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EXHIBIT 2.1
EXECUTION VERSION
PURCHASE AND SALE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇ INDUSTRIAL GROUP, LLC,
AND
▇▇▇▇▇▇▇ TUBE COMPANY, INC.
AND JOINED IN BY
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
AND
CHASE INDUSTRIES INC.
DATED AS OF
MARCH 15, 2001
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TABLE OF CONTENTS
Page
1. Purchase and Sale....................................................................1
1.1. The Shares...........................................................................1
1.2. Purchased Assets.....................................................................1
1.3. Excluded Assets......................................................................3
2. Purchase Price.......................................................................4
2.1. Amount of the Purchase Price.........................................................4
2.2. Allocation of the Purchase Price among the Shares and Purchased Assets...............4
2.3. Assumed Liabilities..................................................................4
2.4. Excluded Liabilities.................................................................6
3. Closing..............................................................................7
3.1. Time and Place of the Closing........................................................7
3.2. Procedure at the Closing.............................................................7
3.3. Effective Time.......................................................................8
3.4. Adjustment of Purchase Price.........................................................8
3.5. Accounts Receivable Adjustment......................................................10
3.6. Non-Assignable Purchased Contracts..................................................12
4. Representations and Warranties of ▇▇▇▇▇▇▇...........................................14
4.1. Organization, Power and Authority of ▇▇▇▇▇▇▇ and Chase..............................14
4.2. Organization, Power, Authority and Qualifications of Sub............................14
4.3. Capital Stock of Sub................................................................14
4.4. Subsidiaries........................................................................14
4.5. Status and Effect of Delivery of the Shares.........................................14
4.6. Financial Statements................................................................14
4.7. Liabilities of ▇▇▇▇▇▇▇ and Sub......................................................15
4.8. Tax Matters.........................................................................15
4.9. Real Estate of ▇▇▇▇▇▇▇ and Sub......................................................17
4.10. Good Title to and Condition of the Purchased Assets.................................17
4.11. Licenses and Permits................................................................18
4.12. Proprietary Rights..................................................................18
4.13. Insurance...........................................................................18
4.14. Litigation..........................................................................18
4.15. No Material Adverse Change..........................................................18
4.16. Absence of Certain Acts or Events...................................................19
4.17. Compliance with Laws................................................................19
4.18. Environmental Matters...............................................................20
4.19. Employee Matters; Labor Relations...................................................21
4.20. Employee Benefit Plans..............................................................22
4.21. Product Recalls.....................................................................23
4.22. Material Agreements; Absence of Defaults............................................23
4.23. Due Authorization; Binding Obligation...............................................25
4.24. Intercompany Transactions...........................................................25
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4.25. Purchased Inventory.................................................................25
4.26. Business Relations..................................................................25
4.27. Product Warranties..................................................................25
4.28. Location of Inventory and Assets....................................................26
4.29. No Production of Asbestos-Containing Products.......................................26
4.30. Final Sales.........................................................................26
4.31. Accounts Receivable.................................................................26
4.32. Manufacture of Tubing and Pipe......................................................26
4.33. Limitations on ▇▇▇▇▇▇▇'▇ Representations and Warranties.............................26
4.34. Brokers.............................................................................27
4.35. True and Complete Copies............................................................27
5. Representations and Warranties of Purchaser.........................................27
5.1. Organization, Power and Authority of Purchaser......................................27
5.2. Due Authorization; Binding Obligation...............................................27
5.3. Purchase for Investment.............................................................28
5.4. Investigation by Purchaser..........................................................28
5.5. Brokers.............................................................................28
5.6. Financial Resources.................................................................28
6. Additional Covenants of the Parties.................................................28
6.1. All Reasonable Efforts..............................................................28
6.2. Conduct of Business Pending the Closing.............................................29
6.3. Access to the Properties and Records of the Business................................30
6.4. Bulk Sales Law......................................................................31
6.5. Expenses............................................................................31
6.6. Employee Matters....................................................................31
6.7. Obligation to Notify................................................................36
6.8. Financing Commitment................................................................37
6.9. Title Commitments; Surveys..........................................................37
7. Conditions to the Obligation of Purchaser...........................................38
7.1. Accuracy of Representations and Warranties and Compliance with Obligations..........38
7.2. Certified Resolutions...............................................................38
7.3. Opinion of Counsel..................................................................39
7.4. Receipt of Necessary Consents.......................................................39
7.5. No Adverse Order....................................................................39
7.6. Purchased Leasehold Premises........................................................39
7.7. No Material Destruction.............................................................39
8. Conditions to Obligations of ▇▇▇▇▇▇▇................................................39
8.1. Accuracy of Representations and Warranties and Compliance with Obligations..........39
8.2. Opinion of Counsel..................................................................40
8.3. Certified Resolutions...............................................................40
8.4. No Adverse Order....................................................................40
9. Certain Actions After the Closing...................................................40
9.1. Purchaser to Act as Agent for ▇▇▇▇▇▇▇...............................................40
9.2. Purchaser Appointed Attorney for ▇▇▇▇▇▇▇............................................40
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10. Product Warranty and Liability Claims...............................................41
10.1. Product Warranty and Liability Claims; Cooperation in Litigation....................41
11. Miscellaneous.......................................................................41
11.1. Brokers' Commission.................................................................41
11.2. Amendment and Modification..........................................................41
11.3. Termination.........................................................................41
11.4. Confidentiality.....................................................................44
11.5. Binding Effect; Assignment..........................................................46
11.6. Entire Agreement....................................................................46
11.7. Headings............................................................................46
11.8. Execution in Counterpart............................................................46
11.9. Notices.............................................................................46
11.10. Governing Law; Consent to Jurisdiction..............................................47
11.11. Limitation on Rights of Other Persons...............................................47
11.12. Severability........................................................................48
11.13. Certain Definitions.................................................................48
11.14. Purchaser Represented by Counsel....................................................48
11.15. Non-Competition.....................................................................48
12. Survival of Representations, Warranties and Covenants...............................49
12.1. Survival of Representations and Warranties..........................................49
12.2. Survival of Covenants...............................................................49
12.3. Pursuit of Claims...................................................................49
13. Indemnification and Procedures......................................................49
13.1. Indemnification.....................................................................49
13.2. Indemnification Procedures..........................................................51
13.3. Claims Limitations; Exclusive Remedies..............................................53
13.4. Tax Indemnification.................................................................54
14. Exclusive Dealing...................................................................55
14.1. Prohibitions on Acquisition Proposals...............................................55
14.2. Terminations Related to Acquisition Proposal........................................55
14.3. Definition of Acquisition Proposal..................................................56
15. Post-Closing Tax Matters............................................................56
15.1. ▇▇▇▇▇▇▇ Tax Returns.................................................................56
15.2. Purchaser Tax Returns...............................................................56
15.3. Allocation of Straddle Period Taxes.................................................56
15.4. Cooperation.........................................................................57
15.5. Tax Refund..........................................................................57
16. Inducement and Guaranty.............................................................57
16.1. Termination Fee.....................................................................57
16.2. Other Obligations...................................................................58
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EXHIBITS
Exhibit A - Form of Transfer Agreement (ss.2.4.8)
Exhibit B - Form of Opinion of Chase's and ▇▇▇▇▇▇▇'▇ Counsel (ss.7.3)
Exhibit C - Form of Opinion of Purchaser's, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇'▇ Counsel (ss.8.2)
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SCHEDULES
Schedule 1.2.6 Purchased Contracts
Schedule 1.2.8 Purchased Proprietary Rights and Proprietary Rights of Sub
Schedule 1.3.3 Excluded Assets: Intellectual Property
Schedule 1.3.9 Non-Assumed Plans
Schedule 2.2 Agreement Among Parties to File IRS Form 8594 - Asset
Acquisition Statement
Schedule 3.4 Closing Statement
Schedule 3.4.1 Inventory Valuation
Schedule 3.5 C.O.D. Customers
Schedule 4.2 Material Agreements
Schedule 4.3 Capital Stock of Sub
Schedule 4.8 Tax Matters
Schedule 4.9 Real Estate of ▇▇▇▇▇▇▇ and Sub
Schedule 4.10 Other Liens
Schedule 4.11 Licenses and Permits
Schedule 4.14 Litigation and Claims
Schedule 4.16 Absence of Certain Acts or Events
Schedule 4.17 Compliance with Laws
Schedule 4.18 Environmental Matters
Schedule 4.19 Employee Matters; Labor Relations
Schedule 4.20 Benefits Plans and Policies Applicable to Employees
Schedule 4.24 Intercompany Transactions
Schedule 4.33 Individuals with Knowledge
Schedule 6.2 Conduct of Business Pending the Closing
Schedule 6.6.1 Employees Associated with the Business
Schedule 6.6.2 Assumed Plans
Schedule 7.4 Material Consents
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Execution Version
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into this 15th day of March, 2001, by and among ▇▇▇▇▇▇▇ Industrial Group, LLC,
an Illinois limited liability company ("Purchaser"), and ▇▇▇▇▇▇▇ Tube Company,
Inc., a Delaware corporation ("▇▇▇▇▇▇▇"), and is joined into by each of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ Industries Inc., a Delaware corporation
("Chase"), solely for the purposes specifically provided in this Agreement.
WHEREAS, ▇▇▇▇▇▇▇ is a subsidiary of Chase;
WHEREAS, Chase has joined into this Agreement to induce Purchaser to
enter into and perform its obligations under this Agreement;
WHEREAS, each of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has joined into
this Agreement to induce each of ▇▇▇▇▇▇▇ and Chase to enter into and perform its
obligations under this Agreement; and
WHEREAS, ▇▇▇▇▇▇▇ desires to sell, convey, transfer and assign to
Purchaser, and Purchaser desires to purchase from ▇▇▇▇▇▇▇, substantially all of
the assets, properties and business of ▇▇▇▇▇▇▇ (collectively, the "Business"),
including all of the issued and outstanding shares of capital stock of Holco
Corporation, an Illinois corporation ("Sub"), for a purchase price consisting of
cash and the assumption by Purchaser of certain liabilities of ▇▇▇▇▇▇▇, all as
herein provided and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, BE IT RESOLVED, that in consideration of the mutual
representations, warranties and covenants and subject to the conditions herein
contained, the parties hereto agree as follows:
1. PURCHASE AND SALE.
1.1. THE SHARES. ▇▇▇▇▇▇▇ agrees to and will sell, transfer, assign and
deliver to Purchaser at Closing (as defined below), free and clear of all liens,
pledges, encumbrances, obligations, charges, mortgages, claims and equitable
interest of every kind, nature and description whatsoever (collectively,
"Liens"), and Purchaser agrees to and will purchase and accept from ▇▇▇▇▇▇▇, on
the terms and subject to the conditions set forth in this Agreement, all of the
issued and outstanding shares of capital stock of Sub (the "Shares").
1.2. PURCHASED ASSETS. ▇▇▇▇▇▇▇ agrees to and will sell, transfer,
assign and deliver to Purchaser at the Closing, free and clear of all Liens
(except Permitted Encumbrances (as defined below)), on the terms and subject to
the conditions set forth in this Agreement, all of the properties, business and
assets of the Business of every kind and description, real, personal and mixed,
tangible and intangible, wherever located (except those assets of the Business
which are specifically excluded from this sale by Section 1.3 hereof and those
which are already owned by Sub) as they shall exist at the Closing Date (as
hereinafter defined) (collectively, the "Purchased
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Assets"). Without limiting the generality of the foregoing, subject to Section
1.3, the Purchased Assets shall include the following:
1.2.1. All right, title and interest of ▇▇▇▇▇▇▇ in and to (a)
the real property described in Schedule 4.9 hereto, (b) the
real property, buildings, facilities and other improvements
thereon and (c) all easements, rights of way and other
appurtenances thereto (the "Purchased Real Estate");
1.2.2. All of the interests of and the rights and benefits
accruing to ▇▇▇▇▇▇▇ as lessee of the real properties (the
"Purchased Leasehold Premises") identified on Schedule 4.9
hereto;
1.2.3. All machinery, vehicles, equipment, tools, spare parts,
construction in progress, computer equipment and computer
programs, furniture and fixtures and other material fixed
assets owned by ▇▇▇▇▇▇▇ and located on the Purchased Real
Estate, the Purchased Leasehold Premises or elsewhere, that
are used primarily in the Business (the "Purchased Fixed
Assets");
1.2.4. All inventories of ▇▇▇▇▇▇▇ relating to the Business as
of the Closing Date (the "Purchased Inventory");
1.2.5. All receivables of ▇▇▇▇▇▇▇ (other than intercompany
receivables) relating to the Business as of the Closing Date,
including without limitation all proceeds thereof which may be
received by ▇▇▇▇▇▇▇ subsequent to the Closing Date except
proceeds relating to Actual Uncollected Receivables assigned
to ▇▇▇▇▇▇▇ pursuant to Section 3.5.4 (the "Purchased
Receivables");
1.2.6. All of the rights and benefits accruing to ▇▇▇▇▇▇▇
under or pursuant to the receivables, contracts, agreements,
arrangements, commitments, open purchase orders for capital
equipment and blanket purchase orders entered into by ▇▇▇▇▇▇▇
in the ordinary course of business that relate to the
Purchased Assets or the business or operation of the Business,
including without limitation such contracts as set forth on
Schedule 1.2.6 (the "Purchased Contracts");
1.2.7. All operating data and records of ▇▇▇▇▇▇▇ related to
the Business, including customer lists, financial, accounting
and credit records, correspondence, budgets and other similar
documents and records (the "Purchased Records");
1.2.8. All of the proprietary rights of ▇▇▇▇▇▇▇ relating to
the Business, including without limitation, all patents,
patent applications, patent licenses, trademarks, trade names
and registrations and applications therefore, trade secrets,
technology, know-how, formulae, designs and drawings, computer
software, slogans, copyrights, processes and other similar
intangible property and rights relating to the Business, as
set forth on Schedule 1.2.8 (the "Purchased Proprietary
Rights");
1.2.9. All prepaid and deferred items of ▇▇▇▇▇▇▇ existing as
of the Closing Date with respect to the Business, including
prepaid rentals, taxes and unbilled charges
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and deposits relating to the operations of the Business,
including those as set forth on Schedule 1.2.9 to the extent
the same exist as of the Closing Date;
1.2.10. All of ▇▇▇▇▇▇▇'▇ right, title and interest in and to
the goodwill of ▇▇▇▇▇▇▇ relating to the Business; and
1.2.11. All insurance proceeds that are received by ▇▇▇▇▇▇▇
directly related to the physical damage, loss or destruction
of any Purchased Assets that occurs after the date of this
Agreement and prior to the Closing Date and is not repaired,
restored or replaced by ▇▇▇▇▇▇▇ to the reasonable satisfaction
of Purchaser; provided, however, that such insurance proceeds
shall not include any insurance proceeds unrelated to the
direct physical damage, loss or destruction of any Purchased
Assets, including without limitation insurance proceeds
related to business interruption and lost profits.
To the extent any affiliate of ▇▇▇▇▇▇▇ (other than Sub) holds any
interest in or to any Purchased Assets or any other properties or assets (other
than Excluded Assets) used primarily in the operation of the Business, ▇▇▇▇▇▇▇
will cause such affiliate to sell, convey, transfer, assign and deliver to
Purchaser at the Closing, free and clear of all Liens (except Permitted
Encumbrances), without any consideration except as provided in this Agreement,
all of such assets and properties to the same extent and on the same terms and
conditions as if such assets and properties were held by ▇▇▇▇▇▇▇ as of Closing.
1.3. EXCLUDED ASSETS. Notwithstanding Section 1.2, ▇▇▇▇▇▇▇ is not
selling or assigning to Purchaser, and the Purchased Assets shall not include,
any of the following (collectively, "Excluded Assets"):
1.3.1. The Cash Consideration (as defined below) and ▇▇▇▇▇▇▇'▇
other rights under this Agreement;
1.3.2. Cash and cash equivalents of ▇▇▇▇▇▇▇ relating to the
Business, provided that any cash shall be excluded only to the
extent it exceeds $11,000;
1.3.3. All intellectual property rights listed on Schedule
1.3.3;
1.3.4. Subject to Section 6.3.5, any document containing
information about the Business which is combined or
consolidated with other information of ▇▇▇▇▇▇▇ or Chase Brass
& Copper Company, Inc., a Delaware corporation ("CBCC"), and
any documents prepared by ▇▇▇▇▇▇▇ for the purpose of informing
its management about the sale of the Business or the Purchased
Assets;
1.3.5. All claims, right and interest of ▇▇▇▇▇▇▇ to any
refunds of Taxes (as defined below);
1.3.6. All privileged communications, oral or written, between
▇▇▇▇▇▇▇'▇ officers, directors or employees and ▇▇▇▇▇▇▇'▇
attorneys (both inside and outside counsel), on any subject
whatsoever regarding the Business. If any documents are
inadvertently transferred to Purchaser which contain such
privileged
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communications or attorney work product, Purchaser immediately
shall return such documents to ▇▇▇▇▇▇▇ upon discovery and such
inadvertent disclosure shall not be deemed to be a waiver of
the attorney-client privilege or work product doctrine;
1.3.7. All intercompany receivables;
1.3.8. Subject to Section 1.2.11, all insurance policies and
insurance policy deposits entered into by ▇▇▇▇▇▇▇ or an
affiliate of ▇▇▇▇▇▇▇ covering the Purchased Assets and/or the
Business and any rights related thereto; and
1.3.9. All rights, obligations and liabilities that are not
being assumed by Purchaser pursuant to this Agreement,
including without limitation the Seller Plans identified in
Schedule 1.3.9 as not being assumed by Purchaser (the
"Non-Assumed Plans").
2. PURCHASE PRICE.
2.1. AMOUNT OF THE PURCHASE PRICE. As consideration for the Shares
and Purchased Assets (the "Purchase Price"), Purchaser agrees, subject to the
terms, conditions and limitations set forth in this Agreement to pay to or for
the account of ▇▇▇▇▇▇▇, in the manner specified in Section 3.2.4, Thirty One
Million, Five Hundred Forty-Six Thousand Dollars ($31,546,000.00) (the "Cash
Consideration"), subject to adjustment pursuant to Sections 3.4 and 3.5.
2.2. ALLOCATION OF THE PURCHASE PRICE AMONG THE SHARES AND
PURCHASED ASSETS. The Purchase Price shall be allocated among the Shares and
each item or class of the Purchased Assets as agreed by the parties hereto and
as specifically set forth in or determined pursuant to Schedule 2.2. ▇▇▇▇▇▇▇ and
Purchaser agree that they will prepare and file their respective federal and any
state or local income tax returns based on such allocation of the Purchase
Price. ▇▇▇▇▇▇▇ and Purchaser agree that they will prepare and file any notices
or other filings required pursuant to Section 1060 of the Internal Revenue Code
of 1986, as amended (the "Code"), or any state, local or foreign taxing
authority and that all such notices or filings will be prepared based on such
allocation of the Purchase Price.
2.3. ASSUMED LIABILITIES. Purchaser agrees to and will at the
Closing assume and agree to pay, discharge and perform when lawfully due the
following liabilities, contracts, commitments and other obligations of ▇▇▇▇▇▇▇
relating to the Business and the Purchased Assets (the "Assumed Liabilities"):
2.3.1. All liabilities and obligations of ▇▇▇▇▇▇▇ to the
extent accrued on the Closing Statement prepared in accordance
with Section 3.4 of this Agreement or incurred in the ordinary
course of business and related to periods from and after the
Closing Date;
2.3.2. All liabilities and obligations of ▇▇▇▇▇▇▇ accruing
under or pursuant to the Purchased Contracts identified in
Item II of Schedule 1.2.6 which are assigned to Purchaser on
the Closing Date and that either are accrued on the Closing
Statement or relate to any period or occurrence on or after
the Closing Date;
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2.3.3. All liabilities and obligations of ▇▇▇▇▇▇▇, to the
extent accrued on the Closing Statement or related to periods
on or after the Closing Date, arising under or pursuant to
those contracts to which ▇▇▇▇▇▇▇ is a party as of the Closing
and that (a) are not disclosed on Schedule 1.2.6, (b) were
entered into by ▇▇▇▇▇▇▇ in the ordinary course of operations
of the Business on terms and conditions consistent with the
past practices of the Business, and (c) are assigned to
Purchaser pursuant to this Agreement on the Closing Date;
2.3.4. All liabilities and obligations of ▇▇▇▇▇▇▇ accruing
under or pursuant to all purchase orders that (a) were entered
into before the Closing by ▇▇▇▇▇▇▇ for the purchase by ▇▇▇▇▇▇▇
of equipment or raw material to be used, or services to be
performed, in the operations of the Business and (b) were
entered into in the ordinary course of operations of the
Business on terms and conditions consistent with past
practices of the Business, including without limitation those
purchase orders listed in Items III, IV and V of Schedule
1.2.6, to the extent the assets or services to be provided
pursuant to such purchase orders have not been delivered or
provided to ▇▇▇▇▇▇▇ (or Sub) prior to the Closing or, in the
event such assets or services have been so delivered or
provided, to the extent the liability under such purchase
orders related to such assets or services is accrued on the
Closing Statement;
2.3.5. All liabilities and obligations of ▇▇▇▇▇▇▇, to the
extent accrued on the Closing Statement or related to periods
on or after the Closing Date, to be performed under or
pursuant to the Madison County Leases (as defined below)
listed in Item II of Schedule 4.9 relating to the Purchased
Leasehold Premises;
2.3.6. All liabilities and obligations of ▇▇▇▇▇▇▇ accruing
under or pursuant to each Non-Assignable Purchased Contract
from and after the date on which all consents required for the
transfer and assignment of such Non-Assignable Purchased
Contract have been obtained and delivered to Purchaser as
contemplated by Section 3.6.1;
2.3.7. Intentionally omitted.
2.3.8. All liabilities and obligations of ▇▇▇▇▇▇▇ under the
Assumed Plans listed on Schedule 6.6.2 or as otherwise
specified in Section 6.6 and/or Exhibit A of this Agreement;
and
2.3.9. All liabilities of ▇▇▇▇▇▇▇ (other than for borrowed
money) related to the Business and arising in the ordinary
course of operations of the Business, but excluding any
amounts payable by ▇▇▇▇▇▇▇ or Sub to any affiliate of Seller
("Residual Liability"); provided, however, that the aggregate
liability assumed by Purchaser under this Section 2.3.9 shall
not exceed the Residual Liability Cap. For purposes of this
Section 2.3.9, the term "Residual Liability Cap" shall mean an
amount that, from time to time, will be equal to (i) $250,000,
reduced by (ii) any and all amounts that Purchaser is entitled
pursuant to Section 13.3.1 of this Agreement to apply toward
the Deductible (as defined below). Any and all
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reductions of the Residual Liability Cap pursuant to this
Section 2.3.9 will be deemed to occur simultaneously with
Purchaser becoming entitled, pursuant to Section 13.4.1 of
this Agreement, to apply an amount towards the Deductible.
Notwithstanding the foregoing, Purchaser shall not assume any
obligations pursuant to Sections 2.3.1, 2.3.2, 2.3.3 or 2.3.4 (i) which relate
to the purchase of raw materials and goods of the type included within Purchased
Inventory that are incurred pursuant to purchase orders placed after the date of
this Agreement unless such purchase orders are approved by Purchaser or (ii)
arising under any contract or agreement that (A) is not disclosed on Schedule
1.2.6, (B) is not accrued on the Closing Statement, and (C) would require
disclosure under Section 4.22.
2.4. EXCLUDED LIABILITIES. Anything to the contrary in Section 2.3
notwithstanding, the Assumed Liabilities shall not include the following
liabilities, contracts, commitments and other obligations of ▇▇▇▇▇▇▇ (the
"Excluded Liabilities"):
2.4.1. Any of ▇▇▇▇▇▇▇'▇ obligations and liabilities arising
under this Agreement;
2.4.2. Any obligation of ▇▇▇▇▇▇▇ for federal, state, local or
foreign income tax liability of ▇▇▇▇▇▇▇ or Sub arising from
the operation of the Business up to the Closing Date (but
specifically excluding any real estate taxes and personal
property taxes) or arising out of the sale by ▇▇▇▇▇▇▇ of the
Shares and Purchased Assets pursuant hereto;
2.4.3. Any obligation imposed by law on ▇▇▇▇▇▇▇ for any
transfer, sales or other taxes, fees or levies imposed by any
state or other governmental entity on or arising out of the
sale of the Shares and Purchased Assets pursuant hereto;
2.4.4. Any obligation of ▇▇▇▇▇▇▇ for expenses incurred in
connection with the sale of the Shares and Purchased Assets
pursuant hereto, including without limitation fees and
expenses of its counsel and independent auditors;
2.4.5. Any intercompany loans and payables;
2.4.6. Any obligation of ▇▇▇▇▇▇▇ for worker's compensation
claims arising from events occurring prior to the Closing
Date;
2.4.7. Subject to Purchaser's obligations under Section 6.6,
any obligation of ▇▇▇▇▇▇▇ arising under the Collective
Bargaining Agreements listed in Item I of Schedule 4.19.
2.4.8. All rights, liabilities and obligations arising under
any Seller Plans except for the Assumed Plans set forth on
Schedule 6.6.2;
2.4.9. All obligations owed to any employees under the stay
bonus plans as described in Schedule 4.16; and
2.4.10. All obligations of ▇▇▇▇▇▇▇ under the change of control
compensation arrangements described in Item 2 of Schedule 4.16
(it being understood that
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Purchaser shall indemnify ▇▇▇▇▇▇▇ and Chase for any Losses
arising from Purchaser's failure to perform its obligations
under Section 6.6.10).
3. CLOSING.
3.1. TIME AND PLACE OF THE CLOSING. The closing of the sale of the
Purchased Assets shall take place at the offices of Deutsch, Levy & ▇▇▇▇▇,
Chartered located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ 10:00 a.m., Central Standard Time, on March 31, 2001; provided, however,
that if any of such conditions to Closing have not been satisfied (or waived) by
March 31, 2001, then the Closing shall take place on a subsequent date not later
than two business days following the satisfaction or waiver of such conditions
or a subsequent date as may be mutually agreed upon by the parties (unless this
Agreement is earlier terminated pursuant to Section 11.3). Throughout this
Agreement, such event is referred to as the "Closing" and such date and time are
referred to as the "Closing Date."
3.2. PROCEDURE AT THE CLOSING. At the Closing, the parties agree to
take the following steps in order listed below:
3.2.1. ▇▇▇▇▇▇▇ shall deliver to Purchaser duly executed
certificates in valid form evidencing the Shares owned by
▇▇▇▇▇▇▇, legended to refer to the fact that the Shares have
not been registered under the Securities Act of 1933 or the
securities or "blue sky" laws of any state, duly endorsed in
blank or accompanied by duly executed stock powers and free
and clear of all Liens.
3.2.2. ▇▇▇▇▇▇▇ shall deliver to Purchaser such special
warranty deeds, bills of sale, endorsements, assignments and
other instruments, in such form as in each case is reasonably
satisfactory to Purchaser, as shall be sufficient to vest in
Purchaser good and indefeasible title to the Purchased Assets,
free and clear of all Liens (except Permitted Encumbrances) in
accordance with the provisions of this Agreement.
3.2.3. ▇▇▇▇▇▇▇ shall deliver to Purchaser the consents to
assignment (the "Madison County Lease Consents") and Estoppel
Certificates ("Madison County Estoppel Certificates") duly
executed by Madison County Economic Development Authority
(f/k/a Industrial Development Authority of Madison County)
("Landlord"), in form and substance reasonably acceptable to
Purchaser, consenting to the assignment to Purchaser of that
certain (i) Lease Agreement, dated as of August 29, 1985, by
and between UNR Industries, Inc., UNR-▇▇▇▇▇▇▇ Division ("UNR")
and Landlord (as assigned to ▇▇▇▇▇▇▇ pursuant to that certain
Assignment and Consent Agreement, dated as of August 28, 1996,
by and between UNR and ▇▇▇▇▇▇▇) and (ii) Lease Agreement,
dated October 14, 1988 (the "October 1988 Lease"), by and
between UNR and Landlord (as assigned to ▇▇▇▇▇▇▇ pursuant to
that certain Assignment and Consent Agreement, dated as of
August 28, 1996, by and between UNR and ▇▇▇▇▇▇▇), in each case
concerning certain real property located in Madison County,
Mississippi (collectively, the "Madison County Leases"). The
Madison County Lease Consents shall, among other things,
acknowledge the exercise of the purchase options by ▇▇▇▇▇▇▇
and
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consent to the assignment to Purchaser of ▇▇▇▇▇▇▇'▇ rights and
obligations to close the purchase of the Purchased Leasehold
Premises by May 1, 2001, which purchase was initiated by
▇▇▇▇▇▇▇'▇ exercise of its purchase options under the Madison
County Leases. The consent for the October 1988 Lease shall
contain language extending the lease until May 1, 2001, in
form and substance reasonably acceptable to Purchaser.
3.2.4. Purchaser shall pay to ▇▇▇▇▇▇▇ the Cash Consideration
by wire transfer of immediately available funds.
3.2.5. ▇▇▇▇▇▇▇ will deliver to Purchaser an executed amendment
to its Certificate of Incorporation that, upon filing, will
have the effect of changing ▇▇▇▇▇▇▇'▇ name to a name that is
not similar to "▇▇▇▇▇▇▇ Tube Company, Inc."
3.2.6. Purchaser shall deliver to ▇▇▇▇▇▇▇ instruments, in such
form as in each case as is satisfactory to ▇▇▇▇▇▇▇, as shall
be sufficient to effect the assumption by Purchaser of the
Assumed Liabilities.
3.2.7. Purchaser and ▇▇▇▇▇▇▇ shall execute and deliver a cross
receipt acknowledging receipt from the other, respectively, of
the Shares and Purchased Assets and the Purchase Price.
3.3. EFFECTIVE TIME. The transfer of the Purchased Assets shall be
deemed to occur at 12:01 a.m. Central Standard Time on the Closing Date (the
"Effective Time"). All of the transactions described in this Article 3 shall be
deemed to occur simultaneously, and none shall be deemed completed until all are
completed.
3.4. ADJUSTMENT OF PURCHASE PRICE.
3.4.1. PREPARATION OF CLOSING STATEMENT. Purchaser shall
prepare and deliver to ▇▇▇▇▇▇▇, as promptly as reasonably
practicable but in any event within thirty (30) days after the
Closing Date, (i) a statement prepared as of the Effective
Time (the "Closing Statement") reflecting the current assets
and current liabilities for the Business as determined on a
basis consistent with the consolidated balance sheet of
▇▇▇▇▇▇▇ as of November 30, 2000 (a copy of which is attached
as Schedule 3.4), and all worksheets related thereto and (ii)
a calculation of the total current assets of the Business less
the current liabilities of the Business being assumed by
Purchaser, as reflected in the Closing Statement ("Closing Net
Assets").
Notwithstanding the foregoing, in preparing the
Closing Statement (1) the current assets of the Business shall
not include any cash (in excess of $11,000), cash equivalents
or other Excluded Assets, (2) Purchased Inventory shall be
valued on the basis as described on Schedule 3.4.1, (3) no
Excluded Liability or other liabilities for which ▇▇▇▇▇▇▇ is
retaining responsibility after the Closing shall be included
in the amounts reflected as current liabilities on the Closing
Statement and (4) any reserves for Excluded Liabilities,
including without limitation
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reserves related to workers' compensation claims and pension
accruals, shall not be included as current liabilities.
3.4.2. ▇▇▇▇▇▇▇ REVIEW OF CLOSING STATEMENT. If ▇▇▇▇▇▇▇
disagrees with the calculation of the Closing Net Assets as
reflected in the Closing Statement, then ▇▇▇▇▇▇▇ may, within
thirty (30) days after delivery of the Closing Statement,
deliver a notice to Purchaser (a "Disagreement Notice"),
setting forth its calculation of the Closing Net Assets and
specifying in reasonable detail, those items or amounts as to
which ▇▇▇▇▇▇▇ disagrees, the reasons for such disagreement,
and ▇▇▇▇▇▇▇'▇ calculation of each disputed item in sufficient
detail to permit Purchaser to verify same. ▇▇▇▇▇▇▇ shall be
deemed to have agreed with all items and amounts contained in
the Closing Statement other than those specified in the
Disagreement Notice, and both parties hereby agree that such
items and amounts not specified in the Disagreement Notice
shall be final. If ▇▇▇▇▇▇▇ agrees with Purchaser's calculation
of the Closing Net Assets as reflected in the Closing
Statement, or if ▇▇▇▇▇▇▇ fails to deliver to Purchaser a
Disagreement Notice within such thirty (30) day period, the
Closing Statement and Purchaser's calculation of the Closing
Net Assets will be deemed final.
3.4.3. DISPUTE RESOLUTION. If a Disagreement Notice is
delivered pursuant to Section 3.4.2, the parties hereto shall,
during the twenty (20) days following such delivery, use good
faith efforts to reach agreement on the disputed items or
amounts in order to determine the final Closing Net Assets. If
▇▇▇▇▇▇▇ and Purchaser are unable to reach such agreement
during such twenty (20) day period, they thereafter shall
cause the Chicago, Illinois office of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or, if
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ fails to serve, some other independent
accountants of nationally recognized standing reasonably
satisfactory to ▇▇▇▇▇▇▇ and Purchaser and who shall not have
any material relationship with ▇▇▇▇▇▇▇ or Purchaser) (the
"Independent Accountants") promptly to review this Agreement
and the disputed items and amounts for the purpose of
calculating the definitive amount of the disputed Closing Net
Assets. If issues in dispute are submitted to the Independent
Accountants for resolution, (i) each party will furnish to the
Independent Accounts such work papers and other documents and
information relating to the disputed issues as the Independent
Accountants may request and are available to that party (or
its independent public accountants), and will be afforded the
opportunity to present to the Independent Accountants any
material relating to the determination and discuss the
determination with the Independent Accounts; (ii) the
determination by the Independent Accountants, as set forth in
a notice delivered to ▇▇▇▇▇▇▇ and Purchaser by the Independent
Accountants, will be binding and conclusive on the parties;
and (iii) the costs and expenses of the Independent
Accountants shall be borne pro rata by ▇▇▇▇▇▇▇ and Purchaser
based on the dollar value of the disputed items determined in
each party's favor. For purposes of Section 3.4, the "Closing
Statement" shall mean the Closing Statement prepared by
Purchaser, as modified or changed by any agreement of the
parties hereto and by any determinations of any firms of
independent accountants made as provided in this Section
3.4.3.
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3.4.4. ADJUSTMENT PAYMENTS. Within five business days after
the earlier to occur of (i) the parties' agreement with
respect to the Closing Net Assets or (ii) the delivery of the
report of the Independent Accountants as provided in Section
3.4.3 hereof, Purchaser shall pay to ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ shall
pay to Purchaser, as applicable, the following amounts in the
cash (including interest thereon computed in the manner set
forth below):
(i) If the amount of the Closing Net Assets
(identified as "Working capital" on Schedule 3.4)
exceeds $22,474,000, Purchaser shall pay to ▇▇▇▇▇▇▇ an
amount equal to such excess;
(ii) If the amount of the Closing Net Assets is equal
to $22,474,000, no payments shall be required by
Purchaser or ▇▇▇▇▇▇▇; or
(iii) If the amount of the Closing Net Assets is less
than $22,474,000, ▇▇▇▇▇▇▇ shall pay to Purchaser an
amount equal to such deficiency.
In the event that any payment is required to be made
under this Section 3.4.4, the amount of the payment shall
include interest computed at the Prime Rate (as hereinafter
defined) as in effect on the first day of each month, from the
Closing Date to the date the payment is made; provided,
however, that if such amount is not paid within fifteen (15)
days after a final determination of the Closing Net Assets,
then any such payment shall bear interest from and after such
date at an amount equal to the Prime Rate plus 4%. The "Prime
Rate" shall mean the rate defined as such in the Wall Street
Journal. Any payment required to be made pursuant to this
Section 3.4.4 shall be deemed an adjustment in the Purchase
Price and shall be consistently treated by the parties hereto
for federal, state, or local income tax purposes. Any payment
required to be made pursuant to this Section 3.4.4 will be
made by wire transfer of immediately available funds into such
accounts as the party entitled to receive such payment
specifies in writing to the party required to make such
payment.
3.4.5. ACCESS TO RECORDS. From the Closing Date until the
final determination of the adjustment payment, each party and
its independent accountants and other representatives will
have such access to the books, records and files of the
Business as may reasonably be required to prepare, audit,
review and otherwise verify the accuracy of the Closing
Statement and its preparation in accordance with this Section
3.4
3.5. ACCOUNTS RECEIVABLE ADJUSTMENT.
3.5.1. PREPARATION OF RECEIVABLE STATEMENT. Purchaser shall
prepare and deliver to ▇▇▇▇▇▇▇ within one hundred and thirty
(130) days after the Closing Date a statement (the "Receivable
Statement") setting forth (i) the name of the obligor and the
amount of each Actual Uncollected Receivable (as hereinafter
defined) and (ii) the aggregate amount of all of the Actual
Uncollected Receivables. For purposes of this Agreement,
"Actual Uncollected Receivable" shall mean each
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account receivable and sales claim that was included in the
Closing Statement to the extent that such receivable or claim
was not collected by Purchaser on or before one hundred and
twenty (120) days after the Closing Date. At any time and from
time to time prior to delivery to ▇▇▇▇▇▇▇ of the Receivable
Statement, at ▇▇▇▇▇▇▇'▇ request Purchaser shall furnish to
▇▇▇▇▇▇▇ a list, including amounts, of those account
receivables and sales claims included in the Closing Statement
that have not been collected. In determining whether a
particular customer has paid a receivable included in the
Closing Statement, all post-Closing Date payments from
customers who are not "C.O.D. Customers" (as hereinafter
defined) and all sales credits, cash discounts and rebates
credited to any customer shall be applied to receivables from
such customer included in the Closing Statement (regardless of
any instructions to the contrary by the customer) until the
receivables for such customer included in the Closing
Statement have been paid in full, and all post-Closing Date
C.O.D. payments from C.O.D. Customers shall be applied to
post-Closing Date receivables and any excess amounts shall be
applied as instructed by the customer. For purposes of this
Section 3.5, (i) "C.O.D. Customers" shall mean (a) the
customers of the Business listed on Schedule 3.5 attached
hereto, (b) any additional customers that the Business ships
to on a "C.O.D. Basis" (as hereinafter defined) as of the
Closing Date, and (c) any additional customers added to such
schedule at and as of the Closing Date that are reasonably
acceptable to Purchaser and ▇▇▇▇▇▇▇ and (ii) "C.O.D. Basis"
shall mean any method pursuant to which a customer of the
Business delivers to the Business cash or other assets at or
prior to the time of delivery of finished goods manufactured
by the Business as full or partial payment of the Purchase
Price of such goods.
3.5.2. ▇▇▇▇▇▇▇ REVIEW OF RECEIVABLE STATEMENT AND DISPUTE
RESOLUTION. If ▇▇▇▇▇▇▇ disagrees with the amount of the Actual
Uncollected Receivables as reflected on the Receivable
Statement, ▇▇▇▇▇▇▇ may, within thirty (30) days after delivery
of the Receivable Statement, deliver a notice to Purchaser (a
"Receivable Disagreement Notice"), setting forth ▇▇▇▇▇▇▇'▇
calculation of the Uncollected Receivables and specifying, in
reasonable detail, those items or amounts as to which ▇▇▇▇▇▇▇
disagrees and the reasons for such disagreement. ▇▇▇▇▇▇▇ shall
be deemed to have agreed with all items and amounts contained
in the Receivable Statement other than those specified in such
Receivable Disagreement Notice. If a Receivable Disagreement
Notice is delivered pursuant to this Section 3.5.2, ▇▇▇▇▇▇▇
and Purchaser shall resolve the dispute by following the
procedures for resolution of disputes concerning the Closing
Net Assets set forth in Section 3.4 hereof, except that
▇▇▇▇▇▇▇ shall be entitled to engage an auditor with respect to
such matters. For purposes of Section 3.5.3, the "Receivable
Statement" shall mean the Receivable Statement prepared by
Purchaser, as modified or changed by any written agreement of
the parties hereto and by any determinations of any firms of
independent accountants made as provided in this Section
3.5.2.
3.5.3. RECEIVABLE ADJUSTMENT PAYMENTS. Based upon the
Receivable Statement, within five business days after the
final determination of the amount of the Actual Uncollected
Receivables, Purchaser shall pay to ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ shall
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pay to Purchaser, as applicable, the following amounts in cash
(including interest thereon computed in the manner set forth
below):
(i) If the aggregate amount of the Actual Uncollected
Receivables exceeds the aggregate amount of the
allowance for cash discounts, rebates, sales credits
and bad debts included in the Closing Statement (the
"Receivable Allowance"), ▇▇▇▇▇▇▇ shall pay Purchaser an
amount equal to such excess;
(ii) If the aggregate amount of the Actual Uncollected
Receivables is equal to the amount of the Receivable
Allowance, no payment shall be made by either ▇▇▇▇▇▇▇
or Purchaser under this Section 3.5.3; or
(iii) If the aggregate amount of the Actual Uncollected
Receivables is less than the Receivable Allowance or if
there is no Actual Uncollected Receivables, Purchaser
shall pay to ▇▇▇▇▇▇▇ an amount equal to such
deficiency.
In the event that any payment is required to be made
under this Section 3.5.3., the amount of the payment shall
include interest computed at the Prime Rate from the Closing
Date to the date the payment is made; provided, however, that
if such amount is not paid within fifteen (15) days after a
final determination of the Receivable Statement and Actual
Uncollected Receivable, then any such payment shall bear
interest from and after such date at an amount equal to the
Prime Rate plus 4%. Any payment made under this Section 3.5.3
shall be deemed an adjustment in the Purchase Price and shall
be consistently treated by the parties hereto for federal,
state or local income tax purposes.
3.5.4. ASSIGNMENT OF COLLECTION RIGHTS. Promptly after the
determination of any Actual Uncollected Receivables and the
receipt by Purchaser of all payments from ▇▇▇▇▇▇▇ required by
Section 3.5.3 above, if any, Purchaser will assign to ▇▇▇▇▇▇▇
all of Purchaser's rights to the Actual Uncollected
Receivables. Purchaser shall use reasonable efforts to make
its employees available to ▇▇▇▇▇▇▇, upon ▇▇▇▇▇▇▇'▇ request, to
assist ▇▇▇▇▇▇▇ in the collection of the Actual Uncollected
Receivables; provided, that ▇▇▇▇▇▇▇ shall reimburse Purchaser
and its employees for any out-of-pocket expenses incurred by
Purchaser or its employees in assisting ▇▇▇▇▇▇▇ pursuant to
this Section 3.5.4.
3.5.5. The covenant of either party to timely make payment
pursuant to Section 3.4 and/or 3.5 hereof shall be deemed
independent covenants of such party and shall not be subject
to any claim or defense, or right of set-off of either party
pursuant to any other Section of this Agreement.
3.6. NON-ASSIGNABLE PURCHASED CONTRACTS.
3.6.1. Notwithstanding any other provision in this Agreement
to the contrary, in the case of any Purchased Contracts or any
contracts or agreements related to the Purchased Real Estate
or the Purchased Leasehold Premises (but excluding
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the Madison County Leases) which are not assignable or
transferable, either by their terms or otherwise without the
prior consent of any third party thereto (such contracts being
the "Non-Assignable Purchased Contracts"), ▇▇▇▇▇▇▇ shall use
commercially reasonable efforts to obtain, or cause to be
obtained, prior to the Closing Date, any written consents or
waivers necessary for the assignment of such Non-Assignable
Purchased Contract to Purchaser as contemplated by this
Agreement, and Purchaser shall cooperate with ▇▇▇▇▇▇▇ in such
manner as may be reasonably requested in connection therewith.
In the event ▇▇▇▇▇▇▇ shall be unable to obtain any such
consent or waiver to the assignment or transfer of a
Non-Assignable Purchased Contract to Purchaser prior to the
Closing (i) ▇▇▇▇▇▇▇ shall continue to use such commercially
reasonable efforts after the Closing, (ii) ▇▇▇▇▇▇▇ shall
provide to Purchaser, from and after the Closing, at a cost to
Purchaser no greater than the cost Purchaser would have
otherwise paid under the terms of such Non-Assignable
Purchased Contract (the "Contract Costs"), benefits
substantially equivalent to the benefits to be obtained under
each such Non-Assignable Purchased Contract, as fully as if
such consent had been obtained, to the extent ▇▇▇▇▇▇▇ is
reasonably capable of legally providing such benefits and
(iii) at Purchaser's option, Purchaser may procure such
equivalent benefits from third parties during the final ninety
(90) days of the current term of any such Non-Assignable
Purchased Contract (or at any time within ninety (90) days of
the date on which the Non-Assignable Purchased Contract which
such equivalent benefits replace would have by its terms
terminated or entitled the other party thereto to terminate or
renegotiate the costs of such benefits) without any further
liability to ▇▇▇▇▇▇▇; provided, however, that (A) Purchaser
shall provide ▇▇▇▇▇▇▇ prior written notice of procuring any
such equivalent benefits thirty (30) days (or, if thirty (30)
days' notice is not practicable, such notice, if any, which is
practicable) prior to obtaining such equivalent benefits
pursuant to clause (iii) above, and (B) in the event Purchaser
procures equivalent benefits purchase to clause (iii), ▇▇▇▇▇▇▇
shall be relieved of its obligations under this Section 3.6.1
with respect to the Non-Assignable Purchased contracts with
respect to which such equivalent benefits have been so
procured by Purchaser and may take any and all action
available to ▇▇▇▇▇▇▇ to terminate its obligations under such
Non-Assignable Purchased Contracts.
3.6.2. Purchaser agrees to pay, or reimburse ▇▇▇▇▇▇▇ for, 100%
of ▇▇▇▇▇▇▇'▇ direct out-of-pocket cost, fees and expenses
(excluding attorneys' fees and fees and expense of other
professionals and employees of ▇▇▇▇▇▇▇), actually incurred by
▇▇▇▇▇▇▇ in fulfilling its obligations to Purchaser under
Section 3.6.1(ii); provided, however, that the amount of such
costs, fees and expenses shall not exceed the related Contract
Costs. Purchaser shall make such payments to ▇▇▇▇▇▇▇ within
thirty (30) days after ▇▇▇▇▇▇▇'▇ submission of an invoice
therefore.
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4. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇. In order to induce each of
Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to enter into this Agreement and
to consummate the transactions contemplated hereunder, ▇▇▇▇▇▇▇ makes the
following representations and warranties (for purposes of this Article 4,
references to Purchased Assets and similar terms shall include the assets of Sub
except where the context otherwise requires):
4.1. ORGANIZATION, POWER AND AUTHORITY OF ▇▇▇▇▇▇▇ AND CHASE.
▇▇▇▇▇▇▇ is a corporation validly existing and in good standing under the laws of
the State of Delaware and has full corporate power and authority (i) to own or
lease the Purchased Assets being transferred by it and to conduct its Business
as now being conducted, (ii) to enter into this Agreement and to sell, convey,
transfer, assign and deliver the Purchased Assets and the Shares being
transferred by it to Purchaser as provided herein and (iii) to carry out the
other transactions and agreements contemplated hereby. Chase is a corporation
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to enter into this Agreement and
perform its obligations hereunder.
4.2. ORGANIZATION, POWER, AUTHORITY AND QUALIFICATIONS OF SUB. Sub
is a corporation validly existing and in good standing under the laws of the
State of Illinois and has full corporate power and authority to own or lease its
properties and to carry on its business. Sub is qualified to transact business
as a foreign corporation in each jurisdiction where the failure to so qualify
would have a Material Adverse Effect.
4.3. CAPITAL STOCK OF SUB. The authorized, issued and outstanding
capital stock of Sub is as set forth in Schedule 4.3 hereto. All of such stock
of Sub is owned by ▇▇▇▇▇▇▇, all voting rights in Sub are vested exclusively in
such stock, and all such stock is validly authorized and issued, fully paid and
non-assessable. Except for this Agreement and as otherwise set forth on Schedule
4.3 hereto, there are no outstanding warrants, options or rights of any kind to
acquire from ▇▇▇▇▇▇▇ or Sub any shares of capital stock or securities of Sub of
any kind, and there are no voting rights, voting trusts, proxies or other
agreements or understandings affecting, or any pre-emptive rights with respect
to the issuance or sale of shares of capital stock of Sub and Sub has no
obligation to acquire any of its issued and outstanding shares of capital stock
or any other security issued by it from any holder thereof.
4.4. SUBSIDIARIES. Except for Sub, ▇▇▇▇▇▇▇ has neither any
subsidiary nor any equity interest or the right or obligation to acquire an
equity interest in any other person or entity.
4.5. STATUS AND EFFECT OF DELIVERY OF THE SHARES. ▇▇▇▇▇▇▇ is the
lawful owner of all of the capital stock of Sub and has valid indefeasible title
thereto, free and clear of all Liens, except that the shares of Sub are pledged
to secure the repayment of indebtedness under that certain Credit Agreement,
dated August 30, 1996 by and among Chase Brass Industries, Inc., the Banks
referred to therein and PNC Bank, National Association, as Agent (the "Credit
Agreement").
4.6. FINANCIAL STATEMENTS. ▇▇▇▇▇▇▇ has previously delivered to
Purchaser copies of the following:
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4.6.1. A consolidating statements of operations of ▇▇▇▇▇▇▇ and
Sub for each of the three years ended December 31, 1998, 1999
and 2000 (collectively, the "Statements of Operations"); and
4.6.2. A consolidated balance sheet of ▇▇▇▇▇▇▇ and Sub as of
December 2000 (the "Balance Sheet").
The Statements of Operations and the Balance Sheet (hereinafter
sometimes referred to together as the "Financial Statements") have been prepared
by ▇▇▇▇▇▇▇'▇ management in accordance with generally accepted accounting
principles ("GAAP"), consistently applied, and are based on books and records of
▇▇▇▇▇▇▇ relating to the Business which have been prepared on a consistent basis.
The Financial Statements fairly present in all material respects, as more fully
described in and subject to the integrally related notes thereto, as of their
respective dates, the assets and liabilities and the operations of the Business
as of the dates thereof and the periods covered thereby.
4.7. LIABILITIES OF ▇▇▇▇▇▇▇ AND SUB. ▇▇▇▇▇▇▇ and Sub have no
liabilities or obligations relating to the Business or the Purchased Assets
except: (i) to the extent reflected in the Balance Sheet; (ii) to the extent
specifically set forth herein or in any of the Schedules; (iii) the Permitted
Exceptions; (iv) liabilities incurred in the ordinary course of business since
December 31, 2000; and (v) liabilities which, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on the
business, operations, condition (financial or otherwise) or results of
operations of the Business, the validity or enforceability of this Agreement or
the ability of ▇▇▇▇▇▇▇ to perform its obligations under this Agreement
("Material Adverse Effect").
4.8. TAX MATTERS.
4.8.1. All tax returns and reports required to be filed by
▇▇▇▇▇▇▇, Sub and each consolidated or affiliated group in
which ▇▇▇▇▇▇▇ or Sub has been a member prior to Closing (an
"Affiliated Group") have been timely filed, including without
limitation, all federal, state, local and foreign income tax
returns, all sales and use tax, gross receipts, property,
payroll and other tax returns (collectively, "Tax Returns"),
and all taxes shown as due thereon have been paid in full or
adequate provision has been made for such taxes by the
establishment of reserves. All of such Tax Returns are correct
and complete in all material respects, and ▇▇▇▇▇▇▇ has no
knowledge of any tax deficiency proposed or threatened against
the Purchased Assets and there are no tax liens upon any of
the Purchased Assets.
▇▇▇▇▇▇▇ or an Affiliated Group has made when due all payments
of taxes or estimated taxes with respect to the Purchased
Assets, the Business and Sub in amounts sufficient to avoid
the imposition of any tax deficiency or penalty.
4.8.2. All taxes and other assessments and levies with respect
to the Purchased Assets and the operation of the Business
which ▇▇▇▇▇▇▇ or Sub were required by law to withhold or to
collect have been duly withheld and collected, and have been
paid over to the proper governmental entity or are being held
by ▇▇▇▇▇▇▇ or Sub for such payment.
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4.8.3. Except as disclosed on Schedule 4.8, none of the Tax
Returns have been audited or are being audited by any taxing
authority, and no assessment, audit or other proceeding by
any taxing authority, court or other governmental or
regulatory authority is proposed, pending or threatened with
respect to the Taxes or Tax Returns of ▇▇▇▇▇▇▇ or Sub.
4.8.4. There are no outstanding agreements, waivers or
arrangements extending the statutory period of limitations
applicable to any claim for or the period for the collection
or assessment of Taxes due for any taxable period with
respect to ▇▇▇▇▇▇▇, Sub or any Affiliated Group.
4.8.5. ▇▇▇▇▇▇▇ is not a foreign person within the meaning of
Section 1445(b)(2) of the Code.
4.8.6. Sub is not a partner of any partnership and no
interest in any partnership is included in the Purchased
Assets.
4.8.7. Neither Chase nor any affiliate of Chase has made any
tax elections under any section of the Code, including
without limitation under any of Sections 108, 168, 338, 441,
472, 1017, 1033, 1503, or 4977 of the Code or Treasury
Regulations Section 1.1502 (or any predecessor thereof) that
affects Sub or the assets of Sub. No consent to the
application of Section 341(f)(2) of the Code (or any
predecessor thereof) has been made or filed by or with
respect to Sub. None of the Purchased Assets or assets of Sub
is an asset or property that Purchaser or any of its
affiliates is or will be required to treat as being (i) owned
by any other person pursuant to the provisions of Section
168(f)(8) of the Internal Revenue Code of 1954 as amended,
and in effect immediately before the enactment of the Tax
Reform Act of 1986 or (ii) tax-exempt use property within the
meaning of Section 168(h)(l) of the Code.
4.8.8. No closing agreement pursuant to Section 7121 of the
Code (or any predecessor provision) or any similar provision
of any state, local or foreign law has been entered into by
or with respect to Chase, ▇▇▇▇▇▇▇ or Sub or any assets or
properties thereof which would be binding upon or enforceable
against Purchaser or Sub or the Purchased Assets.
4.8.9. Neither Chase, ▇▇▇▇▇▇▇ nor Sub has agreed to or is
required to make any adjustment pursuant to Section 481(a) of
the Code (or any predecessor provision) by reason of any
change in any accounting method of Chase, ▇▇▇▇▇▇▇ or Sub,
which change of accounting method would be binding upon Sub
or Purchaser with respect to the Business or the Purchased
Assets. Neither Chase, ▇▇▇▇▇▇▇ nor Sub has any application
pending with any taxing authority requesting permission for
any changes in any accounting method of Chase, ▇▇▇▇▇▇▇ or Sub
which would have such effect, and the Internal Revenue
Service (the "IRS") has not proposed any such adjustment or
change in accounting method therefore.
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4.8.10. None of Chase, ▇▇▇▇▇▇▇ or Sub is a party to, is bound
by, or has any obligation under any tax sharing contract or
similar contract and no such contract shall be entered into
or amended by Chase, ▇▇▇▇▇▇▇ or Sub at or prior to the
Closing.
4.8.11. Except as would not affect Sub or the Purchased
Assets, neither Chase nor any member of its Affiliated Group
has an "excess loss account" (as such term is described in
Treasury Regulations Section 1.1502) existing with respect to
▇▇▇▇▇▇▇ or Sub, and neither ▇▇▇▇▇▇▇ nor Sub has any "deferred
intercompany gain" (as such term is described in Treasury
Regulations Section 1.1502) with respect to Chase or any
member of its Affiliated Group.
For purposes of this Agreement, the term "Taxes" and "taxes" shall mean
all taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation (a) income, gross receipts, ad valorem, premium,
excise, real property, personal property, sales, use, transfer, withholding,
employment, payroll, medicare and franchise taxes imposed by the United States
of America, or by any state, local or foreign government, or any subdivision,
agency or other similar person of the United States or any such government; and
(b) any interest, fines, penalties, assessments or additions to taxes resulting
from, attributable to, or incurred in connection with any Tax or any contest,
dispute, or refund thereof. The representations and warranties in this Section
4.8 with respect to Sub, to the extent they relate to any period prior to August
30, 1996, are limited to the knowledge of ▇▇▇▇▇▇▇.
4.9. REAL ESTATE OF ▇▇▇▇▇▇▇ AND SUB.
4.9.1. Schedule 4.9 sets forth descriptions of the Purchased
Real Estate, the real property owned by Sub (the "Holco Real
Property") and the nature and amount of any mortgages, tax
liens or other Liens thereon. Schedule 4.9 also identifies
each parcel of the Purchased Leasehold Premises and the date
and term of each lease, the lessee and lessor, the location,
including address, and a brief description thereof. The
Purchased Real Estate, the Purchased Leasehold Premises and
the Holco Real Property comprise all of the real property
used in the operation of the Business.
4.9.2. Neither ▇▇▇▇▇▇▇ nor Sub has received any written
notice of any pending or threatened condemnation proceeding
with respect to any portion of the Purchased Real Estate, the
Purchased Leasehold Premises or the Holco Real Property. To
the knowledge of ▇▇▇▇▇▇▇, no governmental authority is
contemplating a special assessment that is not already in
existence.
4.10. GOOD TITLE TO AND CONDITION OF THE PURCHASED ASSETS. ▇▇▇▇▇▇▇
or Sub, as applicable, has good and indefeasible title to all of the Purchased
Assets (excluding the Purchased Real Estate, the Purchased Leasehold Premises
the Holco Real Property), free and clear of all Liens, except those set forth in
Schedule 4.10, Permitted Encumbrances or Liens which will be released at or
prior to the Closing.
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4.11. LICENSES AND PERMITS. Schedule 4.11 contains a true and
complete list of all licenses and other required governmental or official
approvals, permits or authorizations which, to the knowledge of ▇▇▇▇▇▇▇, are
necessary to operate the Business and the failure to possess would reasonably be
expected to have a Material Adverse Effect. ▇▇▇▇▇▇▇ possesses all licenses,
approvals, permits and authorizations identified on Schedule 4.11, all such
licenses, approvals, permits and authorizations are in full force and effect,
▇▇▇▇▇▇▇ is in compliance in all material respects with their requirements, and
no proceeding is pending or, to the knowledge of ▇▇▇▇▇▇▇, threatened to revoke
or amend any of them.
4.12. PROPRIETARY RIGHTS.
4.12.1. The Purchased Proprietary Rights include all
proprietary rights used in the Business, the failure to
possess which would reasonably be expected to have a Material
Adverse Effect.
4.12.2. ▇▇▇▇▇▇▇ is the sole owner, legally and beneficially,
and has good and indefeasible title to the trademarks and
trade names set forth in Schedule 1.2.8 (the "Marks"), and is
an authorized licensee of the software set forth in Schedule
1.2.8, in each case free and clear of any and all Liens,
except for Permitted Encumbrances. Except as set forth on
Schedule 1.2.8, to the knowledge of ▇▇▇▇▇▇▇, no third party
claims any rights in or to the Marks, and, to the knowledge
of ▇▇▇▇▇▇▇, the Marks do not infringe on or otherwise violate
any rights of any third party and no third party has asserted
any claim of any such infringement or violation.
4.12.3. Upon the sale, assignment, transfer and conveyance by
▇▇▇▇▇▇▇ of the Purchased Proprietary Rights to Purchaser
hereunder, Purchaser will have good and indefeasible title to
all of the Marks, free and clear of all Liens, except for
Permitted Encumbrances.
4.13. INSURANCE. The Purchased Assets and third-party claims are
insured or insured against to the extent and in the manner that is customary for
companies engaged in a business similar to the Business except to the extent
that such Purchased Assets or claims are self-insured. ▇▇▇▇▇▇▇ will maintain
such coverage in force up to the Closing Date. The interest of ▇▇▇▇▇▇▇ in such
insurance policies will not be transferred hereunder, and Purchaser shall not be
subrogated to the rights of ▇▇▇▇▇▇▇ thereunder.
4.14. LITIGATION. Except as set forth in Schedule 4.14, as of the
date hereof there are no actions, suits, claims, governmental investigations or
arbitration proceedings pending or, to the knowledge of ▇▇▇▇▇▇▇, threatened
against or affecting any of the Purchased Assets, the Business or Sub as of the
date hereof. Except as set forth in Schedule 4.14, as of the date hereof there
are no writs, judgments, decrees, injunctions or similar orders of any person,
entity or governmental agency or authority outstanding against ▇▇▇▇▇▇▇ affecting
the Purchased Assets, the Business or Sub or which would reasonably be expected
to have a Material Adverse Effect.
4.15. NO MATERIAL ADVERSE CHANGE. Since December 31, 2000, there
has not been (i) any change in the business, properties or financial condition
of the Business other than changes
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occurring in the ordinary course of business which in the aggregate have not had
a Material Adverse Effect or (ii) to the knowledge of ▇▇▇▇▇▇▇, any threatened or
prospective event or condition which would reasonably be expected to have a
Material Adverse Effect.
4.16. ABSENCE OF CERTAIN ACTS OR EVENTS. Except as disclosed in
Schedule 4.16, since December 31, 2000, ▇▇▇▇▇▇▇ has not: (i) committed to or
paid any bonus or increased the rate of compensation or profit sharing of any of
the employees of any of the Business, except in the ordinary course and
consistent with past practice; (ii) sold or transferred any of the assets of any
of the Business other than in the ordinary course of business; (iii) made or
obligated itself to make capital expenditures with respect to the Business
aggregating more than $10,000; (iv) incurred any material obligations or
liabilities (including any indebtedness) or entered into any material
transaction with respect to the business and operations of the Business, except
for this Agreement and the transactions contemplated hereby; (v) suffered any
theft, damage, destruction or casualty loss with respect to the Business that
could reasonably be expected to have a Material Adverse Effect; (vi) experienced
any change in production schedules, acceleration of sales or reduction or
increase of aggregate administrative, marketing, advertising and promotional
expenses of the Business that would reasonably be expected to have a Material
Adverse Effect other than in the ordinary course of business; or (vii)
experienced any change in the relations of the Business with its customers or
material suppliers or any loss of business which would reasonably be expected to
have a Material Adverse Effect.
4.17. COMPLIANCE WITH LAWS.
4.17.1. Except as set forth in Schedule 4.17 and except with
respect to Environmental Laws (as defined below), (i) ▇▇▇▇▇▇▇
is and, prior to the date hereof has been (except to the
extent cured with no further material liability or reasonable
expectation of Material Adverse Effect), in compliance in all
material respects with all laws, regulations, judgments,
decrees and similar orders applicable to the operations of
the Business or the Purchased Assets, the noncompliance with
which would be substantial in character or extent and which
would reasonably be expected to materially interfere with the
use, or impair the operations of the Business in any material
respect or result in the imposition of any material penalty
or otherwise result in a Material Adverse Effect and (ii)
▇▇▇▇▇▇▇ has not received written notification of any asserted
past or present failure to comply with any such laws,
regulations, judgments, decrees and similar orders, and, to
the knowledge of ▇▇▇▇▇▇▇, no proceeding with respect to any
such violation is pending or contemplated.
4.17.2. Neither ▇▇▇▇▇▇▇ nor Sub, nor, to ▇▇▇▇▇▇▇'▇ knowledge,
any employee of the Business, has made any payment of funds
in connection with the Business prohibited by law, and no
funds have been set aside to be used in connection with any
of the Business for any payment prohibited by law.
4.17.3. To ▇▇▇▇▇▇▇'▇ knowledge, there are no criminal felony
indictments or other criminal felony proceedings pending or
threatened against any present officers, employees or agents
of ▇▇▇▇▇▇▇ or Sub with respect to actions taken in such
capacity.
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4.17.4. Except as set forth in Schedule 4.17, to ▇▇▇▇▇▇▇'▇
knowledge, neither ▇▇▇▇▇▇▇ nor Sub has received any written
notification that it is subject to any pending investigation
by any governmental agency or authority, including the United
States Federal Trade Commission or Department of Justice, or
any order of or consent decrees issued by or entered into
with any such governmental agency or authority, and ▇▇▇▇▇▇▇
is not otherwise aware of any threatened or pending
investigation by any governmental agency or authority
relating to ▇▇▇▇▇▇▇, Sub or the Business.
4.18. ENVIRONMENTAL MATTERS.
4.18.1. Except as disclosed on Schedule 4.18 hereto: (i) to
the knowledge of ▇▇▇▇▇▇▇ (A) the Business does not violate in
any material respect and has not, at any time after August
30, 1996 (except to the extent cured with no further
liability or reasonable expectation of a Material Adverse
Effect), violated in any material respect any applicable
Environmental Law in effect as of the date hereof; (B)
▇▇▇▇▇▇▇ is in possession of all Environmental Permits
required under any applicable Environmental Law for the
conduct or operation of its business (or any part hereof),
except where failure to possess such permit would not be
reasonably expected to have a Material Adverse Effect, and
▇▇▇▇▇▇▇ is in compliance with all of the requirements and
limitations included in such Environmental Permits, except
where failure to comply with such permits would not be
reasonably expected to have a Material Adverse Effect; (C)
▇▇▇▇▇▇▇ does not store or use any pollutants, contaminants or
hazardous or toxic wastes, substances or materials; and (D)
there has not been buried, dumped, disposed of, spilled or
released any quantities of any pollutants, contaminants or
hazardous wastes, substances or materials that would
reasonably be expected to have a Material Adverse Effect;
(ii) from and after August 30, 1996, and to ▇▇▇▇▇▇▇'▇
knowledge, prior to that date, the Business has not received
any written notice from any governmental authority or any
private person or entity that its business or operations are
in violation of any Environmental Law or any Environmental
Permit or that it is responsible (or potentially responsible)
for the cleanup of any pollutants, contaminants, or hazardous
or toxic wastes, substances or materials; and (iii) the
Business is not the subject of any federal, state, local or
private litigation or proceedings involving a demand for
damages or other potential liability with respect to
violations of Environmental Laws
4.18.2. For purposes of this Agreement: (i) "Environmental
Law" means any law, statute, regulation or order, consent
decree or settlement agreement which relates to or otherwise
imposes liability or standards of conduct concerning
discharges, emissions, releases or threatened releases of
noises, odors or any pollutants, contaminants or hazardous or
toxic waste, substances or materials, whether or not as
matter or energy, into ambient air, water, or land, or
otherwise relating to the manufacture, processing,
generation, distribution, use, treatment, storage, disposal,
clean-up, transport or handling of pollutants, contaminants,
or hazardous waste, substances or materials, including (but
not limited to) the Comprehensive Environmental Response,
Compensation and Liability Act of
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1980 ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, the Federal Water Pollution
Control Act Amendments of 1972, the Toxic Substances Control
Act, the Clean Water Act of 1977, as amended, any so-called
"Super Lien" law, and any other similar federal, state or
local statutes; and (ii) "Environmental Permit" means any
permit, license, approval, consent or other authorization
required by or pursuant to any applicable Environmental Law.
4.19. EMPLOYEE MATTERS; LABOR RELATIONS.
4.19.1. Except as set forth on Schedule 4.19, to the
knowledge of ▇▇▇▇▇▇▇, none of the employees of the Business
is covered by an employment contract, agreement, or
commitment (whether written or oral) of the following types
to which ▇▇▇▇▇▇▇ is a party: (a) employment and consulting
agreements (including severance and retention agreements) and
(b) collective bargaining agreements. Except as set forth in
Schedule 4.19, to the knowledge of ▇▇▇▇▇▇▇, there have not
been in the past twelve (12) months, and are not, any plans
or solicitations of employees of the Business to form or join
a union.
4.19.2. With respect to the employees of the Business, and
except as may be set forth in Schedule 4.14 and Schedule
4.17, ▇▇▇▇▇▇▇ and Sub have complied in all material respects
with all applicable federal, state and local laws relating to
employment and labor, including without limitation those laws
relating to labor relations, equal employment opportunity,
wages and hours of work and payment of Social Security,
unemployment compensation, worker's compensation and similar
taxes, and, to the knowledge of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and Sub are
not presently liable to any person or governmental agency for
any arrears of wages or subject to any liabilities or
penalties for failure to comply with any of the foregoing
laws. With respect to the employees of the Business, and
except as may be set forth on Schedule 4.14 or Schedule 4.17,
there are no outstanding charges or claims of a material
nature against ▇▇▇▇▇▇▇ or Sub or any of their respective
officers, directors, agents or employees involving any
alleged or actual violation of the National Labor Relations
Act, the Age Discrimination in Employment Act, Title VII of
the Civil Rights Act of 1964, the Fair Labor Standards Act,
or any other federal, state or local law concerning labor
relations, equal employment opportunity, wages and hours of
work or other employment or labor related matters; nor, to
the knowledge of ▇▇▇▇▇▇▇, has there been any threat of any
such claim or charge.
4.19.3. Except as set forth on Schedule 4.14 and Schedule
4.17, no employee of the Business has threatened or asserted
any pending claim, against ▇▇▇▇▇▇▇ regarding working
conditions, labor relations, discrimination or other
employment or labor related matters.
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4.20. EMPLOYEE BENEFIT PLANS. Schedule 4.20 lists all plans
of the types described below which are sponsored, maintained
or contributed to by ▇▇▇▇▇▇▇ or any entity (whether or not
incorporated) that together with ▇▇▇▇▇▇▇ would be treated as
a single employer under Section 414(b), (c), (m) or (o) of
the Code (such group of entities known as "Seller Group") for
the benefit of current and former employees of the Business:
(i) each "employee benefit plan," as such term is
defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")
(including, but not limited to, employee benefit plans,
such as foreign plans, which are not subject to the
provisions of ERISA) (the "ERISA Plans" or "ERISA
Plan");
(ii) each personnel policy, stock option plan, stock
purchase plan, stock appreciation rights, phantom stock
plan, bonus plan or arrangement, incentive award plan or
arrangement, vacation policy, severance pay plan, policy
or agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement and each other employee benefit plan,
agreement, arrangement, program, practice or
understanding which is not described in Section
4.20(a)(i) (the "Benefit Programs") (the items described
in 4.20(a)(i) and (ii) are referred to collectively as
the "Seller Plans").
4.20.2. True, correct and complete copies of each of the
Seller Plans, summary plan descriptions, related trusts,
insurance or group annuity contracts and each other funding
or financing arrangement relating to any Seller Plan,
including all amendments thereto, have been furnished to
Purchaser. There has also been furnished to Purchaser, with
respect to each Seller Plan required to file such report, the
most recent report on Form 5500. Additionally, the most
recent determination letter from the Internal Revenue Service
for each of the Seller Plans intended to be qualified under
Section 401 of the Code has been furnished.
4.20.3. To ▇▇▇▇▇▇▇'▇ knowledge, no Seller Plan (other than a
multiemployer plan as defined in Section 3(37) of ERISA) to
which any member of Seller Group contributes and which is
subject to Part 3 of Subtitle B of Title I of ERISA has
incurred any "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or Section 412 of the Code
and no material liability (other than for annual premiums) to
the Pension Benefit Guaranty Corporation ("PBGC") has been
incurred by any member of any Seller Group with respect to
any such Seller Plan.
4.20.4. As to any ERISA Plan identified on Schedule 6.6.2 to
be assumed by Purchaser (the "Assumed Plans") that is
intended to be qualified under Section 401 of the Code, to
▇▇▇▇▇▇▇'▇ knowledge, there has been no termination or partial
termination of the plan within the meaning of Section
411(d)(3) of the Code. Each Assumed Plan intended to be
qualified under Section 401(a) of the Code has
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received a favorable determination letter from the IRS as to
its qualification under the Code and to the effect that each
trust (if any) forming a part thereof is exempt from taxation
under Section 501(a) of the Code, and, to ▇▇▇▇▇▇▇'▇
knowledge, nothing has occurred since the date of such
determination letter that will adversely affect such
qualification or tax-exempt status.
4.20.5. As to any Seller Plan, to ▇▇▇▇▇▇▇'▇ knowledge, there
are no actions, suits or claims pending (other than routine
claims for benefits) or threatened against or with respect to
any of such Plans or their assets. To ▇▇▇▇▇▇▇'▇ knowledge, no
act, omission or transaction has occurred with respect to any
Assumed Plan which would result in imposition on Purchaser of
any (A) breach of fiduciary duty liability damages under
Section 409 of ERISA, (B) a civil penalty assessed pursuant
to subsections (c), (i) or (l) of Section 502 of ERISA or (C)
a tax imposed pursuant to Chapter 43 of Subtitle D of the
Code and there is no matter pending (other than routine
qualification determination filings) with respect to any of
such Assumed Plans before the Internal Revenue Service, the
Department of Labor or the PBGC. Each Assumed Plan and, to
▇▇▇▇▇▇▇'▇ knowledge, each Non- Assumed Plan which is intended
to be qualified under Section 401(a) of the Code complies in
all material respects with the requirements of ERISA, the
Code and all other applicable laws. The Seller Group have
made, or will timely make prior to the Closing Date, to each
of the Seller Plans, all contributions required to have been
made under the terms of any of such plans or pursuant to any
applicable collective bargaining agreement as of the Closing
Date.
4.20.6. No Assumed Plan provides retiree medical benefits to
any present or former employee of the Business and ▇▇▇▇▇▇▇ is
not contractually or otherwise obligated or otherwise
obligated (whether or not in writing) to provide any person
with medical benefits upon retirement or termination of
employment other than as required by the provisions of
Sections 601 and 608 of ERISA and Section 4980B of the Code.
4.20.7. Except for those Seller Plans designated in Schedule
4.20, no member of the Seller Group is now obligated to
contribute to a multiemployer plan as defined in Section
3(37) of ERISA.
4.21. PRODUCT RECALLS. To the knowledge of ▇▇▇▇▇▇▇, there has not
been any product recall, post-sale warning or similar action (collectively,
"recalls") conducted with respect to any product manufactured, shipped,
delivered or sold by the Business, or any investigation or consideration of, or
decision made by, the Business concerning whether or not to undertake any
recalls.
4.22. MATERIAL AGREEMENTS; ABSENCE OF DEFAULTS.
4.22.1. Schedule 4.22 contains a true and complete list of
the following:
(i) all leases pursuant to which ▇▇▇▇▇▇▇ or Sub
lease any real property for use in the Business;
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(ii) all leases pursuant to which ▇▇▇▇▇▇▇ or Sub
lease any personal property for use in the Business
that provide, individually, rental payments in excess
of $10,000 per year or in excess of $20,000 during
their duration;
(iii) all contracts, agreements or other instruments
of or relating to the Business that by their terms
can reasonably be expected to require the future
payment by or to ▇▇▇▇▇▇▇ or Sub of $20,000 or more;
(iv) all material sales agency or distributor
agreements relating to the Business;
(v) all contracts, agreements or other instruments
related to the Business which were not entered into
in the ordinary course of business of the business,
are not terminable within sixty (60) days without
material liability or that by their terms reasonably
can be expected to require the future payment by or
to ▇▇▇▇▇▇▇ or Sub of $25,000 or more;
(vi) all other contracts, agreements or other
instruments to which ▇▇▇▇▇▇▇ or Sub are parties which
are material to the operation of the Business; and
(vii) all purchase orders for steel that have been
placed and that remain open and have not yet been
filled as of the date of this Agreement.
4.22.2. Schedule 4.10 attached hereto contains a true and
complete list of all mortgages, indentures, notes, loan
agreements, security agreements, pledge agreements, lien
retention agreements, consignment agreements, processing
agreements for third parties, installment obligations or
other instrument for or relating to any borrowings or
otherwise relating to the Business or the Purchased Assets;
and
4.22.3. Neither ▇▇▇▇▇▇▇ nor Sub is in material default under
any contract, order, lease, commitment or agreement referred
to in Schedule 1.2.6, Schedule 4.9 or Schedule 4.10 hereto
(collectively, the "Material Agreements") and no condition
exists which, with the giving of notice or passage of time or
both, would constitute a material default thereunder or
constitute an event creating rights of acceleration,
termination or cancellation thereof, and no person has
asserted in writing that ▇▇▇▇▇▇▇ or Sub is in default under,
or in breach of (with or without the giving of notice or the
passage of time), any material term or provision of any of
the Material Agreements. To the knowledge of ▇▇▇▇▇▇▇, there
are no existing material defaults by any third party under
any contract, order, lease, commitment or agreement referred
to in Schedule 1.2.6, Schedule 4.9 or Schedule 4.10 and no
condition exists which, with the giving of notice or passage
of time or both, would constitute a material default
thereunder or constitute an event creating rights of
acceleration, termination or cancellation thereof, and each
such Material Agreement is in full force and effect and
enforceable in accordance with its terms.
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Neither ▇▇▇▇▇▇▇ nor Sub has waived any rights under any
Material Agreement, which waiver reasonably would be expected
to have a Material Adverse Effect.
4.23. DUE AUTHORIZATION; BINDING OBLIGATION. The execution,
delivery and performance of this Agreement and each of the other agreements
contemplated hereby and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action of each of Chase and
▇▇▇▇▇▇▇. This Agreement has been duly executed and delivered by each of Chase
and ▇▇▇▇▇▇▇ and is a valid and binding obligation of each of Chase and ▇▇▇▇▇▇▇,
enforceable in accordance with its terms. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will: (i) conflict with or violate any provision of either Chase's or ▇▇▇▇▇▇▇'▇
certificate of incorporation or bylaws, or of any law, ordinance or regulation
or any decree or order of any court or administrative or, to the knowledge of
▇▇▇▇▇▇▇, other governmental body which is either applicable to, binding upon or
enforceable against ▇▇▇▇▇▇▇ or requires any filing or authorization under any
applicable law, ordinance or regulation; (ii) subject to obtaining the consents
disclosed on Schedule 7.4, result in any breach of or default under any
mortgage, contract, agreement, indenture, will, trust or other instrument which
is either binding upon or enforceable against Chase, ▇▇▇▇▇▇▇ or Sub or the
Purchased Assets; (iii) require Chase, ▇▇▇▇▇▇▇ or Sub to obtain any consent,
approval or action of, or make any filing with or the giving of notice to, any
person or entity except as contemplated by Sections 3.2.3 or 7.4 or those which
the failure to obtain, make or give, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect; or (iv) result in the
creation or imposition of any Lien upon any of the Purchased Assets, other than
Liens created by Purchaser.
4.24. INTERCOMPANY TRANSACTIONS. Except for the transactions, if
any, described in Schedule 4.24, there are no contracts or arrangements for
purchase, sale or lease of goods, equipment or services, or any tax sharing or
similar agreements, between Sub or the Business, on the one hand, and ▇▇▇▇▇▇▇ or
any affiliate of ▇▇▇▇▇▇▇ other than Sub, on the other hand.
4.25. PURCHASED INVENTORY. The Purchased Inventory to be reflected
in the Closing Statement will consist only of items of quality and quantity
commercially useable and saleable in the ordinary course of the Business, except
for any items of obsolete material or material below standard quality or
commercial specifications which are specifically identified as such.
4.26. BUSINESS RELATIONS. The Business is not required to provide
any bonding or other financial security arrangements in any material amount in
connection with any transactions with any of their customers or suppliers that
would reasonably be expected have a Material Adverse Effect. To ▇▇▇▇▇▇▇'▇
knowledge, no customer of the Business intends to cease doing business with (or
substantially reduce its business with) the Business, which cessation (or
reduction) would reasonably be expected to have a Material Adverse Effect. The
Business has not experienced any difficulties in obtaining any raw materials
necessary to the operations of the Business that had, or may reasonably be
expected to have, a Material Adverse Effect and, to ▇▇▇▇▇▇▇'▇ knowledge, no such
shortage of raw materials that would have reasonably be expected to have a
Material Adverse Effect is threatened.
4.27. PRODUCT WARRANTIES. Neither Chase nor ▇▇▇▇▇▇▇ has made any
express warranty as to the condition, value, design, operation, compliance with
applicable law, merchantability or
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fitness for use of any of the products sold by the Business, except as such
warranties may be contained in customer purchase orders, shipping tags or deemed
to apply by operation of law under the Uniform Commercial Code with respect to
the specifications pursuant to which such products were manufactured or the
tensile strength of such products.
4.28. LOCATION OF INVENTORY AND ASSETS. Except for inventory
in-transit and purchased material at outside processors, no Purchased Inventory
is located in any third party warehouse facilities or customer locations. All of
the personal property, excluding motor vehicles, inventory in-transit and
purchased material in-transit, constituting part of the Purchased Assets is
located at either the Purchased Real Estate or Purchased Leasehold Premises.
4.29. NO PRODUCTION OF ASBESTOS-CONTAINING PRODUCTS. Since August
30, 1996, to the knowledge of ▇▇▇▇▇▇▇, the Business has not produced or
otherwise sold products which contain asbestos or asbestos-containing coatings
or insulation.
4.30. FINAL SALES. All sales of inventory by the Business have been
and currently are made on terms of a final sale, and not on terms of consignment
or pursuant to which such inventory may be returned if not sold or utilized by
customers of the Business.
4.31. ACCOUNTS RECEIVABLE. All accounts receivable of ▇▇▇▇▇▇▇ are
reflected on its books and records in accordance with GAAP consistently applied,
arose from bona fide transactions in the ordinary course of business subject to
no setoffs or counterclaims except as reserved against and, to the knowledge of
▇▇▇▇▇▇▇, are collectible.
4.32. MANUFACTURE OF TUBING AND PIPE. Neither Chase nor any
subsidiary of Chase, other than ▇▇▇▇▇▇▇ or Sub, currently manufactures and sells
steel tubing or steel pipe products.
4.33. LIMITATIONS ON ▇▇▇▇▇▇▇'▇ REPRESENTATIONS AND WARRANTIES.
4.33.1. The exceptions, modifications, descriptions and
disclosures in any Schedule attached hereto are made for all
purposes of this Agreement.
4.33.2. To the extent that ▇▇▇▇▇▇▇'▇ representations and
warranties expressed herein are qualified by reference to
▇▇▇▇▇▇▇'▇ knowledge, such reference shall be limited to the
actual knowledge of the individuals set forth on Schedule
4.33.
4.33.3. The representations and warranties set forth in this
Article 4 are the only representations and warranties made by
▇▇▇▇▇▇▇ with respect to the Business and the Purchased
Assets. Except as specifically set forth herein, ▇▇▇▇▇▇▇ is
selling the Purchased Assets to Purchaser "as is" and with
all faults.
4.33.4. CONDITION OF PURCHASED ASSETS. Purchaser acknowledges
that Purchaser will have the opportunity to independently and
personally inspect the assets and properties of ▇▇▇▇▇▇▇ and
Sub and that Purchaser has entered into this Agreement based
upon its ability to make such examination and inspection. The
Purchased Assets are to be sold to and accepted by Purchaser
at Closing in their then present condition, "AS IS, WITH ALL
FAULTS, AND WITHOUT ANY WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED," EXCEPT FOR THE
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EXPRESS REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇▇ CONTAINED
IN THIS ARTICLE 4. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ARTICLE 4, ▇▇▇▇▇▇▇ MAKES NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND TO PURCHASER, INCLUDING, WITHOUT LIMITATION, WITH
RESPECT TO THE PHYSICAL CONDITION OF THE PURCHASED ASSETS AND
ANY IMPROVEMENTS LOCATED THEREON, OR THEIR SUITABILITY FOR
ANY PARTICULAR PURPOSE OR OF MERCHANTABILITY. PURCHASER SHALL
RELY ON ITS OWN INVESTIGATIONS IN DETERMINING WHETHER TO
ACQUIRE THE PURCHASED ASSETS AND THE SHARES. THE PROVISIONS
OF THIS SECTION ARE A MATERIAL PART OF THE CONSIDERATION FOR
CHASE AND ▇▇▇▇▇▇▇ ENTERING INTO THIS AGREEMENT, AND SHALL
SURVIVE CLOSING.
4.34. BROKERS. ▇▇▇▇▇▇▇ has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement, except The
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company LLC ("▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇"), which ▇▇▇▇▇▇▇ shall be
solely responsible to compensate.
4.35. TRUE AND COMPLETE COPIES. Copies of documents delivered and
to be delivered hereunder by ▇▇▇▇▇▇▇ or Sub are and will be true and complete
copies of such documents.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. In order to induce ▇▇▇▇▇▇▇
and Chase to enter into this Agreement and to consummate the transactions
contemplated hereunder, Purchaser makes the following representations and
warranties:
5.1. ORGANIZATION, POWER AND AUTHORITY OF PURCHASER. Purchaser is
a limited liability company duly organized and validly existing under the laws
of the State of Illinois. Each of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
has all requisite power and authority to enter into this Agreement and perform
its respective obligations hereunder.
5.2. DUE AUTHORIZATION; BINDING OBLIGATION. The execution,
delivery and performance of this Agreement and all other agreements contemplated
hereby and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action of Purchaser. This Agreement has been
duly executed and delivered by each of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and is a valid and binding obligation of each enforceable against each
in accordance with its terms. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
violate, conflict with, or result in any breach of any provisions of Purchaser's
Articles of Organization and Operating Agreement, (ii) violate, conflict with,
or result in a violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under, or permit the termination of, or
result in the acceleration of, or entitle any party to accelerate any
obligation, or result in the loss of any benefit, or give any person the right
to require any security to be repurchased, or give rise to the creation of any
Lien (except Liens created pursuant to financing arrangements entered into by
Purchaser for the purpose of consummating the transactions contemplated hereby)
upon any assets of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ under any of the
terms, conditions, or provisions of any loan or credit agreement, note, bond,
mortgage,
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indenture, or deed of trust, or any license, lease, agreement, or other
instrument or obligation to which Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
is a party or by which Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or any of
their respective material assets may be bound or subjected, (iii) violate any
order, writ, judgment, injunction, decree, statute, law, rule or regulation, of
any governmental entity applicable to Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ or by which or to which any of the assets of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is bound or subject or (iv) require Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to obtain any consent, approval or action of, or make any
filing with or the giving of notice to, any person or entity except those which
the failure to obtain, make or give, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect.
5.3. PURCHASE FOR INVESTMENT. Purchaser is purchasing the Shares
for investment and not with a view to their distribution in whole or in part.
5.4. INVESTIGATION BY PURCHASER. Purchaser has conducted an
investigation of the Purchased Assets and of the operations of the Business.
Purchaser has reviewed all of the documents, records, reports and other material
identified in the Exhibits and Schedules hereto, and is familiar with their
content. Purchaser acknowledges that it has been given access to and has visited
and examined the premises of the Business and is familiar with the condition
thereof. For the purpose of conducting these investigations, Purchaser has
employed the services of its own agents, representatives, counsel, experts and
consultants. Purchaser has relied upon information supplied by ▇▇▇▇▇▇▇ as set
forth herein and in the Exhibits and Schedules hereto and has not relied upon
any other information or statement, oral or written, not described herein or not
included in a Schedule attached hereto. Notwithstanding the foregoing, nothing
contained in this Section 5.4 shall affect or otherwise limit Purchaser's
ability to rely on the representations and warranties of ▇▇▇▇▇▇▇ contained in
this Agreement.
5.5. BROKERS. Purchaser has not employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this Agreement.
5.6. FINANCIAL RESOURCES. Purchaser has, and at the Closing,
Purchaser will have, the financial resources to consummate the transactions
contemplated hereby either through (i) cash held in escrow that is available
conditioned upon, but available for, the Closing occurring, (ii) financing
available through La Salle Bank pursuant to that certain financial commitment
letter, dated as of February 16, 2001, by and between Purchaser and La Salle
Bank (the "Financing Commitment"), or (iii) a combination of the preceding
clauses (i) and (ii). A true and correct copy of the Financing Commitment has
been delivered to ▇▇▇▇▇▇▇, and the Financing Commitment currently is in effect
and has not been rescinded or modified.
6. ADDITIONAL COVENANTS OF THE PARTIES.
6.1. ALL REASONABLE EFFORTS. Each party hereto will use all
reasonable efforts to cause to be satisfied prior to March 31, 2001, or if not
satisfied on or prior to March 31, 2001, as soon as practicable thereafter, all
of the conditions to its respective obligations to consummate the sale and
purchase of the Purchased Assets. Each party hereto shall also execute prior to
or after the Closing Date such other documents or agreements and take such other
actions as may be
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reasonably necessary or desirable for the implementation of this Agreement and
the consummation of the transactions contemplated hereby, and, specifically,
▇▇▇▇▇▇▇ shall use all reasonable efforts to obtain all consents and approvals
necessary for the assignment to Purchaser of the Purchased Contracts, the
Madison County Leases, and such other contracts and agreements related to the
Business to be assigned to Purchaser pursuant to this Agreement.
6.2. CONDUCT OF BUSINESS PENDING THE CLOSING. From and after the
execution and delivery of this Agreement and until the Closing Date, except set
forth on Schedule 6.2 or as otherwise provided by the prior written consent of
Purchaser:
6.2.1. ▇▇▇▇▇▇▇ will, and ▇▇▇▇▇▇▇ will cause Sub to, conduct
the business and operations of the Business in all material
respects in the manner in which the same have heretofore been
conducted, and it will use all commercially reasonable
efforts to (i) preserve the business organization of the
Business intact, (ii) keep available to Purchaser the
services of the employees and agents of the Business, and
(iii) preserve the relationships with the customers of the
Business, suppliers and others having dealings with the
Business;
6.2.2. ▇▇▇▇▇▇▇ will, and ▇▇▇▇▇▇▇ will cause Sub to, maintain
all of the properties of the Business in customary repair,
order and condition, reasonable wear and use and damage by
unavoidable casualty excepted, and will maintain insurance of
such types and in such amounts upon all of the properties of
the Business and with respect to the conduct of the
operations of the Business as are in effect on the date of
this Agreement; and
6.2.3. ▇▇▇▇▇▇▇ will not, and ▇▇▇▇▇▇▇ will cause Sub not to,
(i) pay any bonus or increase the rate of compensation of any
of the employees of any of the Business other than in the
ordinary course of business; (ii) sell or transfer any of the
assets of any of the Business other than in the ordinary
course of business; (iii) make or obligate themselves to make
capital expenditures with respect to the Business aggregating
more than $10,000; (iv) with respect to the operations of the
Business, incur any material obligations or liabilities or
enter into any material transaction; (v) mortgage, pledge or
encumber (or permit any Lien to attach to) any properties or
assets of the Business (other than purchase money security
interests incurred in connection with any purchase of
properties or assets for use in the Business); (vi) other
than in the ordinary course of business, amend or terminate
any Material Agreement or any license or permit relating to
the Business; (vii) make any material change in any Seller
Plan, except as required by law or the terms of any
applicable collective bargaining agreement; (viii) increase
or modify any severance benefit payable to any employee of
the Business except as disclosed on Schedule 4.16 or any
modification to the terms of that certain Change of Control
Agreement, dated as of May 26, 1998 (as amended, the "▇▇▇▇▇
Change of Control Agreement"), by and between Chase and ▇▇▇▇▇
▇. ▇▇▇▇▇ ("▇▇▇▇▇") previously disclosed to Purchaser, or (ix)
enter into any other agreement, course of action or
transaction material to the Business except in the ordinary
course of business.
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6.3. ACCESS TO THE PROPERTIES AND RECORDS OF THE BUSINESS.
6.3.1. From and after the execution and delivery of this
Agreement, ▇▇▇▇▇▇▇ will, and ▇▇▇▇▇▇▇ will cause Sub to,
afford to representatives of Purchaser access, during normal
business hours and upon reasonable notice, to the premises of
the Business sufficient to enable Purchaser to inspect the
Purchased Assets and assets and properties of Sub, and
furnish to such representatives during such period all such
information relating to the foregoing investigation as
Purchaser may reasonably request. Notwithstanding the
foregoing, Purchaser shall not conduct any physical or
invasive testing or inspections of any Purchased Asset
without ▇▇▇▇▇▇▇'▇ prior written consent, which consent may be
withheld in ▇▇▇▇▇▇▇'▇ sole discretion.
6.3.2. Purchaser agrees that in conducting any inspections,
investigations or tests of the Purchased Assets, Purchaser
and its agents and representatives shall (i) not unreasonably
interfere with the operation and maintenance of the Purchased
Assets, (ii) not damage any part of the Purchased Assets,
(iii) not injure or otherwise cause bodily harm to ▇▇▇▇▇▇▇ or
its guests, agents, invitees, contractors and employees, (iv)
maintain comprehensive general liability insurance in terms
and amounts reasonably acceptable to ▇▇▇▇▇▇▇ covering any
accident arising in connection with the presence of
Purchaser, its agents and representatives on the Purchased
Assets, and deliver a certificate of insurance verifying such
coverage to ▇▇▇▇▇▇▇ prior to entry upon the Purchased Assets,
(v) promptly pay when due the costs of all tests,
investigations and examinations done with regard to the
Purchased Assets, (vi) not permit any Liens to attach to the
Purchased Assets or any part thereof by reason of the
exercise of Purchaser's rights hereunder, (vii) fully restore
the Purchased Assets to the condition in which the same was
found before any such inspection or tests were undertaken,
(viii) not reveal or disclose any information obtained
concerning the Purchased Assets to anyone outside Purchaser's
organization, its agents or representatives, (ix) permit
▇▇▇▇▇▇▇ and its agents and representatives to be present
during any such inspection, investigation or test; and (x)
not enter the Land or Improvements, nor contact any leasing
agent or property manager of the Property or any governmental
entity or authority, without ▇▇▇▇▇▇▇'▇ prior written consent,
which consent shall not be unreasonably withheld; provided,
however, that ▇▇▇▇▇▇▇ may, in its sole discretion, withhold
its consent if such consent is requested for any physical or
invasive testing or inspections of any Purchased Assets.
6.3.3. Purchaser will indemnify, defend, and hold ▇▇▇▇▇▇▇ and
its partners, shareholders, officers, directors, agents,
employees, property manager, controlling persons and
affiliates (individually a "▇▇▇▇▇▇▇ Party" and collectively
the "▇▇▇▇▇▇▇ Parties") harmless from all damages to ▇▇▇▇▇▇▇'▇
or Sub's property and all losses, costs, Liens, causes of
action, liability, damages and expenses related thereto,
including without limitation reasonable attorneys' fees
incurred by any ▇▇▇▇▇▇▇ Party as a result of the entry upon
or inspections, tests or investigations of the Purchased
Assets conducted by or on behalf of Purchaser. Purchaser's
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obligations under this Section 6.3.3 shall survive the
termination of this Agreement for any reason.
6.3.4. From and after the Closing, ▇▇▇▇▇▇▇ will make
available to the representatives of Purchaser access, during
normal business hours and upon reasonable notice, to the
financial statements and records of the Business and work
papers of ▇▇▇▇▇▇▇'▇ independent auditors with respect to
audits performed on the financial statements of the Business
and the financial statements of ▇▇▇▇▇▇▇ to the extent
reasonably requested by Purchaser to enable Purchaser to
prepare audited financial statements relating to the Business
for such periods and in such form as Purchaser reasonably
determines is required for purposes of Purchaser's filings
under applicable securities laws.
6.3.5. To the extent any document containing information
about the Business constitutes an Excluded Asset pursuant to
Section 1.3.4 and is reasonably necessary to Purchaser's
operation of the Business after the Closing, ▇▇▇▇▇▇▇ shall
make such document and/or information available to Purchaser
and its representatives during normal business hours of
▇▇▇▇▇▇▇ upon prior written notice by Purchaser. Purchaser
shall be permitted to make copies of any such documentation
and/or information made available to Purchaser pursuant to
this Section 6.3.5 to the extent such documentation and/or
information pertains to the Business, subject to executing
and delivering to ▇▇▇▇▇▇▇ a confidentiality agreement in form
and substance acceptable to ▇▇▇▇▇▇▇ relating to that portion
of such information that pertains to any Excluded Assets or
any assets or operations of any affiliate of ▇▇▇▇▇▇▇ (other
than Sub).
6.4. BULK SALES LAW. Purchaser waives compliance with the bulk
sales law of any applicable state in connection with the transactions
contemplated by this Agreement.
6.5. EXPENSES. Purchaser, on the one hand, and ▇▇▇▇▇▇▇, on the
other hand, shall each bear its own respective expenses incurred in connection
with this Agreement and in connection with all obligations required to be
performed by each of them under this Agreement.
6.6. EMPLOYEE MATTERS.
6.6.1. On or before the Closing Date, Purchaser shall offer
employment on an at will basis and on substantially the same
terms and conditions as in effect on the Closing Date to all
employees of the Business as of the Closing Date, including
without limitation to all such employees on short-term
disability leave and workers' compensation leave but
excluding any such employee on long-term disability leave.
Purchaser shall employ on such terms and conditions provided
herein each such employee who accepts such offer, with such
employment to be effective on the Closing Date; provided that
Purchaser's employment of all such employees who are on (1)
short-term disability leave will only be effective if, and at
such time, such employees are released to return to work
before either (A) qualifying for long-term disability
benefits under the terms of the Insured LTD Component
Program, as defined in Schedule 4.20, as of the Closing Date,
for
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those employees eligible for such benefits, or (B) the end of
the short-term disability period, with respect to those
employees who are not eligible for long-term disability
benefits under the Insured LTD Component Program and (2)
workers' compensation leave will only be effective if, and at
such time, such employees are released and eligible to return
to work under applicable workers' compensation law or, if
applicable, any collective bargaining agreement; and provided
further that any employees of the Business on layoff as of
the Closing Date shall be treated as laid off employees of
Purchaser for all purposes, and shall be accorded all rights,
including without limitation recall and seniority rights,
which such laid off employees had as of the Closing under the
collective bargaining agreements listed in Item I of Schedule
4.19 as in effect as of the date hereof (collectively, the
"Collective Bargaining Agreements"). Purchaser is not
assuming any of the Collective Bargaining Agreements.
Notwithstanding the foregoing, from and after the Closing
Purchaser shall comply with the terms and conditions of each
Collective Bargaining Agreement with respect to all
union-represented employees of the Business who are covered
by the Collective Bargaining Agreements and who accept
employment with Purchaser, except to the extent Purchaser
negotiates different agreements with the applicable union(s)
on either a prospective or retroactive basis or Purchaser
lawfully implements changes to such terms and conditions
after bargaining with the applicable union(s) to an impasse.
Schedule 6.6.1 contains a list of all employees of the
Business, and separately identifies those employees who, as
of the date hereof, are on short-term disability leave,
long-term disability leave, workers' compensation leave or
layoff, and those employees of the Business who are covered
by collective bargaining agreements. ▇▇▇▇▇▇▇ shall inform
Purchaser in writing within two (2) business days of its
being notified of any employee identified as on short-term or
long-term disability leave or workers' compensation leave
being released to return to work prior to the Closing Date.
Those employees of the Business who accept employment with
Purchaser are referred to herein as the "Continued
Employees." Nothing in this Agreement shall be deemed to
require that the employment of any Continued Employee be
continued for any specific period of time after the Closing
Date; provided that this sentence shall not affect the
rights, including recall and seniority rights, of any
employee under the terms and conditions of the Collective
Bargaining Agreements, until they may be changed as described
above. Except for obligations of ▇▇▇▇▇▇▇ as provided in
Section 6.6.2, Purchaser shall indemnify, defend and hold
▇▇▇▇▇▇▇ harmless for any Losses related to, resulting from or
arising out of (i) Purchaser not assuming any of the
Collective Bargaining Agreements, (ii) Purchaser's failure to
comply with the terms and conditions of the Collective
Bargaining Agreements with respect to all union-represented
employees of the Business who are covered by the Collective
Bargaining Agreements and who accept employment with
Purchaser, or (iii) any changes made by Purchaser (either
unilaterally or by agreement with the applicable union(s)) to
the terms and conditions of the Collective Bargaining
Agreements. Purchaser shall further indemnify, defend and
hold ▇▇▇▇▇▇▇ harmless for any Losses related to, resulting
from or arising out of (y) any violation by Purchaser of the
National Labor Relations Act or any other law related to
collective
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bargaining, or (z) Purchaser's failure to perform its
obligations under and pursuant to this Section 6.6.
6.6.2. As of the Closing Date, Purchaser (or a member of its
controlled group within the meaning of Sections 414(b), (c)
or (m) of the Code (collectively, the "Purchaser Group")
shall assume the rights, obligations and liabilities under
the Assumed Plans set forth in Schedule 6.6.2 for the benefit
of the Continued Employees and employees of the Business on
short-term disability leave, long-term disability leave or
workers' compensation leave as of the Closing Date. Purchaser
shall give each Continued Employee credit for accrued
vacation to the extent accrued as of the Closing Date.
Subject to the performance by Purchaser of its obligations
under and pursuant to Section 6.6, and without limiting
Purchaser's indemnity obligations set forth in the last two
sentences of Section 6.6.1, (i) ▇▇▇▇▇▇▇ shall be responsible
for those severance obligations and liabilities, if any,
resulting from ▇▇▇▇▇▇▇'▇ termination of any employee of the
Business as a result of the transactions contemplated in this
Agreement, unless Purchaser fails to offer employment to
employees of the Business, or employ the employees of the
Business who accept such offer, in accordance with Section
6.6.1, in which case Purchaser shall be responsible for such
severance obligations and liabilities, if any, as to such
employee(s) to whom Purchaser fails to offer employment or so
employ, (ii) ▇▇▇▇▇▇▇ shall be responsible for those severance
obligations and liabilities, if any, as to any employee of
the Business who is on layoff as of the Closing Date and is
not (a) recalled to work by Purchaser and (b) subsequently
terminated by Purchaser; and (iii) Purchaser shall be
responsible for those severance obligations or liabilities,
if any, related to, resulting from or arising out of
Purchaser's termination of any Continued Employee.
Notwithstanding the foregoing, should any Continued Employee
or any employee of the Business on layoff as of the Closing
Date seek to impose severance obligations or liabilities on
▇▇▇▇▇▇▇ as a result of Purchaser's unilateral changes to the
terms and conditions of any of the Collective Bargaining
Agreements as permitted under Section 6.6.1, ▇▇▇▇▇▇▇ shall be
responsible for such severance obligations or liabilities, if
any; provided that Purchaser shall be responsible for such
severance obligations or liabilities if Purchaser's
unilateral changes include a reduction in wages of more than
$4.00, or 18%, per hour, whichever is less, for any employee.
6.6.3. Except for the Assumed Plans listed on Schedule 6.6.2,
neither Purchaser nor any member of the Purchaser Group shall
have any liability or responsibility for any Seller Plan
sponsored by any member of the Seller Group. Except as
provided in Exhibit A, with respect to the Assumed Plans,
Purchaser, or a member of the Purchaser Group, shall assume
all liabilities with respect to such Seller Plans, including
without limitation liabilities with respect to employees of
the Business who are on short-term disability leave,
long-term disability leave or workers' compensation leave and
entitled to current or future benefits under such Seller
Plans as of the Closing Date, regardless if such liabilities
were incurred prior to the Closing Date. Purchaser, or a
member of the Purchaser Group, and ▇▇▇▇▇▇▇ agree to enter
into an assumption agreement under which the sponsorship
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of the Assumed Plans will be transferred from ▇▇▇▇▇▇▇ to
Purchaser, or a member of the Purchaser Group, effective on
the Closing Date, substantially in the form of the Assumption
Agreement set forth in Exhibit A attached hereto.
6.6.4. Purchaser shall provide health, life, short term
disability and long term disability coverage for the benefit
of the Continued Employees and employees of the Business on
short-term disability leave, long-term disability leave or
workers' compensation leave as of the Closing Date, to the
extent Seller Plans are not assumed pursuant to Subsection
6.6.3 above, on substantially the same basis as offered by
▇▇▇▇▇▇▇ under the Seller Plans. Effective from and after the
Closing Date, Purchaser shall cause each such employee and
his or her eligible dependents to be eligible to participate
in each such plan maintained by Purchaser (the "Purchaser
Welfare Plans"), in accordance with the terms of the
Purchaser Welfare Plans, without regard to any preexisting
condition of such employees and their dependents, to the
extent such preexisting condition was covered under Seller
Plans, and recognizing service with members of Seller Group
for purposes of meeting any waiting periods under Purchaser
Welfare Plans. ▇▇▇▇▇▇▇ shall remain responsible for claims of
such employees and their eligible dependents incurred under
the Non-Assumed Plans listed in Schedule 1.3.9 which provide
health, life, short-term disability and long-term disability
coverage, and Purchaser shall be solely responsible, in
accordance with the terms of Purchaser Welfare Plans, for all
such liabilities for claims incurred by any such employee and
his or her eligible dependents on or after the Closing Date.
Purchaser and ▇▇▇▇▇▇▇ shall cooperate in ensuring that
welfare benefit coverage for such employees and their
eligible dependents prior to the Closing Date is coordinated
with such coverage provided after the Closing Date, and
▇▇▇▇▇▇▇ shall provide or cause to be provided to Purchaser
such information as may be reasonably necessary to enable
Purchaser to fulfill its obligations toward such employees.
6.6.5. With respect to the Non-Assumed Plans identified in
Schedule 1.3.9 which are qualified under section 401(a) of
the Code which are not assumed by Purchaser, Purchaser shall
provide qualified retirement plan benefits to the Continued
Employees and, if such employees become Purchaser's
employees, employees of the Business on short-term disability
leave, or workers' compensation leave as of the Closing Date,
to the extent applicable, in the aggregate on substantially
the same basis as offered by ▇▇▇▇▇▇▇ under such Non-Assumed
Plans until such time as Purchaser negotiates a different
agreement with any labor union that is a party to or
beneficiary of such Non-Assumed Plans on either a prospective
or retroactive basis or Purchaser lawfully implements changes
to such qualified retirement plan benefits after bargaining
with the applicable union to impasse. For purposes of
participation in the qualified plans maintained by Purchaser
(the "Purchaser Qualified Plans"), Purchaser shall recognize
service with members of Seller Group for eligibility and
vesting purposes under such Purchaser Qualified Plans.
▇▇▇▇▇▇▇ shall provide or cause to be provided to Purchaser
such information as may be reasonably necessary to enable
Purchaser to fulfill its obligations toward such employees
pursuant to this Section 6.6.5.
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6.6.6. Pursuant to the ▇▇▇▇▇▇▇ Tube Company Salaried
Employees Profit Sharing and 401(k) Plan (the "▇▇▇▇▇▇▇ 401(k)
Plan") documents, ▇▇▇▇▇▇▇ shall cause the account balances of
the Continued Employees and employees of the Business on
short-term disability leave, long-term disability leave or
workers' compensation leave as of the Closing Date to be
credited with contributions and appropriate earnings through
the Closing Date. In connection with its assumption of the
▇▇▇▇▇▇▇ 401(k) Plan, Purchaser shall take the requisite
actions, including, but not limited to, amending the
governing plan documents and associated instruments, to
ensure that any outstanding loans of any participant under
such plan does not incur an event of default by reason of
transactions contemplated by this Agreement and that such
participants shall be able to continue to maintain and repay
such loans pursuant to their terms under the ▇▇▇▇▇▇▇ 401(k)
Plan as assumed by Purchaser. ▇▇▇▇▇▇▇ shall provide or cause
to be provided to Purchaser such information as may be
reasonably necessary to enable Purchaser to fulfill its
obligations toward such participants pursuant to this Section
6.6.6.
6.6.7. Purchaser shall be responsible for providing
continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"),
under those Assumed Plans which are group health plans to
current and former employees of the Business and their
dependents who are or become entitled to or are receiving
continuation coverage pursuant to COBRA ("COBRA Coverage")
under such plans prior to the Closing Date (the "Existing
COBRA Continuees") and to any Continued Employee and any
employee of the Business on short-term disability leave,
long-term disability leave or workers' compensation leave who
incurs a COBRA qualifying event under such plans on or after
the Closing Date. Purchaser shall also be responsible for
providing COBRA Coverage under those Purchaser Plans which
are group health plans to any such employee who incurs a
COBRA qualifying event under such plans on or after the
Closing Date. ▇▇▇▇▇▇▇ shall be responsible for providing
COBRA Coverage under those Non-Assumed Plans which are group
health plans, to any employee of the Business and his or her
dependents covered under such plans who incurs a COBRA
qualifying event before or on the Closing Date.
6.6.8. Prior to the Closing Date, ▇▇▇▇▇▇▇ shall use its
reasonable efforts to encourage all of the employees of the
Business to continue their respective employment with the
Seller Group and to accept employment with Purchaser on or
following the Closing Date. ▇▇▇▇▇▇▇ shall cause each member
of the Seller Group to, as of the Closing Date, irrevocably
waive any and all rights ▇▇▇▇▇▇▇ or any member of the Seller
Group shall have under any agreements (including
noncompetition and confidentiality agreements) with any of
the Continued Employees or under any applicable law to
restrict or limit the scope or duties of any of the Continued
Employees' employment with Purchaser, any member of Purchaser
Group, Seller or any member of any Seller Group. Except as
specifically provided otherwise in this Agreement, neither
Purchaser nor ▇▇▇▇▇▇▇ will solicit for employment, for a
period of twelve (12) months after the Closing Date, any of
the employees of the other party.
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6.6.9. ▇▇▇▇▇▇▇ shall communicate or cause to be communicated
to the employees of the Business the effect of the provisions
of this Agreement and the actions required to be taken by
▇▇▇▇▇▇▇ and Purchaser under the terms of this Agreement on
such employees' benefits and terms of employment with members
of the Seller Groups. Purchaser shall communicate or cause to
be communicated to the employees of the Business the effect
of the provisions of this Agreement and the actions required
to be taken by ▇▇▇▇▇▇▇ and Purchaser under the terms of this
Agreement on such employees' benefits and terms of employment
with Purchaser. Purchaser and ▇▇▇▇▇▇▇ shall cooperate in
providing information necessary to enable each to satisfy
their obligations pursuant to this Section 6.6.9.
6.6.10. Effective as of the consummation of the Closing,
Purchaser will offer employment to ▇▇▇▇▇ upon such terms so
that ▇▇▇▇▇ shall not be entitled to receive compensation as
provided pursuant to Section 4.a of the ▇▇▇▇▇ Change of
Control Agreement. Purchaser agrees that if ▇▇▇▇▇'▇
employment by Purchaser shall thereafter be terminated by
Purchaser, or if ▇▇▇▇▇ shall thereafter resign from such
employment, Purchaser will be liable and responsible for
paying, and hereby assumes the obligation to pay, to ▇▇▇▇▇
any and all amounts that may be due or owing to ▇▇▇▇▇ under
the ▇▇▇▇▇ Change of Control Agreement as a result of such
termination or resignation and shall indemnify, defend and
hold ▇▇▇▇▇▇▇ and Chase harmless from and against any Losses
related to, resulting from, or arising out of any claim or
demand which may be asserted by ▇▇▇▇▇ against ▇▇▇▇▇▇▇ or
Chase arising out of or pursuant to the ▇▇▇▇▇ Change of
Control Agreement; provided, however, that Purchaser shall
not indemnify Chase or ▇▇▇▇▇▇▇ for any such Losses to the
extent related to, resulting from or arising out of any
actions by ▇▇▇▇▇▇▇, ▇▇▇▇▇ or any of their affiliates prior to
the Closing other than in connection with the transactions
contemplated by this Agreement. This provision is not
intended to create rights in ▇▇▇▇▇ as a third party
beneficiary hereof.
6.6.11. ▇▇▇▇▇▇▇ shall terminate the employees of the Business
on the Closing Date, except ▇▇▇▇▇▇▇ may in its discretion
decide to continue the employment of such employees on (i)
long term disability leave, (ii) short-term disability leave
or (iii) workers' compensation leave, in each case, for a
period of time also in ▇▇▇▇▇▇▇'▇ discretion, up until such
time as any such employee is to be employed by Purchaser
pursuant to this Agreement. Purchaser shall be responsible
for providing any notice required under the Worker Adjustment
Retraining Notification Act ("WARN"). Purchaser shall be
responsible for any Losses under WARN, and Purchaser shall
indemnify, defend and hold ▇▇▇▇▇▇▇ harmless for any such
Losses
6.7. OBLIGATION TO NOTIFY. Each party shall have the continuing
obligation until the Closing to notify the other party promptly in writing with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in this Agreement. To the extent any such matter causes or will cause
any covenant under this Agreement to be breached, or that renders or will render
untrue any representation or warranty contained in this Agreement, the party
whose covenant,
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agreement, representation or warranty would be breached or rendered untrue shall
use commercially reasonable efforts to cure, before the Closing, any violation
or breach of any covenant, agreement, representation or warranty made in this
Agreement. Notwithstanding the foregoing, the notification obligation under this
Section 6.7 shall not apply with respect to any event, transaction or
circumstance of which a party has been notified by the other party pursuant
hereto or with respect to which both parties to this Agreement have actual
knowledge, and the failure by any part to notify the other party pursuant to
this Section 6.7 with respect to any matter hereafter arising or discovered
shall not affect such party's rights or obligations under Article 12 hereof.
6.8. FINANCING COMMITMENT. Purchaser shall not take any action
from and after the date of this Agreement through the Closing Date that is
prohibited by the Financing Commitment or would otherwise limit or restrict the
financing available thereunder.
6.9. TITLE COMMITMENTS; SURVEYS.
6.9.1. INITIAL TITLE COMMITMENTS. Purchaser acknowledges and
agrees that (i) Purchaser has received initial title
commitments or certificates of title (collectively, the
"Initial Title Commitments"), and all applicable title
exception documents, for each of the Purchased Real Estate,
the Purchased Leasehold Premises, and the Holco Real Property
(collectively, the "Real Estate"), (ii) the title to the Real
Estate as reflected in the Initial Title Commitments is
acceptable to Purchaser, (iii) the issuance of the Title
Policies (defined below) shall be conclusive evidence that
Purchaser or Sub, as applicable, hold good and indefeasible
fee title to the Purchased Real Estate and the Holco Real
Property and good and indefeasible leasehold title to the
Purchased Leasehold Premises.
6.9.2. DELIVERY OF TITLE POLICIES. On or before the Closing,
▇▇▇▇▇▇▇ and Purchaser shall take all reasonably necessary
actions customarily required by each party to cause the
issuance at the Closing of title policies (collectively, the
"Title Policies") for the Real Estate. The Title Policies
shall (i) be based on the applicable Initial Title
Commitments, (ii) name only Purchaser (or its assignee as
permitted hereunder) or Sub, as applicable, as the named
insured, (iii) list as permitted exceptions only the
Permitted Exceptions, (iv) state that the insured amount is
an amount as is requested by Purchaser and permitted by the
applicable title insurance company, and (v) to the extent
available at Closing, contain any endorsements that are
requested by Purchaser.
6.9.3. DELIVERY OF SURVEYS. ▇▇▇▇▇▇▇ shall deliver to
Purchaser a current ALTA survey for each portion of the Real
Estate (but excluding the portion of the Real Estate located
in Hammond, Indiana) (such surveys being hereinafter
collectively referred to as the "Initial Surveys") promptly
after ▇▇▇▇▇▇▇ receives such Initial Survey.
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6.9.4. ALLOCATION OF COSTS. ▇▇▇▇▇▇▇ agrees to pay all costs
and expenses related to (i) subject to the Title Policy Cost
limitation set forth below, the issuance by the applicable
title insurance company of the Initial Title Commitments, (ii)
the issuance by the applicable surveyor of the Initial
Surveys, (iii) any applicable state and county transfer taxes
and recording costs incurred in connection with the transfers
of the Real Estate as contemplated by this Agreement, and (iv)
one-half of any escrow fees incurred in connection with the
transfers of the Real Estate as contemplated by this
Agreement. Purchaser agrees to pay all costs and expenses
related to (a) any updates, changes, or corrections to the
Initial Title Commitments or the Initial Surveys, and (b)
one-half of any escrow fees, and all municipal transfer taxes,
incurred in connection with the transfers of the Real Estate
as contemplated by this Agreement. With respect to the costs
and expenses related to the issuance by the applicable title
insurance company of the Title Policies (the "Title Policy
Cost"), ▇▇▇▇▇▇▇ shall pay up to, but not exceeding, $10,000 of
the Title Policy Costs, and Purchaser shall pay the Title
Policy Costs that exceed $10,000. Notwithstanding the
foregoing, Purchaser agrees to pay all costs (including
without limitation, transfer taxes, escrow fees, and recording
costs) incurred in connection with the transfer of the portion
of the Real Estate located in Hammond, Indiana. All other
costs and expenses not allocated by this Section 6.9.4 but
incurred in connection with the transfers of the Real Estate
as contemplated by this Agreement shall be paid by and
allocated to ▇▇▇▇▇▇▇ and Purchaser in accordance with the
customs of the municipality in which the applicable portion of
the Real Estate is located.
7. CONDITIONS TO THE OBLIGATION OF PURCHASER. The obligation of Purchaser
to purchase the Shares and Purchased Assets shall be subject to the fulfillment
at or prior to the Closing Date of each of the following conditions:
7.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of ▇▇▇▇▇▇▇ contained in this
Agreement shall be true and correct in all material respects at and as of the
date hereof, and they shall be true and correct in all material respects at and
as of the Closing Date with the same force and effect as though made at and as
of that time (other than representations and warranties which address matters
only as of a certain date, which shall be true and correct in all material
respects as of such certain date); provided, however, that this condition shall
be deemed to have been satisfied unless, individually or in the aggregate, any
inaccuracy of such representations and warranties (without regard to any
qualification as to materiality or Material Adverse Effect) would reasonably be
expected to constitute or result in a Material Adverse Effect on the Business.
▇▇▇▇▇▇▇ shall have performed and complied in all material respects with all of
its obligations required by this Agreement to be performed or complied with at
or prior to the Closing Date. ▇▇▇▇▇▇▇ shall have delivered to Purchaser a
certificate to such effect, dated as of the Closing Date and signed by an
executive officer of ▇▇▇▇▇▇▇.
7.2. CERTIFIED RESOLUTIONS. ▇▇▇▇▇▇▇ shall have delivered to
Purchaser copies of resolutions adopted by the board of directors and
stockholders of ▇▇▇▇▇▇▇ authorizing the transactions contemplated by this
Agreement, certified in each case as of the Closing Date by a secretary or
assistant secretary of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall have delivered to Purchaser copies
of
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resolutions adopted by the board of directors of Chase authorizing Chase's
execution and delivery of this Agreement, certified as of the Closing Date by a
secretary or assistant secretary of Chase.
7.3. OPINION OF COUNSEL. Purchaser shall have received an opinion
dated the Closing Date from ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for ▇▇▇▇▇▇▇ and
Chase, substantially in form and substance as set forth in Exhibit B attached
hereto.
7.4. RECEIPT OF NECESSARY CONSENTS. All required consents or
approvals of third parties necessary to convey to Purchaser all of the Purchased
Assets as contemplated by this Agreement, the absence of which would materially
adversely affect Purchaser's rights hereunder, shall have been obtained and
shown by written evidence reasonably satisfactory to Purchaser; provided,
however, that (i) if ▇▇▇▇▇▇▇ or Purchaser is unable to obtain any such consents
or approvals on reasonable commercial terms by the Closing Date, this condition
shall be satisfied if ▇▇▇▇▇▇▇, by acting as agent for Purchaser or participating
in any other reasonable and lawful arrangement, is able to put Purchaser in the
same position in all material respects as if such consents or approvals had been
obtained in the manner contemplated by Section 3.7 and (ii) the only consents
that shall be deemed to materially adversely affect Purchaser's rights hereunder
and which, therefore, are the only consents the failure to obtain or provide an
arrangement as described in clause (i) above with respect thereto would cause
the condition of this Section 7.5 not to be satisfied are those set forth on
Schedule 7.4. Notwithstanding the foregoing or anything herein to the contrary,
▇▇▇▇▇▇▇ shall not have the right to act as an agent for Purchaser or otherwise
fail to obtain required consents relating to the Purchased Leasehold Premises.
7.5. NO ADVERSE ORDER. There shall not be any order of any court or
governmental authority restraining, prohibiting or invalidating the sale of the
Shares and Purchased Assets to Purchaser or any other material transaction
contemplated hereby.
7.6. PURCHASED LEASEHOLD PREMISES. ▇▇▇▇▇▇▇ shall have obtained all
Madison County Consents and Madison County Estoppel Certificates.
7.7. NO MATERIAL DESTRUCTION. From the date hereof until the
Closing Date, there shall not have occurred any damage to or destruction of the
Purchased Assets that, individually or in the aggregate, have had, or could
reasonably be expected to have, a Material Adverse Effect.
8. CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇▇
The obligations of ▇▇▇▇▇▇▇ to sell the Shares and Purchased Assets
shall be subject to the fulfillment at or prior to the Closing Date of each of
the following conditions:
8.1. ACCURACY OF REPRESENTATIONS AND WARRANTIES AND COMPLIANCE WITH
OBLIGATIONS. The representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects at and as of the
date hereof, and they shall be true and correct in all material respects at and
as of the Closing Date with the same force and effect as though made at and as
of that time (other than representations and warranties which address matters
only as of a certain date, which shall be true and correct in all material
respects as of such certain date); provided, however, that this condition shall
be deemed to have been satisfied
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unless, individually or in the aggregate, any inaccuracy of such representations
and warranties (without regard to any qualification as to materiality or
Material Adverse Effect) could reasonably be expected to constitute or result in
a Material Adverse Effect on Purchaser. Purchaser shall have performed and
complied in all material respects with all of its obligations required by this
Agreement to be performed or complied with at or prior to the Closing Date.
Purchaser shall have delivered to ▇▇▇▇▇▇▇ a certificate to such effect, dated as
of the Closing Date and signed by an executive officer.
8.2. OPINION OF COUNSEL. ▇▇▇▇▇▇▇ shall have received an opinion,
dated the Closing Date, from Deutsch, Levy & ▇▇▇▇▇, Chartered, counsel for
Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, substantially in form and
substance as set forth in Exhibit C attached hereto.
8.3. CERTIFIED RESOLUTIONS. Purchaser shall have delivered to
▇▇▇▇▇▇▇ a copy of a resolution adopted by its board of directors or its managing
members, as applicable, authorizing the transactions contemplated by this
Agreement, certified as of the Closing Date by its authorized officer.
8.4. NO ADVERSE ORDER. There shall not be any order of any court
restraining, prohibiting or invalidating the sale of the Purchased Assets or
Shares to Purchaser or any other material transaction contemplated hereby.
9. CERTAIN ACTIONS AFTER THE CLOSING.
9.1. PURCHASER TO ACT AS AGENT FOR ▇▇▇▇▇▇▇. This Agreement shall
not constitute an agreement to assign any claim, contract, license, lease
commitment, sales order or purchase order if any attempted assignment of the
same without the consent of the other party thereto would constitute a breach
thereof or in any way affect the rights of ▇▇▇▇▇▇▇ thereunder and, if after
▇▇▇▇▇▇▇ shall have fulfilled its duties under Section 6.1 hereof with respect to
using reasonable efforts to obtain such required consents, such consents shall
not have been obtained. If such consent is not obtained or if any attempted
assignment would be ineffective or would affect ▇▇▇▇▇▇▇'▇ rights thereunder so
that the Purchaser would not in fact receive all such rights, then Purchaser
shall act as the agent for ▇▇▇▇▇▇▇ in order to obtain for Purchaser the benefits
thereunder. Notwithstanding anything else in this section to the contrary, this
section shall not apply to required consents relating to the Purchased Leasehold
Premises.
9.2. PURCHASER APPOINTED ATTORNEY FOR ▇▇▇▇▇▇▇. Effective at the
Closing Date, ▇▇▇▇▇▇▇ hereby constitutes and appoints Purchaser, its successors
and assigns, the true and lawful attorney of ▇▇▇▇▇▇▇, in the name of either
Purchaser or ▇▇▇▇▇▇▇ (as Purchaser shall determine in its sole discretion) but
for the benefit and at the expense of Purchaser (except as otherwise herein
provided), (i) to institute and prosecute all proceedings which Purchaser may
deem proper in order to collect, assert or enforce any claim, right or title of
any kind in or to the Purchased Assets as provided for in this Agreement; (ii)
to defend or compromise any and all actions, suits or proceedings in respect of
any of the Purchased Assets, and to do all such acts and things in relation
thereto as Purchaser shall deem advisable; and (iii) to take all action which
Purchaser may reasonably deem proper in order to provide for Purchaser the
benefits under any of the Purchased Assets where any required consent of another
party to the sale or assignment thereof to the Purchaser pursuant to this
Agreement shall not have been obtained. Subject to Section
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3.5.4, the Purchaser shall be entitled to retain for its own account any amounts
collected pursuant to the foregoing powers, including any amounts payable as
interest in respect thereof.
10. PRODUCT WARRANTY AND LIABILITY CLAIMS.
10.1. PRODUCT WARRANTY AND LIABILITY CLAIMS; COOPERATION IN
LITIGATION. As to any product warranty or liability claims asserted against
Purchaser or ▇▇▇▇▇▇▇ for products of the Business shipped after the Closing,
Purchaser shall be fully responsible for their defense and resolution. As to
product warranty and liability claims for products of the Business shipped
before the Closing and first asserted against Purchaser, ▇▇▇▇▇▇▇ or Sub after
the Closing, ▇▇▇▇▇▇▇ shall be fully responsible for their defense and resolution
except to the extent an accrual therefore is included in the Closing Statement
as contemplated by Section 3.4.1, with respect to which Purchaser shall be
responsible to the extent of such accrual; provided, however, that, with respect
to any inventory returned to Purchaser in connection with the assertion of any
such product warranty or liability claim, Purchaser shall either deliver to
▇▇▇▇▇▇▇ the scrap value of such inventory returned to Purchaser or credit the
scrap value of such inventory against amounts then owing by ▇▇▇▇▇▇▇ to Purchaser
pursuant to this Agreement. As to such claims first asserted before the Closing,
▇▇▇▇▇▇▇ shall be solely responsible. Purchaser and ▇▇▇▇▇▇▇ shall each cooperate
with the other in the defense of any such action and in the prosecution or
defense of any other actions affecting the Business to the extent reasonably so
requested.
11. MISCELLANEOUS.
11.1. BROKERS' COMMISSION. Purchaser will indemnify and hold
harmless ▇▇▇▇▇▇▇ from the commission, fee or claim of any person, firm or
corporation employed or retained or claiming to be employed or retained by
Purchaser to bring about, or to represent it in, the transactions contemplated
hereby. ▇▇▇▇▇▇▇ will indemnify and hold harmless Purchaser from the commission,
fee or claim of any person, firm or corporation employed or retained or claiming
to be employed or retained by ▇▇▇▇▇▇▇ to bring about, or to represent them in,
the transactions contemplated hereby.
11.2. AMENDMENT AND MODIFICATION. The parties hereto may amend,
modify and supplement this Agreement in such manner as may be agreed upon by
them in writing.
11.3. TERMINATION.
11.3.1. TERMINATION. Anything to the contrary herein
notwithstanding, this Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time
prior to the Closing:
(i) By the mutual written consent of the parties
hereto;
(ii) By Purchaser or ▇▇▇▇▇▇▇ if a court of competent
jurisdiction or other governmental entity shall have
issued an order, decree, or ruling or taken any other
action (which order, decree, ruling or other action
the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining
or otherwise prohibiting the transactions
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contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final
and nonappealable;
(iii) By Purchaser or ▇▇▇▇▇▇▇ in the event of the
material breach by the other party of any provisions
of this Agreement which would give rise to the failure
of a condition or covenant set forth in Section 7.1 or
Section 8.1, respectively, which breach, if subject to
cure, is not remedied by the breaching party within
thirty (30) days after receipt of notice thereof from
the terminating party; provided, however, that (A) in
no event shall the existence of such cure period limit
either party's right to terminate this Agreement under
Section 11.3.1 (iv) and (B) a party may not terminate
this Agreement pursuant to this Section 11.3.1(iii) if
such party is then in material breach for any
covenant, representation or warranty under this
Agreement.
(iv) (A) By ▇▇▇▇▇▇▇ if the Closing shall not have
occurred by March 31, 2001, and the conditions set
forth in Section 7 shall have been satisfied or
▇▇▇▇▇▇▇ shall have notified Purchaser that ▇▇▇▇▇▇▇ is
ready to tender all items necessary in satisfaction
thereof or (B) by Purchaser or ▇▇▇▇▇▇▇ if the Closing
shall not have occurred by May 31, 2001; provided,
however, that the failure of the Closing to have
occurred on or before the date set forth in clauses
(A) and (B) above, as applicable, shall not have
resulted from the breach by the terminating party of
any representation, warranty, covenant or agreement of
such party contained in this Agreement.
11.3.2. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 11.3.1(i), no party shall have any
liability for any costs, expenses, loss of anticipated profit
or any further obligation for breach of warranty or otherwise
to any other party to this Agreement. The parties hereby agree
that, prior to the Closing, the sole and exclusive remedy of
any party hereto with respect to all claims related to this
Agreement will be as provided in this Section 11.3 This
Section 11.3 and Section 11.4.2 shall survive any termination
of this Agreement.
11.3.3. LIMITATION ON DAMAGES. Notwithstanding anything in
this Agreement to the contrary, if prior to the Closing this
Agreement is terminated (i) by ▇▇▇▇▇▇▇ (1) by reason of a
breach by Purchaser of Purchaser's obligations hereunder,
including without limitation a material breach by Purchaser of
any provisions of this Agreement which would give rise to the
failure of a condition or covenant of Purchaser or ▇▇▇▇▇▇▇ as
set forth in Sections 7.1 or 8.1 or (2) pursuant to Section
11.3.1(iv)(A), Purchaser agrees to pay ▇▇▇▇▇▇▇ the sum of
Three Hundred Thousand Dollars ($300,000) as and for a
termination fee (the "Purchaser Termination Fee") or (ii) by
Purchaser by reason of a breach by ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇'▇
obligations hereunder, including without limitation a material
breach by ▇▇▇▇▇▇▇ of any provisions of this Agreement which
would give rise to the failure of a condition or covenant of
Purchaser or ▇▇▇▇▇▇▇ as set forth in Sections 7.1 or 8.1,
▇▇▇▇▇▇▇ agrees to pay Purchaser the sum of Three Hundred
Thousand Dollars ($300,000) as and for a termination fee (the
"▇▇▇▇▇▇▇ Termination Fee"). It is the
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intent of the parties hereunder, and this Agreement hereby
provides, that, notwithstanding anything in this Agreement to
the contrary (but subject to Section 11.3.5), in the event of
any breach hereunder prior to the Closing (A) by Purchaser,
▇▇▇▇▇▇▇'▇ sole and exclusive remedy shall be receipt of the
Purchaser Termination Fee and, except for the payment of the
Purchaser Termination Fee as above provided, Purchaser shall
not have any further liability to ▇▇▇▇▇▇▇ or Chase for any
Losses or consequential or other damages incurred or (B) by
▇▇▇▇▇▇▇, Purchaser's sole and exclusive remedy shall be
receipt of the ▇▇▇▇▇▇▇ Termination Fee and, except for the
payment of the ▇▇▇▇▇▇▇ Termination Fee as above provided,
neither ▇▇▇▇▇▇▇ nor Chase shall have any further liability to
Purchaser for any Losses or consequential or other damages
incurred. The Purchaser Termination Fee shall be payable
within 10 days after any termination of this Agreement by
▇▇▇▇▇▇▇ that results in the Purchaser Termination Fee being
due and payable and the ▇▇▇▇▇▇▇ Termination Fee shall be
payable within 10 days after the termination of this Agreement
that results in the ▇▇▇▇▇▇▇ Termination Fee being due and
payable; provided, however, that if such amount is not paid
within fifteen (15) days after it becomes due, then any such
payment shall bear interest from and after such date at an
amount equal to the Prime Rate plus 4%.
11.3.4. INDUCEMENT AND GUARANTY. To induce ▇▇▇▇▇▇▇ and Chase
to execute this Agreement and in consideration thereof, each
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (each, a "Guarantor")
hereby individually guarantees $150,000 of the payment
obligation of Purchaser (for an aggregate of $300,000) to pay
to ▇▇▇▇▇▇▇ the Purchaser Termination Fee as provided above,
when and if due. The guaranty set forth herein by each
Guarantor is absolute, unconditional, a guarantee of payment,
may not be revoked by either Guarantor and shall continue to
be effective after any attempted revocation by either
Guarantor and shall not be subject to set-off, counterclaim,
reduction, recoupment, reduction or dimuntion, or any defense
of any kind or nature that Purchaser or Guarantor may have
against ▇▇▇▇▇▇▇ or any other party or that Guarantor may have
against Purchaser or any other party. In the event of default
by Purchaser in payment of the Purchaser Termination Fee, or
any part thereof, when the Purchaser Termination Fee becomes
due, each Guarantor shall, on demand, and without further
notice of dishonor and without any notice having been given to
either Guarantor previous to such demand of the acceptance by
▇▇▇▇▇▇▇ and Chase of this Agreement, and without any notice
having been given to either Guarantor previous to such demand
of the creating or incurring of the Purchaser Termination Fee,
pay the amount due herein to ▇▇▇▇▇▇▇ at its office as set
forth in this Agreement, and it shall not be necessary for
▇▇▇▇▇▇▇ or Chase, in order to enforce such payment by the
Guarantors, first, to institute suit or exhaust its remedies
against Purchaser or others liable for the Purchaser
Termination Fee, to have Purchaser joined with the Guarantors
in any suit brought under this Agreement or to enforce its
rights against any security which shall ever have been given
to secure such fees. Each Guarantor expressly agrees to be
primarily liable therefor jointly and severally with Purchaser
to extent of his guaranty set forth herein. Each Guarantor
agrees that Purchaser may modify the terms of this Agreement,
other than increasing the amount of the obligations of any
Guarantor hereunder, without notice to
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Guarantor and without affecting in any manner the
unconditional obligation of Guarantor hereunder. Each
Guarantor acknowledges and agrees that the liabilities created
by this Guaranty are direct and are not conditioned upon
pursuit by ▇▇▇▇▇▇▇ or Chase of any remedy that ▇▇▇▇▇▇▇ or
Chase may have against Purchaser or any other person or any
security. No invalidity, irregularity or unenforceability by
reason of any bankruptcy, insolvency or other similar law, or
any law or order of any government agency thereof purporting
to reduce, amend or otherwise affect the Purchaser Termination
Fee shall impair, affect or be a defense to the obligations of
Guarantor under this guaranty.
11.3.5. LIMITATIONS ON ▇▇▇▇▇▇▇ TERMINATION FEE.
Notwithstanding Section 11.3.3, the limitation on ▇▇▇▇▇▇▇'▇
liability as provided in Section 11.3.3 shall not apply if (i)
this Agreement is terminated by Purchaser pursuant to Section
11.3.1(iii) or pursuant to Section 11.3.1(iv)(B) because of a
material breach by ▇▇▇▇▇▇▇ of any representation, warranty,
covenant or agreement of ▇▇▇▇▇▇▇ herein, or because of the
occurrence of an event, or the failure of a condition to
Purchaser's obligations hereunder or ▇▇▇▇▇▇▇'▇ obligations
hereunder to have been satisfied, which event or failure is a
result of a breach by ▇▇▇▇▇▇▇ of its covenants and agreements
hereunder, and (ii) within six months after the date of such
termination of this Agreement, ▇▇▇▇▇▇▇ or an affiliate of
▇▇▇▇▇▇▇ enters into an agreement with any person (other than
the Purchaser or an affiliate of the Purchaser) providing for
a transaction of a type included within the definition of
"Acquisition Proposal," and which transaction will provide
consideration to ▇▇▇▇▇▇▇, or any affiliate of ▇▇▇▇▇▇▇ or its
stockholders in excess of that contemplated by this Agreement
provided that all amounts paid to Purchaser by ▇▇▇▇▇▇▇
pursuant to Section 11.3.3. as the ▇▇▇▇▇▇▇ Termination Fee
shall be credited to and applied as a set-off against any
Losses or other damages received by Purchaser, if any,
pursuant to any claim by Purchaser against ▇▇▇▇▇▇▇ based on
any transaction resulting from any such Acquisition Proposal.
11.4. CONFIDENTIALITY.
11.4.1. From the date hereof until the earlier to occur of the
Closing Date or the termination of this Agreement pursuant to
Section 11.3, each of Purchaser and ▇▇▇▇▇▇▇ will refrain, and
will cause its respective affiliates, officers, directors,
employees, agents, and other representatives to refrain, from
disclosing to any other person or entity any documents or
information concerning the other party hereto (including, with
respect to ▇▇▇▇▇▇▇, Sub and the Business) acquired by it in
connection with this Agreement or the transactions
contemplated hereby unless (i) such disclosure is compelled by
judicial or administrative process or by other requirements of
law (including in connection with obtaining necessary
insurance regulatory approvals) and notice of such disclosure
is furnished to such other party hereto; (ii) either party
hereto deems it advisable (upon advise of such party's legal
counsel) to disclose any such documents or information in
connection with the requirements of any securities law,
provided that such disclosing party furnishes to the
non-disclosing party notice of such disclosure; or (iii) such
documents or information can be shown to have been (A)
previously
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known by the party hereto receiving such documents or
information, (B) in the public domain through no fault of such
receiving party, or (C) later acquired by such receiving party
from other public sources.
11.4.2. If this Agreement is terminated pursuant to Section
11.3, Purchaser shall continue to adhere to the terms of the
Confidentiality Agreement dated January 16, 2001 between
Purchaser and ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, as agent for ▇▇▇▇▇▇▇, with
respect to information concerning ▇▇▇▇▇▇▇, Sub or the Business
obtained by Purchaser in connection with this Agreement or
investigations or evaluations concerning the transactions
contemplated hereby.
11.4.3. If the Closing occurs, following the Closing Date (i)
▇▇▇▇▇▇▇ will refrain, and will cause its affiliates, officers,
directors, employees, agents, and other representatives to
refrain, from disclosing, to any person or entity any
information regarding Sub, the Business or the transactions
contemplated hereby unless (A) such disclosure is compelled by
judicial or administrative process or by other requirements of
law and notice of such disclosure is furnished to Purchaser;
(B) ▇▇▇▇▇▇▇ deems it advisable (upon advice of legal counsel
to ▇▇▇▇▇▇▇) to disclose any such documents or information in
connection with the requirements of any securities law,
provided that ▇▇▇▇▇▇▇ furnishes to Purchaser notice of such
disclosure; (C) such documents or information can be shown to
have been (1) in the public domain through no fault of ▇▇▇▇▇▇▇
or (2) later acquired by ▇▇▇▇▇▇▇ from other public sources; or
(D) such disclosure is made in connection with a merger, sale,
consolidation or other extraordinary transaction involving
▇▇▇▇▇▇▇, its affiliates or its parent company; and (ii)
Purchaser will refrain, and will cause its officers,
directors, employees, agents and other representatives to
refrain, from any other person or entity any documents or
information concerning the business or operations of ▇▇▇▇▇▇▇
other than to the extent relating to Sub or the Business
unless (A) such disclosure is compelled by judicial or
administrative process or by other requirements of law and
notice of such disclosure is furnished to ▇▇▇▇▇▇▇; (B)
Purchaser deems it advisable (upon advice of legal counsel to
Purchaser) to disclose any such documents or information in
connection with the requirements of any securities law,
provided that Purchaser furnishes to ▇▇▇▇▇▇▇ notice of such
disclosure; (C) such documents or information can be shown to
have been (1) in the public domain through no fault of
Purchaser or (2) later acquired by Purchaser from other public
sources; or (D) such disclosure is made in connection with a
merger, sale, consolidation or other extraordinary transaction
involving Purchaser, its affiliates or its members.
11.4.4. The parties hereto acknowledge and agree that (i) a
breach of any of the terms or provisions of this Section 11.4
would cause irreparable damage to the non-breaching party for
which adequate remedy at law is not available and (ii) the
non-breaching party will be entitled as a matter of right to
obtain, without posting any bond or proving of actual damages
whatsoever, an injunction, restraining order or other
equitable relief to restrain any threatened or further breach
of this Section 11.4 which right will not be exclusive but
will be cumulative and in addition to any other rights and
remedies available at law or in equity.
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11.4.5. At the Closing, ▇▇▇▇▇▇▇ will assign to Purchaser the
non-exclusive right to enforce the rights of ▇▇▇▇▇▇▇ and its
affiliates under each of the confidentiality agreements
between ▇▇▇▇▇▇▇ or its affiliates (directly or indirectly
through ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, acting as agent for ▇▇▇▇▇▇▇) and
any prospective purchaser of Sub and the Business.
11.5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives. No rights or obligations
hereunder may be assigned by a party hereto without the prior written consent of
the other party, provided that (i) Purchaser may assign its rights and
obligations hereunder no later than five (5) business days before Closing to a
wholly-owned affiliate of Purchaser or another entity commonly owned by the
members of Purchaser without ▇▇▇▇▇▇▇'▇ prior written consent if Purchaser
irrevocably and unconditionally guarantees the performance of all the assignee's
obligations under this Agreement hereof, subject only to the terms and
conditions of this Agreement (ii) and ▇▇▇▇▇▇▇ may assign its rights and
obligations hereunder to any affiliate of ▇▇▇▇▇▇▇ or other party after March 31,
2001, provided, that such assignment shall not relieve each of ▇▇▇▇▇▇▇ and Chase
of its respective obligations under this Agreement.
11.6. ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
attached hereto and the Confidentiality Agreement between Purchaser and
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ dated January 16, 2001, contain the entire agreement of the
parties hereto with respect to the purchase of the Purchased Assets and the
other transactions contemplated herein, and supersede all prior understandings
and agreements of the parties with respect to the subject matter hereof. Any
reference herein to this Agreement shall be deemed to include the Schedules and
Exhibits attached hereto, which are fully incorporated herein.
11.7. HEADINGS. The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
11.8. EXECUTION IN COUNTERPART This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, all
of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
11.9. NOTICES. Any notice, request, information or other document to
be given hereunder to any of the parties by any other party shall be in writing
and delivered to the parties at the following addresses (or to such other
address as a party may have specified by notice to the other party pursuant to
this provision):
If to ▇▇▇▇▇▇▇ prior to Closing, addressed to: ▇▇▇▇▇▇▇ Tube Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to ▇▇▇▇▇▇▇ after Closing, addressed to: LTC Reserve Corp.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇
3700 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser, addressed to: ▇▇▇▇▇▇▇ Industrial Group, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Deutsch, Levy & ▇▇▇▇▇, Chartered
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice shall be deemed given (i) when receipted for by the
party to whom addressed, in the case of persona delivery; (ii) the next business
day following service by overnight mail or delivery service; (iii) the third
business day following the deposit in the U.S. mail, postage prepaid, registered
or certified mail, return receipt requested; or (iv) upon receipt of electronic
facsimile transmission, provided that a copy of such facsimile notice shall
simultaneously be sent to the address by certified or registered mail, return
receipt requested.
11.10. GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall
be governed by and construed in accordance with the internal laws of the State
of Illinois applicable to contracts made and to be performed therein without
regard to the conflicts of laws principles thereof. Each of the parties to this
Agreement irrevocably consents to the exclusive jurisdiction and venue (and
waives any inconvenient forum objection) of the state and federal courts located
in the State of Illinois for the purposes of any court proceedings hereunder and
to accept service of process by any means specified in Section 11.9.
11.11. LIMITATION ON RIGHTS OF OTHER PERSONS. Except for the rights
of any Indemnified Parties under Article 13, nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give any
person, firm, corporation or entity other than the parties hereto any rights or
remedies under or by reason of this Agreement or any transaction contemplated
hereby.
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11.12. SEVERABILITY. If any provision of this Agreement shall be held
or deemed to be, or shall in fact be, illegal, inoperative or unenforceable
under present or future laws effective during the term of this Agreement, such
provision shall be fully severable and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
11.13. CERTAIN DEFINITIONS. As used herein, the term "reasonable
efforts" means those commercially reasonable efforts which would be exerted by a
substantial business enterprise to accomplish the desired result, short of the
expenditure of funds disproportionate to the benefit derived; the term
"affiliate" shall mean, with respect to a person or entity, any other person or
entity which, directly, or indirectly or through one of more intermediaries,
controls or is controlled by, or is under common control with, the person or
entity specified; the term "Permitted Encumbrances" shall mean (i) when used
with respect to the Purchased Assets other than the Purchased Real Estate
(including the Purchased Leasehold Interests), (a) statutory liens for current
Taxes not yet due and payable, or being contested in good faith by appropriate
proceedings, (b) mechanics', carriers', workers', repairers', and other similar
liens imposed by law arising or incurred in the ordinary course of business for
obligations which are not overdue for a period of more than ninety (90) days or
which are being contested in good faith by appropriate proceedings, (c) public
utility easements of record, in customary form, to serve the Purchased Real
Estate, (d) Liens incident to the liabilities and obligations permitted or
assumed under this Agreement, and (e) Liens that are not substantial in
character, amount or extent and do not materially detract from the value, or
interfere with the present use of, any of the Purchased Assets or otherwise
impair the operations of the Business in any material respect, and (ii) when
used with respect to the Purchased Real Estate (including the Purchased
Leasehold Interests), Permitted Exceptions; and the term "Permitted Exceptions"
shall mean (i) all matters shown in the Initial Title Commitments, and (ii) any
exceptions to title, encumbrances, encroachments or similar matters which are or
would be disclosed by a review of the Initial Surveys.
11.14. PURCHASER REPRESENTED BY COUNSEL. Purchaser hereby represents
and warrants to ▇▇▇▇▇▇▇ that: (i) Purchaser is represented by legal counsel in
connection with the transaction contemplated by this Agreement; and (ii)
Purchaser is purchasing the Purchased Assets for business, commercial,
investment or other similar purpose and not for use as Purchaser's residence.
Purchaser waives any and all rights or remedies it may have or be entitled to,
deriving from disparity in size or from any significant disparate bargaining
position in relation to ▇▇▇▇▇▇▇.
11.15. NON-COMPETITION. For a period of five years after the date
hereof, each of Chase and ▇▇▇▇▇▇▇ covenants and agrees that it will not, without
the prior written consent of Purchaser, directly or indirectly engage or carry
on any business engaged in the manufacture or marketing of mechanical and
structural steel tubing and Hi Y 50 pipe in the United States, become involved
in the development, manufacture, distribution, licensing, or sale of any
products, including without limitation any mechanical and structural steel
tubular products in such shapes and sizes, which are now being produced by the
Business or whose development, manufacture,
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distribution, licensing or sale currently is being researched and developed by
▇▇▇▇▇▇▇ for sale to customers. This Section 11.15 shall not apply to any
affiliate of Chase or ▇▇▇▇▇▇▇ from and after such date that any person acquires
fifty percent (50%) or more of the outstanding common stock of Chase.
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
12.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, (i) each of the
representations and warranties set forth in Sections 4.3, 4.4, 4.5, 4.8, 4.10,
4.20, 5.3 and 5.5 shall terminate on the expiration of all applicable statute of
limitations; and (ii) all remaining representations and warranties shall
terminate at 5:00 p.m., Central Standard Time, on the first anniversary of the
Closing Date. Following the date of termination of a representation or warranty,
no claim can be brought with respect to a breach of such representation or
warranty, but no such termination shall affect any claim for a breach of a
representation or warranty that was asserted before the date of termination.
12.2. SURVIVAL OF COVENANTS. The covenants and agreements of the
parties hereto contained in this Agreement, to the extent that, by their terms,
they are to be performed or complied with (i) prior to or on the Closing Date,
shall expire at Closing; and (ii) after the Closing, including without
limitation those covenants set forth in Section 6.6 and Article 13, shall expire
on the expiration of all applicable statute of limitations affecting such
covenant or agreement; provided, however, that any such covenant or agreement
that specifies a term or period expiring before the expiration of all applicable
statutes of limitations will survive for a period of one hundred eighty days
(180) days following the expiration of such specified term or period.
12.3. PURSUIT OF CLAIMS. If a claim for indemnification is made in
accordance with Article 13 before the expiration of the applicable survival
period set forth in Sections 12.1 and 12.2, then (notwithstanding such survival
period) the representation, warranty, covenant or agreement applicable to such
claim will survive until the resolution of such claim by final, nonappealable
judgment or settlement.
13. INDEMNIFICATION AND PROCEDURES.
13.1. INDEMNIFICATION.
13.1.1. BY ▇▇▇▇▇▇▇ AND CHASE. Subject to the limitations set
forth in Section 12, from and after the Closing, each of
▇▇▇▇▇▇▇ and Chase, jointly and severally, will defend,
indemnify and hold harmless Purchaser and any of its officers,
directors, employees, representatives, agents attorneys and
affiliates (collectively, the "Purchaser Indemnitees") from
and against, and pay or reimburse the Purchaser Indemnitees
for, any and all liabilities, obligations, commitments,
losses, fines, penalties, sanctions, costs (including court
costs but excluding costs and expenses of in-house experts and
other personnel), expenses, interest, deficiencies or damages
(whether absolute, accrued, conditional or otherwise and
whether or not resulting from third-party claims), including
reasonable out-of-pocket expenses
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and reasonable fees and expenses of attorneys, accountants,
consultants and expert witnesses (collectively "Losses")
resulting from or arising out of:
(i) any breach or inaccuracy by ▇▇▇▇▇▇▇ of any
representations and warranties of ▇▇▇▇▇▇▇ contained in
this Agreement; and notwithstanding anything to the
contrary contained in this Agreement, to determine if
there has been an inaccuracy of a representation or
warranty and the Losses arising from such an
inaccuracy, such representation or warranty shall be
read as if it were not qualified by materiality,
including, without limitation, qualifications
indicating accuracy "in all material respects" or
accuracy except to the extent the inaccuracy would not
reasonably be expected to have a Material Adverse
Effect);
(ii) any failure of ▇▇▇▇▇▇▇ to perform any covenant
or agreement of ▇▇▇▇▇▇▇ hereunder or fulfill any other
obligation of ▇▇▇▇▇▇▇ in respect hereof;
(iii) any and all Excluded Liabilities;
(iv) liabilities for Taxes as provided in Section
13.4.1; and
(v) the lawsuits and claims listed in Items I and
III of Schedule 4.14, all other lawsuits pending as of
the Closing Date that would require disclosure under
Section 4.14, and any lawsuit or third party claim
that arises from conduct of Chase, ▇▇▇▇▇▇▇ or Sub that
occurred prior to the Closing Date, in any such case
whether such Losses arise directly out of such
lawsuits and claims, or from the assertion of any
other claims that arise from the matters alleged in
such lawsuits and claims, or from the assertion of
claims for contribution or indemnity in connection
with such lawsuits and claims under the Articles of
Incorporation or Certificate of Incorporation, as the
case may be, or Bylaws of ▇▇▇▇▇▇▇ or Sub (and the
resolutions of the respective boards of directors
relating thereto) that arise from conduct that
occurred prior to the Closing Date.
13.1.2. BY PURCHASER. From and after the Closing, Purchaser
will defend, indemnify and hold harmless Chase and ▇▇▇▇▇▇▇ and
each of its their officers, directors, representatives,
agents, attorneys and affiliates (collectively, the "Seller
Indemnitees") from and against, and pay or reimburse the
Seller Indemnitees for, any and any and all Losses related to,
resulting from or arising out of:
(i) any breach by Purchaser of any representations
or warranties of Purchaser contained in this
Agreement;
(ii) any failure of Purchaser to perform any covenant
or agreement of Purchaser hereunder, including without
limitation the obligations of Purchaser under Section
6.6 and Exhibit A, or fulfill any other obligation of
Purchaser in respect hereof;
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(iii) any and all Assumed Liabilities;
(iv) the inspections as set forth in Section 6.3.3;
(v) any action taken by Purchaser pursuant to the
authority granted to it in Sections 9.1 and 9.2;
(vi) any matter arising from the operations of the
Business on or after the Closing Date; and
(vii) liabilities for Taxes as provided in Section
13.4.2.
13.2. INDEMNIFICATION PROCEDURES. Subject to Sections 13.3.2 and
13.4:
13.2.1. If a Purchaser Indemnitee or ▇▇▇▇▇▇▇ Indemnitee (each,
an "Indemnitee") becomes aware of any matter that it believes
is indemnifiable pursuant to Section 13.1 and such matter
involves (i) any claim made against the Indemnitee by any
person or entity other than a Purchaser Indemnitee or a
▇▇▇▇▇▇▇ Indemnitee or (ii) the commencement of any action,
suit, investigation, arbitration or similar proceeding against
the Indemnitee by any person or entity other than a Purchaser
Indemnitee or a ▇▇▇▇▇▇▇ Indemnitee, the Indemnitee will give
the party obligated to indemnify the Indemnitee under this
Article 13 (the "Indemnifying Party") prompt written notice of
such claim or the commencement of such action, suit,
investigation, arbitration or similar proceeding, which notice
must (A) provide (with reasonable specificity) the basis on
which indemnification is being asserted, (B) set forth the
actual or good-faith estimated amount of Losses for which
indemnification is being asserted, if known, and (C) be
accompanied by copies of all relevant pleadings, demands and
other papers served on the Indemnitee; provided, however, that
the Indemnitee's failure to provide the Indemnifying Party
with such notice shall not relieve the Indemnifying Part of
its obligations under this Article 13, except to the extent
that such Indemnifying Party's ability to defend against such
claims has been prejudiced as a result of such failure.
13.2.2. The Indemnifying Party will have a period of ten (10)
days after the delivery of each notice required by Section
13.2.1 during which to respond to such notice. If the
Indemnifying Party notifies the Indemnified Party that the
Indemnifying Party does not dispute its liability to the
Indemnified Party, and that the Indemnifying Party desires to
defend the Indemnified Party with respect to the third party
claim, the Indemnifying Party will be obligated to compromise
or defend (and will control the defense of) such claim, at its
own expense and by counsel chosen by the Indemnifying Party;
provided, however, that the Indemnified Party may, at any time
prior to its receipt of such notice from the Indemnifying
Party, file any motion, answer other pleadings that the
Indemnified Party may deem necessary or appropriate to protect
its interest or those of the Indemnifying Party and not
irrevocably prejudicial to the Indemnifying Party. The
Indemnitee will cooperate fully with the Indemnifying Party
and counsel for the Indemnifying Party in the defense against
any such claim, and the Indemnitee
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will have the right to participate in the defense of such
claim and to employ its own separate counsel, but the fees and
expenses of such separate counsel shall be at the expense of
the Indemnitee unless any of the following provisions shall
apply: (i) to the extent the employment of such counsel shall
have been authorized in writing by the Indemnifying Party in
connection with the defense of such claim, action or
proceeding; (ii) there shall be defenses available to the
Indemnitee that are different from or additional to those
available to the Indemnifying Party and that the Indemnifying
Party is not able to assert on behalf of or in the name of the
Indemnitee; or (iii) there is a conflict of interest that
would make it inappropriate under applicable standards of
professional conduct to have common counsel. If clause (i),
(ii) or (iii) in the immediately preceding sentence is
applicable, then the Indemnitee may employee separate counsel
at the expense of the Indemnifying Parties to represent or
defend it, but in no event shall the Indemnifying Party be
obligated to pay the fees and disbursements of more than one
such separate counsel for any one such claim, action or
proceeding in any one jurisdiction or fees in excess of fees
that are reasonable. If the Indemnifying Party fails to notify
the Indemnified Party that the Indemnifying Party does not
dispute its liability to the Indemnified Party and that the
Indemnifying Party desire to defend the Indemnified Party with
respect to the third party claim pursuant to this Section
13.2.2, or if the Indemnifying Party gives such notice but
fails diligently and promptly to prosecute or settle the third
party claim, the Indemnitee will be free to compromise or
defend (and control the defense of), at the expense of the
Indemnifying Party such claim and to pursue such remedies as
may be available to the Indemnitee under applicable law.
13.2.3. Any compromise or settlement of any claim (whether
defended by the Indemnitee or by the Indemnifying Party) will
require the prior written consent of the Indemnitee and the
Indemnifying Party (which consent will not be unreasonably
withheld).
13.2.4. If an Indemnitee becomes aware of any matter that it
believes is indemnifiable pursuant to Section 13.1 and such
matter involves a claim made by a Purchaser Indemnitee or a
▇▇▇▇▇▇▇ Indemnitee, the Indemnitee will give the Indemnifying
Party prompt written notice of such claim, which notice must
(i) provide (with reasonable specificity) the basis for which
indemnification is being asserted, and (ii) set forth the
actual or good-faith estimated amount of Losses for which
indemnification is being asserted. The Indemnifying Party will
have a period of ten (10) days after the delivery of each
notice required by this Section 13.2.4 during which to respond
to such notice. If the Indemnifying Party accepts (in writing)
full responsibility for the claim described in such notice or
does not respond within such ten (10) day period, the
Indemnifying Party will pay upon demand to the Indemnitee the
actual or estimated amount of Losses reflected in such notice.
If the Indemnifying Party disputes such claim, then the
Indemnifying Party and the Indemnitee agree to proceed in good
faith to negotiate a resolution of such dispute. If all such
disputes are not resolved through negotiations within ten (10)
days after such negotiations begin or if such negotiations are
not initiated within ten (10) days after notice is given,
either the
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Indemnifying Party or the Indemnitee may initiate litigation
to resolve such disputes or otherwise exercise any rights it
may have at law or equity with respect to such disputes.
13.3. CLAIMS LIMITATIONS; EXCLUSIVE REMEDIES. Notwithstanding the
foregoing provisions of this Article 13,
13.3.1. Chase and ▇▇▇▇▇▇▇ shall have no liability for
indemnification for any Losses under Section 13.1.1(i) until
and unless the cumulative total of such Losses exceeds in the
aggregate $250,000 (the "Deductible"), at which time all
amounts of Losses (other than De Minimus Losses (as defined
below)) in excess of $250,000 may be claimed and recovered as
provided in this Agreement; provided, however, that no Loss
with a value of less than $1,000 (a "De Minimus Loss") shall
be included in calculating the aggregate amount of Losses for
determining whether the Deductible has been satisfied;
provided, further, that a De Minimus Loss shall not be
recoverable for any reason, including without limitation if
the Losses exceed the Deductible; provided, further, that the
aggregate liability of Chase and ▇▇▇▇▇▇▇ pursuant to this
Article 13 shall be limited to an amount equal to the Cash
Consideration as adjusted pursuant to Section 3.4 and Section
3.5;
13.3.2. If an Indemnitee recovers from any third party
(including insurers) all or any part of any amount previously
paid to it by an Indemnifying Party pursuant to Sections 13.1
or 13.4, such Indemnitee will promptly pay over to the
Indemnifying Party the amount so recovered (after deducting
therefrom the full amount of the expenses incurred by it in
procuring such recovery), but not in excess of any amount
previously so paid by the Indemnifying Party; and
13.3.3. Chase and ▇▇▇▇▇▇▇ shall not be liable to indemnify any
Purchaser Indemnity for any Loss, and such Loss shall not be
applied towards the thresholds in Sections 13.3.1 and 13.3.2,
to the extent such Losses constitute an Assumed Liability or
otherwise are reserved against or reflected as a liability in
the Closing Statement.
13.3.4. Without limiting the rights that any party may have
for fraud under common law, Purchaser and Chase and ▇▇▇▇▇▇▇
agree that, from and after the Closing, the sole and exclusive
remedy of any party hereto with respect to all claims related
to this Agreement, including without limitation any claims
regarding the Purchased Assets arising out of any actual or
alleged breach of this Agreement will be provided as set forth
in this Article 13.
13.3.5. After the Closing neither ▇▇▇▇▇▇▇, ▇▇▇▇▇ nor Purchaser
shall be liable under this Agreement for consequential damages
of the other party.
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13.4. TAX INDEMNIFICATION.
13.4.1. ▇▇▇▇▇▇▇ will be responsible for, will pay or cause to
be paid, and will indemnify and hold harmless each Purchaser
Indemnity from and against, any and all Losses for or in
respect of each of the following:
(i) any and all Taxes arising out of or relating to
operations of the Business or other business or
operations of, transactions involving, and
distributions made by or to, ▇▇▇▇▇▇▇, Sub or any other
member of an Affiliated Group, or the assets of any of
them, with respect to any taxable period (or portions
thereof) of the Business or Sub (or any predecessor)
ending on or before the Closing Date;
(ii) any and all Taxes of any member (other than
▇▇▇▇▇▇▇ or Sub) of an affiliated, consolidated,
combined, or unitary group of which ▇▇▇▇▇▇▇ or Sub (or
any predecessor) is or was a member on or prior to the
Closing Date by reason of the liability of ▇▇▇▇▇▇▇ or
Sub pursuant to Treasury Regulation Section
1.1502-6(a) or any analogous or similar state, local
or foreign Law;
(iii) Taxes asserted against any person for which any
Purchaser Indemnity is liable under any agreement
entered into by ▇▇▇▇▇▇▇ or Sub prior to the Closing to
indemnify such person; and
(iv) any breach by ▇▇▇▇▇▇▇ of any representation,
warranty, covenant, or agreement contained in Sections
4.8 or 13.4;
provided, however, that ▇▇▇▇▇▇▇ shall not be liable
for or obligated to indemnify any Purchaser Indemnity
for any Losses or Taxes to the extent such Taxes (A)
result from an election or deemed election by
Purchaser under Section 338 of the code with respect
to Sub (or any analogous provision under any state,
local or foreign tax law), (B) arise as a result of
the business, operations or transactions of Purchaser
or Sub after the Closing; (C) are reflected as
liabilities or accruals in the Closing Statement or;
(D) are payable by Purchaser pursuant to Section
6.9.4.
13.4.2. Purchaser agrees to pay, and to indemnify ▇▇▇▇▇▇▇ in
respect of, and hold ▇▇▇▇▇▇▇ harmless from and against, any
and all Losses for or in respect of Taxes incurred by, imposed
upon, or assessed against ▇▇▇▇▇▇▇ or any affiliate of ▇▇▇▇▇▇▇
(other than Sub) (i) relating to the business and operations
of Purchaser, the Business or Sub after the Closing Date or
(ii) to the extent reflected as a liability in the Closing
Statement.
13.4.3. Purchaser will promptly notify ▇▇▇▇▇▇▇ of the
commencement of any claim, audit, examination, or other
proposed change or adjustment by an taxing authority
concerning any Taxes or other Losses covered by Section 13.4.1
("Tax Claim"). ▇▇▇▇▇▇▇ shall control the defense and
settlement of any Tax audit or administrative or court
proceeding relating to (i) any Seller Consolidated Returns
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(as defined below) and (ii) taxable periods of the Business or
Sub beginning on or prior to the Closing Date; provided,
however, that if the results of any such Tax audit or
administrative or court proceeding could reasonably be
expected to be material to Purchaser, the Business or Sub,
then Purchaser may, at its expense, participate in any such
contest or proceeding upon written notice to ▇▇▇▇▇▇▇ and
neither party shall compromise or settle such contest or
refund suit without the consent of the other. ▇▇▇▇▇▇▇ shall
promptly notify Purchaser if it decides not to participate in
the defense or settlement of any such Tax audit or
administrative or court proceeding and Purchaser thereupon
shall be permitted to defend and settle such Tax audit or
proceeding. ▇▇▇▇▇▇▇ will promptly notify Purchaser of the
commencement of any claim, audit, examination, or other
proposed change or adjustment by any taxing authority which
may affect the liability of Purchaser or Sub for Taxes
(including any audit or proceeding relating to Seller
Consolidated Returns) and ▇▇▇▇▇▇▇ shall keep Purchaser duly
informed on a regular and periodic basis of the progress
thereof. For purposes of this Agreement, "Seller Consolidated
Returns" shall mean all consolidated, combined, affiliated or
unitary Tax Returns which include the Business, or Sub with
respect to the Business' or Sub's taxable income or loss for
periods beginning prior to the Closing Date.
13.4.4. Any claim for indemnify hereunder may be made at any
time prior to sixty days after the expiration of the
applicable Tax statute of limitations with respect to the
relevant taxable period (including all periods of extension,
whether automatic or permissive).
14. EXCLUSIVE DEALING.
14.1. PROHIBITIONS ON ACQUISITION PROPOSALS. Except as otherwise set
forth in this Section 14.1, at any time subsequent to the date of this
Agreement, ▇▇▇▇▇▇▇ shall not authorize or permit any officer, director, agent or
employee of, or any investment banker, financial advisor, attorney, accountant
or other representatives retained by, ▇▇▇▇▇▇▇ or any affiliate of ▇▇▇▇▇▇▇ (each
a "Seller Representative"), to, directly or indirectly, (i) solicit, initiate,
seek or encourage (including by way of furnishing information or assistance) or
take other action to facilitate any inquiries or the making of any proposal
which constitutes or may reasonably be expected to lead to, an Acquisition
Proposal (as defined below) from any person other than Purchaser (a "Third
Party"), or (ii) engage in any discussions or negotiations relating thereto or
in furtherance thereof or accept any Acquisition Proposal (as defined below);
provided, however, that Purchaser hereby acknowledges that ▇▇▇▇▇▇▇ has had
negotiations with a Third Party which is an affiliate of Chase (and not a
competitor of ▇▇▇▇▇▇▇) regarding an Acquisition Proposal to be entered into if
and only if the transactions contemplated hereby are not closed on or before
March 31, 2001 (the "Back-up Transaction"), and such continuing negotiations and
the execution and delivery by ▇▇▇▇▇▇▇ of any definitive written agreement with
respect to the Back-up Transaction shall not violate any of ▇▇▇▇▇▇▇'▇
obligations hereunder, including without limitation this Section 14.
14.2. TERMINATIONS RELATED TO ACQUISITION PROPOSAL. Upon execution
by ▇▇▇▇▇▇▇ of this Agreement, ▇▇▇▇▇▇▇ will terminate any solicitations,
encouragement, activities, discussions and negotiations with any parties
conducted heretofore by ▇▇▇▇▇▇▇ or any Seller Representatives with respect to
any Acquisition Proposal.
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14.3. DEFINITION OF ACQUISITION PROPOSAL. As used in this Agreement,
"Acquisition Proposal" shall mean any proposal or offer by a Third Party for (i)
any merger, consolidation, share exchange, business combination or other similar
transaction in which the Business would be acquired by any person, (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of the
assets of the Business, in a single transaction or series of transactions
(whether related or unrelated) other than in the ordinary course of business,
(iii) any exchange offer for outstanding shares of ▇▇▇▇▇▇▇'▇ common stock or
debt securities pursuant to which the Business or any portion thereof (including
the capital stock of Sub) would be acquired by any Third Party, or the filing of
a registration statement under the Securities Act of 1933, as amended, in
connection therewith, or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing.
15. POST-CLOSING TAX MATTERS.
15.1. ▇▇▇▇▇▇▇ TAX RETURNS. ▇▇▇▇▇▇▇ will prepare and file, or cause
to be prepared and filed, all appropriate and necessary Tax Returns which
include, on a consolidated or any other reporting basis, the results of
operations of the Business and Sub for all taxable periods ending on or before
the Closing Date, including the period beginning January 1, 2001, through the
Closing Date (the "Interim Tax Returns") (collectively, the "Seller Tax
Returns"). ▇▇▇▇▇▇▇ will timely pay or discharge, or cause to be paid or
discharged, any and all Taxes for which the Business and Sub may be held liable
as a result of Seller Tax Returns, unless such Taxes are being contested in good
faith; provided, however, nothing in this Section 15.1 shall be construed to
limit ▇▇▇▇▇▇▇'▇ or Purchaser's indemnification rights set forth in Article 13.
▇▇▇▇▇▇▇ and its affiliates will not amend any Seller Consolidated Return with
respect to Sub in a manner which may adversely affect tax liability of Sub in a
taxable period ending after the Closing Date without consulting with Purchaser.
15.2. PURCHASER TAX RETURNS. Purchaser will timely prepare and file,
or cause to be prepared and filed, all appropriate and necessary returns,
reports and estimates for all Taxes of Sub which relate to taxable periods
ending after the Closing Date, including the period from and after the Closing
Date through December 31, 2001 (collectively, the "Purchaser Tax Returns"). To
the extent any Purchaser Tax Return relates to the operations of Sub during any
period prior to the Closing Date, Purchaser will consult with ▇▇▇▇▇▇▇ in the
preparation of such Tax Returns and shall not file such tax return until
obtaining the written consent of ▇▇▇▇▇▇▇ (which consent shall not be
unreasonably withheld). Purchaser will pay or cause to be paid to the taxing
authority any and all Taxes due as a result of Purchaser Tax Returns required to
be filed pursuant to the preceding sentence, unless such Taxes are being
contested in good faith; provided, however, ▇▇▇▇▇▇▇ shall pay to and reimburse
Purchaser for any Taxes paid by Purchaser or Sub under or pursuant to the
Purchaser Tax Returns to the extent relating to the operations of the Business
prior to the Closing Date within five days after ▇▇▇▇▇▇▇ delivers written
consent to the filing of the Purchaser Tax Return pursuant to which such Tax is
payable but in no event earlier than two (2) days prior to the due date of such
Tax, and nothing in this Section 15.2 shall be construed to limit any Purchaser
Indemnitee's indemnification rights set forth in Article 13.
15.3. ALLOCATION OF STRADDLE PERIOD TAXES. For purposes of Section
2.4.2, Section 13.4, and this Article 15, Taxes arising out of or relating to
operations of the Business or Sub for any taxable period beginning on or before
the Closing Date and ending after the Closing Date
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shall be allocated to pre-closing and post-closing periods based upon an interim
closing of the books as of the Closing Date, except for ad valorem taxes which
shall be prorated on a daily basis.
15.4. COOPERATION. Purchaser and ▇▇▇▇▇▇▇ agree to furnish or cause
to be furnished to each other, upon request as promptly as practicable, such
information (including without limitation, access to books and records) and
reasonable assistance relating to the Business or Sub as is reasonably necessary
for the preparation and filing of any Tax Return contemplated in this Article
15, for the preparation for any audit, and for the prosecution of any proceeding
in respect of any proposed adjustment. Purchaser and ▇▇▇▇▇▇▇ shall cooperate
with each other in the conduct of any audit or other proceedings involving the
Business and Sub or any entity with which they are or were consolidated or
combined for any Tax purposes and each shall execute and deliver such documents
as are necessary to carry out the intent of this Article 15.
15.5. TAX REFUND. ▇▇▇▇▇▇▇ shall be entitled to any Tax refund with
respect to Seller Tax Returns and with respect to the portion of any Purchaser
Tax Returns to the extent relating to the operation of the Business prior to or
on the Closing Date; provided, however, that in the event that the Business or
Sub has a carryback from a taxable period ending after the Closing Date which
may be carried back to a ▇▇▇▇▇▇▇ Consolidated Return, ▇▇▇▇▇▇▇ shall promptly pay
to Purchaser any refund of Taxes which is attributable to such carryback when
and to the extent received by or credited for the benefit of ▇▇▇▇▇▇▇. In the
event that such carryback is subsequently disallowed by the Internal Revenue
Service, Purchaser will promptly repay such refund to ▇▇▇▇▇▇▇, together with all
interest payable to the IRS, in the event there is a final determination that
such refund is not allowable.
16. INDUCEMENT AND GUARANTY.
16.1. TERMINATION FEE. To induce Purchaser and Guarantors to execute
this Agreement and in consideration thereof, Chase hereby guarantees the payment
obligation of ▇▇▇▇▇▇▇ to pay to Purchaser the ▇▇▇▇▇▇▇ Termination Fee as
provided in Section 11.3.3, when and if due. The guaranty set forth herein by
Chase is absolute, unconditional, a guarantee of payment, may not be revoked by
Chase and shall continue to be effective after any attempted revocation by Chase
and shall not be subject to set-off, counterclaim, reduction, recoupment,
reduction or dimuntion, or any defense of any kind or nature that Chase or
▇▇▇▇▇▇▇ may have against Purchaser or any other party or that Chase may have
against ▇▇▇▇▇▇▇ or any other party. In the event of default by ▇▇▇▇▇▇▇ in
payment of the ▇▇▇▇▇▇▇ Termination Fee, or any part thereof, when the ▇▇▇▇▇▇▇
Termination Fee becomes due, Chase shall, on demand, and without further notice
of dishonor and without any notice having been given to Chase previous to such
demand of the acceptance by Purchaser of this Agreement, and without any notice
having been given to Chase previous to such demand of the creating or incurring
of the ▇▇▇▇▇▇▇ Termination Fee, pay the amount due herein to Purchaser at its
office as set forth in this Agreement, and it shall not be necessary for
Purchaser, in order to enforce such payment by Chase, first, to institute suit
or exhaust its remedies against ▇▇▇▇▇▇▇ or others liable for the ▇▇▇▇▇▇▇
Termination Fee, to have ▇▇▇▇▇▇▇ joined with Chase in any suit brought under
this Agreement or to enforce its rights against any security which shall ever
have been given to secure such fees. Chase expressly agrees to be primarily
liable therefor jointly and severally with ▇▇▇▇▇▇▇ to extent of its guaranty set
forth herein. Chase agrees that ▇▇▇▇▇▇▇ may modify the terms of this Agreement,
other than
57
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increasing the amount of the ▇▇▇▇▇▇▇ Termination Fee, without notice to Chase
and without affecting in any manner the unconditional obligation of Chase
hereunder. Chase acknowledges and agrees that the liabilities created by this
guaranty are direct and are not conditioned upon pursuit by Purchaser of any
remedy that Purchaser may have against ▇▇▇▇▇▇▇ or any other person or any
security. No invalidity, irregularity or unenforceability by reason of any
bankruptcy, insolvency or other similar law, or any law or order of any
government agency thereof purporting to reduce, amend or otherwise affect the
▇▇▇▇▇▇▇ Termination Fee shall impair, affect or be a defense to the obligations
of Chase under this guaranty.
16.2. OTHER OBLIGATIONS. To induce Purchaser and Guarantors to
execute this Agreement and in consideration thereof, Chase hereby guarantees the
payment obligations of ▇▇▇▇▇▇▇ under Sections 3.4, 3.5, 13.1.1 and 13.4.1, to
the extent and when and if due by ▇▇▇▇▇▇▇. The guaranty set forth herein by
Chase is absolute, unconditional, a guarantee of payment, may not be revoked by
Chase and shall continue to be effective after any attempted revocation by
Chase, but, subject to Section 3.5.5, shall be subject to any defense to payment
or liability or any right of set-off, counterclaim, reduction, recoupment,
reduction or dimuntion, or any other defense of any kind or nature, that ▇▇▇▇▇▇▇
or Chase may have against Purchaser except as provided in the last sentence of
this Section 16. Chase expressly waives presentment, demand, notice of
non-payment, protest and notice of protest and dishonor and any other notice in
connection its obligations under this Section 16 and agrees to be primarily
liable therefor jointly and severally with ▇▇▇▇▇▇▇. Chase agrees that ▇▇▇▇▇▇▇
may modify the terms of this Agreement without notice to Chase and without
affecting in any manner the obligation of Chase hereunder. Subject to the
forgoing, Chase acknowledges and agrees that the liabilities created by this
Section 16 are direct and are not conditioned upon pursuit by Purchaser of any
remedy that Purchaser may have against ▇▇▇▇▇▇▇ or any other person or any
security. No invalidity, irregularity or unenforceability by reason of any
bankruptcy, insolvency or other similar law, or any law or order of any
government agency thereof purporting to reduce, amend or otherwise affect the
obligations of ▇▇▇▇▇▇▇ under Sections 3.4, 3.5, 13.1.1 or 13.4.1 shall impair,
affect or be a defense to the obligations of Chase under this guaranty.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
▇▇▇▇▇▇▇ INDUSTRIAL GROUP, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Manager
--------------------------
▇▇▇▇▇▇▇ TUBE COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
--------------------------
Each of the following hereby join into
this Agreement solely for the purpose CHASE INDUSTRIES INC.
as specifically referenced herein:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
--------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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ANNEX A
LIST OF DEFINED TERMS
"Acquisition Proposal" shall have the meaning given such term in Section 14.3.
"Actual Uncollected Receivables" shall have the meaning given such term in
Section 3.5.1.
"affiliate" shall have the meaning given such term in Section 11.13.
"Affiliated Group" shall have the meaning given such term in Section 4.8.1.
"Agreement" shall have the meaning given such term in the first paragraph of
this Agreement.
"Assumed Liabilities" shall have the meaning given such term in Section 2.3.
"Assumed Plans" shall have the meaning given such term in Section 4.20.4.
"Back-up Transaction" shall have the meaning given such term in Section 14.1.
"Balance Sheet" shall have the meaning given such term in Section 4.6.2.
"Benefit Programs" shall have the meaning given such term in Section 4.20.1.
"Business" shall have the meaning given such term in the second paragraph of
this Agreement.
"Cash Consideration" shall have the meaning given such term in Section 2.1.
"CBCC" shall have the meaning given such term in Section 1.3.4.
"CERCLA" shall have the meaning given such term in Section 4.18.2.
"Chase" shall have the meaning given such term in the first paragraph of this
Agreement.
"Closing" shall have the meaning given such term in Section 3.1.
"Closing Date" shall have the meaning given such term in Section 3.1.
"Closing Net Assets" shall have the meaning given such term in Section 3.4.1.
"Closing Statement" shall have the meaning given such term in Section 3.4.1.
"COBRA" shall have the meaning given such term in Section 6.6.7.
"COBRA Coverage" shall have the meaning given such term in Section 6.6.7.
"C.O.D. Basis" shall have the meaning given such term in Section 3.5.1
"C.O.D. Customers" shall have the meaning given such term in Section 3.5.1.
Annex A-1
67
"Code" shall have the meaning given such term in Section 2.2.
"Collective Bargaining Agreements" shall have the meaning given such term in
Section 6.6.1.
"Continued Employees" shall have the meaning given such term in Section 6.6.1.
"Contract Costs" shall have the meaning given such term in Section 3.6.1.
"Credit Agreement" shall have the meaning given such term in Section 4.5.
"De Minimus Loss" shall have the meaning given such term in Section 13.3.1.
"Deductible" shall have the meaning given such term in Section 13.3.1.
"Disagreement Notice" shall have the meaning given such term in Section 3.4.2.
"Effective Time" shall have the meaning given such term in Section 3.3.
"Environmental Law" shall have the meaning given such term in Section 4.18.2.
"Environmental Permit" shall have the meaning given such term in Section 4.18.2.
"ERISA" shall have the meaning given such term in Section 4.20.1.
"ERISA Plans" or "ERISA Plan" shall have the meaning given such term in Section
4.20.1.
"Excluded Assets" shall have the meaning given such term in Section 1.3.
"Excluded Liabilities" shall have the meaning given such term in Section 2.4.
"Existing COBRA Continuees" shall have the meaning given such term in Section
6.6.7.
"Financial Statements" shall have the meaning given such term in Section 4.6.
"Financing Commitment" shall have the meaning given such term in Section 5.6.
"GAAP" shall have the meaning given such term in Section 4.6.
"Guarantor" shall have the meaning given such term in Section 11.3.4.
"Holco Real Property" shall have the meaning given such term in Section 4.9.1.
"Indemnifying Party" shall have the meaning given such term in Section 13.2.1.
"Indemnitee" shall have the meaning given such term in Section 13.2.1.
"Independent Accountants" shall have the meaning given such term in Section
3.4.3.
"Initial Surveys" shall have the meaning given such term for Section 6.9.3.
Annex A-2
68
"Initial Title Commitments" shall have the meaning given such term for Section
6.9.1.
"Interim Tax Returns" shall have the meaning given such term in Section 15.1.
"IRS" shall have the meaning given such term in Section 4.8.9.
"▇▇▇▇▇" shall have the meaning given such term in Section 6.2.3.
"▇▇▇▇▇ Change of Control Agreement" shall have the meaning given such term in
Section 6.2.3.
"Landlord" shall have the meaning given such term in Section 3.2.3.
"▇▇▇▇▇▇▇" shall have the meaning given such term in the first paragraph of this
Agreement.
"▇▇▇▇▇▇▇ 401(k) Plan" shall have the meaning given such term in Section 6.6.6.
"▇▇▇▇▇▇▇ Party" or "▇▇▇▇▇▇▇ Parties" shall have the meaning given such term in
Section 6.3.3.
"▇▇▇▇▇▇▇ Termination Fee" shall have the meaning given such term in Section
11.3.3.
"Liens" shall have the meaning given such term in Section 1.1.
"Losses" shall have the meaning given such term in Section 13.1.1.
"Madison County Estoppel Certificates" shall have the meaning given such term in
Section 3.2.3.
"Madison County Lease Consents" shall have the meaning given such term in
Section 3.2.3.
"Madison County Leases" shall have the meaning given such term in Section 3.2.3.
"Marks" shall have the meaning given such term in Section 4.12.2.
"Material Adverse Effect" shall have the meaning given such term in Section 4.7.
"Material Agreements" shall have the meaning given such term in Section 4.22.3.
"Non-Assignable Purchased Contracts" shall have the meaning given such term in
Section 3.6.1.
"Non-Assumed Plans" shall have the meaning set forth in Section 1.3.9.
"October 1988 Lease" shall have the meaning given such term in Section 3.2.3.
"PBGC" shall have the meaning given such term in Section 4.20.3.
"Permitted Encumbrances" shall have the meaning given such term in Section
11.13.
"Permitted Exception" shall have the meaning given such term in Section 11.13.
"Prime Rate" shall have the meaning given such term in Section 3.4.4.
Annex A-3
69
"Purchase Price" shall have the meaning given such term in Section 2.1.
"Purchased Assets" shall have the meaning given such term in Section 1.2.
"Purchased Contracts" shall have the meaning given such term in Section 1.2.6.
"Purchased Fixed Assets" shall have the meaning given such term in Section
1.2.3.
"Purchased Inventory" shall have the meaning given such term in Section 1.2.4.
"Purchased Leasehold Premises" shall have the meaning given such term in Section
1.2.2.
"Purchased Proprietary Rights" shall have the meaning given such term in Section
1.2.8.
"Purchased Real Estate" shall have the meaning given such term in Section 1.2.1.
"Purchased Receivables" shall have the meaning given such term in Section 1.2.5.
"Purchased Records" shall have the meaning given such term in Section 1.2.7.
"Purchaser" shall have the meaning given such term in the first paragraph of
this Agreement.
"Purchaser Group" shall have the meaning given such term in Section 6.6.2.
"Purchaser Indemnitees" shall have the meaning given such term in Section
13.1.1.
"Purchaser Qualified Plans" shall have the meaning given such term in Section
6.6.5.
"Purchaser Tax Returns" shall have the meaning given such term in Section 15.2.
"Purchaser Termination Fee" shall have the meaning given such term in Section
11.3.3.
"Purchaser Welfare Plans" shall have the meaning given such term in Section
6.6.4.
"Real Estate" shall have the meaning given such term in Section 6.9.1.
"reasonable efforts" shall have the meaning given such term in Section 11.13.
"recalls" shall have the meaning given such term in Section 4.21.
"Receivable Allowance" shall have the meaning given such term in Section 3.5.3.
"Receivable Disagreement Notice" shall have the meaning given such term in
Section 3.5.2.
"Receivable Statement" shall have the meaning given such term in Section 3.5.1.
"Residual Liability" shall have the meaning given such term in Section 2.3.9.
"Residual Liability Cap" shall have the meaning given such term in Section
2.3.9.
Annex A-4
70
"▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇" shall have the meaning given such term in Section 4.34.
"Seller Consolidated Returns" shall have the meaning given such term in Section
13.4.3.
"Seller Group" shall have the meaning given such term in Section 4.20.1.
"Seller Indemnitees" shall have the meaning given such term in Section 13.1.2.
"Seller Plans" shall have the meaning given such term in Section 4.20.1
"Seller Representative" shall have the meaning given such term in Section 14.1.
"Seller Tax Returns" shall have the meaning given such term in Section 15.1.
"Shares" shall have the meaning given such term in Section 1.1.
"Statements of Operations" shall have the meaning given such term in Section
4.6.1.
"Sub" shall have the meaning given such term in the second paragraph of this
Agreement.
"Tax Claim" shall have the meaning given such term in Section 13.4.3.
"Tax Returns" shall have the meaning given such term in Section 4.8.1
"Taxes" shall have the meaning given such term in Section 4.8.
"Third Party" shall have the meaning given such term in Section 14.1.
"Title Policies" shall have the meaning given the term in Section 6.9.2.
"Title Policy Cost" shall have the meaning given the term in Section 6.9.4.
"UNR" shall have the meaning given such term in Section 3.2.3.
"WARN" shall have the meaning given such term in Section 6.6.11.
Annex A-5
71
EXHIBIT A
TRANSFER AGREEMENT
This Transfer Agreement is made as of the date set forth below
by and among ▇▇▇▇▇▇▇ Tube Company, Inc. ("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ Industrial
Group, LLC ("▇▇▇▇▇▇▇") to transfer plan sponsorship and administration of the
_____________, including any associated funding vehicle, (the "Plan or
Contract") from the ▇▇▇▇▇▇▇ controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code of 1986, as amended (the "Code"))
(the "▇▇▇▇▇▇▇ Control Group") to ▇▇▇▇▇▇▇.
WHEREAS, ▇▇▇▇▇▇▇ established and maintained the Plan or
Contract for the benefit of its eligible employees; and
WHEREAS, on ____________, 2001 (the "Transfer Date"), ▇▇▇▇▇▇▇
purchased a substantial portion of ▇▇▇▇▇▇▇'▇ assets and began employing the Plan
or Contract participants; and
WHEREAS, as of the date that ▇▇▇▇▇▇▇ purchased the assets of
▇▇▇▇▇▇▇, the members of the ▇▇▇▇▇▇▇ Control Group no longer employed the Plan or
Contract participants; and
WHEREAS, the ▇▇▇▇▇▇▇ Control Group desires to transfer
sponsorship and administration of the Plan or Contract, and ▇▇▇▇▇▇▇ desires to
assume sponsorship and administration of the Plan or Contract;
NOW, THEREFORE, in consideration of their mutual undertakings,
the parties hereto agree to the following:
1. ▇▇▇▇▇▇▇ hereby assumes sponsorship and administration of
the Plan or Contract and is hereby substituted for any current or former member
of the ▇▇▇▇▇▇▇ Control Group as "Employer" and "Administrator" under the Plan or
Contract as of the Transfer Date.
2. All references in the Plan or Contract to any current or
former member of the ▇▇▇▇▇▇▇ Control Group are hereby changed to references to
▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ assumes all powers, duties, rights, privileges, obligations
and liabilities of any such member under the Plan or Contract.
3. The Plan or Contract shall be maintained and administered
by ▇▇▇▇▇▇▇ in accordance with its terms subject to the same powers to amend or
terminate the Plan or Contract previously reserved to ▇▇▇▇▇▇▇.
4. Each current and former member of the ▇▇▇▇▇▇▇ Control
Group, to the fullest extent permitted by law, is hereby relieved of all
responsibilities and liabilities for actions taken with respect to the Plan or
Contract, including the obligation to make contributions and pay benefits under
the Plan or Contract, which are hereby expressly assumed by ▇▇▇▇▇▇▇.
5. ▇▇▇▇▇▇▇ shall be responsible for (a) filing any Annual
Return/Report of Employee Benefit Plan (IRS Form 5500 series) for the Plan or
Contract for any plan year ending after the Transfer Date, and (b) any penalties
assessed by any governmental agency with respect
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72
to such an Annual Return/Report. ▇▇▇▇▇▇▇ shall remain responsible for (a) filing
any Annual Return/Report of Employee Benefit Plan (IRS Form 5500 series) for the
Plan or Contract for any plan year ending before the Transfer Date, and (b) any
penalties assessed by any governmental agency with respect to such an Annual
Return/Report. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall cooperate with respect to such filings.
6. ▇▇▇▇▇▇▇ hereby assumes all the obligations under any and
all agreements with respect to the Plan or Contract between any member of the
▇▇▇▇▇▇▇ Control Group and any third party administrator, recordkeeper, trustee
or custodian.
7. ▇▇▇▇▇▇▇ shall be responsible for amending the Plan or
Contract as specified in Section 6.6.6 of the Agreement and to comply with the
Uruguay Round Agreements Act, the Uniformed Services Employment and Reemployment
Rights Act of 1994, the Small Business Job Protection Act of 1996, the Taxpayer
Relief Act of 1997, the Internal Revenue Service Restructuring and Reform Act of
1998 and any subsequent legislation.
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EXHIBIT B
OPINION OF CHASE'S AND ▇▇▇▇▇▇▇'▇ COUNSEL
As used herein, all capitalized terms shall have the meanings ascribed
to them in the Agreement.
1. Each of Chase, ▇▇▇▇▇▇▇ and Sub is a corporation, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has full corporate power and authority to carry on the business as now being
conducted by it and to own or holder under lease the Purchased Assets owned or
held under lease by it.
2. ▇▇▇▇▇▇▇ has full corporate power and authority to enter into the
Agreement, to sell, convey, assign, transfer and deliver the Shares and the
Purchased Assets to Purchaser as provided in the Agreement and to enter into and
carry out any other transactions and agreements contemplated thereby. Chase has
full corporate power to enter into the Agreement and perform its obligations
thereunder.
3. The authorized, issued and outstanding capital stock of Sub is as
set forth on Schedule 4.2.
4. All corporate and other proceedings required to be taken by or on
the part of ▇▇▇▇▇▇▇ to authorize ▇▇▇▇▇▇▇ to execute and deliver the Agreement,
to sell, convey, assign, transfer and deliver the Purchased Assets and the
Shares pursuant to the Agreement and to enter into and carry out the other
transactions contemplated thereby, have been fully and properly taken. All
corporate and other proceedings required to be taken by or on the part of Chase
to authorize Chase to execute and deliver the Agreement have been fully and
properly taken.
5. The Agreement has been fully executed and delivered by each of Chase
and ▇▇▇▇▇▇▇ and constitutes the valid and binding obligation of each of Chase
and ▇▇▇▇▇▇▇, enforceable against each of Chase and ▇▇▇▇▇▇▇ in accordance with
its terms, except as such terms may be limited by (i) any applicable bankruptcy,
reorganization, moratorium or similar laws, now or hereafter in effect,
affecting the enforceability of creditors' rights generally or (ii) general
principles of equity; provided, that Chase's and ▇▇▇▇▇▇▇'▇ counsel shall not be
required to express any opinion as to the valid and binding effect or
enforceability of the provisions of Section 11.15 of the Agreement.
6. The execution and delivery of the Agreement by each of Chase and
▇▇▇▇▇▇▇ and the consummation of the transactions contemplated thereby do not and
will not (i) conflict with or result in a breach of or constitute a default
under, (ii) result in the creation of any Lien, security interest, charge or
other encumbrance upon the Purchased Assets pursuant to, or (iii) give any third
party the right to accelerate any obligation under, any provision of: (1) the
certificates or articles of incorporation and bylaws of Chase or ▇▇▇▇▇▇▇, (2)
any indenture, mortgage, lease, loan agreement or other agreement or instrument
listed on Schedules 1.2.6 or 4.9, (3) any law, statute, rule or regulation known
to us to which ▇▇▇▇▇▇▇ is subject or (4) any judgment or decree known to us to
which ▇▇▇▇▇▇▇ is subject.
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74
7. No permit, consent, approval or authorization of, or declaration to
or filing with, any regulatory or other government authority is required in
connection with the execution and delivery of the Agreement by Chase or ▇▇▇▇▇▇▇
and the consummation of the transactions contemplated thereby, except those
which have been accomplished or obtained or waived in writing by Purchaser.
8. To our knowledge, there are no actions, suits, proceedings, orders,
investigations or claims pending or threatened against ▇▇▇▇▇▇▇, at law or in
equity, or before by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or other instrumentality, domestic
or foreign, which might adversely affect its performance under the Agreement or
the consummation of the transactions contemplated thereby.
Such counsel may qualify its opinion to the effect that it assumes the
laws of the State of Illinois are identical to the laws of the State of Texas.
Purchaser hereby consents in advance to such qualification.
Such opinion may contain customary and reasonable qualifications.
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75
EXHIBIT C
OPINION OF PURCHASER'S, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ COUNSEL
1. Purchaser is a Limited Liability Company validly existing in good
standing under the laws of the State of Illinois.
2. Each of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has all
requisite power and authority to enter into the Agreement and perform its
obligations thereunder.
3. All actions and other proceedings required to be taken by or on the
part of Purchaser to authorize Purchaser to execute and deliver the Agreement
and to enter into and carry out the other transactions contemplated thereby,
have been fully and properly taken.
4. The Agreement has been fully authorized, executed and delivered by
each of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and constitutes a valid
and binding obligation of each of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
enforceable in accordance with its terms against each of Purchaser, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, except as such terms may be limited by (i) any
applicable bankruptcy, reorganization, moratorium or similar laws, now or
hereafter in effect, affecting the enforceability of creditors' rights generally
or (ii) general principles of equity.
5. The execution and delivery of the Agreement by Purchaser, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the consummation of the transactions contemplated
thereby do not and will not (i) conflict with or result in a breach of or
constitute a default under, (ii) result in the creation of any Lien, security
interest, charge or other encumbrance upon the assets of Purchaser, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to, or (iii) give any third party the right
to accelerate any obligation under, any provision of: (1) the certificates or
articles of organization of Purchaser, (2) any indenture, mortgage, lease, loan
agreement or other agreement or instrument known to us (except Liens created
pursuant to financing agreements entered into by Purchaser for the purpose of
consummating the transactions contemplated hereby), (3) any law, statute, rule
or regulation known to us to which either of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is subject or (4) any judgment or decree known to us to which
either of Purchaser, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is subject.
6. To our knowledge, there are no actions, suits, proceedings, orders,
investigations or claims pending or threatened against Purchaser, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, at law or in equity, or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or other instrumentality, domestic or foreign, which might adversely
affect Purchaser's ▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇'▇ performance under the
Agreement or the consummation of the transactions contemplated thereby.
7. No permit, consent, approval or authorization of, or declaration to
or filing with, any regulatory or other governmental agency is required in
connection with the execution and delivery of the Agreement by Purchaser, ▇▇▇▇
▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the consummation of the transactions
contemplated thereby, except those which have been accomplished or obtained or
waived in writing by ▇▇▇▇▇▇▇.
Such opinion may contain customary and reasonable qualifications.
76
SCHEDULES
The Schedules to the Purchase and Sale Agreement included herewith as
Exhibit 2.1 have been omitted as permitted under item 601(b)(2) of Regulation
S-K. A list of omitted schedules is included at page (v) of the Purchase and
Sale Agreement included as Exhibit 2.1.
Chase Industries Inc. agrees to furnish supplementally to the Securities
and Exchange Commission a copy of any omitted schedule upon request.