EXHIBIT 10.2
CANADIAN STOCK PURCHASE AGREEMENT
---------------------------------
STOCK PURCHASE AGREEMENT
by and between
INTERLAKE PACKAGING CORPORATION
and
THE INTERLAKE COMPANIES, INC. AS SELLERS
and
▇▇▇▇▇▇ MANU-TECH INC., AS PURCHASER
dated
September 30, 1996
____________
STOCK PURCHASE AGREEMENT
------------------------
This STOCK PURCHASE AGREEMENT dated September 30, 1996 (as amended or
modified from time to time in accordance with the terms hereof, this "Agreement)
is by and between Interlake Packaging Corporation, a Delaware corporation
(together with its successors and permitted assigns, "Packaging"), and The
Interlake Companies, Inc., a Delaware corporation (together with its successors
and permitted assigns, "Interlake Companies"; together with Packaging,
"Sellers"), and ▇▇▇▇▇▇ Manu-Tech Inc., a corporation incorporated under the
laws of the Province of Ontario (together with its successors and permitted
assigns, "Purchaser").
R E C I T A L S:
A. Sellers own all of the issued and outstanding shares of the
capital stock of Acme Strapping Inc., a corporation incorporated under the
federal laws of Canada (the "Company").
B. The Company is in the businesses of manufacturing and supplying
steel and plastic strapping and edgeboard, and the machinery and tools to apply
such strapping, and of supplying product identification equipment, primarily to
the newspaper, lumber, metal, brick, textile, corrugated box, graphics, can,
bottle and distribution industries (collectively, the "Business").
C. Packaging is in the businesses of (i) supplying plastic strapping,
and the machinery and tools to apply such strapping, primarily to the newspaper,
textile, corrugated box, graphics, can, bottle and distribution industries and
(ii) manufacturing and distributing wire stitching equipment, primarily to the
graphic arts, fruit and produce growing and corrugated box manufacturing
industries (collectively, "Packaging's U.S. Businesses").
D. Interlake Companies owns directly or indirectly substantially all
of the issued and outstanding capital stock of Precis (935) Limited, a company
incorporated in England and Wales ("Precis").
E. Purchaser desires to acquire from Sellers, and Sellers desire to
sell to Purchaser, all of the issued and outstanding capital stock of the
Company on the terms and subject to the conditions hereinafter set forth.
F. Concurrently with Purchaser's purchase of all of the issued and
outstanding capital stock of the Company hereunder, Purchaser also desires to
acquire (or to cause ▇▇▇▇▇▇ Tennessee and ▇▇▇▇▇▇ U.K., respectively, to acquire)
(i) from Packaging, Packaging's U.S. Businesses and substantially all of the
assets of Packaging's U.S. Businesses and (ii) from Interlake Companies and the
other shareholders of Precis, all of the issued and outstanding capital stock of
Precis, pursuant to and in accordance with the terms and conditions of the U.S.
Asset
2.
Purchase Agreement (as hereinafter defined) and the U.K. Stock Purchase
Agreement (as hereinafter defined), respectively.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE 1
DEFINITIONS
-----------
1.1 Previously Defined Terms. Each term defined in the first paragraph
and Recitals of this Agreement shall have the meaning set forth above whenever
used herein, unless otherwise expressly provided or unless the context clearly
requires otherwise.
1.2 Definitions. In addition to the terms defined in the first paragraph
and Recitals of this Agreement, whenever used herein, the following terms shall
have the meanings set forth below unless otherwise expressly provided or unless
the context clearly requires otherwise.
"Acme License Agreements" means (i) that certain License Agreement,
dated as of July 1, 1985, between Interlake, Inc. and the Company, as heretofore
amended, and (ii) that certain Services Agreement, dated January 1, 1964 between
Acme Steel Company and the Company as heretofore amended.
"Acquired Businesses" means the Business, Packaging's U.S. Businesses
and the businesses of Precis and its subsidiaries, collectively.
"Affiliate" means, with respect to any Person, a Person that, directly
or indirectly is controlled by, controls, or is under common control with such
Person. As used in the preceding sentence, "control" shall mean and include, but
not necessarily be limited to, (i) the ownership of 50% or more of the voting
securities or other voting interests of any Person, of (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Ancillary Agreements" means the Pre-Signing Escrow Agreement and the
Post-Signing Escrow Agreement.
"Balance Sheet" means the unaudited consolidated balance sheet dated
June 30, 1996, of the Company and the Subsidiary, which constitutes a part of
the Financial Statements.
"Balance Sheet Liabilities" means those obligations and liabilities
relating to the operation of the Business.
"Business" has the meaning specified in the Recitals to this
Agreement.
3.
"Business Day" means any day of the year on which banks are not
required or authorized to be closed in Chicago, Illinois.
"Cass Strapping" means Cass Strapping Corporation, a Michigan
corporation.
"Closing" - See Section 3.1.
"Closing Date - See Section 3.1.
"Competition Act (Canada)" means the Competition Act, R.S.C. 1985,
c. C-34, as amended, and the regulations promulgated thereunder.
"Competition Act Opinion" means, as to any date, the unqualified legal
opinion of ▇▇▇▇▇ ▇▇▇▇▇, or such other Canadian legal counsel reasonably
acceptable to Sellers, to the effect that, were Sellers and Purchaser to have
consummated the transactions contemplated by this Agreement as of such date, or
at any time thereafter up to the date of such opinion, they would have been in
compliance with the merger provisions of the Competition Act (Canada),
including, without limitation, Section 123 regarding prenotification and
expiration of the twenty-one day waiting period.
"Consequential Damages" means any loss which is not the direct or
proximate result of any events described in Section 12.1 or Section 12.3 of
this Agreement.
"Contingent Liabilities" means those obligations (except for the
fulfilment of post-closing obligations under the Contracts) and liabilities
relating to the operation of the Business prior to the Effective Date and not
set forth on the Final Closing Balance Sheet (as defined in the U.S. Asset
Purchase Agreement) or under unfulfilled purchase orders or a Plan including,
without limitation, any such liability or obligation arising under any
Environmental Law, severance arrangement or with respect to any Taxes of the
Company or the Subsidiary.
"Contracts" means all contracts, agreements, license agreements,
purchase and sale orders, foreign exchange contracts, leases of machinery and
equipment, and conditional sales contracts and title retention agreements
relating to machinery and equipment, in each case, to which the Company or the
Subsidiary is a party and all other commitments and binding arrangements of the
Company or the Subsidiary, including, without limitation, the Contracts listed
in Section 7.11 of the Disclosure Letter.
"Date of the Notice of Claim" - See Section 12.7.
"Disclosure Letter" means the letter dated as of the date of this
Agreement and delivered by Sellers to Purchaser pursuant to Section 6.1(b)
simultaneously with the execution and delivery of this Agreement.
"Effective Date" means September 29, 1996 at 11:59 p.m. (Toronto time)
or such other date and time agreed to in writing by Seller and Purchaser.
4.
"Environmental Laws" means any applicable foreign, federal, provincial
or local law relating to: (a) releases or threatened releases of Hazardous
Substances; (b) the manufacture, handling, transport, use, treatment, storage or
disposal of Hazardous Substances or materials containing Hazardous Substances;
or (c) the imminent and substantial endangerment of the environment or the
protection of human health or safety.
"Facilities" means the facilities of the Company located on or forming
a part of the real property described in Section 7.12 of the Disclosure Letter.
"Financial Statements" means the unaudited consolidated balance sheet
and income statement for the Company and the Subsidiary at and for the year
ended December 31, 1995, and for the six months ended June 30, 1996 a copy of
each of which is set forth in Section 6.1(a) of the Disclosure Letter.
"First Anniversary" means the one-year anniversary of the Effective
Date.
"GAAP" means United States generally accepted accounting principles.
"Hazardous Substances" means any waste, contaminant, pollutant,
hazardous substance, toxic substance, hazardous waste, special waste, hazardous
industrial substance or waste, petroleum or petroleum-derived substance or
waste, or any constituent of any such substance or waste, to the extent
regulated under or defined by any applicable Canadian Environmental Law.
"Indemnitee" - See Section 12.4.
"Indemnitor" - See Section 12.4.
"Information" - See Section 13.1.
"Interlake Companies" has the meaning specified in the introductory
paragraph of this Agreement.
"Interlake Corporation" means The Interlake Corporation, a Delaware
corporation.
"Lien" means a mortgage, pledge, security interest, encumbrance, lien
or other charge, claim, right or adverse interest of another Person.
"Material Adverse Effect" means, relating to any occurrence of
whatever nature, any material adverse change in, or effect on:
(a) the Business or the present or projected business, revenues, financial
condition, operations or prospects of the Acquired Businesses, each taken as a
whole; or
5.
(b) the ability of Sellers to timely and fully perform any of their
material obligations hereunder or under the U.S. Asset Purchase Agreement or
the U.K. Stock Purchase Agreement or any document to be delivered in connection
herewith or therewith;
provided however, that Material Adverse Effect shall not include (i) any
industry-wide changes in the industries in which the Company is operating, (ii)
any changes in the general economic conditions in the United States, Canada or
the United Kingdom, or (iii) any general changes in the securities market in the
United States, Canada or the United Kingdom.
"Multiemployer Plan" - See Section 7.16.
"Notice of Claim" - See Section 12.4.
"Packaging" has the meaning specified in the introductory paragraph of
this Agreement.
"Packaging's U.S. Businesses" has the meaning specified in the
Recitals to this Agreement.
"Payables" means all accounts payable, notes payable, contract
payables and other payables which are obligations of the Company or the
Subsidiary.
"Permitted Exceptions" means, with respect to the real property
described in Section 7.12 of the Disclosure Letter, any Liens or exceptions
which, alone or in the aggregate, do not materially detract from, or materially
interfere with, the ownership, occupancy or use of the properties subject
thereto or affected thereby, or otherwise materially impair the operations
conducted thereon or affect in any material respect the value of the properties
subject thereto.
"Person" means any natural person, company, corporation, limited
liability company, partnership, joint venture, trust, association or
unincorporated entity of any kind.
"Plans" - See Section 7.16.
"Post-Signing Escrow Agreement" means that certain Escrow Agreement
made and entered as of the Closing Date by and among ▇▇▇▇▇▇ Trust & Savings
Bank, as escrow agent, Purchase and Seller, as heretofore or hereafter amended.
"Pre-Signing Escrow Agreement" means that certain Escrow Agreement
made and entered into as of July 29, 1996 among ▇▇▇▇▇▇ Trust & Savings Bank,
as escrow agent, The Interlake Corporation and Purchaser, as heretofore or
hereafter amended.
"Purchase Price" - See Section 2.2.
"Purchased Shares" means 4,000 common shares in the capital of the
Company.
6.
"Purchaser Indemnified Persons" - See Section 12.1.
"Receivables" means all accounts receivable, notes receivable,
contract receivables and other receivables owned by the Company or the
Subsidiary.
"Retained Assets" means all of the Company's rights, title and
interest in and to the following:
(a) all of the assets, properties, rights and business of the Company
relating to its material handling business, which is known as "Redirack"; and
(b) all other assets, properties, rights and interests of Sellers
described in Section 1.2 of the Disclosure Letter as Retained Assets.
"Retained Liabilities" means all of the Company's liabilities or
obligations relating to the said Redirack business except any obligations or
liabilities of the Plans with respect to former employees of the Redirack
business and except any liabilities or obligations for federal, provincial or
local taxes to the extent accrued on the Final Closing Balance Sheet (as defined
in the U.S. Asset Purchase Agreement).
"Returns" means all Tax returns and forms required to be filed or
furnished with respect to the Business.
"▇▇▇▇▇▇ Tennessee" means ▇▇▇▇▇▇ Strapping Systems (Tennessee), Inc.,
a Delaware corporation.
"▇▇▇▇▇▇ U.K." means ▇▇▇▇▇▇ Strapping Systems (U.K.) Ltd., a company
organized under the laws of England.
"Seller Indemnified Persons" - See Section 12.3.
"Senior Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of September 27, 1989 and Amended and Restated as of May 28,
1992, among The Interlake Corporation, certain of its subsidiaries, The
Interlake Corporation Employee StockOwnership Trust, acting by and through The
LaSalle National Bank, as Trustee, various banks party thereto, Chemical Bank,
as Administrative Agent, and The First National Bank of Chicago, as Co-Agent,
as amended, modified or supplemented from time to time.
"Subsidiary" means Seal-less Strapping Industries Limited, a company
organized under the laws of Canada.
"Subsidiary Stock" means 5 common shares in the capital of the
Subsidiary.
"Tangible Assets" means, as of the Effective Date, all tangible assets
of the Business other than the Retained Assets including all prepaid assets.
7.
"Tangible Net Worth" means, as of the Effective Date, the value of the
Tangible Assets of the Business, minus the Balance Sheet Liabilities, in each
case as determined in accordance with Section 2.3 as of the Effective Date.
"Tax" or "Taxes" means all income, gross receipts, sales, use,
employment, franchise, profits, property, excise or other taxes, fees, stamp
taxes and duties, assessments or charges of any kind whatsoever (whether payable
directly or by withholding), together with all interest and all penalties,
additions to tax or additional amounts imposed by any taxing or other authority
with respect thereto.
"Third Anniversary" means the three-year anniversary of the Effective
Date.
"Third Party Debt" - See Section 2.2.
"Transferred Intercompany Account" means any account on the books and
records of the Company or the Subsidiary that evidences amounts either payable
by the Company or the Subsidiary to, or receivable by the Company or the
Subsidiary from, Packaging (but only to the extent relating to Packaging's U.S.
Businesses) or Precis (or any direct or indirect subsidiary of Precis).
"U.K. Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of the date hereof by and among Strapping U.K., Interlake Companies and
the other shareholders of Precis, as amended or modified from time to time in
accordance with the terms thereof.
"U.S. Asset Purchase Agreement" means the Asset Purchase Agreement
dated as of the date hereof by and between ▇▇▇▇▇▇ Tennessee and Packaging, as
amended or modified from time to time in accordance with the terms thereof.
1.3 Interpretation. Unless the context of this Agreement otherwise
requires, (a) words of any gender shall be deemed to include each other gender,
(b) words using the singular or plural number shall also include the plural or
singular number, respectively, (c) references to "hereof", "herein", "hereby",
"hereunder" and similar terms shall refer to this entire Agreement and (d)
unless otherwise specified herein, each reference to an "Article" or "Section"
is to an Article or Section of this Agreement, and each reference to an
"Exhibit" is to an Exhibit attached to and made a part of this Agreement.
1.4 Exchange Rate. If any amounts calculated pursuant to, or referred to
in, this agreement in Canadian dollars are required for the purposes of this
agreement to be converted at any time into US dollars, a conversion rate equal
to the mid-range spot rate as at the close of business on 27 September 1996, as
set out in the Wall Street Journal shall be applied.
8.
ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE
AND OTHER RELATED MATTERS
-------------------------
2.1 Purchase and Sale. Upon the terms and subject to the conditions
of this Agreement, at the Closing on the Closing Date, Sellers shall sell,
assign, convey, transfer and deliver to Purchaser, and Purchaser shall acquire
from Sellers, the Purchased Shares.
2.2 Consideration.
(a) The purchase price (the "Purchase Price") payable by Purchaser for
the Purchased Shares shall be an amount equal to (i) THIRTY MILLION DOLLARS
($30,000,000), plus (ii) the amount of all cash and cash equivalents of the
Company and the Subsidiary as of the Effective Date, plus (iii) the amount of
any and all Receivables of the Company and the Subsidiary as of the Effective
Date that are owed to the Company or the Subsidiary by either Seller or any
Affiliates of either Seller (other than any such Receivables that constitute
Transferred Intercompany Accounts), minus (iv) all indebtedness of the Company
or the Subsidiary for money borrowed from third party nonaffiliated lenders
("Third Party Debt") which is outstanding as of the Effective Date, minus (v)
the amount of any and all Payables of the Company and the Subsidiary as of the
Effective Date that are owed by the Company or the Subsidiary to either Seller
or any Affiliates of either Seller (other than any such Payables that constitute
Transferred Intercompany Accounts). The Purchase Price may also be adjusted as
provided for in Section 12.2(i). One day prior to the Closing Date, Sellers
shall provide to Purchaser a certification as to the amounts of each of the
items described in clauses (ii), (iii), (iv) and (v) of this Section 2.2(a).
(b) At the Closing on the Closing Date, Purchaser shall pay the
Purchase Price to Sellers, on a pro rata basis in accordance with the respective
percentage of Purchased Shares owned by Sellers as set forth in Section 7.21 of
the Disclosure Letter, less the sum of any amounts paid out to Sellers at or
prior to the Closing from the Purchaser Fund pursuant to the Pre-Signing Escrow
Agreement, by the wire transfer of immediately available federal funds to the
respective accounts designated in writing by Sellers to Purchaser prior to the
Closing Date.
2.3 Sales and Transfer Taxes. The Sellers shall pay one-half and the
Purchaser shall pay one-half of the cost of any and all stamp, transfer, goods
and services, sales, purchase, use, filing, value added, excise and similar
taxes and fees which arise out of the transactions contemplated by this
Agreement, the U.S. Asset Purchase Agreement and the U.K. Stock Purchase
Agreement including, without limitation, any stamp or transfer tax or filing fee
relating to the transfer of shares of capital stock, whether now in effect or
hereafter adopted and regardless of upon whom said tax or fee is imposed, but
excluding any tax on or measured by net or gross income or gain of either
Seller.
9.
ARTICLE 3
CLOSING AND CLOSING DATE DELIVERIES
-----------------------------------
3.1 Closing. The term "Closing" as used herein shall refer to the
actual sale, assignment, conveyance, transfer and delivery of the Purchased
Shares to Purchaser in consideration for the payment to Sellers of the Purchase
Price. Subject to Section 11.1 hereof, the Closing shall take place at the
offices of ▇▇▇▇▇ ▇▇▇▇▇, Suite 5800, Scotia Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, or at such other place in Canada as is mutually agreed in
writing by Sellers and Purchaser, at 10:00 a.m. Toronto time on the later of (A)
October 4, 1996, and (B) fifth Business Day occurring after the earliest date on
which all of the conditions set forth in Articles 9 and 10 below have been or
are capable of being satisfied or at such other time and/or date as is mutually
agreed in writing by Seller and Purchaser (the "Closing Date").
3.2 Closing Deliveries by Sellers. At the Closing on the Closing Date,
Sellers shall deliver to Purchaser:
(a) certificates representing all of the Purchased Shares and the
Subsidiary Stock, with the certificates representing the Purchased Shares being
either duly endorsed or accompanied by stock powers duly executed;
(b) written resignations, effective on the Closing Date, of those
directors of the Company and the Subsidiary that Purchaser shall have requested
prior to the Closing together with written resignations of those officers of the
Company and the Subsidiary who are not employees thereof;
(c) releases in favour of the Company and the Subsidiary from those
persons referred to in Section 3.2(b);
(d) all corporate and other records of the Company and the Subsidiary
held by Sellers, including but not limited to, minute books, stock books and
registers, corporate seals, books of account, Contracts, financial records and
personnel records;
(e) Articles of Incorporation or Amalgamation of each of the Company
and the Subsidiary, each certified as of the date not earlier than ten (10) days
prior to the Closing Date by Industry Canada, Corporations Directorate;
(f) certificates dated as of a date not earlier than ten (10) days
prior to the Closing Date, of the appropriate governmental offices where the
Company and the Subsidiary are organized and each of the jurisdictions in which
the Company and the Subsidiary are qualified to transact business as a foreign
entity as to the qualification of the Company and the Subsidiary, as the case
may be, in such jurisdictions;
(g) By-laws of each of the Company and the Subsidiary certified, as of
the Closing Date, by its corporate secretary;
10.
(h) certified copies of (i) minutes or unanimous written consents of
the Board of Directors of each Seller approving the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement and (ii) the consent of either the majority of
the directors of the Company or the majority of the shareholders of the Company
to the sale of the Purchased Shares pursuant to this Agreement;
(i) a certificate, dated the Closing Date, executed by an appropriate
officer of each Seller, as required by Section 9.2;
(j) a certificate pursuant to section 116 of the Income Tax Act
(Canada) with respect to the sale of the Purchased Shares;
[(k) Intentionally deleted;] and
(l) such other documents as Purchaser may reasonably request to carry
out the purposes of this Agreement, including, but not limited to, the documents
to be delivered pursuant to Article 9.
3.3 Closing Deliveries by Purchaser. At the Closing on the Closing Date,
Purchaser shall deliver to Sellers:
(a) the payment to be delivered by Purchaser pursuant to Section
2.2(b);
(b) certified copies of minutes or unanimous written consents of the
Board of Directors of Purchaser approving the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated under this Agreement;
(c) the opinion of ▇▇▇▇▇ ▇▇▇▇▇, Canadian counsel for Purchaser, dated
the Closing Date, covering the matters set forth in the form attached hereto as
Exhibit 3.3(c);
(d) the certificate, dated the Closing Date, executed by the
appropriate officer of Purchaser, as required by Section 10.2;
(e) releases of the officers and directors referred to in Section
3.2(b), in form reasonably satisfactory to the Sellers; and
(f) such other documents as Sellers may reasonably request to carry
out the purposes of this Agreement, including, but not limited to, the documents
to be delivered pursuant to Article 10.
3.4 Cooperation. Sellers and Purchaser shall, on request on and after the
Closing Date, cooperate with one another by furnishing any and all additional
information, executing and delivering any and all additional documents and/or
instruments and doing any and all such other things as may be reasonably
requested by the other party to consummate or otherwise implement the
transactions contemplated by this Agreement.
11.
ARTICLE 4
PRE-CLOSING FILINGS
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4.1 Government Filings. Sellers and Purchaser covenant and agree with
each other to (a) promptly file, or cause to be promptly filed, with any
Canadian agency or any province or local governmental body or agency, all
notices, applications or other documents as may be necessary to consummate the
transactions contemplated hereby, including, without limitation, any and all
filings or notices required under the Competition Act (Canada) and (b)
thereafter diligently pursue all consents or approvals from any such
governmental agencies or bodies as may be necessary to consummate the
transactions contemplated hereby.
ARTICLE 5
PRE-CLOSING COVENANTS
---------------------
5.1 Conduct of Business Prior to Closing. (a) During the period from
the date hereof to the Closing Date, Sellers shall cause the Company to:
(i) use its reasonable efforts to preserve substantially intact the
business organization of the Business, to keep available the
services of the present employees of the Business and to
preserve the current relationships of the Company with the
customers, suppliers and other Persons having a material
business relationship with the Business; and
(ii) operate the Business in the ordinary course consistent with
prior practice, except as set forth in Section 5.1(a) of the
Disclosure Letter or as otherwise contemplated by this
Agreement.
(b) Each Seller covenants and agrees with Purchaser that during the
period from the date hereof to the Closing Date such Seller shall not, except
with the prior written consent of Purchaser, cause or permit the Company to: (i)
materially change its accounting methods, principles or practices; (ii)
establish or materially increase any bonus, insurance, severance, deferred
compensation, pension, profit sharing or other employee benefit plan or
otherwise increase the rates of compensation payable or to become payable to any
officer, employee, agent or consultant employed by the Company, except in the
ordinary course of business consistent with prior practice or in accordance with
existing compensation policies or the provisions of existing contracts entered
into prior to the date of this Agreement; (iii) sell, transfer, mortgage or
acquire any of the Company's assets other than in the ordinary course of
business consistent with prior practice or as disclosed to Purchaser prior to
the date hereof; (iv) merge or consolidate with any other Person; (v) declare,
pay or set aside for payment any dividend or other distribution in respect of
its capital stock, other than those payable in cash or Retained Assets; (vi)
directly or indirectly, redeem, purchase or otherwise acquire any shares of its
capital stock, other than for
12.
cash or Retained Assets; (vii) issue, sell or otherwise dispose of any of its
shares of capital stock or grant any options, warrants or other rights to
acquire any of its shares of capital stock; or (viii) amend its charter
documents in any material respect; provided, however, that, prior to the
Closing, Sellers may cause the Company or the Subsidiary to pay to its employees
any or all bonuses accrued on or prior to the Closing Date.
(c) Notwithstanding anything in this Agreement to the contrary,
Purchaser acknowledges and agrees that Sellers intend to cause the Company,
prior to or at the Closing, to cancel all intercompany service and supply
arrangements (other than the Acme License Agreements, which such agreements will
be assigned at the Closing under the U.S. Purchase Agreement by Packaging).
(d) Notwithstanding anything in this Agreement to the contrary,
Purchaser acknowledges and agrees that, prior to the Closing, Sellers may cause
the Company to dividend, distribute or otherwise convey the Retained Assets to
Sellers or their designees, provided that the method of such conveyance has
received the prior written consent of the Purchaser, such consent not to be
unreasonably withheld.
(e) During the period from the Effective Date to the Closing Date,
Sellers will not cause and will not permit the Company or the Subsidiary to
dividend, distribute or otherwise convey any amount of cash or any other assets
to, or incur any new obligation to Seller or any of Seller's Affiliates other
than Precis or any of its direct or indirect subsidiaries or Packaging's U.S.
Buinesses; provided, that nothing in this Section 5.1(e) shall be deemed to
prohibit or prevent, during the period between the Effective Date and the
Closing, the settlement of intercompany accounts as contemplated by Section 9.10
and 10.10.
5.2 Access to Information. From the date hereof until the Closing, upon
reasonable notice, Sellers shall cause the Company, the Subsidiary and each of
their respective officers, directors, employees, auditors and agents to: (a)
afford the officers, employees and authorized agents and representatives of
Purchaser reasonable access, during normal business hours, to the offices,
properties, books and records of the Business, the Company and the Subsidiary
and (b) furnish to the officers, employees and authorized agents and
representatives of Purchaser such additional financial and operating data and
other information regarding the assets, properties, goodwill and business of the
Business, the Company and the Subsidiary as Purchaser may from time to time
reasonably request; provided, however, that such investigation shall not
unreasonably interfere with any of the businesses or operations of the Company
or any of its Affiliates or subsidiaries.
ARTICLE 6
FINANCIAL STATEMENTS; DISCLOSURE LETTER;
FINANCING COMMITMENT LETTER
---------------------------
6.1 Pre-Signing Deliveries by Sellers. Sellers have heretofore delivered
to Purchaser:
13.
(a) the Financial Statements; and
(b) the Disclosure Letter, together with (or preceded by) a copy of
each Contract listed in Section 7.11 thereof and containing all of the
information required by the terms of this Agreement to be contained therein.
6.2 Pre-Signing Deliveries by Purchaser. Purchaser has heretofore
delivered to Sellers a true and complete copy of the written binding commitment
of a reputable lending institution to provide the funds necessary for Purchaser,
▇▇▇▇▇▇ Tennessee and ▇▇▇▇▇▇ U.K. to purchase the Purchased Shares hereunder,
Packaging's U.S. Business under the U.S. Asset Purchase Agreement and all of the
outstanding shares of Precis under the U.K. Stock Purchase Agreement.
ARTICLE 7
WARRANTIES AND REPRESENTATIONS OF SELLERS
-----------------------------------------
Sellers, jointly and severally, warrant and represent to Purchaser
(which warranties and representations shall, subject to Section 12.2(a), survive
the Closing) as follows:
7.1 Incorporation and Qualification of the Company, the Subsidiary and
Sellers.
(a) The Company is a corporation validly existing under the laws of
Canada and has all requisite corporate power and authority to own, operate and
lease the assets it now owns, operates or leases and to carry on the Business as
it is currently conducted.
(b) Except as set forth in Section 7.1 of the Disclosure Letter, the
Company is duly licensed or qualified to do business in each jurisdiction in
which the properties owned or leased by it or the operation of the Business
makes such licensing or qualification necessary, except where the failure to be
so licensed or qualified would not, individually or in the aggregate, have a
Material Adverse Effect.
(c) The Subsidiary is a corporation validly existing under the laws of
Canada and has all requisite corporate power and authority to own, operate and
lease the assets it now owns, operates or leases and to carry on its business as
it is currently conducted.
(d) The Subsidiary is duly licensed or qualified to do business in
each jurisdiction in which the properties owned or leased by it or the operation
of its business makes such licensing or qualification necessary, except where
the failure to be so licensed or qualified would not, individually or in the
aggregate, have a Material Adverse Effect.
(e) Each Seller is a corporation validly existing and in good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own, operate and lease the assets it now owns, operates or
leases and to carry on its business as it is currently conducted.
14.
7.2 Authority. Each Seller has all requisite corporate power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby. The execution and delivery of this Agreement by Sellers, the performance
by Sellers of their respective obligations hereunder and the consummation by
Sellers of the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of each Seller. This Agreement has been
duly executed and delivered by each Seller and (assuming the due authorization,
valid execution and delivery hereof by Purchaser) is a legal, valid and binding
obligation of each Seller, enforceable against each Seller in accordance with
its terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
7.3 No Conflict. Assuming all consents, approvals, authorizations and
other actions described in Section 7.4 have been obtained and all filings and
notifications listed in Section 7.4 of the Disclosure Letter have been made or
given (except as may result from any facts or circumstances relating solely to
Purchaser), the execution, delivery and performance of this Agreement by Sellers
do not and will not: (a) except as set forth in Section 7.3 of the Disclosure
Letter, or as would not have a Material Adverse Effect, conflict with or violate
any provision of the organizational documents of the Company or either Seller;
(b) except as set forth in Section 7.3 of the Disclosure Letter or as would not
have a Material Adverse Effect, result in any breach of, or constitute a default
(or event with which the giving of notice or lapse of time, or both, would
become a default) under, or give to any Person any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Lien on any of the assets of the Company or the Purchased Shares pursuant to,
any Contract or any instrument, license, agreement or commitment to which either
Seller is a party or by which either Seller is bound; or (c) except as set forth
in Section 7.3 of the Disclosure Letter or as would not have a Material Adverse
Effect, conflict with or violate any law, rule, regulation, order, writ,
judgment, injunction or decree applicable to the Company, the Subsidiary, the
Purchased Shares, the Business or either Seller.
7.4 Consents and Approvals. The execution and delivery by Sellers of this
Agreement do not, and compliance by Sellers with the terms hereof and
consummation by Sellers of the transactions contemplated hereby will not,
require either Seller or the Company to obtain any consent, approval,
authorization or other action of, or make any filing with or give any notice to,
any court, administrative agency or other governmental authority, except (a) as
disclosed in Section 7.4 of the Disclosure Letter, (b) pursuant to the
applicable requirements of the Competition Act (Canada), (c) where failure to
obtain such consents, approvals, authorizations or actions, make such filings or
give such notices would not have a Material Adverse Effect and (d) as may be
necessary as a result of any facts or circumstances relating solely to
Purchaser.
7.5 Brokers. Neither this Agreement nor the sale of the Purchased Shares
nor any other transaction contemplated by this Agreement was induced or procured
through any Person acting on behalf of or representing either Seller or any of
their respective Affiliates as broker, finder, investment banker, financial
advisor or in any similar capacity.
15.
7.6 No Subsidiaries. Except for the Subsidiary Stock, the Company does not
own any capital stock or other equity securities or any other direct or indirect
equity interest in any Person.
7.7 Intellectual Property.
(a) To the knowledge of Sellers, except as set forth in Section 7.7
or 7.14 of the Disclosure Letter, there is not now and has not been during the
past three (3) years any infringement, misuse or misappropriation in any
material respect by the Company or the Subsidiary of any valid patent,
trademark, trade name, service ▇▇▇▇, copyright or trade secret which is owned by
any other Person, and there is not now any existing or, to the knowledge of
Sellers, any threatened claim asserted in writing against the Company or the
Subsidiary of any infringement, misuse or misappropriation in any material
respect by the Company or the Subsidiary of any patent, trademark, trade name,
service ▇▇▇▇, copyright or trade secret. All material patents, trademarks,
service marks, tradenames, copyrights, and all applications and registrations
thereof, used in connection with the operation of the Business are set forth in
Section 7.7 of the Disclosure Letter ("Proprietary Rights"). Except as set forth
in Section 7.7 of the Disclosure Letter, Sellers and their Affiliates are the
sole and exclusive owners of, or have the sole and exclusive right to use, the
Proprietary Rights.
(b) Except as described in Section 7.14 of the Disclosure Letter,
there is no pending or threatened claim by the Company or the Subsidiary against
any other Person for infringement, misuse or misappropriation of any patent,
trademark, trade name, service ▇▇▇▇, copyright or trade secret owned by the
Company or the Subsidiary.
7.8 Financial Statements. Each of the Financial Statements is consistent
with the books and records of the Company and the Subsidiary and fairly presents
the financial condition, assets and liabilities of the Business as of their
respective dates and the results of operations for the periods related thereto
in accordance with GAAP consistently applied among the periods which are the
subject of the Financial Statements.
7.9 Compliance with Laws. On the Closing Date, to the knowledge of
Sellers, neither the Company nor the Subsidiary will be in violation of any law,
rule or regulation, or any order, judgment or decree, in any case applicable to
the Company or the Subsidiary or by which any of their respective properties are
bound or affected, except (a) as set forth in Section 7.9 of the Disclosure
Letter and (b) for violations the existence of which could not reasonably be
expected to have a Material Adverse Effect; provided, however, that Purchaser
acknowledges and agrees that Sellers' representations under this Section 7.9 are
not made with respect to any Environmental Laws and that Sellers'
representations and warranties with respect to Environmental Laws are made only
in Section 7.18.
7.10 Licenses and Permits. Except as set forth in Section 7.10 of the
Disclosure Letter, to the knowledge of Sellers, each of the Company and the
Subsidiary has, or has applied for, all material governmental licenses,
franchises, permits, approvals, authorizations, exemptions, certificates,
registrations and similar documents or instruments necessary to carry on the
Business as it is currently conducted, except for such governmental licenses,
franchises, permits, approvals,
16.
authorizations, exemptions, certificates, registrations and similar documents or
instruments the absence of which would not have a Material Adverse Effect;
provided, however, that Purchaser acknowledges and agrees that Sellers'
representations under this Section 7.10 are not made with respect to any
Environmental Laws and that Sellers' representations and warranties with respect
to Environmental Laws are made only in Section 7.18.
7.11 Material Contracts.
(a) Section 7.11 of the Disclosure Letter lists or describes all
currently existing Contracts which involve an executory obligation of more than
$100,000 in any one calendar year, except Contracts which are terminable by the
Company or the Subsidiary without penalty on no more than thirty (30) days'
notice. Complete and correct copies of all Contracts listed in Section 7.11 of
the Disclosure Letter have been delivered to or made available for inspection by
Purchaser.
(b) Neither the Company or the Subsidiary nor, to the knowledge of
either Seller, any other Person, is in material breach of, or material default
under, any Contract and no event or action has occurred, is pending or, to the
knowledge of either Seller, is threatened, which after the giving of notice, or
the lapse of time, or both, could reasonably be expected to constitute or result
in a material breach by the Company or the Subsidiary or, to the knowledge of
either Seller, any other Person, under any Contract.
7.12 Real Properties. Section 7.12 of the Disclosure Letter sets forth a
true and complete list and brief description of all real property owned, leased
or used by the Company or the Subsidiary, as landlord, tenant or otherwise. The
Company has good and marketable title to all real properties described in
Section 7.12 of the Disclosure Letter as being owned by it, except for Permitted
Exceptions and except as disclosed in the Disclosure Letter.
7.13 Tangible Personal Property. The Company has good title to all the
material assets consisting of tangible personal property purported to be owned
by it and valid and subsisting leases with respect to all of the material assets
consisting of tangible personal property purported to be leased by the Company.
All such owned tangible personal property is owned free and clear of all Liens,
except: (a) as set forth in Section 7.13 of the Disclosure Letter; (b) liens for
Taxes and assessments not yet payable; (c) liens for Taxes, assessments and
charges and other claims, the validity of which the Company is contesting in
good faith; and (d) imperfections of title and Liens the existence of which
could not be reasonably expected to have a Material Adverse Effect.
7.14 Litigation. Except as set forth in Section 7.14 of the Disclosure
Letter, (a) there are no actions, claims, proceedings or governmental
investigations pending or, to the knowledge of either Seller, threatened against
the Company, the Subsidiary, the Business or any of the assets of the Company or
the Subsidiary at law or in equity, before or by any federal, provincial or
municipal court, agency or other governmental entity, or by any other Person,
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and (b) neither the Business nor any of the assets of
the Company or the Subsidiary is subject to any
17.
order, judgment or decree of any court or governmental agency having or which
could reasonably be expected to have a Material Adverse Effect.
7.15 Labour Matters. Section 7.15 of the Disclosure Letter contains a list
of the collective bargaining agreements to which the Company or the Subsidiary
is a party. Except as disclosed in Section 7.15 of the Disclosure Letter, (a)
there are no labour controversies pending or, to the knowledge of either Seller,
threatened against the Company or the Subsidiary which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect;
and (b) there are no grievances outstanding, or unfair labour practice
complaints pending before any applicable authorities, against the Company or the
Subsidiary under any such agreement or contract which could reasonably be
expected to have a Material Adverse Effect.
7.16 Employee Benefit Matters. Section 7.16 of the Disclosure Letter lists
all employee benefit plans contributed to or entered into by the Company or the
Subsidiary, or to which the Company or the Subsidiary is or has been obligated
to contribute, in either case within the last five (5) years (the "Plans").
Except as set forth in Section 7.16 of the Disclosure Letter, no Plan is a
multiemployer plan established pursuant to a trust agreement or a collective
bargaining agreement (a "Multiemployer Plan"). With respect to the Plans,
Sellers further represent and warrant to Purchaser that, to the best of their
knowledge and belief and except as set forth in Section 7.16 of the Disclosure
Letter or to the extent that the failure of any of the representations set forth
in this sentence could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect:
(a) Each Plan has been duly registered where required, and is in good
standing under, conforms in all material respects to, and its administration
complies with, all applicable legislation, regulatory requirements, orders or
governmental rules, including without limitation, the Pension Benefits Act
(Ontario), the Income Tax Act (Canada) and, where required, Revenue Canada
Customs, Excise and Taxation Information Circular 72-13R8 (collectively,
"Applicable Legislation").
(b) All of the Plans are in full force and effect as written, and the
Company has performed all material obligations required to be performed by it
under, and is not in material default under, or in material violation of any
Plan. Without limiting the generality of the foregoing, all premiums,
contributions and other payments required to be made by the Company and any
other party under the terms of any Plan maintained by the Company with respect
to the Business that is a pension plan as defined in Section 1 of the Pension
Benefits Act (Ontario) (a "Pension Plan") have been made for all such Pension
Plans, and no amounts are owed in respect of the period prior to the Effective
Date. All amounts properly accrued to the date hereof as liabilities of the
Company under or with respect to each Plan which have not been paid are set
forth in Section 7.16 of the Disclosure Letter. The Pension Plans are funded on
a proper actuarial basis (consistently applying the assumptions used in the
actuarial reports of September 29, 1995) having regard to the benefits to be
provided by such plans.
(c) All premiums, contributions and other payments required to be made
under all Applicable Legislation by the Company before the Closing Date with
respect to the Pension Plans
18.
will have been made before the Closing Date to each of the funds established for
the Pension Plans in accordance with Applicable Legislation. From the date
hereof to the Closing Date, the Company shall not improve or promise to improve
any benefits provided or to be provided in accordance with the terms of the
Plans as of the date hereof, unless required by law or collectively negotiated
agreement.
Sellers may, however, cause the Company to pay prior to Closing any
bonuses to the extent accrued to such time.
(d) None of the Pension Plans has been wound-up in whole or in part or has
been subject to a revocation, an order or a declaration by the Pension
Commission of Ontario or the Superintendent of Pensions pursuant to the
provisions of the Pension Benefits Act (Ontario), or by other applicable pension
authorities pursuant to Applicable Legislation. No proceedings by the
Superintendent of Pensions to wind-up or revoke the registration status of any
of the Pension Plans pursuant to the provisions of the Pension Benefits Act
(Ontario) have been ordered, instituted or threatened by the Superintendent of
Pensions or any other individual, and no similar proceedings have been ordered,
instituted or threatened by any other applicable pension authority.
(e) There are no material actions, suits or claims pending, other than
routine claims for benefits, or, to the knowledge of the Company, threatened
against the Company in respect of employees who are members of any of the
Pension Plans, against any of the Pension Plans, or against the assets of any
Pension Plan.
(f) The Company does not maintain any Plan providing post-retirement
benefits other than pension benefits provided under the Pension Plans registered
in accordance with the Applicable Legislation. The financial obligation for
post-retirement benefits has been determined in accordance with generally
accepted actuarial practice and is reflected in the Financial Statements in
accordance with GAAP. The Company is not currently liable for post-retirement
benefits with respect to the Business under any Plan which has been wound up and
is not now maintained by the Company.
7.17 Taxes. Each of the Company and the Subsidiary has duly and timely
filed with the appropriate Canadian or foreign federal, provincial, state,
municipal and local authorities or Governmental Agencies all tax returns and
reports required to be filed by it; all such returns and reports were complete
and correct in all material respects; and, except to the extent reflected or
reserved against in the Final Closing Balance Sheet (as defined in the U.S.
Asset Purchase Agreement), each of the Company and the Subsidiary has paid all
taxes, levies, duties, assessments, deficiencies and imposts of any nature or
kind and any related penalties and interest (collectively, "Taxes") due to, or
claimed to be due from it by, any taxing authority. The Financial Statements
include adequate provision for all Taxes which relate to the business,
operations, properties or assets of the Company or the Subsidiary through the
periods indicated thereon which are not yet due and owing to the appropriate
taxing authority. All Taxes that the Company or the Subsidiary is or was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the appropriate taxing authority.
There are no Tax-related liens on the assets of the Company or the Subsidiary.
Neither
19.
the Subsidiary nor the Company has executed or filed with any taxing authority
any agreement extending the period for assessment or collection of Taxes. The
Company is not a party to any pending action or proceeding, nor (to the best of
the knowledge of Sellers or the Company) is any such action or proceeding
threatened by any Governmental Agency, for the collection of Taxes. No claim for
assessment or collection of Taxes has been asserted against the Company or the
Subsidiary nor (to the knowledge of Sellers or the Company) is there any basis
for any such claim. No issue has been raised by any taxing authority in respect
of an audit or examination of any Tax return or report filed by the Company or
the Subsidiary which has not been settled or resolved, and no examination or
audit of any Tax return or report filed by the Company or the Subsidiary is
currently in progress or, to the best of the knowledge of Sellers or the
Company, threatened or contemplated by any Governmental Agency other than by the
Province of Ontario. The Company or the Subsidiary is not a party to any
agreement providing for the sharing or allocation of any Tax liability.
Notwithstanding any other provision of this Section 7.17, Sellers shall not be
deemed to be in breach of this Section 7.17 by virtue of any Taxes with respect
to any period including or ending prior to the Effective Date which results from
Purchaser causing the write-up of assets.
7.18 Environmental Compliance.
(a) Compliance. To the knowledge of Sellers, except as set forth in
Section 7.18 of the Disclosure Letter (i) the Company and the Subsidiary are in
compliance with all applicable Environmental Laws as presently in effect, (ii)
the Company possesses all required permits, licenses, certifications and
approvals under the Environmental Laws as presently in effect relating to the
use, occupancy or operation of the Business, and (iii) the Company and the
Subsidiary are in compliance with all requirements or conditions imposed under
their permits, licenses, certifications and approvals, and have filed all
required notices and applications.
(b) No Hazardous Substance. Except as set forth in Section 7.18 of the
Disclosure Letter, neither the Company nor the Subsidiary has ever generated,
used, transported, treated, stored, disposed of or otherwise handled any
Hazardous Substance at any site, location or facility in connection with the
use, occupancy or operation of the Business, other than in compliance in all
material respects with Environmental Laws in effect at the time in question.
Except as set forth in Section 7.18 of the Disclosure Letter, neither the
Company nor the Subsidiary has owned or operated any underground storage tanks
("USTs") in connection with the use or occupancy by the Company or the
Subsidiary of its real property or the operation of its Business, other than in
compliance in all material respects with all applicable Environmental Laws.
Except as set forth in Section 7.18 of the Disclosure Letter, to the knowledge
of Seller, there has been no release, spill or discharge of any Hazardous
Substance in connection with the use or occupancy of its real property or the
operation of its Business in material violation of or requiring reporting,
removal or remediation under any Environmental Laws in effect at the time in
question which has not been reported, removed or remediated, as the case may be.
(c) No Actions or Proceedings. Except as set forth in Section 7.18 of the
Disclosure Letter, neither the Company nor the Subsidiary is subject to, nor, to
Sellers' knowledge, is the subject of, any threatened private, administrative or
judicial inquiry, investigation, order or action
20.
resulting from or relating to violations of or obligations under Environmental
Laws, including without limitation liabilities relating to the generation,
transportation, treatment, storage, disposal or other handling of Hazardous
Substance in connection with the use or occupancy of its real property or the
operation of its Business.
(d) Other Conditions. Except as set forth in Section 7.18 of the
Disclosure Letter, to the knowledge of the Sellers, no facts, events or
conditions exist which could reasonably be expected to interfere with or prevent
continued compliance with applicable Environmental Laws, as in effect on the
date hereof, or result in any common law or statutory liability, or otherwise
form the basis of any claim, action, suit, proceeding, hearing or investigation,
relating to the release, discharge, generation, use, transportation, treatment,
storage, disposal or other handling of Hazardous Substance in connection with
the use, occupancy or operation of the real estate or the Business.
7.19 Inventory. All of the inventories which are reflected in the balance
sheet dated June 30, 1996, constituting a part of the Financial Statements were
purchased or acquired in the ordinary and regular course of the conduct of the
Business and in a manner consistent with the regular inventory practices
relating to the Business, and have been or will be used or sold in the ordinary
and regular course of the Business and in a manner consistent with the Company's
or the Subsidiary's regular inventory practices; all of the inventories which
are reflected in the balance sheets constituting a part of the Financial
Statement were priced at the lower of cost (on the first-in-first-out basis), or
market, and were (as to classes of items inventories and methods of accounting
and pricing) determined in a manner consistent with prior years; and all
inventories which have been purchased or acquired by the Company or the
Subsidiary for the Business since June 30, 1996 were purchased or acquired in
the ordinary and regular course of the Business and in a manner consistent with
the Company's or the Subsidiary's regular inventory practices and have been or
will be used or sold in the ordinary and regular course of the Company's or
Subsidiary's business and in a manner consistent with the Company's or the
Subsidiary's regular inventory practices.
7.20 Receivables. All of the Receivables which are reflected in the balance
sheets constituting a part of the Financial Statements represent, and all of the
Receivables as of the Closing Date will represent, valid obligations arising
from sales actually made or services actually performed in the ordinary course
of business. Unless paid prior to the Closing Date, all of the Receivables set
forth on the Seller Closing Balance Sheet delivered under the U.S. Asset
Purchase Agreement will be current and enforceable (but no representation is
hereby made as to their collectibility). There will be as of the Closing Date no
contest, claim or asserted right of set-off in any agreement relating to the
amount or validity of any Receivable set forth on the Seller Closing Balance
Sheet delivered under the U.S. Asset Purchase Agreement except those arising in
the ordinary course of business. The Seller has delivered or made available to
Purchaser a complete and accurate list of all Receivables as of June 30, 1996,
which list sets forth the aging of such Receivables.
7.21 Capitalization.
21.
(a) The total number of shares of capital stock that the Company and
the Subsidiary are authorized to issue, the number of such shares that are
issued and outstanding and the respective holders of such shares are set forth
in Section 7.21 of the Disclosure Letter. The Purchased Shares constitute the
only shares of capital stock of the Company which are issued and outstanding;
and the Subsidiary Stock constitutes the only shares of capital stock of the
Subsidiary which are issued and outstanding.
(b) The Purchased Shares and the Subsidiary Stock are validly issued,
fully paid and nonassessable and are not subject to any preemptive rights, and,
except as disclosed in Section 7.21 of the Disclosure Letter, there are no
voting trust agreements or other contracts, agreements or arrangements
restricting voting or dividend rights or transferability with respect to either
the Purchased Shares or the Subsidiary Stock.
(c) Except as disclosed in Section 7.21 of the Disclosure Letter, (i)
Sellers own the Purchased Shares free and clear of all Liens, and (ii) the
Company owns the Subsidiary Stock free and clear of all Liens.
(d) Except as disclosed in Section 7.21 of the Disclosure Letter,
there are no outstanding options, warrants, rights, privileges or other
arrangements, preemptive, contractual or otherwise, to acquire any shares of
capital stock or other securities of the Company or the Subsidiary.
7.22 Undisclosed Liabilities. On June 30, 1996, neither the Company nor the
Subsidiary had any material debts, liabilities or obligations of a nature
required to be reflected on a balance sheet prepared in accordance with GAAP,
which were not fully disclosed, reflected or reserved against in the Balance
Sheet, except as disclosed in the Disclosure Letter. Except for current
liabilities or obligations which have been incurred since June 30, 1996 in the
ordinary course of business and except as disclosed in the Disclosure Letter or
as reflected on the Final Closing Balance Sheet (as defined in the U.S. Asset
Purchase Agreement), since June 30, 1996, neither the Company nor the Subsidiary
has incurred any material debt, liability or obligation of a nature required to
be reflected on a balance sheet prepared in accordance with GAAP.
7.23 Books and Records. The books and records maintained by the Company and
the Subsidiary are fully and accurately maintained in all material respects. The
minute books of the Company or the Subsidiary are complete and accurate in all
material respects and reflect all material actions taken and resolutions passed
by the directors and shareholders of the Company and the Subsidiary since their
respective dates of incorporation, and all such meetings were duly called and
held, and the share certificate books, register of shareholders, register of
transfer and registers of directors are complete and accurate in all material
respects.
7.24 Full Disclosure. The materials delivered by or on behalf of Seller in
connection with this Agreement, taken as a whole, fairly present the Business,
the Purchased Assets and the Assumed Liabilities.
22.
7.25 DISCLAIMER OF WARRANTIES. EXCEPT WITH RESPECT TO THE WARRANTIES AND
REPRESENTATIONS SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLERS MAKE NO
WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, SUITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, OR QUALITY AS TO THE ASSETS OF THE COMPANY OR THE
SUBSIDIARY OR ANY PART THEREOF, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF,
OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING
UNDERSTOOD BY PURCHASER THAT SUCH ASSETS ARE TO BE ACQUIRED BY IT BY VIRTUE OF
PURCHASER'S ACQUISITION OF THE COMPANY HEREUNDER "AS IS" ON THE DATE HEREOF, AND
IN THEIR PRESENT CONDITION, SUBJECT TO REASONABLE USE, WEAR AND TEAR BETWEEN THE
DATE HEREOF AND THE CLOSING DATE, AND PURCHASER SHALL RELY UPON ITS OWN
EXAMINATION THEREOF.
ARTICLE 8
WARRANTIES AND REPRESENTATIONS OF PURCHASER
Purchaser warrants and represents to Sellers (which warranties and
representations shall survive the Closing) as follows:
8.1 Incorporation and Qualification of Purchaser.
(a) Purchaser is a corporation validly existing and in good standing
under the laws of the Province of Ontario and has all requisite corporate power
and authority to own, operate and lease the assets it now owns, operates or
leases and to carry on its business as currently conducted.
8.2 Authority. Purchaser has all requisite corporate power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser, the
performance by Purchaser of its obligations hereunder and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized by
all requisite corporate action on the part of Purchaser. This Agreement has been
duly executed and delivered by Purchaser and (assuming the due authorization,
valid execution and delivery hereof by Sellers) is a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
8.3 No Conflict. Except as may result from any facts or circumstances
relating solely to Sellers, the execution, delivery and performance of this
Agreement by Purchaser do not and will not: (a) conflict with or violate any
provision of the Articles of Amalgamation or by-laws of Purchaser; (b) except as
would not have a material adverse effect on Purchaser or its ability to
23.
consummate the transactions contemplated hereby, result in any breach of, or
constitute a default (or event which, with the giving of notice or lapse of
time, or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of any Lien on any of the assets or properties of Purchaser pursuant
to, any instrument, license, agreement or commitment to which Purchaser is a
party or by which any of its assets or properties are bound; or (c) except as
would not have a material adverse effect on Purchaser or its ability to
consummate the transactions contemplated hereby, conflict with or violate any
law, rule, regulation, order, writ, judgment, injunction or decree applicable to
Purchaser or its assets or properties.
8.4 Consents and Approvals. The execution, delivery and performance by
Purchaser of this Agreement do not, and compliance by Purchaser with the terms
hereof and consummation by Purchaser of the transactions contemplated hereby
will not, require Purchaser to obtain any consent, approval, authorization or
other action of, or make any filing with or give any notice to, any court,
administrative agency or other governmental authority, except (a) pursuant to
the applicable requirements of the Competition Act (Canada) , (b) where failure
to obtain such consents, approvals, authorizations or actions, make such filings
or give such notice would not prevent Purchaser from performing any of its
material obligations under this Agreement and (c) as may be necessary as a
result of any facts or circumstances relating solely to Sellers.
8.5 Litigation. There are no actions, claims, proceedings or governmental
investigations pending against Purchaser or any of its assets or properties at
law or in equity, before any federal, provincial or municipal court, agency or
other governmental entity, or by any other Person, which, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on
Purchaser or its ability to consummate the transactions contemplated hereby.
8.6 Brokers. Neither this Agreement nor the purchase of the Purchased
Shares or any other transaction contemplated by this Agreement was induced or
procured through any Person acting on behalf of or representing Purchaser or any
of its Affiliates as broker, finder, investment banker, financial advisor or in
any similar capacity.
8.7 Financial Ability. At the Closing on the Closing Date, Purchaser will
have the funds necessary to purchase the Purchased Shares and consummate the
transactions contemplated hereby.
8.8 Investment Purpose. Purchaser confirms that it is acquiring the
Purchased Shares for investment for its own account and not with a view to the
sale or distribution of any part thereof, and that Purchaser has no present
intention of selling, granting, participating in, or otherwise distributing the
same.
8.9 Investment Canada Act. Purchaser is not a non-Canadian for the
purposes of the Investment Canada Act.
24.
ARTICLE 9
CONDITIONS TO CLOSING APPLICABLE TO PURCHASER
The obligation of Purchaser to consummate the transactions herein
contemplated is subject to the following conditions precedent:
9.1 No Termination. Neither Purchaser nor either Seller shall have
terminated this Agreement pursuant to Section 11.1.
9.2 Bring-Down of Sellers' Warranties. The warranties and representations
made by Sellers herein to Purchaser shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if such
warranties and representations had been made on and as of the Closing Date, and
each Seller shall have performed and complied with all agreements, covenants and
conditions on its part required to be performed or complied with on or prior to
the Closing Date; and at the Closing, Purchaser shall have received a
certificate executed by the President or any Vice President of each Seller to
the foregoing effect.
9.3 Pending Actions. No investigation, action, suit or proceeding by any
governmental or regulatory commission, agency, body or authority (except
pursuant to the Competition Act), shall be pending on the Closing Date which
challenges, or is reasonably likely to result in a challenge to, this Agreement
or any transactions contemplated hereby or any action is brought by any other
person which is reasonably likely to prevent the consummation of the
transactions contemplated hereby.
9.4 Consents and Approvals. All consents, approvals or authorizations of
any governmental authority required to consummate the transactions contemplated
hereby (except as contemplated under Section 9.6) shall have been duly obtained
and shall be in full force and effect as of the Closing Date, and Sellers shall
have complied with all applicable provisions of law requiring any notification,
declaration, filing, registration and/or qualification with any governmental
authority in connection with such performance and consummation (except pursuant
to the Competition Act).
9.5 All Necessary Documents. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement and all
documents incident thereto, shall be reasonably satisfactory in form and
substance to Purchaser, and Purchaser shall have received copies of such
documents as Purchaser may reasonably request in connection with said
transactions, including without limitation, those documents to be delivered
pursuant to Section 3.2.
9.6 Competition Act (Canada). Upon consummation of the transactions
contemplated hereby, the Parties shall be in compliance with the merger
provisions of the Competition Act (Canada) , including Section 123 regarding
pre-notification and expiration of the twenty-one day waiting period, in respect
of the transactions contemplated by this Agreement.
25.
9.7 Termination of Certain Liens. Purchaser shall have received evidence,
in form and substance reasonably satisfactory to it, of the termination,
cancellation and release of the Liens set forth in Section 7.13 of the
Disclosure Letter, which are to be satisfied at or prior to Closing.
9.8 U.S. and U.K. Transactions. The "Closing" contemplated under each of
the U.S. Asset Purchase Agreement and the U.K. Stock Purchase Agreement shall be
consummated concurrently with the Closing hereunder.
9.9 Consents under Senior Credit Agreement and Release of Liens. All
consents required under the Senior Credit Agreement and the documents and
instruments executed and delivered in connection therewith to permit Sellers to
consummate the transactions contemplated hereby shall have been delivered to
Sellers and all Liens on the Purchased Shares and the assets of the Company and
the Subsidiary under the Senior Credit Agreement and the other documents and
instruments executed and delivered in connection therewith shall have been
released and terminated.
9.10 Certain Required Payments. (a) At or prior to Closing, Sellers shall
have paid (or caused to be paid) to the Company any and all amounts then owed by
either Seller or any Affiliate of the Sellers to the Company, and shall have
caused to be paid by the Company to Sellers or any Affiliate any and all amounts
then owed by the Company to such Seller or Affiliate, (in each case, other than
any amounts represented by a Transferred Intercompany Account), but in each case
only to the extent that such amount constituted an adjustment to the Purchase
Price pursuant to Section 2.2; and
(b) At or prior to Closing, the Sellers shall have caused the Company to
pay an amount sufficient to retire the Third Party Debt
and shall have provided evidence satisfactory to the Purchaser of such payments.
Purchaser shall have the right to waive any of the foregoing
conditions precedent.
ARTICLE 10
CONDITIONS TO CLOSING APPLICABLE TO SELLERS
The obligation of Sellers to consummate the transactions herein
contemplated is subject to the following conditions precedent:
10.1 No Termination. Neither Purchaser nor either Seller shall have
terminated this Agreement pursuant to Section 11.1.
10.2 Bring-Down of Purchaser Warranties. All warranties and representations
made by Purchaser herein to Sellers shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if such
warranties and representations had been made on and
26.
as of the Closing Date, and Purchaser shall have performed and complied with all
agreements, covenants and conditions on its part required to be performed or
complied with on or prior to the Closing Date; and at the Closing, Sellers shall
have received a certificate executed by the President or any Vice President of
Purchaser to the foregoing effect.
10.3 Pending Actions. No investigation, action, suit or proceeding by any
governmental or regulatory commission, agency, body or authority, shall be
pending on the Closing Date which challenges or is reasonably likely to result
in a challenge to this Agreement or any transaction contemplated hereby or any
action is brought by any other Person which is reasonably likely to prevent the
consummation of the transactions contemplated hereby.
10.4 Consents and Approvals. All consents, approvals or authorizations of
any governmental authority required to consummate the transactions contemplated
hereby shall have been duly obtained and shall be in full force and effect as of
the Closing Date, and Purchaser shall have complied with all applicable
provisions of law requiring any notification, declaration, filing, registration
and/or qualification with any governmental authority in connection with such
performance and consummation.
10.5 All Necessary Documents. All proceedings to be taken in connection
with the consummation of the transactions contemplated by this Agreement, and
all documents incident thereto, shall be reasonably satisfactory in form and
substance to Sellers, and Sellers shall have received copies of such documents
as they may reasonably request in connection with said transactions, including
without limitation, those documents to be delivered pursuant to Section 3.3.
10.6 Competition Act (Canada). Upon the consummation of the transactions
contemplated hereby, the Parties shall be in compliance with the merger
provisions of the Competition Act (Canada), including Section 123 regarding
prenotification and expiration of the twenty-one day waiting period, in respect
of the transactions contemplated by this Agreement.
10.7 Termination of Certain Liens. Sellers shall have received evidence, in
form and substance reasonably satisfactory to them, of the termination,
cancellation and release of the Liens set forth in Section 7.13 of the
Disclosure Letter, which are to be satisfied at or prior to Closing.
10.8 U.S. and U.K. Transactions. The "Closing" contemplated under each of
the U.S. Asset Purchase Agreement and the U.K. Stock Purchase Agreement shall be
consummated concurrently with the Closing hereunder.
10.9 Consents under Senior Credit Agreement and Release of Lien. All
consents required under the Senior Credit Agreement and the documents and
instruments executed and delivered in connection therewith to permit Sellers to
consummate the transactions contemplated hereby shall have been delivered to
Sellers and all Liens on the Purchased Shares and the assets of the Company and
the Subsidiary under the Senior Credit Agreement and the other documents and
instruments executed and delivered in connection therewith shall have been
released and terminated.
27.
10.10 Certain Required Payments. (a) At or prior to Closing, Sellers shall
have paid (or caused to be paid) to the Company any and all amounts then owed by
either Seller or any Affiliate of the Sellers to the Company (other than any
amounts represented by a Transferred Intercompany Account), but only to the
extent that such amounts constituted an adjustment to the Purchase Price
pursuant to Section 2.2.; and
(b) At or prior to Closing, Sellers shall have caused to be paid by the
Company to Sellers or their Affiliates all amounts then owed by the Company to
Sellers or their Affiliates (other than any amounts represented by a Transferred
Intercompany Account), but only to the extent that such amounts constituted an
adjustment to the Purchase Price pursuant to Section 2.2;
(c) At or prior to Closing, the Sellers shall cause the Company to pay
an amount sufficient to retire the Third Party Debt.
10.11 Approval of Preferred Stockholders of The Interlake Corporation. The
preferred stockholders of The Interlake Corporation shall have authorized
Sellers' execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
Sellers shall have the right to waive any of the foregoing conditions
precedent.
ARTICLE 11
TERMINATION
11.1 Termination. This Agreement may be terminated at any time prior to the
Closing only as follows, and in no other manner:
(a) by mutual consent of Purchaser and Sellers;
(b) by Purchaser or by either Seller if the Closing of the
transactions contemplated by this Agreement shall not have occurred on or before
November 30, 1996, or such later date as may have been agreed upon in writing by
the parties hereto; provided, that the party seeking to terminate is not, in any
material respect, in breach of or in default under this Agreement; or
(c) by Purchaser or by either Seller if any representation or warranty
made herein for the benefit of Purchaser or Sellers, respectively, or in any
certificate, schedule or documents furnished to Purchaser or Sellers,
respectively, pursuant to this Agreement is untrue in any material respect, or
if either Seller or Purchaser, respectively, shall have defaulted in any
material respect in the performance of any material obligation under this
Agreement; or
(d) by Sellers if the Closing of the transactions contemplated by this
Agreement shall not have occurred on or before October 10, 1996, and no
Competition Act Opinion as of the
28.
date of Seller's notice of termination shall have been delivered to Sellers by
Purchaser within five business days after the date of Seller's notice of
termination under this Section 11.(d).
Any termination pursuant to this Article 11, other than pursuant to
Section 11.1(d), shall not limit or restrict the rights or other remedies of any
party hereto. Upon termination of this Agreement pursuant to Section 11.1(d),
neither Sellers nor Purchaser shall have any further rights hereunder.
ARTICLE 12
INDEMNIFICATION
12.1 Sellers' Indemnity. After the Closing Date, Sellers and Interlake
Corporation, (collectively, the "Covenantors") agree, jointly and severally, to
indemnify and hold Purchaser, its Affiliates (and, after the Closing, but only
in connection with a Tax Claim (as defined below) the Company and the
Subsidiary) and their officers and directors (collectively, the "Purchaser
Indemnified Persons") harmless against any loss, damage or expense (including
reasonable attorneys' fees) ("Loss") suffered as the result of (a) any breach by
either Seller of this Agreement, (b) any inaccuracy in or breach of any of the
representations, warranties, covenants or agreements made by either Seller
herein or in the Disclosure Letter (including, without limitation an inaccuracy
in or breach of Section 7.17 hereof (a "Tax Claim")), (c) any inaccuracy or
misrepresentation in a certificate or affidavit delivered by either Seller at
the Closing in accordance with the provisions of this Agreement, (d) the
assertion by a third party of any Contingent Liabilities or the compliance by
Purchaser with any applicable law, rule or order resulting in any Contingent
Liabilities and (e) any Retained Liabilities.
12.2 Limitation. Purchaser's right to indemnification pursuant to Section
12.1 is subject to the following specific limitations:
(a) (i) After the Third Anniversary, no Purchaser Indemnified
Person shall be entitled to assert any right of indemnification with respect to
Section 7.18 for any loss, damage or expense suffered by such Purchaser
Indemnified Person, except that if, as of the Third Anniversary, there shall
then be pending any such claim under Section 12.1 of which such Purchaser
Indemnified Person shall have notified the Covenantors in writing on or prior to
the Third Anniversary, such Purchaser Indemnified Person shall continue to have
the right to be indemnified with respect to such claim.
(ii) After the expiration of the statute of limitations imposed
by any applicable law with respect to the underlying tax liability that forms
vthe basis for any Purchaser Indemnified Person's claims, such Purchaser
Indemnified Person shall not be entitled to assert any right of indemnification
under Section 12.1 with respect to any loss, damage or expense suffered by such
Purchaser Indemnified Person as the result of a breach by Sellers of their
representations and warranties set forth in Section 7.17, except that if, as of
the expiration of any such statute of limitation, there shall then be pending
any such claim under Section 12.1 of which such Purchaser Indemnified Person
shall have notified the Covenantors in writing on or prior to such expiration
29.
date, such Purchaser Indemnified Person shall continue to have the right to be
indemnified with respect to such claim.
(iii) Except as set forth above, after the First Anniversary, no
Purchaser Indemnified Person shall be entitled to assert any other right of
indemnification under Section 12.1 (except with respect to the second sentence
of Section 7.12 or the first sentence of Section 7.13) for any loss, damage or
expense suffered by such Purchaser Indemnified Person, except that if, as of the
First Anniversary, there shall then be pending any such claim under Section 12.1
of which such Purchaser Indemnified Person shall have notified the Covenantors
in writing on or prior to the First Anniversary, such Purchaser Indemnified
Person shall continue to have the right to be indemnified with respect to such
claim.
(iv) If a claim shall be made by any taxing authority, or if any
Purchaser Indemnified Person shall become aware that any taxing authority is
considering any issues which may give rise to such a claim, that in either
event, if successful, would result in the indemnification of a Purchaser
Indemnified Person under Section 12.1 (as limited by Section 12.2) for a Tax
Claim or would result in a loss, damage or expense in the nature of a Tax Claim
that would be counted towards the Threshold under Section 12.2(b), such
Purchaser Indemnified Person shall notify the Covenantors in writing of such
claim or other circumstances within ten days of receipt by any Purchaser
Indemnified Person from the taxing authority of notice of such claim, or any
such Purchaser Indemnified Person becoming aware of such other circumstances.
(b) No Purchaser Indemnified Person shall be entitled to
indemnification hereunder for any indemnification claim until the amount of the
aggregate losses, damages and expenses required to be indemnified by the
Covenantors pursuant to Section 12.1 (as limited by Section 12.2) together with
the amount of the aggregate losses, damages and expenses required to be
indemnified by the "Sellers" and/or "Covenantors" under Sections 12.1 of each of
the U.S. Asset Purchase Agreement and the U.K. Stock Purchase Agreement, exceed
$750,000 (said amount is hereinafter sometimes referred to as the "Threshold"),
whereupon the Purchaser Indemnified Persons shall be entitled to indemnification
hereunder from the Covenantors only for the aggregate of indemnification claims
in excess of the Threshold. For the purposes of Section 12.1 and this Section
12.2, in computing such individual or aggregate amounts of claims, and the
amount set forth in (c) below, the amount of each claim shall be deemed to be an
amount (i) net of any tax benefit realized by a Purchaser Indemnified Person or
the Company by reason of deductibility of such liability or damage (determined
by multiplying such deductible amount by the then applicable highest effective
corporate income tax rate for the Purchaser Indemnified Person), and any
deferred tax benefit attributable to such liability or damage (determined on the
same basis but present-valued to the extent obtained through depreciation or
amortization deductions), (ii) net of any insurance proceeds and any indemnity,
contribution or other similar payment recoverable by a Purchaser Indemnified
Person or the Company or from any third party with respect thereto, and (iii)
without limiting the generality of the foregoing, in respect of any Tax Claim
the net amount thereof after adjusting for any corresponding or related
deductions, refunds, losses or other tax benefits of any nature whatsoever for
any earlier or later taxation period, and to the extent any such benefits are
deferred, they shall be present valued on the same basis as above.
30.
(c) The maximum liability of the Covenantors under this Agreement and
the "Sellers" and/or "Covenantors" under the U.S. Asset Purchase Agreement and
the U.K. Stock Purchase Agreement to the Purchaser Indemnified Persons for
indemnification claims hereunder and thereunder shall be $25,000,000 in
aggregate.
(d) Prior to seeking indemnification under Section 12.1, a Purchaser
Indemnified Person shall deliver appropriate claims to any relevant insurer or
third party obligated to indemnify or reimburse such Purchaser Indemnified
Person with respect to the loss, damage or expense giving rise to such claim. To
the extent necessary, a Purchaser Indemnified Person shall permit the
Covenantors to assert any such claims and shall cooperate, at the Covenantors'
expense, with the Covenantors' prosecution of such claims. In the event that any
Covenantor makes any payment to a Purchaser Indemnified Person for
indemnification for which such Purchaser Indemnified Person could have collected
on a claim against a third party, such Covenantor shall be entitled to pursue
claims and conduct litigations on behalf of such Purchaser Indemnified Person
and any of its successors, to pursue and collect on any indemnification or other
remedy available to such Purchaser Indemnified Person with respect to such claim
and generally to be subrogated to the rights of such Purchaser Indemnified
Person with respect thereto.
(e) As a condition to accepting the benefits of Section 12.1, each
Purchaser Indemnified Person acknowledges and agrees that its sole and exclusive
remedy with respect to any and all claims relating to the subject matter of this
Agreement shall be pursuant to the indemnification provisions set forth in this
Article 12. In furtherance of the foregoing, each Purchaser Indemnified Person
waives, to the fullest extent permitted under applicable law, any and all
rights, claims and causes of action it may have against the Covenantors and each
other Seller Indemnified Person arising under or based upon any foreign,
federal, provincial, state or local statute, law, ordinance, rule or regulation
(including, without limitation, any such rights, claims or causes of action
arising under or based upon common law, Environmental Laws or otherwise).
(f) Except as specifically set forth in this Agreement, no Seller is
making any representation, warranty, covenant or agreement with respect to the
matters contained herein including, without limitation, the assets, liabilities
and operations of the Company and the Subsidiary. Anything herein to the
contrary notwithstanding, no breach of any representation, warranty, covenant or
agreement contained herein shall give rise to any right on the part of
Purchaser, after the consummation of the purchase and sale of the Purchased
Shares contemplated hereby, to rescind this Agreement or any of the transactions
contemplated hereby.
(g) No Covenantor shall have any liability under any provision of this
Agreement for any liabilities or damages to the extent that such liabilities or
damages relate to actions taken or not taken by the Company, the Subsidiary,
Purchaser or any other Purchaser Indemnified Person after the Closing Date. In
no event shall any Covenantor be liable for Consequential Damages.
(h) Each Purchaser Indemnified Person shall take all reasonable steps
to mitigate all liabilities and damages for which a claim may be made against
Covenantors pursuant
31.
to Section 12.1 upon and after becoming aware of any event which could
reasonably be expected to give rise to such liabilities or damages. Purchaser
shall cause the Company to refrain from issuing credit notes against the
Receivables unless Sellers have consented thereto.
(i) If at any time or from time to time either any Covenantor makes
any indemnification payment under Section 12.1 or Section 12.2, such payment
shall be deemed for all purposes hereto to constitute a reimbursement of a
portion of the Purchase Price equal to the amount so paid, and upon such
reimbursement, the Purchase Price shall be deemed to have been reduced
accordingly for all purposes hereof.
(j) (A) Upon notice from Purchaser to the Covenantors that a
Purchaser Indemnified Person is entitled to an indemnification payment for a
Loss arising from a Tax Claim, the Covenantors shall thereupon jointly and
severally, pay to the Purchaser Indemnified Person an amount that will indemnify
and hold the Purchaser Indemnified Person harmless from such loss, or if the
claim is being handled pursuant to sub-section (B) hereof, make such payment or
provide the security referred to in sub-section (B)(cc) hereof.
(B) The Covenantors shall have the right to control in all
respects the contest of any Tax Claim or any claim or possible claim by any
taxing authority that may give rise to any Tax Claim or any loss, damage or
expense in the nature of a Tax Claim that would be counted towards the Threshold
under Section 12.2(b) (collectively, a "claim"), whether in Covenantors' names
or in the name of any relevant Purchaser Indemnified Person, including, without
limitation, the right to negotiate with the relevant taxing authority with
respect thereto and, subject to the balance of this Section 12.2(j), to settle
any such claim, and each Purchaser Indemnified Person shall take all such action
in connection with contesting such claim, including, without limitation,
providing copies of any relevant documentation, as Sellers shall reasonably
request in writing from time to time, but only if
(aa) within 30 days (or such earlier date that any payment
of Taxes is due by the Purchaser Indemnified Person) after the notice described
above has been given to Sellers by the Purchaser Indemnified Person, the
Covenantors advise that they wish to exercise their rights under this Section
12.2(j)(B),
(bb) subject to the provisions of clause (dd) below on the
sharing of fees and expenses, the Covenantors shall have agreed to pay to the
Purchaser Indemnified Person, as provided in this Section 12.2(j), all costs and
expenses that the Purchaser Indemnified Person may reasonably incur in
connection with contesting such claim, including reasonable solicitors' and
accountants' fees and disbursements,
(cc) if the Purchaser Indemnified Person is requested to pay
the Tax claimed and ▇▇▇ for a refund, the Covenantors shall have either provided
security to the relevant taxing authority in form satisfactory to such taxing
authority for payment of such Tax, or paid the amount of such claimed Tax
directly to such taxing authority on behalf of the Purchaser Indemnified Person
(but only to the extent that the Covenantors would be required under Section
12.1 hereof (as limited by Section 12.2) to indemnify the Purchaser Indemnified
Person in respect
32.
of such Tax so claimed) in which event such payment shall be deemed to
constitute the advance by the Covenantors to the Purchaser Indemnified Person,
on an interest-free basis, of the amount of such claim and to the extent that
the Covenantors are not so obligated to indemnify such Purchaser Indemnified
Person with respect to such Tax so claimed, such Purchaser Indemnified Person
shall promptly pay the Tax so claimed on its own, and any indemnity provided
hereunder shall not extend to any additional interest, costs or penalties
resulting from any failure by such Purchaser Indemnified Person to promptly pay
such Tax so claimed,
(dd) The Covenantors shall have selected tax counsel
reasonably satisfactory to the Purchaser Indemnified Person (provided it is
hereby agreed that Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ should each be
deemed to be satisfactory). In the case of any claim referred to in this Section
12.2 (j), the Purchaser Indemnified Person shall not make payment of such claim
for at least 30 days (or such shorter period as may be required by applicable
law) after the giving of the notice required by Subsection (a)(iv) above. The
Covenantors shall keep Purchaser informed as to the progress of any contest
pursuant to this Section 12.2, shall consult with Purchaser and Purchaser's
counsel in good faith with respect to such contest and shall make available to
Purchaser and Purchaser's counsel, a reasonable time prior to filing, any
materials to be filed with respect to such contest. In the case of any claim the
resolution of some portion of which is reasonably expected by Purchaser to have
an adverse effect on the Purchaser Indemnified Person as to which there will be
no indemnification by the Covenantors: (i) if the Covenantors wish to use
accountants other than KPMG Peat Marwick or Price Waterhouse, or counsel other
than Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or ▇▇▇▇▇ ▇▇▇▇▇, then Purchaser and the
Covenantors shall have agreed upon the accountants and the legal counsel to
represent them in contesting such claim; if Purchaser and the Covenantors cannot
or do not so agree within 15 days from the date on which the need for such
accountants and counsel first arises, then one of the national accounting firms
shall serve as the accountants and a firm selected by both ▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall serve as the legal counsel in such contest; and
(ii) the fees and expenses of any accountants and legal counsel shall be shared
by the Covenantors and the Purchaser in proportion to the amount at stake for
each. Notwithstanding anything to the contrary herein, neither party shall
settle any claim without the prior written consent of the other party, provided
that such consent is not unreasonably withheld or delayed, provided, however,
that if the Purchaser shall refuse to consent to any settlement of a claim which
the Covenantors wish to agree to, then without limiting the applicability of the
$750,000 Threshold or maximum liability of the Covenantors as provided for in
Sections 12.2(b) and (c) above, the liability of the Covenantors in connection
with such claim shall be limited to no more than the amount for which the
Covenantors would have settled, and
(ee) The Covenantors do not act unlawfully.
(C) If, after actual payment by the Covenantors of an amount
advanced pursuant to Subsection (j)(B)(cc) above, the extent of the liability of
the Purchaser Indemnified Person with respect to the indemnified matter shall be
established by the final judgment or decree of a court or a final or binding
settlement with a taxing authority having jurisdiction thereof (the "Final
Determination"), the Purchaser Indemnified Person shall promptly pay the
Covenantors any refund received by or credited to the Purchaser Indemnified
Person with respect to the
33.
indemnified matter (together with any interest paid or credited thereon by the
taxing authority and any recovery of legal fees from such taxing authority) and
to the extent that the amount so paid by Sellers exceeds the amount for which
they are liable under Sections 12.1 and 12.2, the Purchaser Indemnified Person
shall promptly repay such excess to the Covenantors. Notwithstanding the
foregoing, the Purchaser Indemnified Person shall not be required to make any
payment under this clause (C) before such time as the Covenantors shall have
made all payments or indemnities then due with respect to Purchaser Indemnified
Person pursuant to Section 12.2.
(D) The Purchaser shall cause the Company to retain all books
and records that may become relevant to any Tax Claim that may arise hereunder
from time to time, until such time as the making of any such Tax Claim is
precluded pursuant to Section 12.2(a)(ii).
(k) Notwithstanding any provision hereof, after the Tangible Net
Worth is finally calculated in accordance with Section 2.3 of the U.S. Asset
Purchase Agreement, no Purchaser Indemnified Person shall have any right to
indemnification for any Loss suffered as a result of any inaccuracy in or breach
of the warranty contained in Section 7.8 or Section 7.22 (to the extent such
Loss arises out of matters which were finally determined in accordance with
Section 2.3 of the U.S. Asset Purchase Agreement), Section 7.19 or Section 7.20
12.3 Purchaser Indemnity. After the Closing Date, Purchaser agrees to
indemnify and hold each Seller, its Affiliates and their officers and directors
(collectively, the "Seller Indemnified Persons") harmless against any loss,
damage or expense (including reasonable attorneys' fees) suffered as the result
of (a) any breach by Purchaser of this Agreement, (b) any inaccuracy in or
breach of any of the representations, warranties, covenants or agreements made
by Purchaser herein, (c) any inaccuracy or misrepresentation in a certificate or
affidavit delivered by Purchaser at the Closing in accordance with the
provisions of this Agreement and (d) except to the extent Sellers have
indemnified Purchaser pursuant to this Section 12, the conduct of the Business
or the ownership or use of its assets by the Company or the Subsidiary before or
after the Closing, including without limitation under any Environmental Laws.
12.4 Notice of Claims. Upon obtaining knowledge of any claim or demand
which has given rise to, or could reasonably be expected to give rise to, a
claim for indemnification hereunder, the party seeking indemnification
("Indemnitee") shall give written notice of such claim or demand ("Notice of
Claim") to the other party ("Indemnitor"). Indemnitee shall furnish to the
Indemnitor in reasonable detail such information as Indemnitee may have with
respect to such indemnification claim (including copies of any summons,
complaint or other pleading which may have been served on it and any written
claim, demand, invoice, billing or other document evidencing or asserting the
same). Subject to the limitations set forth in Section 12.2(a), no failure or
delay by Indemnitee in the performance of the foregoing shall reduce or
otherwise affect the obligation of Indemnitor to indemnify and hold Indemnitee
harmless, except to the extent that such failure or delay shall have adversely
effected Indemnitor's ability to defend against, settle or satisfy any
liability, damage, loss, claim or demand for which Indemnitee is entitled to
indemnification hereunder.
34.
12.5 Indemnification Proceeding. If the claim or demand set forth in
the Notice of Claim given by Indemnitee pursuant to Section 12.4 is a claim
or demand asserted by a third party, Indemnitor shall have fifteen (15) days
after the Date of the Notice of Claim to notify Indemnitee in writing of its
election to defend such third-party claim or demand on behalf of the Indemnitee.
If Indemnitor elects to defend such third-party claim or demand, Indemnitee
shall make available to Indemnitor and its agents and representatives all
records and other materials which are reasonably required in the defense of such
third-party claim or demand and shall otherwise cooperate with, and assist
Indemnitor in the defense of, such third-party claim or demand, and so long as
the Indemnitor is defending such third-party claim in good faith, Indemnitee
shall not pay, settle or compromise such third-party claim or demand. If
Indemnitor elects to defend such third-party claim or demand, Indemnitee shall
have the right to participate in the defense of such third-party claim or
demand, at Indemnitee's own expense. If Indemnitor does not elect to defend such
third-party claim or demand or does not defend such third-party claim or demand
in good faith, Indemnitee shall have the right, in addition to any other right
or remedy it may have hereunder, at Indemnitor's expense, to defend such third-
party claim or demand; provided, however, that (a) Indemnitee shall not have any
obligation to participate in the defense of, or defend, any such third-party
claim or demand; and (b) Indemnitee's defense of or its participation in the
defense of any such third-party claim or demand shall not in any way diminish or
lessen the obligations of Indemnitor under the agreements of indemnification set
forth in this Article 12.
12.6 Satisfaction of Claims. Except for third-party claims (including
Tax Claims) being defended in good faith, and subject to the resolution of any
disputes hereunder in accordance with Section 15.7, Indemnitor shall satisfy its
obligations under this Article 12 within thirty (30) days after the Date of
Notice of Claim.
12.7 Date of Notice of Claim. The term "Date of the Notice of Claim"
as used in this Article 12 shall mean the date the Notice of Claim is effective
pursuant to Section 15.12.
ARTICLE 13
CONFIDENTIALITY
---------------
13.1 Confidentiality. Purchaser agrees with respect to all technical,
commercial and other information relating to the Company, the Subsidiary, any
of their respective assets, the Facilities or the Business that is or has been
furnished or disclosed to Purchaser on, or after or before the date hereof,
including, but not limited to, information regarding the Company, the Subsidiary
and the organization, personnel, business activities, customers, policies,
assets, finances, costs, sales, revenues, rights, obligations, liabilities and
strategies of the Business (the "Information"), that, unless and until the
transactions contemplated by this Agreement shall have been consummated, (a)
such Information is confidential and/or proprietary to the Company and the
Business and entitled to and shall receive treatment as such by Purchaser; (b)
Purchaser will, and will require all of its employees, representatives, agents
and advisors who have access to such Information to, hold in confidence and not
disclose to any other Person nor use (except in respect
35.
of the transactions contemplated by this Agreement or as required by law or in a
court, administrative or regulatory proceeding) any such Information; provided,
however, that Purchaser shall not have any restrictive obligation with respect
to any Information which (i) is contained in a printed publication available to
the general public, (ii) is or becomes publicly known through no wrongful act or
omission of, or violation of the terms hereof by, Purchaser, or (iii) becomes
known to Purchaser from a source which has no confidentiality obligation with
respect to such Information at the time of receipt of such Information; and (c)
all such Information, unless otherwise specified in writing, shall remain the
property of the Company or the Subsidiary, as the case may be, and, in the event
this Agreement is terminated, shall be returned to the Company or the
Subsidiary, as the case may be, together with any and all copies made thereof,
upon request for such return by either Seller (except for documents submitted
to a governmental agency with the consent of either Seller or upon subpoena and
which cannot be retrieved with reasonable effort). Purchaser shall provide
Information only to its employees, representatives, agents and advisors who have
a need to know such Information in connection with the transactions contemplated
by this Agreement.
13.2 Remedy. Purchaser acknowledges that the remedy at law for any
breach by Purchaser of its obligations under Section 13.1 is inadequate and that
Sellers shall be entitled to equitable remedies, including an injunction, in the
event of breach by Purchaser, in addition to any other available remedies at law
or otherwise.
ARTICLE 14
CERTAIN OTHER UNDERSTANDINGS
----------------------------
14.1 Records.
(a) After the Closing, each party agrees to provide the other with
access to all relevant documents and other information which may be needed by
such party for purposes of preparing tax returns or responding to an audit by
any governmental agency or for any other reasonable purpose. Such access will
be during normal business hours, upon reasonable prior notice and not otherwise
subject to time limitations.
(b) Purchaser agrees that it shall preserve and keep all books and
records relating to the Business, including, without limitation, the Company's
and the Subsidiary's assets, in Purchaser's possession until six months
following the expiration of the applicable statute of limitations (including
extensions thereof) applicable to the Returns of the Company or the Subsidiary
filed for each taxable period first ending after the Closing Date and each prior
taxable period to which such books or records are relevant. After such time,
before Purchaser shall dispose of any of such books and records, at least ninety
(90) calendar days' prior written notice to such effect shall be given by
Purchaser to Sellers, and Sellers shall be given an opportunity, at their own
cost and expense, to remove and retain all or any part of such books and records
as Sellers may select. Duly authorized representatives of Sellers shall, upon
reasonable notice, have
36.
access to such books and records during normal business hours to examine,
inspect, retrieve and copy such books and records.
(c) In order to facilitate the resolution of any claims made by or
against or incurred by Sellers prior to or after the Closing, upon reasonable
notice, Purchaser shall, after the Closing: (i) afford the officers, employees
and authorized agents and representatives of Sellers reasonable access, during
normal business hours, to the offices, properties, books and records of
Purchaser and the Company with respect to the Business; (ii) furnish to the
officers, employees and authorized agents and representatives of Sellers such
additional financial and other information regarding the Business as Sellers may
from time to time reasonably request; and (iii) make available to Sellers, the
employees of Purchaser and the Company whose assistance, testimony or presence
is necessary to assist Sellers in evaluating any such claims and in defending
such claims, including the presence of such persons as witnesses in hearings or
trials for such purposes; provided, however, that such investigation shall not
unreasonably interfere with the businesses or operations of the Company.
(d) If, in order properly to prepare documents required to be filed
with governmental authorities or its financial statements, it is necessary that
either party hereto or any successors be furnished with additional information
relating to the Business, including, without limitation, the Company's and the
Subsidiary's assets, and such information is in the possession of the other
party hereto, such other party agrees to use its best efforts to furnish such
information to the party needing such information, at the cost and expense of
the party being furnished such information; provided, that Purchaser will cause
the Company to provide the Sellers with information relevant to tax filings for
portions of 1996 prior to the Closing without charge.
14.2 Further Actions. Sellers agree that from and after the Closing
Date, if reasonably requested by Purchaser, they will execute and deliver such
further instruments of conveyance and transfer and take such other reasonable
action as may be necessary or desirable to convey and transfer more effectively
to Purchaser the Purchased Shares.
14.3 Change of Control. If (a) any Contract requires a consent to any
change in control of the Company and such consent has not been obtained by
the Closing Date or (b) a Contract relates solely to the Business but is in the
name of a Seller or an Affiliate of a Seller other than the Company, then this
Agreement, to the extent permitted by law, shall constitute an equitable
assignment by such Seller or such Affiliate to the Company of all rights,
benefits, title and interest, liabilities and obligations under any such
Contracts. Such Seller or Affiliate shall take all necessary steps and action
to provide the Company with the benefits of such Contracts. Purchaser and the
Company shall take all necessary steps to perform their obligations with respect
thereto and shall indemnify such Seller or such Affiliate for any losses
suffered by such Seller or such Affiliate relating to the Purchaser's or the
Company's performance of such obligations.
14.4 Taxes. Sellers shall be responsible for causing the Company to
prepare and file all Tax returns and reports of the Company due on or prior to
the Closing Date, which returns and reports shall be prepared and filed timely
and on a basis consistent with existing procedures for preparing such returns
and reports and in a manner consistent with prior practice with respect to
37.
the treatment of specific items on the returns or reports. Purchaser shall be,
or shall cause the Company to be, responsible for preparing and filing all Tax
returns and reports of the Company due after the Closing Date (after taking into
account any applicable extensions of time to file), which returns and reports,
to the extent they relate to periods or portions of periods ending or prior to
the Closing Date, shall be prepared and filed timely and on a basis consistent
with existing procedures for preparing such returns and in a manner consistent
with prior practice with respect to the treatment of specific items on the
return. Purchaser will cause the Company to make available to the Sellers for
their review, at least 30 days prior to filing, any returns and reports
pertaining to the tax year ending on the Closing Date or any portion thereof,
and will respond to any reasonable requests of Seller with respect thereto.
ARTICLE 15
MISCELLANEOUS
-------------
15.1 Cost and Expenses. Except as otherwise provided in this Agreement,
each party hereto shall pay its own fees, costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with the negotiation, preparation, execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby.
15.2 Entire Agreement. The Disclosure Letter and the Exhibits referenced
in this Agreement are incorporated into this Agreement and together with this
Agreement and the Ancillary Agreements contain the entire agreement between the
parties hereto with respect to the transactions contemplated hereunder, and
supersede all negotiations, representations, warranties, commitments, offers,
contracts and writings prior to the date hereof, including, without limitation,
the letter dated May 3, 1996 from ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇, President of Purchaser,
to Mr. W. ▇▇▇▇▇▇ ▇▇▇▇, Chairman, President and Chief Executive Officer of The
Interlake Corporation, regarding the transaction contemplated hereby and the
Mutual Confidentiality Agreement dated as of April 26, 1996 between the
Interlake Corporation and Purchaser. No waiver, modification or amendment of
any provision of this Agreement shall be effective unless specifically made in
writing and duly signed by the party to be bound thereby.
15.3 Counterparts. This Agreement may be executed in counterparts, each of
which when executed shall be deemed an original and all of which together shall
constitute one and the same instrument.
15.4 Assignment, Successors and Assigns. The respective rights and
obligations of the parties hereto shall not be assignable without the prior
written consent of the other parties; provided, however, that Purchaser may
assign all or part of its rights under this Agreement and delegate all or part
of its obligations under this Agreement to a wholly-owned subsidiary of
Purchaser, in which event all the rights and powers of Purchaser and remedies
available to it under this Agreement shall extend to and be enforceable by such
subsidiary; provided further, however, that no such assignment and delegation
shall release Purchaser from its obligations under
38.
this Agreement, and further, Purchaser hereby guarantees to Sellers the
performance by such subsidiary of its obligations under this Agreement and each
other document or instrument to be entered into by such subsidiary in connection
with the transactions contemplated hereby. In the event of any such assignment
and delegation the term "Purchaser" as used in this Agreement shall be deemed to
refer to such subsidiary of Purchaser where reference is made to actions to be
taken with respect to the acquisition of the Purchased Shares, and shall be
deemed to include both Purchaser and such subsidiary where appropriate. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
15.5 Savings Clause. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, rule or
regulation, 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 hereof. 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 herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
15.6 Headings. The captions of the various Articles and Sections of this
Agreement have been inserted only for convenience of reference and shall not be
deemed to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
15.7 Arbitration.
(a) Exclusive Procedure. Any dispute arising out of or relating to
this Agreement will be resolved in accordance with the procedures specified in
this Section 15.7, and this is the sole and exclusive procedure for resolution
of any such dispute. Each party waives its right to court proceedings, in
consideration of the parties' agreement to negotiate and arbitrate.
(b) Negotiation between Executives. The parties will attempt in good
faith to resolve any dispute arising out of or relating to this Agreement
promptly by negotiation between the Presidents of The Interlake Corporation and
the Purchaser (as of the date hereof, W. ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇,
respectively), who may be accompanied by such other persons as they choose. Any
party may give the other party written notice of any dispute not resolved in the
normal course of business, and specifically require a response by referring to
this section of this Agreement. Within 15 days after receipt of such notice, the
receiving party will submit to the other a written response. The notice and the
response will include a statement of each party's position and a summary of
arguments supporting that position and the names and titles of the persons who
will accompany the Chief Executive Officer. Within 30 days after delivery of the
disputing party's notice, the executives of both parties will meet at a mutually
acceptable time and place, and thereafter as often as they reasonably deem
necessary, to attempt to resolve the dispute. All reasonable requests for
information made by one party to the other will be honoured.
39.
(c) Arbitration under the CPR Rules. Any dispute arising out of or
relating to this Agreement which has not been resolved within 60 days of the
initial written notice of the dispute under subsection (b) above will be settled
by arbitration. If, however, either party will not participate in the
negotiations required above, then the other party may initiate arbitration
before expiration of the period specified above. The following rules will apply
to the arbitration:
(i) the then current CPR Non-Administered Arbitration Rules
(adopted by the CPR Institute for Dispute Resolution) will
govern, and the United States Federal Arbitration Act,
9.U.S.C. (S) 1-16, will also govern to the extent
consistent;
(ii) there will be three independent and impartial arbitrators,
of whom each party will appoint one and the third will be
appointed by the other two;
(iii) the place of arbitration will be metropolitan Chicago;
(iv) the arbitrators shall not be empowered to award damages in
excess of compensatory damages, and each party hereby
irrevocably waives any right to recover any such damages;
(v) as a primary goal of this section is to conclude disputes
in a speedy manner at substantially less cost to the
parties than litigation, the arbitrators are therefore to
conduct the proceedings in a speedy and expeditious manner
and to conclude and issue an award as soon as possible
after appointment of the third arbitrator; and
(vi) the arbitrators' decision will be final and binding and
judgment upon the award rendered by the arbitrators may be
entered by any court having jurisdiction.
(d) Statute of Limitations. The statute of limitations of the State
of Illinois applicable to the commencement of a lawsuit will apply to the
commencement of an arbitration, except that no defenses will be available in
arbitration based upon the passage of time during any negotiation called for by
this Section.
(e) Costs. Each party must bear its own costs of resolving any
dispute under this Agreement and the parties each hereby severally agree to pay
50% of the costs of any arbitrators engaged.
(f) Confidentiality. Any information or documents disclosed under
this section (i) will be treated as settlement negotiations under any rules of
evidence, (ii) must be kept confidential and (iii) may not be used except to
attempt to settle the dispute.
40.
(g) Continued Performance. Each party is required to continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement, unless to do so would be
impossible or impracticable under the circumstances.
15.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCLUDING THE
"CONFLICT OF LAWS" RULES THEREOF.
15.9 Public Announcements. No press release or other public statement with
respect to this Agreement or the transactions contemplated hereby shall be
issued by any party without such party having consulted with and obtained the
written consent of the other parties, which consent shall not be unreasonably
withheld; provided, however, that no such consultation or consent is necessary
if a press release or other public statement is required to be made by
applicable law.
15.10 U.S. Dollars. All amounts expressed in this Agreement and all
payments required by this Agreement are in United States dollars.
15.11 Survival. All representations and warranties made by any party in
this Agreement shall be deemed made for the purpose of inducing the other
parties to enter into this Agreement and, subject to Section 12.2(a) shall
survive the Closing.
15.12 Notices.
(a) All notices, requests, demand and other communications under this
Agreement shall be in writing and delivered in person or sent by overnight
courier or certified mail, postage prepaid, or by facsimile transmission and
properly addressed as follows:
To Sellers or Interlake Companies or Interlake Corporation:
c/o Interlake Packaging Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Vice President - Finance and
Chief Financial Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President, Secretary and
General Counsel
41.
To Purchaser:
▇▇▇▇▇▇ Manu-Tech Inc.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice-President and
Chief Financial Officer
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ Plaza
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) Any party may from time to time change its address for the purpose
of notices to that party by a similar notice specifying a new address, but no
such change shall be deemed to have been given until it is actually received by
the party sought to be charged with its contents.
(c) All notices and other communications required or permitted under
this Agreement which are addressed as provided in this Section 15.12 if
delivered personally or by overnight courier, or by facsimile transmission,
shall be effective upon delivery; and if delivered by mail, shall be effective
three (3) Business Days after deposit in the United States mail, postage
prepaid.
15.13 Disclosures. All matters disclosed by Sellers in any Section of the
Disclosure Letter shall be deemed a disclosure by Sellers for purposes of all
relevant Sections of this Agreement.
15.14 No Third-Party Beneficiaries. Except as otherwise expressly provided
in this Agreement, nothing in this Agreement, expressed or implied, is intended
or shall be construed to confer upon or give to any Person, other than the
parties hereto, any rights, remedies or other benefits under or by reason of
this Agreement.
[SIGNATURE PAGE FOLLOWS]
42.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement on September 30, 1996 in ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇. This Stock
Purchase Agreement will become effective once it and the U.S. Asset Purchase
Agreement and the U.K. Stock Purchase Agreement all have been executed and
delivered.
INTERLAKE PACKAGING CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President Secretary
and General Counsel
--------------------------
THE INTERLAKE COMPANIES, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Vice President, Secretary
and General Counsel
--------------------------
▇▇▇▇▇▇ MANU-TECH INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title: Director
--------------------------
Agreed to and accepted as of September 30, 1996 as
to Article 12 only.
THE INTERLAKE CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Title: Vice President-Finance
--------------------------