been
fulfilled on or prior to the Closing and shall not have been waived in
writing by Buyer, subject to the right of Seller to delay the Closing
for not more than thirty (30) days in order to satisfy such
conditions; or
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40
(iii) by Seller by written notice to Buyer if any
of the conditions set forth in Section 6.2 hereof shall not have been
fulfilled on or prior to the Closing and shall not have been waived in
writing by Seller subject to the right of Buyer to delay the Closing
for not more than thirty (30) days in order to satisfy such
conditions; or
(iv) by either Seller or Buyer, by written notice
to the other, if the Closing has not occurred, for any reason
whatsoever, on or before December 31, 1995.
(b) If this Agreement is terminated by Buyer pursuant to
Section 6.3(a)(ii) or (iv) hereof, or by Buyer and Seller pursuant to Section
6.3(a)(i) hereof, all further obligations of the parties hereunder shall
terminate, except that the obligations contained in this Section 6.3(b),
Sections 9.8 and 9.9, the second sentence of Section 5.2, and Section 5.20
shall survive said termination, and nothing herein will eliminate the right of
Buyer to seek the remedy of specific performance.
(c) If this Agreement is terminated by Seller pursuant to
Section 6.3(a)(iii) or (iv) hereof, or by Buyer and Seller pursuant to Section
6.3(a)(i) hereof, all further obligations of the parties hereunder shall
terminate, except that the obligations contained in this Section 6.3(c),
Sections 9.8 and 9.9, the second sentence of Section 5.2, and Section 5.20
shall survive said termination, and nothing herein will eliminate the right of
Seller to seek damages or other remedies for breach of this Agreement.
ARTICLE VII - CLOSING
7.1 TIME, DATE AND PLACE OF CLOSING. The transaction which is the
subject of this Agreement shall be closed on December 15, 1995 at 9:00 a.m., or
such earlier date as shall be ten (10) days after delivery of all required
Schedules, if the waiting period under the Antitrust Improvements Act has
expired or been terminated, or on such other date and time as the parties shall
mutually agree upon in writing. The Closing shall take place at the offices of
Buyer's counsel in Chicago, Illinois.
7.2 DELIVERIES BY SELLER AT CLOSING. At the Closing, Seller will
deliver to Buyer the following documents:
(a) Share certificates representing all of the Stock,
duly endorsed for transfer to Buyer or with separate stock transfer powers duly
endorsed by Seller for transfer of the Stock to Buyer.
(b) Certificates of the Secretary of State of Delaware,
and of the respective States (or other jurisdictions) of incorporation of each
of the other Companies, evidencing the corporate good standing of Seller and
the Companies.
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(c) Such releases and other documents as are necessary to
evidence the release of Liens which secure Debt of Seller or its Affiliates
(other than a Company) (including those Liens in favor of Chemical) on the
Stock and the Assets of the Companies.
(d) The minute book, stock records and corporate seal of
each Company, to the extent in existence and available.
(e) Resignations of all members of the Board of Directors
of the Companies, to be effective as of the Closing.
(f) The opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.C., counsel
for Seller, in a form acceptable to Buyer and its counsel.
(g) A certificate of Seller, executed by a duly
authorized officer of Seller, certifying that the conditions set forth in
Section 6.1 have been satisfied.
(h) A copy of a resolution of Seller's Board of Directors
certified by Seller's Secretary as having been duly adopted and being in full
force and effect, authorizing Seller's execution and performance of this
Agreement.
(i) Consents referred to on Schedule 3.3 and such other
consents as are necessary to avoid terminations, defaults or penalties under
the Contracts disclosed pursuant to Section 3.6; provided that except for
consents referred to on Schedule 3.3 which shall be delivered at Closing, no
such consent will be required for any Contract if the failure to obtain such
consent would not have a Material Adverse Effect upon of the applicable
Company.
(j) The Ultimate Parent Guaranty in a form mutually
acceptable to the Seller and Buyer, executed by a duly authorized officer of
Ultimate Parent.
(k) Such other documents as may be reasonably requested
by Buyer in connection with the Closing of the transactions contemplated by
this Agreement, all in form and substance reasonably satisfactory to Buyer.
7.3 DELIVERIES BY BUYER AT CLOSING. At the Closing, Buyer will
deliver to Seller:
(a) A bank wire transfer in the amount required by
Section 2.1 hereof.
(b) The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇, counsel for
Buyer, in a form acceptable to Seller and its counsel.
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November 1, 1995
42
(c) A copy of a resolution of Buyer's Board of Directors
certified by Buyer's Secretary as having been duly adopted and being in full
force and effect, authorizing Buyer's execution and performance of this
Agreement.
(d) A certificate of Buyer, executed by a duly authorized
officer of Buyer, certifying that the conditions set forth in Section 6.2 have
been satisfied.
(e) The letters of credit (or cash) required pursuant to
the provision of Section 5.7 hereof.
(f) Such other documents as may be reasonably requested
by Seller in connection with the Closing of the transactions contemplated by
this Agreement, all in form and substance reasonably satisfactory to Seller.
7.4 ADDITIONAL ACTION TO BE TAKEN AT CLOSING. At the Closing, the
following parties will take the following actions:
(a) Buyer shall pay the Receivables Purchase Price to
Bank of America, as Trustee, as contemplated in the Receivables Sale Agreement.
ARTICLE VIII - INDEMNIFICATION
8.1 SURVIVAL. The representations, warranties and covenants of
the Parties in this Agreement and in any other, certificates and documents
delivered in connection therewith shall survive the Closing and continue in
effect notwithstanding any investigation by or on behalf of either Party as set
forth below. The indemnification obligations of Seller contained in Section
8.2 shall terminate as to any claim of inaccuracy or breach by Seller of which
Buyer shall not have given notice to Seller on or before twenty-four (24)
months from the Closing Date or, in the case of representations made pursuant
to Section 3.19 or with respect to the indemnification obligations contained in
Section 8.2(iv), the fifth anniversary of the Closing Date; provided however
that notwithstanding the foregoing in the case of all claims relating to (i)
fraud by Seller for the period prior to and including the Closing, and (ii) all
claims relating to Taxes or Income Taxes, such claims may be brought until the
date which is 30 days after the expiration of the applicable statute of
limitations after giving effect to all tolling periods or extensions to such
applicable statutes of limitations available at, or imposed by, law or equity
or agreed to by Seller. The indemnification obligations of Buyer contained in
Section 8.3 shall terminate as to any claim of inaccuracy or breach by Buyer of
which Seller shall not have given notice to Buyer on or before twenty-four (24)
months from the Closing Date. All covenants of the Parties that are to be
performed at or prior to the Closing shall terminate at Closing. All covenants
of the Parties that are to be performed after Closing shall continue and expire
in accordance with their respective terms. The date on which the respective
periods of survival specified above terminate are each referred to as a "Cutoff
Date", provided that any claim with respect to the breach of
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November 1, 1995
43
any representation or warranty which would otherwise terminate after the Cutoff
Date shall survive until the final adjudication or settlement of any such
matter if notice of any inaccuracy or breach thereof, including a reasonably
detailed description of such alleged inaccuracy or breach, shall have been
given in writing to Buyer or Seller, as the case may be, on or prior to the
Cutoff Date, and further provided that the representations and warranties set
forth in Section 3.1, 3.2, 3.3, 3.4, 4.1, 4.2 and 4.3 shall continue without
limit as to time.
8.2 INDEMNIFICATION OF BUYER.
Except as otherwise provided in this Article 8, Seller shall
indemnify and hold harmless Buyer, its officers, directors, employees,
stockholders, agents and Affiliates from and against, and shall reimburse such
parties for, any Adverse Consequences arising from or related to any of the
following: (i) any breach of or inaccuracy in any representation or warranty
made by or on behalf of Seller in this Agreement (including, without
limitation, the Schedules hereto) or in any document, instrument or certificate
delivered pursuant hereto; or (ii) any breach or violation of any covenant or
agreement made by or on behalf of Seller in this Agreement (including, without
limitation, the Schedules hereto) or in any document, instrument or certificate
delivered pursuant hereto; or (iii) any state of facts or condition relating to
Seller or any of its Affiliates (other than the Companies or their predecessor
entities), whether before, at or after the Closing; or (iv) (A) the presence on
or before the Closing Date of Hazardous Materials on, in, or under properties
formerly, but not as of the Closing Date, owned or operated by any of the
Companies (including by any former subsidiaries, divisions or operating units
of the Companies); or (B) the presence at off-site facilities of Hazardous
Materials which were generated by (or which otherwise originated at) any of the
Companies (including at any former subsidiaries, divisions or operating units
of the Companies) prior to the Closing Date at properties formerly, but not as
of the Closing Date, owned or operated by any of the Companies (including by
any former subsidiaries, divisions or operating units of the Companies); or (C)
the presence on or before the Closing Date of Hazardous Materials on, in or
under properties currently (i.e., as of the Closing Date) owned or operated by
any of the Companies; or (D) the presence at off-site facilities of Hazardous
Materials which were generated by (or which otherwise originated at) any of the
Companies (including at any former subsidiaries, divisions or operating units
of the Companies) prior to the Closing Date at properties currently (i.e., as
of the Closing Date) owned or operated by any of the Companies. Seller shall
be responsible for all Adverse Consequences claimed for any breach of any
representation or warranty herein, or indemnification with respect thereto
pursuant to clauses (i) or (ii) above, only after such time and to the extent
that the aggregate amount of such Adverse Consequences claimed for all of such
breaches, calculated after taking into account the net amount of any recovery
or benefit described in Section 8.4(b) below ("Buyer's Net Claim"), exceeds
$1,500,000. Seller shall be responsible for all Adverse Consequences resulting
from the matters referenced in clause (iv) (A) or (B) above, only after such
time and to the extent that
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44
Buyer's Net Claim with respect thereto exceeds $1,500,000. Seller shall be
responsible for all Adverse Consequences resulting from the matters referred to
in clause (iv) (C) or (D) above only after such time and to the extent that
Buyer's Net Claim with respect thereto exceeds $2,000,000; provided, however
that Buyer and Seller shall each be responsible for fifty percent (50%) of
Buyer's Net Claim in excess of $2,000,000 but less than $7,000,000, and
provided, further that Buyer shall be solely responsible for Buyer's Net Claim
resulting from such matters in excess of $7,000,000 in the aggregate. Except
as otherwise provided in this Agreement to the contrary, (A) Buyer shall not be
entitled to indemnification from Seller with respect to any Adverse
Consequences to the extent that the amount of such item is reflected or
reserved against in the Closing Balance Sheet, (B) only when Buyer's Net Claim
pursuant to clauses (i) or (ii) above exceeds $1,500,000 (or exceeds the other
amounts specified above with respect to clause (iv)) shall Buyer be entitled to
indemnification from Seller pursuant to such clauses, and then only to the
extent of Buyer's Net Claim in excess of $1,500,000, (or in excess of such
other amounts specified above with respect to clause (iv)) and (C) under no
circumstances shall the aggregate amount of payments made by Seller pursuant to
clauses (i), (ii) or (iv) above exceed $22,000,000. Furthermore, Buyer shall
not be entitled to indemnification for any Adverse Consequences claimed for any
breach of any representation or warranty herein which is asserted after the
Cutoff Date. Notwithstanding anything in this Section 8.2 to the contrary,
none of the indemnification obligations of Seller with respect to Adverse
Consequences which relate to (x) matters referred to in clause (iii) above, (y)
Income Taxes, or (Z) any obligations relating to the Purchase Price adjustment
provided for in Section 2.3, are subject to, or limited by, the dollar
limitations referred to above, and Seller shall be responsible for all such
Adverse Consequences and any Purchase Price adjustment required to be paid by
Seller from the first dollar of liabilities or adjustment, as applicable.
Notwithstanding anything in this Section 8.2 to the contrary, Seller's
obligations under Section 8.2(iv) shall not apply to (i) any Disclosed
Environmental Matters set forth in Schedule 3.19, (ii) any Identified
Environmental Matters identified by Buyer pursuant to the Environmental
Protocol set forth in Schedule 5.22, or (iii) any matter for which Buyer may
assert a claim against Seller for the breach of a representation or warranty
under Section 8.2(i), above (i.e., if Buyer may assert a claim against Seller
for a breach of a representation or warranty under Section 8.2(i), above and/or
assert a claim against Seller under this Section 8.2(iv), Buyer shall only
assert a claim against Seller under Section 8.2(i), above).
8.3 INDEMNIFICATION OF SELLER. Except as otherwise provided in
this Article 8, Buyer shall indemnify and hold harmless Seller, its officers,
directors, employees, stockholders, agents and Affiliates from and against, and
shall reimburse such parties for any Adverse Consequences arising from or
related to any of the following: (i) any breach of or inaccuracy in any
representation or warranty made by or on behalf of Buyer in this Agreement
(including, without limitation, the Schedules hereto) or in any document,
instrument or certificate delivered pursuant hereto; or (ii) any breach or
violation of any covenant or agreement made by or on behalf of Buyer in this
Agreement (including, without limitation, the Schedules hereto) or in any
document, instrument or certificate delivered pursuant hereto; or (iii) any
state of facts or condition relating to the Companies or their predecessor
entities following the Closing, provided such Adverse Consequences do not
relate to any matter for which the Buyer is entitled to
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November 1, 1995
45
indemnification from Seller under the provisions of Section 8.2 or would have
been entitled to indemnification but for the conditions contained in Section
8.2 that the aggregate of Buyer's Net Claim must exceed $1,500,000 and be less
than $22,000,000. Buyer's obligation to indemnify Seller pursuant to Section
8.3(iii) above shall include, without limitation, those Actions of the
Companies listed on Schedule 8.3(iii) hereto which include as party defendants
Seller, or Affiliates of Seller other than the Companies, which Actions relate
to the Companies (the "Company Actions"). Buyer shall be responsible for all
Adverse Consequences claimed for any breach of any representation or warranty
herein, or indemnification with respect thereto pursuant to clauses (i) or (ii)
above, only after such time and to the extent that the aggregate amount of such
Adverse Consequences claimed for all of such breaches, calculated after taking
into account the net amount of any recovery or benefit described in Section
8.4(b) below ("Seller's Net Claim"), exceeds $1,500,000. Except as otherwise
provided in this Agreement to the contrary, (A) only when Seller's Net Claim
exceeds $1,500,000 shall Seller be entitled to indemnification from Buyer
pursuant to clauses (i) or (ii) above, and then only to the extent of Seller's
Net Claim in excess of $1,500,000, and (B) under no circumstances shall the
aggregate amount of payments made by Buyer pursuant to clauses (i) or (ii)
above exceed $22,000,000. Furthermore, Seller shall not be entitled to
indemnification for any Adverse Consequences claimed for any breach of any
representation or warranty herein which is asserted after the Cutoff Date.
Notwithstanding anything in this Section 8.3 to the contrary, the
indemnification obligations of Buyer with respect to Adverse Consequences which
relate to (x) matters referred to in clause (iii) above or (y) any obligations
relating to the Purchase Price adjustment provided by Section 2.3, are not
subject to, or limited by, the dollar limitations referred to above, and Buyer
shall be responsible for all such Adverse Consequences and any Purchase Price
adjustment required to be paid by Buyer from the first dollar of liabilities or
adjustment, as applicable.
8.4 TERMS OF INDEMNIFICATION. The indemnification obligations set
forth in this Article 8 are subject to the following:
(a) Notification of Claim. Promptly after the assertion
of any claim by a third party or occurrence of any event which may give rise to
a claim for indemnification from a party obligated to indemnify another party
(the "Indemnitor") under this Article 8, the party seeking indemnity hereunder
(an "Indemnitee") shall notify the Indemnitor in writing of such claim, with
reasonable particularity, and, with respect to claims by third parties, advise
the Indemnitor whether the Indemnitee intends to contest same. Buyer hereby
acknowledges receipt of notice from Seller satisfying the requirements of this
Section 8.4(a) regarding the Company Actions.
(b) Recoveries. The Indemnitee shall be deemed to have
suffered an Adverse Consequence for which the Indemnitor shall be liable for
indemnification only to the extent that the Indemnitee has not received any
recovery or benefit with respect thereto from any third party, person or entity
(including without limitation insurance benefits, recoveries under any
counterclaims or set-off, or Income Tax Benefits obtained as a result of such
Adverse Consequence); and if the Indemnitee received such a recovery or benefit
after receipt of payment
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46
of a loss, then the amount of such recovery or benefit (but not exceeding the
amount of such payment), net of reasonable expenses incurred in obtaining the
recovery or benefit shall be paid to the Indemnitor. Each Indemnitee shall
diligently pursue such recover of any such insurance benefits counterclaims,
setoffs or Income Tax Benefits. Without limiting the foregoing, in the event
that a claim or benefit is created in connection with the occurrence of an
Adverse Consequence which has not been collected or otherwise enjoyed by the
Indemnitee at the time payment with respect to the Adverse Consequence is made,
the Indemnitee shall assign such benefit or claim to the Indemnitor as a
condition to the payment of such Adverse Consequence, or, if such claim or
benefit is not assignable under applicable laws, the Indemnitee shall attempt
in good faith to collect such claim or benefit.
(c) Defense. With respect to any third party claim or
Action that could give rise to indemnity under this Agreement, the Indemnitor
shall be entitled to assume the defense thereof, and after notice from the
Indemnitor to the Indemnitee of its election so to assume the defense thereof,
the Indemnitor shall not be liable to the Indemnitee under the foregoing
indemnity agreement for any legal or other expenses subsequently incurred by
the Indemnitee in connection with the defense thereof. Any party which
receives notice of a claim for indemnification may agree to assume the defense
thereof conditional upon the final determination of its indemnification
obligation, and any such assumption of defense shall not prejudice its right to
contest its indemnification obligation. Regardless of which Party is
controlling the defense of any claim that could give rise to indemnity under
this Agreement, (i) both the Indemnitor and Indemnitee shall act in good faith
and (ii) no settlement of such claim may be agreed to without the written
consent of the Indemnitor, which consent shall not be unreasonably withheld,
or, in the case the settlement requires actions, forbearance or payments by
Indemnitee, without the consent of such Indemnitee (as to such matters) which
consent shall not be unreasonably withheld. The controlling party shall
deliver, or cause to be delivered, to the other party copies of all
correspondence, pleadings, motions, briefs, appeals or other written statements
relating to or submitted in connection with the defense of any such claim, and
timely notices of any hearing or other court proceeding relating to such claim.
Parties shall mutually agree regarding the ongoing defense of Company Actions
handled by insurance carriers.
8.5 LIMITATION OF REMEDY. In the event that, after the date
hereof but prior to the Closing Date, either party shall discover and disclose
in writing to the other party (the "Receiving Party") notice of any fact,
circumstance or event (a "Disclosed Matter") which either currently results or
with the passage of time could result, in a breach of any representation,
warranty or covenant of the disclosing party hereunder, then the sole remedy of
the Receiving Party upon receipt of such notification shall be to exercise its
rights of termination, if applicable, pursuant to Section 6.3(a) of this
Agreement if such Disclosed Matter has not been remedied on or before the
Closing; provided, however, if such rights of termination are available but not
exercised by the Receiving Party, under no circumstances shall the Receiving
Party be entitled to seek indemnification under this Article 8 following the
Closing with respect to such Disclosed Matter.
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47
8.6 EXCLUSIVE REMEDY. From and after the Closing Date, the
indemnification provided in this Article 8 shall constitute the sole and
exclusive remedy of the Parties with respect to the breach of any
representation, warranty, or covenant of any Party under this Agreement except
as may be otherwise expressly provided in Section 8.5 or otherwise in this
Agreement.
8.7 SECURITY FOR SELLER'S INDEMNIFICATION OBLIGATIONS. In order
to secure its indemnification obligations under this Agreement, at the Closing
Seller at its sole expense will provide Buyer with a guaranty of Ultimate
Parent in the form mutually acceptable to Buyer and Seller (which shall provide
for alternative security in the form of a letter of credit in the event the net
worth of Ultimate Parent is substantially reduced) ("Ultimate Parent
Guaranty"). The Ultimate Parent Guaranty shall expire (i) with regard to
indemnification obligations for a breach of a representation, warranty or
covenant contained in Sections 3.13 or 5.4 pertaining to Taxes or Income Taxes,
upon the expiration of the applicable Tax or Income Tax statute of limitations;
provided that the term of such guaranty shall be extended to cover the period
of any extension of any applicable Tax or Income Tax statute of limitations
(whether initiated by Seller, its Affiliates or the Companies (but in the last
case, only if extended with the consent of Seller or its Affiliates) or
effected through the assessment of Tax or Income Tax, the delivery of any
notice of deficiency concerning Tax or Income Tax, or otherwise by operation of
applicable law) with respect to periods prior to or including the Closing Date;
(ii) with respect to indemnification obligations for a breach of a
representation, warranty or covenant contained in Section 3.19 or the
indemnification obligations contained in Section 8.2 (iv), on the fifth (5th)
anniversary of the Closing Date and, (iii) with respect to any other
indemnification obligations of Seller, twenty-four (24) months following the
Closing Date.
Notwithstanding the above to the contrary, if at the time the Ultimate
Parent Guaranty referred to above (or any portion thereof) is to expire and
Seller or Ultimate Parent has received notice of an indemnification claim with
respect to such portion, the term of the applicable portion of the Ultimate
Parent Guaranty shall be extended until such time as the claim for
indemnification has been determined. The aggregate obligations of Ultimate
Parent under clauses (ii) and (iii) above shall not exceed $22,000,000.
ARTICLE IX - MISCELLANEOUS
9.1 NOTICES. Any notices hereunder shall be in writing and shall
be deemed to have been given and received when delivered by hand or by telecopy
or other facsimile transaction, or the first business day after sent by
overnight courier with instructions for next day delivery (such as Federal
Express):
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48
If to Seller: Eagle Industrial Products Corporation
c/o Eagle Industries, Inc.
Two ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President and
General Counsel
with a copy to: ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, P.C.
Two ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to Buyer: ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
with copies to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ Schiave, Esq.
or at such other address or addresses as the parties may from time to time
specify by notice in writing to the other parties, given in the manner provided
in this Section.
9.2 SEVERABILITY. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision.
9.3 ASSIGNMENT. Neither this Agreement nor any interest hereunder
shall be assigned or transferred by Seller or Buyer. Notwithstanding the
foregoing, the rights and obligations of Seller under this Agreement may be
assigned after the Closing Date to any Person who shall concurrently acquire
all or substantially all of the assets of Seller and shall assume Seller's
obligations hereunder. Subject to the foregoing, this Agreement shall inure to
the benefit of and shall be binding upon Seller and Buyer and their respective,
permitted successors and assigns.
9.4 ENTIRE AGREEMENT. This Agreement and the Confidentiality
Agreement sets forth the entire understanding of the parties with respect to
the subject matter hereof and may be modified only by instruments signed by
both of the parties hereto. Any and all prior or collateral representations,
promises and conditions in connection with the subject matter hereof
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49
and any representations, promise or condition not incorporated herein or made a
part hereof, in each case other than the Confidentiality Agreement, shall not
be binding upon either party. This Agreement cannot be modified, or amended
except by a written instrument signed by both Parties.
9.5 DOCUMENTS. Each party will execute all documents and take
such other actions as the other party may reasonably request in order to
consummate the transactions provided for herein and to accomplish the purposes
of this Agreement. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
9.6 THIRD PARTIES. Nothing in this Agreement is intended to
confer any right or remedy under or any reason of this Agreement on any person
other than the Parties and their respective successors and assigns.
9.7 GOVERNING LAW. This Agreement shall be construed and governed
in accordance with the laws of the State of Illinois, without regard to
principles of conflicts of law. The Parties acknowledge the State of Illinois
to be the proper venue for any Action brought to enforce the rights of any
Party hereunder.
9.8 EXPENSES. Each Party hereto shall pay its own expenses and
costs incurred in connection with the negotiation and consummation of this
Agreement and the transactions contemplated hereby; except that Seller shall be
responsible for and pay all applicable sales, transfer, documentation, use,
filing and other taxes and fees (other than income taxes) that may become due
and payable as a result of the sale, transfer and delivery of the Stock,
whether levied on Buyer, Seller or the Company.
9.9 BROKERAGE. Seller and Buyer represent that they have not
dealt with any brokers in connection with this transaction with the exception
of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., whose fee Seller agrees to pay, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.,
whose fee Buyer agrees to pay. Seller and Buyer shall indemnify and hold the
other harmless from and against any and all claims of all other brokers and
finders, claiming by, through or under said party and in any way related to
this Agreement, including, without limitation, attorneys' fees in connection
with such claims.
9.10 SCHEDULES. The Schedules attached to this Agreement are
incorporated herein and shall be part of this Agreement for all purposes.
Disclosures made in any one Schedule shall be deemed to apply to all other
Schedules relating to similar subject matter and having a similar intended
disclosure purpose.
9.11 PRESS RELEASES. Neither Seller nor Buyer shall issue any
press release regarding the execution of this Agreement or the consummation of
the transactions contemplated hereby without the prior written consent of the
other. Notwithstanding the foregoing, either Party may
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50
issue, upon prior consultation with the other Party, such press releases as the
issuing Party's legal counsel deems required by the Securities Exchange Act of
1934, other state or federal securities laws or by the rules of any exchange
upon which the issuing party's securities may be listed.
9.12 CAPTIONS. Section and subsection headings are included
herein, or in any Exhibit or Schedule hereto, for convenience or reference only
and shall not constitute a part of this Agreement for any other purpose or be
given substantive effect.
9.13 COUNTERPARTS. This Agreement may be executed in various
counterparts, each of which shall be deemed an original and all of which
together shall constitute a single instrument.
ARTICLE X - DEFINITIONS
For purposes of this Agreement, any amendments hereto and any Exhibit
or Schedule hereto, and in addition to terms defined elsewhere, herein, the
following terms shall have the following meanings except as otherwise expressly
provided or the context shall otherwise require:
10.1 CERTAIN DEFINITIONS.
"Action" shall mean any written claim, action, cause of action
or suit (in contract or tort or otherwise), arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Adverse Consequences" shall mean any and all losses, damages,
injuries, deficiencies, demands, obligations, liabilities, awards (including,
without limitation, awards of punitive or treble damages or interest but
excluding indirect or consequential damages), assessments, amounts paid in
settlement, judgments, orders, decrees, fines, penalties, and other sanctions,
costs and expenses (including, without limitation, reasonable legal costs and
expenses and costs and expenses of collection) and shall include any Income
Taxes paid or payable as a result of the receipt of an indemnification payment
or a payment under the Ultimate Parent Guaranty hereunder, net of any Income
Tax Benefits resulting from the Adverse Consequence which is the subject of the
indemnification payment.
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
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51
"Affiliated Group" shall mean any affiliated group within the
meaning of Code Sec. 1504.
"Agreement" means this Agreement and all Schedules and
Exhibits hereto, as the same may be amended from time to time.
"Americans With Disabilities Act" shall mean The Americans
With Disabilities Act of 1990 and the rules and regulations promulgated
thereunder, or any similar state or local law, rule or regulation.
"Antitrust Division" shall mean the Antitrust Division of the
Department of Justice.
"Antitrust Improvements Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
"Area(s) of Environmental Concern" shall mean any area(s) on,
in, under, beneath, or approximately about the property in question which has
(have) been impacted in any way by Hazardous Materials so as to likely give
rise to Environmental Liabilities.
"Business" shall mean the businesses of the Companies as such
businesses are currently conducted.
"Buyer" shall mean ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation.
"Cash" shall mean as of any date of determination, cash and
cash equivalents on deposit in domestic and foreign accounts.
"Cash Balance Plan" shall mean the Eagle Industrial Products
Corporation Cash Balance Pension Plan.
"Chemical" shall mean Chemical Bank, as Administrative Agent
and Citicorp North America, Inc. as Collateral Agent.
"Chemical Agreements" means the Amended and Restated Credit
Agreement dated as of October 28, 1994 among Seller, Chemical Bank as
Administrative Agent, Citicorp North America, Inc. as Collateral Agent and the
various lender parties thereto and all related agreements, instruments and
documents.
"Closing" means the closing of the transaction contemplated by
this Agreement as provided in Article 7 hereof.
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52
"Closing Balance Sheet" shall mean the unaudited Combining
Balance Sheet of Amerace and its Subsidiaries as of the Closing Date prepared
in accordance with Sections 2.3 and 3.8.
"Closing Date" means the date of Closing.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Company" or "Companies" shall mean Amerace and each of its
Subsidiaries (excluding Excluded Subsidiaries and the Joint Ventures).
"Company Material Adverse Effect" shall mean with respect to
any Company, any adverse change or effect on the business, operations, assets
or condition, financial or otherwise, of such Company or of any division or
business operating unit of such Company, which if considered either singly or
together with all other adverse changes and effects with respect to which this
phrase is used in the Agreement with respect to such Company or any division or
business operating unit of such Company, is material to such Company or any
division or business operating unit of such Company.
"Compensation", as applied to any Person, shall mean all
salaries, compensation, remuneration or bonuses of any character, and medical,
surgical, dental, hospital, disability, unemployment, retirement, pension,
vacation, severance, insurance or fringe benefits of any kind, or other
payments or benefits of any kind whatsoever made or provided directly or
indirectly by or on behalf of the Company to such Person or members of the
immediate family of such Person.
"Confidential Information" means any information of a
proprietary nature concerning the businesses and affairs of the Companies that
is not already generally available to the public.
"Confidentiality Agreement" means that certain Confidentiality
Agreement by and between Eagle Industries, Inc. and Buyer entered into prior to
the date of this Agreement.
"Contractual Obligation" shall mean, with respect to any
Person, any binding and enforceable executory contract, agreement, deed,
mortgage, lease, license, indenture, commitment, undertaking, arrangement or
understanding, written or oral, or other document or agreement, including,
without limitation, any document or instrument evidencing or otherwise relating
to any Debt but excluding the Charter and By-laws of such Person, to which or
by which such Person is a party or otherwise subject or bound or to which or by
which any property or right of such Person is subject or bound.
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53
"Debt" of any Person shall mean all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred and paid in the Ordinary Course of
Business), (iv) under capital leases, or (v) in the nature of Guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Deferred Intercompany Transaction" has the meaning set forth
in Treas. Reg. Section 1.1502-13.
"Distribution" shall mean, with respect to any equity security
issued by any Person, (i) the declaration or payment of any dividend on or in
respect of any equity security; (ii) the purchase, redemption or other
retirement of any equity security, directly or indirectly through an Affiliate
or otherwise; and (iii) any other distribution on or in respect of any shares
of any class of such capital stock or beneficial interest or other equity
security.
"Eagle" shall mean Eagle Industries, Inc. a Delaware
corporation.
"Eagle Employee" shall refer to those directors, officers and
employees of Eagle or any Affiliate of Eagle (other than a Company) which are
currently also directors or officers of a Company, which latter position is to
terminate as of the Closing Date.
"Employee Benefit Plan" means any (a) Pension Plan, including
any multi-employer plan within the meaning of Section 3(37) of ERISA, (b)
Welfare Plan, or (c) other plan, program or arrangement for the benefit of any
employee, director, consultant or agent of a Company (whether pursuant to
contract, arrangement, custom or understanding), that does not constitute an
"employee benefit plan" within the meaning set forth in Section 3(3) of ERISA,
including, without limitation, any retirement or deferred compensation plan,
incentive compensation plan, stock option plan, stock plan, unemployment
compensation plan, or vacation pay, severance pay or bonus arrangement.
"Enforceable" shall mean, with respect to any Contractual
Obligation, that such Contractual Obligation is the legal, valid and binding
obligation of the Person in question, substantially enforceable against such
Person in accordance with its terms.
"Environmental Assessment Protocol" shall mean the principles
set forth on Schedule 5.22.
"Environmental Law(s)" shall mean any and all Legal
Requirements relating to the protection of the environment, including without
limitation, Legal Requirements regulating air pollution, water pollution, noise
control, wetlands, water courses, natural resources, wildlife, Hazardous
Materials, or any other activities or conditions which impact or relate to the
environment, or the protection of human health from exposure to Hazardous
Materials.
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54
Environmental Laws shall include, without limitation, the federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), the Resource
Conservation and Recovery Act ("RCRA"), the Clean Air Act, the Water Pollution
Control Act, the Emergency Planning and Community Right to Know Act ("EPCRA"),
the Oil Pollution Act, and the Toxic Substances Control Act ("TSCA"), the
Occupational Safety and Health Act ("OSHA")(but only with respect to the
provisions which address the protection of human health from exposure to
Hazardous Materials), and various analogous state laws and local laws.
"Environmental Liabilities" means any and all liabilities,
written claims or demands, assessments, obligations, asserted causes of action,
legal orders, damages, losses, costs, expenses, injuries, or judgments arising
out of, relating to, or resulting from the presence, generation, use, handling,
transport, recycling, reclamation, disposal, treatment, storage, or Release of
any Hazardous Materials, or the failure or alleged failure to comply with any
Environmental Law. Environmental Liabilities include any necessary cost of
investigation, remediating, removing, or disposing of any Hazardous Materials,
any required medical monitoring of or treatment to persons exposed or allegedly
exposed to such Hazardous Materials, and other related and necessary costs or
expenses, including without limitation, reasonable attorney's and consultant's
fees and reasonable disbursements.
"Equipment" shall mean all of the tangible personal property
other than inventory included in the Assets.
"ERISA" shall mean the federal Employee Retirement Income
Security Act of 1974 or any successor statute, and the rules and regulations
thereunder, and in the case of any referenced section of any such statute, rule
or regulation, any successor section thereto, collectively and as from time to
time amended and in effect.
"Excess Loss Account" has the meaning set forth in Treas.
Reg. Section 1.1502-19.
"Excluded Subsidiaries" shall mean those Subsidiaries of
Amerace set forth in Schedule 10.1(A) hereof.
"FTC" shall mean the Federal Trade Commission.
"GAAP" means generally accepted accounting principles, as
defined by the United States Financial Accounting Standards Board (i) with
respect to the Closing Balance Sheet, as of June 30, 1995, or (ii) with respect
to any other financial statement referred to herein, as of the respective dates
of such financial statement.
"Governmental Authority" shall mean any U.S. federal, state or
local or any foreign government, governmental authority, regulatory or
administrative agency, governmental
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55
commission, court or tribunal (or any department, bureau or division thereof)
or any arbitral body.
"Governmental Order" shall mean any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Guarantee" shall mean any of the following entered into by a
Company which shall survive the Closing and which relates to a Person which is
not a Company (i) any guarantee of the payment or performance of, or any
contingent obligation in respect of, any Debt of any other Person, (ii) any
other arrangement whereby credit is extended to one obligor on the basis of any
promise or undertaking of another Person (A) to pay the Debt of such obligor,
(B) to purchase any obligation owed by such obligor, (C) to purchase or lease
assets (other than inventory in the Ordinary Course of Business) under
circumstances that would enable such obligor to discharge one or more of its
obligations, or (D) to maintain the capital, working capital, solvency or
general financial condition of such obligor, and (iii) any liability as a
general partner of a partnership or as a venturer in a joint venture in respect
of Debt of such partnership or venture.
"Hazardous Materials" shall mean (i) oil or other petroleum
products; (ii) "hazardous wastes" as defined by RCRA or any similar
Environmental Law; (iii) "hazardous substances" as defined by CERCLA or any
similar Environmental Law; (iv) "hazardous materials" as defined by the federal
Hazardous Materials Transportation Act or any similar state or local law,
regulation, ordinance or order; (v) "pollutants" as defined by the federal
Clean Water Act or Clean Air Act, or similar Environmental Laws; (vi) asbestos,
PCBs, and other substances regulated by TSCA or any similar Environmental Laws;
(vii) "hazardous chemicals" as defined by OSHA's Hazard Communication Standard;
(viii) radioactive materials subject to the federal Atomic Energy Act or any
similar state or local law, regulation, ordinance or order; and (ix) any other
pollutant, contaminant, chemical, or substance defined or regulated as
hazardous or toxic by an Environmental Law.
"Income Tax" shall mean any federal, state, local or foreign
tax based on or measured by, income, estimated, alternative minimum, add-on
minimum and environmental (including Code Section 59A), including, without
limitation, all interest, penalties and additions with respect to any of the
foregoing.
"Income Tax Benefit" shall mean, for Income Tax purposes, any
reduction in taxable income, increase in tax deduction, increase in basis of
assets, increase in tax credit, or any change in the character of income or
deduction that results in a net decrease in Income Tax liability of Buyer or
any of the Companies and shall be determined by including the net Income Taxes
paid by reason of receipt of an indemnification payment or other reimbursement
due hereunder relating to the Income Tax Benefit.
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56
"Income Tax Detriment" shall mean for Income Tax purposes, any
increase in taxable income, decrease in tax deduction, decrease in basis of
assets, decrease in tax credit, or any change in the character of income or
deduction that results in a net increase in the Income Tax liability of Buyer
or any of the Companies, and shall be determined by including the net Income
Tax paid by reason of the receipt of an indemnification payment or other
reimbursement due hereunder or any payment due under the Ultimate Parent
Guaranty, in each case related to the Income Tax Detriment.
"Income Tax Return" shall mean all consolidated or pro forma
federal Income Tax returns, separate state, local or foreign Income Tax
returns, claims for refund of Income Tax, and declarations of estimated Income
Tax, or other statement relating to Income Tax and any schedule or attachments
to any of the foregoing or amendments thereto.
"Intercompany" means, with respect to any transaction,
obligation, agreement or account, a transaction, obligation, agreement or
account between any one of the Companies and Seller or any of its Affiliates
(other than one of the Companies).
"Joint Ventures" shall mean Euromold S.A., Fujimold Ltd.,
Taimold Electrical Ltd.
"Knowledge," "to the knowledge of", "to the best knowledge
of", "Known" or other words or phrases of similar or correlative meaning used
with reference to Seller or any Company means the current actual knowledge of
those officers and employees of Seller and the Companies primarily responsible
for supervision and management of financial, human resource and operational
matters at each of the Seller and the Companies and the divisions or operating
units of the Seller and the Companies (a true and complete list of such
officers and employees is set forth as Schedule 10.1(B) hereto).
"Legal Requirement" shall mean any U.S. federal (including,
without limitation, the Foreign Corrupt Practices Act), state or local or any
foreign law, statute, ordinance, code, order, rule, regulation, promulgation,
or any Governmental Order, or any license, franchise, consent, approval, permit
or similar right granted under any of the foregoing, all as from time to time
in effect.
"LIBOR" shall mean the effective London Interbank Offered Rate
for deposits in United States dollars with maturity periods of one month, as
published from time to time in the Wall Street Journal, Midwest Edition.
"Lien" shall mean any mortgage, pledge, lien, security
interest, charge, claim, attachment, equity, encumbrance, restriction on
transfer (or, in the case of capital stock, restrictions on the transfer or
voting of such securities), conditional sale or other title retention device or
arrangement (including, without limitation, a capital lease), transfer for the
purpose
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57
of subjection to the payment of any Debt, or restriction on the creation of any
of the foregoing, whether relating to any property or right or the income or
profits therefrom; provided, however, that the term "Lien" shall not include
(i) statutory liens for Taxes to the extent that the payment thereof is not in
arrears or otherwise due, (ii) encumbrances in the nature of zoning
restrictions, easements, rights or restrictions of record on the use of real
property if the same do not materially impair the use of such property in the
Business as currently conducted, (iii) statutory or common law liens to secure
landlords, lessors or renters under leases or rental agreements confirmed to
the premises rented to the extent that no payment or performance under any such
lease or rental agreement is in arrears or is otherwise due, (iv) deposits or
pledges made in connection with, or to secure payment of, worker's
compensation, unemployment insurance, old age pension programs mandated under
applicable Legal Requirements or other social security, (v) statutory or common
law liens in favor of carriers, warehousemen, mechanics and materialmen,
statutory or common law liens to secure claims for labor, materials or supplies
and other like liens, which secure obligations to the extent that (A) payment
of such obligations is not in arrears or otherwise due and (B) such liens do
not and will not, individually or in the aggregate, have a Company Material
Adverse Effect or materially affect the use of any Real Property, and (vi)
restrictions on transfer of securities imposed by applicable state and federal
securities laws.
The term "Material" shall be determined with reference to the
purpose and intent of the particular provision without regard to a particular
dollar amount or any dollar amount, provided, however, the Parties agree that
"Material" shall be presumed to include, when used with reference to the items
set forth below, any Amount in Issue equal to or greater than the Threshold
Amount. "Threshold Amount" shall mean the lesser of (x) 5% of the earnings
before interest and taxes for the year ended December 31, 1994 of the
particular Company, as set forth in Schedule 10.1(C), or (y) $500,000. In
determining the "Amount in Issue" with respect to the following items, the
following principles shall apply: (i) with respect to a Contract, Contractual
Obligation or other obligation, the Amount in Issue is the amount of the
contracting party is obligated to pay or is committed to pay within one year,
with regard to a Contractual Obligation or other obligation that cannot
otherwise be canceled on 90 days' notice; (ii) with respect to an asset,
property or right, the Amount in Issue is the replacement cost; (iii) with
respect to a contingent obligation, the Amount in Issue is the reasonable
estimate of the maximum amount of exposure; (iv) with respect to a
contractual breach or default, the Amount in Issue is the amount obligated to
be paid as a consequence of such breach or default; (v) with respect to a
permit or license, the Amount in Issue is the cost of obtaining the permit or
license; (vi) with respect to a Lien, the Amount in Issue is the cost to
release the Lien; (vii) with respect to a risk, the Amount in Issue is the
amount of loss or damages likely to result from the risk; (viii) with respect
to a Legal Requirement, the Amount in Issue is the cost of compliance with the
Legal Requirement; (ix) with respect to the term "Respects", the Amount in
Issue is the dollar amount of deviation from complete accuracy; or (x) with
respect to a loss or damage, the Amount in Issue is the cost to repair or
replace.
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58
"Material Adverse Effect" shall mean, with respect to any
Person, any adverse change in or effect on the business, operations, assets or
condition, financial or otherwise, of such Person (on a combined basis with
such Person's Subsidiaries, if applicable or, in the case of any Company, on a
combined basis with all other Companies) which, when considered either singly
or together with all other adverse changes and effects with respect to which
such phrase is used in this Agreement with respect to such Person, is material
to such Person (on a combined basis with such Person's Subsidiaries, if
applicable or, in the case of any Company, on a combined basis with all other
Companies).
"Net Worth" shall mean the excess of the assets of Amerace and
its Subsidiaries over the liabilities of Amerace and its Subsidiaries on a
combining basis as set forth on the Closing Balance Sheet.
"Ordinary Course of Business" shall mean the ordinary course
of Business generally consistent with past custom and practice, with such
variations therefrom as may be appropriate (as determined in good faith by the
Persons conducting such business) to respond to prevailing facts, circumstances
and conditions.
"Parties" shall mean the Seller and the Buyer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" means an employee pension benefit plan within
the meaning of Section 3(2) of ERISA that is maintained or contributed to by a
Company.
"Person" means and includes natural persons, corporations,
limited liability companies, limited partnerships, general partnerships, joint
stock companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).
"Purchase Price" shall have the meaning ascribed to it in
Section 2.1, but shall take into account any adjustments pursuant to Section
2.2.
"Real Property" shall mean all of the real property and
fixtures and other improvements constituting real property included in the
Assets.
"Receivables Agreement" means the Receivables Sale Agreement
to be entered into between Buyer and Bank of America, Illinois, as Trustee, and
attached hereto as Exhibit 10.1(ee).
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59
"Receivables Purchase Price" means an amount equal to the
receivables purchase price payable to Bank of America, Illinois, as Trustee,
pursuant to the Receivables Agreement.
"Release" shall mean any and all releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing, dumping, and any other means by which any Hazardous
Substances are introduced into or travel through the environment.
"Savings Plan" shall mean the Eagle Industrial Products
Corporation Employee Savings Plan.
"Seller" shall mean Eagle Industrial Products Corporation, a
Delaware corporation.
"Site" shall mean the Real Property and each other area of
real property at any time owned or leased by the Company or any of its
Subsidiaries or any predecessor entity or with respect to which the Company or
any of its Subsidiaries or any predecessor entity was the operator.
"Subsidiary" shall mean any Person of which Amerace (or other
specified Person) shall own directly or indirectly through a subsidiary, a
nominee arrangement or otherwise at least a majority of the outstanding capital
stock (or other shares of beneficial interest) entitled to vote generally or at
least a majority of the partnership, joint venture or similar interests, or in
which the Amerace (or other specified Person) is a general partner or joint
venturer without limited liability, but shall not include any of the Joint
Ventures.
"Tax" shall mean any (and in the plural "Taxes" shall mean
all) gross receipts, franchise, sales, use, transfer, registration, value
added, excise, natural resources, severance, stamp, occupation, premium,
profit, windfall profit, customs, duties, real property, personal property,
capital stock, intangibles, social security, employment, unemployment,
disability, payroll, license, employee, and other tax, withholding taxes,
assessments, imposts, levies, and other charges of every kind and nature
arising under or imposed by any Legal Requirement, including, without
limitation, all interest, penalties and additions with respect to any of the
foregoing, but excluding Income Taxes.
"Tax Return" shall mean all federal, state, local, and foreign
Tax returns, Tax reports, claims for refund of Tax, and declarations of
estimated Tax, or other statement relating to Taxes and any schedule or
attachments to any of the foregoing or amendments thereto, but excluding Income
Tax Returns.
"Ultimate Parent" means Great American Management and
Investment, Inc., a Delaware corporation.
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60
"Welfare Plan" means an employee welfare benefit plan within
the meaning of Section 3(1) of ERISA that is maintained or contributed to by a
Company.
10.2 CERTAIN TERMS DEFINED IN TEXT. The following terms are
defined in the Sections of the Agreement referenced below:
Section
Term Reference
------------------------- -----------
"Accounting Firm" Section 2.3(a)
"Affiliate Relationships" Section 3.20
"Amerace" Recitals
"Assets" Section 3.7(a)
"Buyer Affiliate" Section 5.10(a)
"Buyer's Net Claim" Section 8.2
"Closing Balance Sheet" Section 2.3(a)
"Company Action" Section 8.3
"Contract" Section 3.6
"Covered Claim" Section 5.12(a)
"Current Insurance" Section 5.12(a)
"Cutoff Date" Section 8.1
"Delivering Party" Section 5.4(i)
"Disclosed Environmental Matters" Section 3.19
"Disclosed Matter" Section 8.5
"ECRA" Section 3.19(b)
"ERISA Affiliate" Section 3.17(b)
"Financial Statements" Section 3.8
"Identified Environmental Matters" Schedule 5.22
"Indemnitee" Section 8.4
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Section
Term Reference
------------------------ -------------
"Indemnitor" Section 8.4
"Insurance Policies" Section 3.16
"Intangibles" Section 3.15
"ISRA" Section 3.19(b)
"Leases" Section 3.7(b)
"Licenses" Section 3.15
"Non-Competition Period" Section 5.21
"Objection Notice" Section 2.3(a)
"Permits" Section 3.11
"Receiving Party" Section 8.5
"Reference Balance Sheet" Section 2.3(a)
"Requesting Party" Section 5.4(i)
"Seller Insured Entity" Section 5.12(a)
"Seller's Net Claim" Section 8.3
"Stock" Recitals
"Transferred Employee" Section 5.10(a)
"Transferee Savings Plan" Section 5.10(c)
"Ultimate Parent Guaranty" Section 8.7
"Unlisted Intangibles" Section 3.15
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[SIGNATURE PAGE FOR NOVEMBER 1, 1995 AGREEMENT]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BUYER: SELLER:
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation Eagle Industrial Products Corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President ▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
ULTIMATE PARENT:
Great American Management & Investment, Inc.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President
(Solely for the purpose of agreeing to
deliver the Ultimate Parent Guaranty and the
other specific undertakings and obligations
of Ultimate Parent contained in the above
Agreement)