STOCK PURCHASE AGREEMENT
by and between
Echlin Inc.
and
Imo Industries Inc.
Dated as of October 13, 1999
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
ARTICLE II SALE AND PURCHASE OF SHARES 1
2.1 Sale and Purchase of Shares 1
2.2 Purchase Price 2
2.3 Purchase Price Adjustment 2
ARTICLE III
CLOSING AND DELIVERIES 4
3.1 Closing 4
3.2. Deliveries by Seller 4
3.3 Deliveries by Buyer 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER 6
4.1 Organization and Standing 6
4.2 Authorization, Validity and Effect 6
4.3 Capitalization 6
4.4 Title 7
4.5 No Conflict; Required Filings and Consents 7
4.6 Financial Statements 7
4.7 Taxes 8
4.8 Properties, Assets and Leases 8
4.9 Employee Benefit Plans 9
4.10 Company Contracts 10
4.11 Legal Proceedings 11
4.12 Year 2000 Compliance 11
4.13 Compliance with Laws 11
4.14 Environmental Matters 11
4.15 Intellectual Property 12
4.16 No Brokers 12
4.17 Company Employees 12
4.18 Bank Accounts 12
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER 13
5.1 Investment Intent 13
5.2 Organization and Standing 13
5.3 Authorization, Validity and Effect 13
5.4 No Conflict; Required Filings and Consents 13
5.5 Legal Proceedings 14
5.6 No Brokers 14
5.7 Buyer's Financing 14
5.8 Financial Information 14
5.9 No Reliance 14
ARTICLE VI
COVENANTS AND AGREEMENTS 15
6.1 Interim Operations of the Company 15
6.2 Reasonable Access; Confidentiality 16
6.3 Filings; Other Action 16
6.4 Publicity 16
6.5 Records 17
6.6 Tax Matters 17
6.7 Allocation Matters 18
6.8 NAPA Business Practices 19
6.9 Non-Competition 19
6.10 Accounts Receivable 20
ARTICLE VII
CONDITIONS TO CLOSING 20
7.1 Conditions to Obligations of Seller and Buyer 20
7.2 Conditions to Obligation of Seller 20
7.3 Conditions to Obligation of Buyer 21
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION 22
8.1 Survival Periods 22
8.2 Indemnification 22
8.3 Indemnification Amounts 23
8.4 Claims 23
8.5 Exclusive Remedy 24
8.6 Tax and Insurance 24
ARTICLE IX
EMPLOYEE BENEFIT MATTERS 25
9.1 Employment 25
9.2 Compensation and Employee Benefits 25
9.3 WARN Act and Severance 26
ARTICLE X
TERMINATION OF AGREEMENT 27
10.1 Termination 27
10.2 Effect of Termination 27
ARTICLE XI
MISCELLANEOUS AND GENERAL 28
11.1 Expenses 28
11.2 Successors and Assigns 28
11.3 No Third Party Beneficiaries 28
11.4 Notices 28
11.5 Complete Agreement 30
11.6 Captions; References 30
11.7 Amendment 30
11.8 Waiver 30
11.9 Governing Law 30
11.10 Severability 30
11.11 Further Assurances 30
11.12 Disclosure Schedule Supplements 31
11.13 Mutual Drafting 31
11.14 Counterparts 31
Exhibits
Exhibit A Current Competitors
Exhibit B Current Customers
Exhibit C Employee Retention Incentive Agreements
Exhibit D Freight Agreement
Exhibit E Litchfield Facility Lease
Exhibit F Specified Accounting Principles
Exhibit G Supply Agreement
Exhibit H Transitional Services Agreement
Exhibit I Trucking Agreement
Schedules
Schedule 4.5 Conflicts, Filings and Liens; Approvals
Schedule 4.6 Financial Statements
Schedule 4.7 Taxes
Schedule 4.8(a) Liens
Schedule 4.8(b) Real Property
Schedule 4.8(c) Personal Property Leases
Schedule 4.8(d) Material Equipment
Schedule 4.9 Company Benefit Arrangements
Schedule 4.10 Company Contracts
Schedule 4.11 Legal Proceedings
Schedule 4.13 Compliance with Laws
Schedule 4.14 Environmental Matters
Schedule 4.15 Intellectual Property
Schedule 4.17 Employees
Schedule 4.18 Bank Accounts
Schedule 5.4(b) Buyer's Conflicts; Filings and Consents; Approvals
Schedule 5.5 Legal Proceedings
Schedule 6.1 Interim Operations of the Company
Schedule 9.1 List of Certain Continuing Employees
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
October 13. 1999, by and between Echlin Inc., a Connecticut corporation
("Seller"), and IMO Industries, Inc., a Delaware corporation ("Buyer").
RECITALS:
A. Automotive Controls Corp., a wholly owned subsidiary of
Seller (the "Shareholder"), is the beneficial and record owner of all the
issued and outstanding shares (the "Shares") of common stock, par value
of $1.00 per share, of Sierra International Inc., an Illinois corporation
(the "Company").
B. Seller desires Shareholder to sell to Buyer, and
Buyer desires to purchase from Shareholder, all of the Shares upon the
terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, Seller and Buyer
hereby agree as follows:
ARTICLE I
DEFINITIONS
See Appendix A for a list of the definitions used in this Agreement.
ARTICLE II
DATE AND PURCHASE OF SHARES
2.1 Sale and Purchase of Shares. Subject to the terms and conditions
of this Agreement, at the Closing (a) Seller shall cause the Shareholder to
sell, assign and transfer all of the Shares to Buyer free and clear of any
and all Liens except any created by or through Buyer, (b) Buyer shall
purchase all of the Shares, (c) Seller shall deliver to Buyer one or more
stock certificates representing the Shares with duly executed stock powers
attached in proper form for transfer to Buyer or its designee, and (d) Buyer
shall pay and deliver to Seller the Purchase Price as provided in Section
2.2 below.
2.2 Purchase Price. In full consideration for the Shares and subject
to adjustment pursuant to Section 2.3 below, Buyer shall (a) pay to Seller
at the Closing by wire transfer of immediately available funds to an account
designated by Seller prior to the Closing an aggregate amount of cash equal
to $34,000,000 (the "Purchase Price") and (b) assume those obligations of
▇▇▇▇ Corporation, a Virginia corporation ("▇▇▇▇") under the Employee
Retention Incentive Agreements to be assumed pursuant to Section 7.2(d).
2.3 Purchase Price Adjustment
(a) As used herein, the term "Closing Net Working Assets" means
the aggregate of the sum of the value of the net trade accounts receivable
and the value of the net inventory less the value of the net trade accounts
payable of the Company as of the close of business on the date immediately
preceding the Closing Date and as such values are determined in accordance
with the Specified Accounting Principles and reflected in the Final Net
Working Assets Statement.
(b) Within forty five (45) days after the Closing Date, Seller
shall prepare and deliver to Buyer a statement of the Closing Net Working
Assets of the Company, together with footnotes (collectively, the "Closing
Net Working Assets Statement"). Seller shall prepare the Closing Net Working
Assets Statement in accordance with the Specified Accounting Principles and
the net inventory value to be reflected on the Closing Net Working Assets
Statement is to be based on a physical inventory to be commenced by Buyer on
the Closing Date and to be conducted by Buyer in the presence and under the
supervision of Seller's Accountants. Buyer shall promptly deliver to Seller
the results of the inventory count and shall grant Seller's Accountants such
access to the Company's facilities and the results of the physical count as
Seller reasonably requires to prepare the Closing Net Working Assets
Statement.
(c) Buyer shall allow Seller and Seller's independent
accountants ("Seller's Accountants") access to the business, books, records
and personnel of the Company and the work papers, if any, of Buyer's
independent accountants ("Buyer's Accountants"), prepared subsequent to the
date hereof which are relevant to the Closing Net Working Assets Statement,
and shall cooperate and direct its personnel and Buyer's Accountants to
cooperate with Seller and Seller's Accountants to facilitate preparation and
delivery of the Closing Net Working Assets Statement and in connection with
the resolution of any disputes with respect thereto and the determination of
the Final Net Working Assets Statement. Buyer and its representatives,
including Buyer's Accountants, will be entitled to review all work papers,
if any, of Seller's Accountants prepared subsequent to the date hereof, and
to obtain access to the books and records of Seller or its Affiliates to the
extent necessary for Buyer to review the Closing Net Working Assets
Statement and to resolve any disputes concerning the same.
(d) The Closing Net Working Assets Statement delivered by Seller
to Buyer will be the Final Net Working Assets Statement and will be
conclusive and binding on the parties unless Buyer, within the thirty (30)
day period after the delivery to Buyer of the Closing Net Working Assets
Statement, notifies Seller in writing that Buyer disputes any of the amounts
set forth therein, specifying the nature of each dispute and the basis
therefor (the "Dispute Notice"); provided, that Buyer may deliver a Dispute
Notice only if Buyer reasonably believes the Closing Net Working Assets
Statement contains mathematical errors or has not been prepared in
accordance with the Specific Accounting Policies. Failure by Buyer to
dispute the amounts reflected in the Closing Net Working Assets Statement
within such thirty (30) day period will be deemed an acquiescence thereto by
Buyer. The parties shall attempt in good faith to reach agreement resolving
all of the disputes set forth in the Dispute Notice within thirty (30) days
alter the Dispute Notice is delivered by Buyer to Seller, in which event the
Closing Net Working Assets Statement, as amended to the extent necessary to
reflect the resolution of all such disputes, will be the Final Net Working
Assets Statement and will be conclusive and binding on the parties. If the
parties are unable to resolve any or all of such disputes within the
aforesaid thirty (30) day period, the parties will, promptly after the
expiration of such time period, submit for resolution all unresolved
disputes to Ernst & Young, as an arbiter (the "Designated Accounting
Arbitrator") for resolution. Promptly, but no later than thirty (30) days
after its acceptance of its appointment as Designated Accounting Arbitrator,
the Designated Accounting Arbitrator shall determine, based solely on
presentation by Buyer and Seller, and not by independent review, those items
in dispute on the Closing Net Working Assets Statement and shall render a
written report as to the resolution of each dispute and the resulting
calculation of the Final Net Working Assets Statement and the Closing Net
Working Assets. In resolving any disputed item, the Designated Accounting
Arbitrator may not assign a value to such item greater than the greatest
value for such item claimed by either party or less than the smallest value
for such item claimed by either party. The Designated Accounting Arbitrator
will have exclusive jurisdiction over, and resort to the Designated
Accounting Arbitrator as provided in this paragraph (d) will be the sole
recourse and remedy of, the parties against one another or any other person
(including Seller's Accountants or Buyer's Accountants) with respect to, any
disputes arising out of or relating to the Closing Net Working Assets
Statement and/or the Final Net Working Assets Statement; and the Designated
Accounting Arbitrator's determination will be conclusive and binding on the
parties and will be enforceable in a court of law.
(e) Seller shall pay the fees and expenses of Seller's
Accountants. Buyer shall pay the fees and expenses of Buyer's Accountants.
Buyer and Seller shall share equally the fees and expenses of the Designated
Accounting Arbitrator.
(f) As used herein, the term "Final Net Working Assets
Statement" means (i) the Closing Net Working Assets Statement if no Dispute
Notice is given by Buyer within the time period set forth in Section 2.3(d)
or (ii) if the Dispute Notice is timely given and all of the disputed items
are resolved by mutual agreement of the parties, the Closing Net Working
Assets Statement, as amended, if necessary, to reflect such resolution of
all disputes, or (iii) if any or all of the disputed items are submitted to
the Designated Accounting Arbitrator for resolution, the Closing Net Working
Assets Statement, as amended, if necessary, to reflect any resolution of any
disputes by mutual agreement of the parties and the resolution of all other
disputes by the Designated Accounting Arbitrator.
(g) If the Closing Net Working Assets exceeds $18,871,000, Buyer
shall pay to Seller the amount of such excess. If the Closing Net Working
Assets is less than $18,871,000, Seller shall pay Buyer the amount of such
difference. Any payments made by Buyer or Seller, as the case may be,
pursuant to this Section 2.3(g) will be made together with interest thereon
from the Closing Date to the date of payment at a rate of eight percent (8%)
per annum within thirty (30) Business Days of the date on which the Final
Net Working Assets Statement is determined by wire transfer of immediately
available funds to the account designated by the payee; provided, however,
that, if payment is not made within such thirty Business Day period, the
applicable rate of interest is to be eleven percent (11%) per annum for the
period from the day following such date through the date such payment is
made.
ARTICLE III
CLOSING AND DELIVERIES
3.1 Closing. The closing of the transactions contemplated hereby (the
"Closing") is to take place at the offices of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇,
North Point, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m.,
local time on the first Business Day following the satisfaction or waiver of
each of the conditions set forth in Article VII (other than those conditions
that are to be satisfied at the Closing), or on such other date or at such
other time and place as the parties mutually agree in writing (the "Closing
Date"). All proceedings to be taken and all documents to be executed and
delivered by all parties at the Closing will be deemed to have been taken
and executed simultaneously and no proceedings will be deemed to have been
taken nor documents executed or delivered until all have been taken,
executed and delivered.
3.2 Deliveries by Seller. At the Closing, Seller shall deliver
or cause to be delivered to Buyer the following items:
(a) One or more certificates representing the Shares,
accompanied by duly executed stock powers in proper form for transfer;
(b) The Articles of Incorporation of the Company, certified
as of the most recent practicable date by the Secretary of State of the
State of Illinois;
(c) A Certificate of the Secretary of State of the State of
Illinois as to the good standing as of the most recent practicable date of
the Company in Illinois and a certificate of good standing as of the most
recent practicable date from the appropriate Governmental Authority in each
state where the Company is qualified to do business;
(d) A certificate of the Secretary of Seller certifying as
to the resolutions authorizing this Agreement and the transactions
contemplated hereby;
(e) The Supply Agreement duly executed by Seller and the
Company;
(f) The Freight Agreement duly executed by Echlin Freight
Group and the Company;
(g) The Trucking Agreement duly executed by DTF Trucking,
Inc. and the Company;
(h) The Transitional Services Agreement duly executed by
Seller and the Company;
(j) The original corporate record books and stock record
book of the Company;
(k) The certificate from Seller referred to in Section
7.3(c); and
(l) Written resignations of each director of the Company.
Notwithstanding the foregoing, Seller shall have an obligation to deliver at
Closing only those agreements referred to in clauses (e) - (h) above which Buyer
has advised Seller in writing prior to October 27, 1999 that Buyer desires to
have Seller deliver.
3.3 Deliveries by Buyer. At the Closing, Buyer shall deliver or
cause to be delivered to Seller the following items:
(a) The Purchase Price, paid by wire transfer of immediately
available funds in accordance with Section 2.2(a);
(b) The certificate of an officer of Buyer referred to in
Section 7.2(c); and
(c) A certificate of the Secretary of Buyer certifying as to the
By-laws of Buyer and the resolutions authorizing this Agreement and the
transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date of this
Agreement as follows:
4.1 Organization and Standing. The Company is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company is duly qualified to do business and in good
standing in the jurisdictions in which the character of the properties owned
or leased by it or in which the conduct of its business requires it to be so
qualified.
4.2 Authorization, Validity and Effect. Seller has all requisite power
and authority to enter into and perform its obligations under this Agreement
and all agreements and documents contemplated hereby and to consummate the;
transactions contemplated hereby and thereby, and this Agreement and such
other agreements and documents have been, or will be, duly executed and
delivered by Seller pursuant to all necessary authorization and are, or
will, when delivered, be the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as limited
by (a) applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
from time to time in effect and (b) the availability of equitable remedies
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
4.3 Capitalization. The authorized capital stock of the Company
consists of 10,000 shares of common stock, par value of $1.00 per share, of
which, only the Shares are issued and outstanding. All of the Shares are
duly and validly issued and outstanding and are fully paid and
nonassessable. There are no authorized or outstanding Options or other
agreements under which the Company may be obligated to issue or sell any
shares of capital stock or any other securities of the Company.
4.4 Title. The Shareholder (a) is the record and beneficial owner of
all of the Shares and (b) has valid title to all of the Shares free and
clear of all Liens. Upon the consummation of the transactions contemplated
by this Agreement in accordance with the terms hereof, Buyer will acquire
valid title to the Shares, free and clear of all Liens except those created
by or through Buyer.
4.5 No Conflict; Required Filings and Consents.
(a) Neither the execution and delivery of this Agreement by
Seller, nor the consummation by Seller of the transactions contemplated
herein, nor compliance by Seller with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of the Company's
Articles of Incorporation or By-laws, (ii) except as set forth in Schedule 4
5, constitute or result in the breach of any term, condition or provision
of, or constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation or
imposition of any Lien upon any property or assets of the Company, pursuant
to any note, bond, mortgage, indenture, license, agreement, lease or other
instrument or obligation to which the Company is a party or by which any of
its properties or assets may be subject, or (iii) subject to receipt of the
requisite approvals referred to in Schedule 4 5 violate any Order or Law
applicable to the Company or any of its properties or assets.
(b) Other than (i) those required under the HSR. Act and (ii) as
set forth in Schedule 4.5, no notice to, filing with, authorization of,
exemption by or Consent of any Person or Governmental Authority is necessary
for the consummation by Seller of the transactions contemplated in this
Agreement.
4.6 Financial Statements.
(a) The Company has prepared and furnished to Buyer and included
in Schedule 4.6, the unaudited balance sheets of the Company as of the end
of the fiscal years ending August 31, 1997 and 1998, the end of the calendar
year ending December 31, 1998, and the unaudited consolidated statements of
income for such periods. The Company has furnished to Buyer and included in
Schedule 4.6 the unaudited balance sheet of the Company for the six months
ended June 30, 1999 (the "June Balance Sheet), and the unaudited statements
of income for such period. All of the financial statements (i) are in
accordance with the books and records of the Company, (ii) present fairly in
all material respects the financial position of the Company as of the
respective dates and the results of operations for the respective periods
indicated, and (iii) have been prepared in all material respects in
accordance with GAAP applied on a basis consistent with prior accounting
periods except they contain none of the footnotes required by GAAP and the
June Balance Sheet reflects no year-end adjustments.
(b) Except as reflected in the June Balance Sheet, as of June
30, 1999, there existed no liabilities (whether contingent or absolute,
matured or unmatured, known or unknown) of the Company. Except as described
in Schedule 4.6, since June 30, 1999, (i) the Company has not incurred any
liabilities (whether contingent or absolute, matured or unmatured, known or
unknown) other than in the ordinary course of business consistent with past
practice and (ii) no change or event has occurred which has had a Material
Adverse Effect on the Company.
(c) The projected unaudited balance sheet of the Company as of
November 30, 1999 has been delivered to Buyer solely to provide Buyer with
an understanding of the cyclical nature of the Business and the basis for
the adjustment to the Purchase Price under Section 2.3(g).
4.7 Taxes.
(a) The Company has filed all Tax Returns required to be filed
by it, paid or made in the June Balance Sheet adequate provision for the
payment of all Taxes shown on such returns to be owed by it, and no claims
for additional Taxes for any prior fiscal years are pending except as
disclosed in Schedule 4.7. The Company is not a party to any pending Action,
nor, to Seller's Knowledge, is any such Action threatened, by any
Governmental Authority for the assessment or collection of Taxes.
(b) The Company is a member of the Selling Consolidated
group as defined in Treasury ▇▇▇.▇▇. 1.338(h)(10)-1(c)(3) and Seller is
eligible to make an election under IRCss.338(h)(10).
4.8 Properties, Assets and Leases.
(a) Except as disclosed on Schedule 4 8(a) the Company has good
and valid title to all of the properties and assets reflected in the June
Balance Sheet, free and clear of all Liens except for (i) those properties
and assets which have been sold in the ordinary course since the date hereof
and (ii) such imperfections or irregularities of title, Liens or defaults
that do not affect the use thereof and statutory Liens securing payments not
yet due.
(b) Schedule 4.8(b) contains a complete and accurate description
in all material respects of all the Real Property and the Company's interest
therein. The Real Property listed on Schedule 4.8(b) comprises all real
property interests used in the conduct of the business and operations of the
Company as conducted as of the date hereof. The Company has delivered to
Buyer true and complete copies of all leases pertaining to the Real
Property. Subject to the terms of the Litchfleld Facility Lease, all Real
Property (including the improvements thereon) (i) is available and is
adequate for immediate use in the conduct of the business and operations of
the Company as currently conducted and (ii) complies in all material
respects with all applicable building or zoning codes and regulations of any
Governmental Authority having jurisdiction.
(c) Schedule 4.8(c) contains a complete list of all vehicle
leases and subleases and all leases and subleases pursuant to which the
Company leases personal property that require the payment of $5,000 or more
per year. Except as set forth in Schedule 4 8(c),( i) all leases listed on
Schedule 4.8(c) and (ii) all leases pertaining to Real Property are valid,
binding and enforceable in accordance with their terms, except as limited by
any applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and to
general principles of equity (whether or not considered in a court of law or
equity), and are in full force and effect. There are no existing defaults by
the Company under such leases. The Company has not received notice of the
occurrence of, nor to Seller's Knowledge has there occurred, any event which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a default under such leases
by any party thereto.
(d) Schedule 4 8(d) is an accurate list of all machinery,
equipment and other tangible personal property, including motor vehicles,
which are owned by the Company, used in the conduct of its business and
having a net book value in excess of $10,000 as of August 31, 1999
(collectively, the "Material Equipment"'). Except as otherwise specified in
Schedule 4.8(d), to Seller's Knowledge, all Material Equipment: is, in all
material respects, in good repair and working order and is adequate for the
conduct of the Company's business as currently conducted. Except as set
forth in Schedule 4 8(d) hereto, no Person, other than the Company, owns any
equipment or other tangible property or assets on the premises of the
Company that is necessary to the operation of the business of the Company.
4.9 Employee Benefit Plans. Each "employee benefit plan", as defined
in Section 3(3) of ERISA, maintained, contributed to or required to be
contributed to by the Company for the benefit of current, former and retired
employees (the "Company ERISA Plans") and each other plan, contract, program
or arrangement maintained, contributed to or required to be contributed to
by the Company for the benefit of current, former and retired employees (the
"Company Benefit Arrangements") complies in all material respects with its
terms and all applicable Laws, including ERISA, and no "reportable event" or
"prohibited transaction" (as such terms are defined in ERISA) or termination
has occurred with respect to any Company ERISA Plan under circumstances that
present a risk of any material liability to the Company. The Company ERISA
Plans and the Company Benefit Arrangements are listed on Schedule 4.9.
Copies or descriptions of each Company ERISA Plan and Company Benefit
Arrangement have been made available to Buyer for review prior to the date
hereof. The Company has no obligation to provide medical or life insurance
coverage to retired employees under the Company ERISA Plans, the Company
Benefit Arrangements or any other plan or agreement. No Company ERISA Plan
is a "multi-employer plan" as defined in Section 3(37) of ERISA, and no
Company ERISA Plan promises or provides post-retirement medical benefit.
4.10 Company Contracts. Set forth in Schedule 4.10 is a list, as
of the date hereof, of the following agreements (the "Company Contracts"):
(a) Each agreement to which the Company is a party requiring
payment in excess of $50,000 per year except those that are terminable at
the option of the Company upon less than thirty (30) days notice;
(b) Each agreement covering the lease, purchase or service of
tangible personal property to which the Company is a party requiring
payments in excess of $l0,000 per year;
(c) Each agreement to which the Company is a party with respect
to indebtedness for money borrowed, including letters of credit, guaranties,
indentures, swaps and similar agreements;
(d) Each management, consulting, employment, severance,
collective bargaining or similar agreement, and each employment, to which
the Company is a party;
(e) Each agreement with any manufacturer's representative,
distributor or sales agent; and
(f) Each agreement between the Company and Seller or its
Affiliates.
Each of the Company Contracts is valid, binding and enforceable in
accordance with its terms, except as limited by any applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and to general principles of
equity (whether or not considered in a court of law or equity), and are in
full force and effect. There are no existing material defaults by the
Company under any of the Company Contracts. No event has occurred which
(whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute a material default under any
of the Company Contracts by any party thereto.
4.11 Legal Proceedings. Except as set forth in Schedule 4 11, there
are no Actions instituted or pending, or, to Seller's Knowledge threatened
or anticipated, against the Company or to which the Company is a party, or
against any property, asset, interest or right of the Company. Except as
disclosed on Schedule 4 11, the Company is not subject to any Order that
would have a Material Adverse Effect on the Company.
4.12 Year 2000 Compliance. The Company has adopted and implemented
commercially reasonably measures to investigate and correct any "year 2000
problems" associated with the operation of the Company's business.
4.13 Compliance with Laws. Except as set forth in Schedule 4.13, the
Company: (a) is in compliance with all Laws and Orders applicable to it and
(b) since January 1, 1997, has received no written notification or
communication from any Governmental Authority (i) asserting that the Company
is not in compliance with any Law or (ii) threatening to revoke any Permit
of any Governmental Authority.
4.14 Environmental Matters. Except as set forth in Schedule 4.14:
(a) The Company has complied with all of the terms and
conditions of all Permits which are required under, and has complied with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables which are contained in,
all federal, state and local Laws relating to pollution or protection of the
environment, including Laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, or any other materials or
wastes including "hazardous substances" as defined in 42 U.S.C. ss. 9601,
petroleum or any constituent thereof and any hazardous or solid waste as
defined in 42 U.S.C. ss. 6903 ("Hazardous Substances"") into the environment
(including ambient air, surface water, ground water or lands) or otherwise
regulating the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances
(Environmental Laws").
(b) Since October 1, 1989, the Company has not received any
written notice of a charge, complaint, action, suit, proceeding, hearing,
investigation, claim, demand or notice alleging any liability of the Company
or any failure by the Company to comply with any Environmental Law
("Environmental Claim") and any disputes resulting from any notice received
prior to such date have been resolved.
4.15 Intellectual Property.
(a) Schedule 4.15 sets forth a complete and correct list of all
patented or registered Intellectual Property and pending patent applications
or other applications for registrations of Intellectual Property owned or
filed by or on behalf of the Company and any other Intellectual Property the
Company currently uses in connection with its business.
(b) Except as set forth on Schedule 4.15 (i) the Company owns
and possesses all right, title and interest in and to, or, to Seller's
Knowledge, has a valid and enforceable license to use, the Intellectual
Property currently used in the operation of the Company's business and (ii)
since January 1, 1997, the Company has not received any notices of any
infringement or misappropriation by, or conflict with, any third party with
respect to the Intellectual Property or any third party's intellectual
property rights and any disputes resulting from any notice received prior to
such date have been resolved.
(c) "Intellectual Property" means all patents, patent
applications, patent licenses, software licenses, know-how, licenses,
trademarks, copyrights, service marks, trademark registrations and
applications, copyright registrations and applications, service ▇▇▇▇
registrations and applications and all other intangible property rights or
technology owned or used by the Company in the operation of its businesses.
4.16 No Brokers. Except for the compensation payable to W. Y.
▇▇▇▇▇▇▇▇ & Company ("▇▇▇▇▇▇▇▇") in connection with the transactions
contemplated by this Agreement, which is to be paid by Seller, no broker,
finder or similar agent has been employed by or on behalf of Seller or
the Company, and no Person with which Seller or the Company have had any
dealings or communications of any kind other than ▇▇▇▇▇▇▇▇ is entitled to
any brokerage commission, finder's fee or any similar compensation in
connection with this Agreement or the transactions contemplated hereby.
4.17 Company Employees. Schedule 4.17 sets forth a complete list of
all current employees of the Company and their annualized rates of pay as of
September 1, 1999 and since that date there have been no changes in the
annual rates of pay of any employees. To Seller's Knowledge and except for
those efforts made in 1998 in connection with the tender offer for Seller,
there has not been since January 1, 1997 any effort by any labor
organization to organize into a collective bargaining unit any employees of
the Company.
4.18 Bank Accounts. Schedule 4.18 is an accurate list of all
bank accounts maintained by the Company and the authorized signatories
therefor.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date of this
Agreement as follows:
5.1 Investment Intent. The Shares are being purchased for
its own account and not with the view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of
the Securities Act of 1933.
5.2 Organization and Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as presently
being conducted.
5.3 Authorization, Validity and Effect Buyer has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby to be executed and delivered by
it, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and such other agreements and
documents, and the consummation of the transactions contemplated herein and
therein, have been duly and validly authorized by all necessary corporate
action in respect thereof on the part of Buyer. This Agreement and all
agreements and documents contemplated hereby has been duly and validly
executed and delivered by Buyer and represents the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as limited by (a) applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally from time to time in effect and (b) the availability of
equitable remedies (regardless of whether enforceability is considered in a
proceeding at law or in equity).
5.4 No Conflict; Required Filings and Consents.
(a) Neither the execution and delivery of this Agreement by
Buyer, nor the consummation by Buyer of the transactions contemplated
herein, nor compliance by Buyer with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of the Articles of
Incorporation or By-laws or equivalent organizational documents of Buyer,
(ii) constitute or result in the breach of any term, condition or provision
of, or constitute a default under, or give rise to any right of termination,
cancellation or acceleration with respect to, or result in the creation or
imposition of any Lien upon, any property or assets of Buyer or, pursuant to
any note, bond, mortgage, indenture, license, agreement, lease or other
instrument or obligation to which it is a party or by which it or any of its
properties or assets may be subject, and that would, in any such event, have
a Material Adverse Effect on Buyer, or (iii) subject to receipt of the
requisite approvals referred to in Schedule 5.4(b), to the actual knowledge
of the executive officers of Buyer ("Buyer's Knowledge"), violate any Order
or Law applicable to Buyer or any of its properties or assets,
(b) Other than (i) notices under the HSR Act, (ii) as set forth
in Schedule 5.4(b) and (iii) where the failure to give such notice, make
such filing, or receive such authorization, exemption or Consent would not
have a Material Adverse Effect on Buyer, no notice to, filing with,
authorization of, or exemption by, or Consent of any Person or Governmental
Authority is necessary for the consummation by Buyer of the transactions
contemplated in this Agreement.
5.5 Legal Proceedings. Except as set forth in Schedule 5.5, there are
no Actions instituted or pending, or to Buyer's Knowledge, threatened,
against Buyer, or against any of its properties, assets, interests or
rights, that would interfere with or delay the consummation of the
transactions contemplated by this Agreement. Buyer is not subject to any
Order that would have a Material Adverse Effect on Buyer.
5.6 No Brokers. No broker, finder or similar agent has been employed
by or on behalf of Buyer, and no Person with which Buyer has had any
dealings or communications of any kind is entitled to any brokerage
commission, finder's fee or any similar compensation in connection with this
Agreement or the transactions contemplated hereby.
5.7 Buyer's Financing. Buyer has sufficient funds available to
consummate the transactions contemplated hereby and pay all related fees
and expenses.
5.8 Financial Information. Buyer has made available to Seller copies
of the audited consolidated financial statements of Buyer and its
Subsidiaries as of and for the period ended December 31, 1997 and 1998
accompanied by the reports thereon of Buyer's independent public accountants
(the "Buyer Financials"). Since December 31, 1998, no Material Adverse
Effect has occurred with respect to Buyer.
5.9 No Reliance. The purchase of the Shares by Buyer and the
consummation of the transactions contemplated hereunder by Buyer are not
done in reliance upon any warranty or representation by, or information
from, Seller or the Company of any sort, oral or written, except the
warranties and representations specifically set forth in this Agreement
(including the schedules and exhibits hereto) and in any certificates
required to be delivered to Buyer by Seller hereunder and thereunder.
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 Interim Operation of the Company. From the date hereof until the
Closing Date, except as contemplated by any other provision of this
Agreement or as set forth in Schedule 6.1, unless Buyer has previously
consented in writing thereto, Seller shall cause the Company to operate in
the ordinary course of business and Seller shall cause the Company not to:
(a) incur any indebtedness or issue any debt securities or
assume, guarantee or endorse the obligations of any other Persons,:
except for indebtedness incurred in the ordinary course of business
consistent with past practice;
(b) except in the ordinary course of business consistent
with past practice, acquire or dispose of any material assets;
(c) enter into any agreements, commitments or contracts, except
agreements, commitments or contracts made in the ordinary course of business
consistent with past practice;
(d) except in the ordinary course of business consistent with
past practice, engage in any transactions with, or enter into any contracts
or agreements with any Affiliates of the Company;
(e) enter into, adopt, amend or terminate any agreement relating
to the compensation or severance of any employee associated with the
Company, except to the extent required by Law, any existing agreements and
for the agreement with ▇▇▇▇ ▇▇▇▇▇▇ in the form delivered to Buyer on October
12, 1999;
(f) make any material change to its accounting (including
tax accounting) methods, principles or practices, except as may be
required by GAAP;
(g) make any amendment to its Articles of Incorporation or
By-laws;
(h) issue or sell any capital stock of the Company or split,
combine or subdivide the capital stock of the Company; or
(i) agree to take any of the actions described in
sub-clauses (a) through (h) above.
6.2 Reasonable Access; Confidentiality
(a) From the date hereof until the Closing, Seller shall cause
the Company to give Buyer and its representatives (including its attorneys,
agents and lenders or other sources of financing), upon reasonable notice to
the Company, reasonable access to the assets, properties, books, records,
agreements, employees and commitments of the Company and shall cause the
Company to permit Buyer to make such inspections as it may reasonably
require and to furnish Buyer during such period with all such information
relating to the Company as Buyer may from time to time reasonably request.
(b) Any information provided to or obtained by Buyer pursuant to
paragraph (a) above is "Information" as defined under the Confidentiality
Agreement, dated July 16, 1999, between the Company and Buyer (the
"Confidentiality Agreement'),, and is to be held by Buyer in accordance with
and be subject to the terms of the Confidentiality Agreement.
(c) Buyer agrees to be bound by and comply with the provisions
set forth in the Confidentiality Agreement as if such provisions were set
forth herein, and such provisions are hereby incorporated herein by
reference.
6.3 Filings; Other Action. Subject to the terms and conditions
provided herein, Seller and Buyer shall (a) promptly make their respective
filings and thereafter make any other required submissions under the HSR
Act; (b) use their reasonable best efforts to cooperate with each other in
(i) determining which filings are required to be made prior to the Closing
Date with, and which Consents are required to be obtained prior to the
Closing Date from, Governmental Authorities in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and (ii) timely making all such filings and timely
seeking all such Consents; and (c) use their reasonable best efforts to
cause the conditions to each of Seller's and Buyer's obligations hereunder
to be fulfilled.
6.4 Publicity. Seller and Buyer shall make a joint press release
announcing the execution of this Agreement and the transactions contemplated
hereby, which is to be acceptable to each of Seller and Buyer; provided,
however, that such press release and any other public disclosure by Seller
or Buyer of this Agreement or the transactions contemplated hereby is not to
disclose the Purchase Price unless such disclosure is required by Law. No
other publicity release or announcement concerning the transactions
contemplated hereby is to be issued by either party without the advance
written consent of such other party, except any such release or announcement
as may be required by applicable Law.
6.5 Records. With respect to the financial books and records (other
than Tax records which are provided for in Section 6.6) and minute books of
the Company relating to matters on or prior to the Closing Date, for a
period of ten years after the Closing Date, neither Seller nor Buyer shall
cause or permit their destruction or disposal without first offering to
surrender them to Buyer or Seller as appropriate, and Seller and Buyer shall
allow Buyer and Seller and his representatives, as appropriate, access to
such books and records during regular business hours.
6.6 Tax Matters. From and after the Closing:
(a) Seller and Buyer shall (i) each provide the other and shall
cause their respective accountants to provide the other party's accountant,
and Buyer shall cause the Company to provide Seller, with such assistance as
may reasonably be requested by any of them in connection with the
preparation of any Tax Return, or the conduct of any audit or other
examination by any taxing authority or judicial or administrative
proceedings relating to liability for Taxes; (ii) each retain and provide
the other and shall cause their respective accountants to provide the other
party's accountant, and Buyer shall cause the Company to retain and provide
Seller with, any records or other information that may be relevant to such
Tax Return, audit or examination, proceeding or determination; and (iii)
each provide the other with any final determination of any such audit or
examination, proceeding or determination that affects any amount required to
be shown on any Tax Return of the other for any period. Without limiting the
generality of the foregoing, Buyer shall retain, and shall cause the Company
to retain, and Seller shall retain, until the applicable statute of
limitations (including any extensions) have expired, copies of all Tax
Returns, supporting work schedules, and other records or information that
may be relevant to such returns for all Tax periods or portions thereof
ending before or including the Closing and shall not destroy or otherwise
dispose of any such records without first providing the other party with a
reasonable opportunity to review and copy same at the cost of such other
party.
(b) Seller shall prepare and file income Tax Returns with
respect to the Company for all periods commencing prior to and ending on or
before the Closing Date. Seller shall pay all Taxes described in Section
8.2(a)(vi). Buyer shall pay all Taxes of the Company for all periods that
begin after the Closing Date, and shall prepare and file all Tax Returns
with respect to the Company for all periods commencing after the Closing
Date and ending thereafter.
(c) Seller and Buyer shall each pay fifty percent (50%) of any
state and local sales and stock transfer taxes and all recording costs and
fees however styled or designated that are required to be paid in connection
with the transfer of the Shares contemplated by this Agreement.
(d) Seller and Buyer shall provide to each other prompt notice
of, and as requested by the other party reasonable cooperation in respect
of, any audit or similar investigation or proceeding in which the Internal
Revenue Service or any other Governmental Authority makes or proposes to
make a Tax adjustment to any Tax period of the Company ending on or before
the Closing Date.
(e) Buyer and Seller shall make a timely, effective, and
irrevocable election under Section 338(h)(10) of the Code and under any
comparable statutes in any other jurisdiction with respect to the purchase
of the Shares of the Company (collectively, the "Section 338(h)(10)
Election"), and to file that election in accordance with applicable
regulations. The Section 338(h)(10) Election will allocate the modified ADSP
(as that term is defined in Treasury Regulations Section 1.338(h)(10)-1(f))
of the assets of the Company in accordance with the Treasury regulations
promulgated under Section 338(h)(l0). Neither Buyer nor Seller nor any of
their respective Affiliates shall take any action inconsistent with, or fail
to take any action necessary for the validity of the ss. 338(h)(10)
Election, and shall utilize the asset values determined from the Allocation
Agreement (as defined in Section 6.7) for the purpose of all tax returns
filed and shall not take any action inconsistent therewith upon examination
of any tax return, in any refund claim, in any litigation, or otherwise in
respect to such returns.
6.7 Allocation Matters. The parties shall use their best efforts to
enter into an agreement (the "Allocation Agreement") as soon as possible
after the final determination of the purchase price allocating the Purchase
Price among the assets and liabilities of the Company. Buyer shall deliver
to Seller a proposed Allocation Agreement within sixty (60) days after the
signing of this agreement. If Seller has not objected to the proposed
Allocation Agreement within thirty (30) days after receipt, such agreement
shall be accepted and shall be the Allocation Agreement.
If Seller objects to Buyer's proposed Allocation Agreement.
Seller shall give Buyer written notice of the objections and Seller and
Buyer shall use reasonable efforts to resolve the differences. If within
thirty (30) days after the date on which Seller has given Buyer notice of
its objections, the parties have not adopted the Allocation Agreement, any
dispute related thereto shall be referred to an independent accounting firm
selected by the parties and resolved thirty (30) days after such referral.
The independent accounting firm's determination shall be conclusive and
binding upon Buyer and Seller and its Affiliates except as provided below.
The costs, expenses, and fees of the independent accounting firm shall be
borne equally by the parties.
The value assigned to the building and land located at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇. (a.k.a. ▇ ▇▇▇▇▇▇ ▇▇▇▇▇), ▇▇▇▇▇▇▇▇▇▇, ▇▇ shall be $912,000.
Buyer will prepare IRS Form 8023 and deliver the form to Seller
no later than sixty (60) days prior to its due date. Seller will review and
complete Section F ("Seller's Statement") of Form 8023, sign and return to
Buyer no later than thirty (30) days prior to Form 8023's due date.
6.8 NAPA Business Practices. For one year following the Closing, Buyer
shall cause the Company to continue the business practices (the "NAPA
Business Practices") formerly employed by the Company as a supplier of
products to NAPA, including, without limitation, the following practices:
(a) the Company shall continue to supply NAPA products requested by NAPA
within forty eight (48) hours after the order has been received, (b) the
Company shall accept returns of products supplied by the Company to NAPA in
an amount not more than two percentage points above the average amount
expressed as a percentage accepted by the Company in the fiscal years 1996,
1997 and 1998, and (c) for all invoices paid by NAPA within sixty (60) days
of shipment, NAPA will be entitled to take a 2% discount off the invoice
price. Notwithstanding the foregoing, if NAPA amends any of the above
described practices or any other NAPA Business Practice, Buyer shall cause
the Company to negotiate in good faith with NAPA regarding such changes.
6.9 Non-Competition.
(a) For a period of two (2) years from the Closing Date, Seller
shall not and shall cause its Affiliates not to (i) acquire or invest in any
business that competes with the Business within the Restricted Territory; or
(ii) sell any Current Products to any Current Customers or to any Current
Competitors within the Restricted Territory.
(b) The provisions of Section 6.9(a) do not prohibit Seller or
its Affiliates from (i) acquiring another Person engaged in activities
prohibited by Section 6.9(a) if at the time of the acquisition the business
of the Person acquired otherwise prohibited by Section 6.9(a) represents
less than 20% of such Person's consolidated sales for its most recently
completed fiscal year, (ii) acquiring up to five percent (5%) of the
securities of any Person which is engaged in activities prohibited by
Section 6.9(a) if the securities of such Person are listed on a national
securities exchange or the NASDAQ Automated Quotation System, (iii)
performing the obligations set forth in the Transitional Services Agreement,
or (iv) engaging in any business activity in which Seller or its Affiliates
(other than the Company) are currently engaged with any Person, whether or
not such Person is a Current Customer or a Current Competitor.
(c) Seller acknowledges that its failure to comply with this
Section 6.9 will irreparably harm Buyer and Buyer will not have an adequate
remedy at law in the event of such non-compliance. Therefore, Seller
acknowledges that Buyer will be entitled to injunctive relief and/or
specific performance, in addition to whatever other remedies it may have, at
law or in equity, against any acts of non-compliance by Seller under this
Section 6.9.
6.10 Accounts Receivable. If, following the Closing Date, Seller or
any of its Affiliates (other than the Company) receive any payments of
accounts receivable relating to the Company, such payments will be the
property of, and will be immediately forwarded and remitted to, the Company.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligations of Seller and Buyer. The respective
obligations of Seller and Buyer to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction or waiver at or prior
to the Closing of each of the following conditions:
(a) The waiting period applicable to the consummation of the
transactions contemplated by this Agreement under the HSR Act shall have
expired or been terminated.
(b) None of the parties hereto shall be subject to any Order of
a court of competent jurisdiction that prohibits the consummation of the
transactions contemplated by this Agreement. In the event any such Order
shall have been issued, each party agrees to use its reasonable best efforts
to have any such Order overturned or lifted.
7.2 Conditions to Obligation of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction or waiver at or prior to the Closing of each of the
following additional conditions:
(a) The representations, warranties and any certification or
instrument delivered pursuant to this Agreement of Buyer set forth in this
Agreement shall be true and correct in all respects as of the Closing Date
as though made on and as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date).
(b) Each of the agreements and covenants of Buyer to be
performed and complied with by Buyer pursuant to this Agreement prior to the
Closing Date shall have been duly performed and complied with in all
material respects.
(c) Buyer shall have delivered to Seller a certificate, dated as
of the Closing Date and signed on its behalf by its chief executive officer
and its chief financial officer, as to the satisfaction by it of the
conditions set forth in Sections 7.2(a) and 7.2(b).
(d) Buyer shall have assumed all obligations of ▇▇▇▇ under the
Employee Retention Incentive Agreements other than those relating to the
payment of the Retention Incentive Payments and the Divestiture Payments as
defined in the Employee Retention Incentive Agreements.
(e) The Company shall have assumed all obligations under the
Clearwater Lease.
(f) The Company shall have entered into a lease agreement with
Hewlett Packard Company as described in Schedule 4.8(d)(ii).
(g) Buyer shall have delivered the Purchase Price and the
documents required to be delivered by Buyer pursuant to Section 3.3.
7.3 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction or waiver at or prior to the Closing of the following
conditions:
(a) The representations and warranties of Seller set forth in
this Agreement shall be true and correct in all respects as of the Closing
Date as though made on and as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date).
(b) Each of the agreements and covenants of Seller to be
performed and complied with by Seller pursuant to this Agreement prior to
the Closing Date shall have been duly performed and complied with in all
material respects.
(c) Seller shall have assigned its rights under the Clearwater Lease to the
Company.
(d) Seller shall have delivered to Buyer a certificate, dated as
of the Closing Date, as to the satisfaction by Seller of the conditions set
forth in subsections 7.3(a) and 7.3(b).
(e) Between the date of this Agreement and the Closing Date, no
change or event shall have occurred which has had a Material Adverse Effect
on the Company.
(f) Seller shall have delivered to Buyer the documents required
to be delivered by Seller pursuant to Section 3.2.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 Survival Periods. The representations and warranties of the
parties contained in this Agreement will survive the Closing until 18 months
from the Closing Date (the "Expiration Date"); provided, however, that (i)
the Expiration Date for any claims for indemnification relating to a breach
of the representations and warranties set forth in Section 4.7 (Taxes) and
Section 4.9 (Employee Benefit Plans) will be the expiration of all
applicable periods prescribed under statutes of limitation and (ii) there
will be no Expiration Date (other than the applicable statute of limitation)
for the representations and warranties contained in Section 4.3 and Section
4.4. The covenants and agreements of the parties hereto shall survive the
Closing in accordance with their terms. No party providing indemnification
pursuant to this Article VIII (an "Indemnifying Party") is obligated to
provide such indemnification with respect to the representations and
warranties to the other party (the "Indemnified Party") unless the
Indemnified Party has delivered written notice of its claim for
indemnification prior to the Expiration Date; provided, however, that any
claim for indemnification for which a notice has been given on or before the
Expiration Date may continue to be asserted and indemnified against until
finally resolved.
8.2 Indemnification, Subject to the other provisions of this
Article VIII, from and after the Closing,
(a) Seller shall indemnify and hold Buyer harmless from and
against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims and damages (collectively, "Damages")
resulting from (i) any breach of any representation or warranty made by
Seller in this Agreement; (ii) the failure to perform or breach of any
covenant or agreement made by Seller under this Agreement; (iii) liabilities
associated with Company ERISA Plans or Company Benefit Plans; (iv) personal
injury or property damage claims arising from or related to any products
distributed by the Company to the extent that the injury or damage to which
such claims relate occurred prior to the Closing Date and resulted from or
is alleged to have resulted from products sold or services performed by the
Company prior to the Closing Date; (v) the failure of ▇▇▇▇ to pay the
employees of the Company who are party to the Employee Retention Incentive
Agreements the Retention Incentive Payments and the Divestiture Payments as
defined in the Employee Retention Incentive Agreements, or (vi) Taxes
(including income Taxes payable as a result of the application of Treasury
Regulation ss. 1.1502-6) attributable to the Company (and its Affiliates
included with the Company in the filing of a Consolidated Tax Return) for
tax periods ending on or prior to the Closing Date including any gain
recognized as a result of the Section 338(h)( 10) Election provided for in
Section 6.6(e).
(b) Buyer shall indemnify and hold Seller harmless from and
against all Damages to the extent they are the result from (i) any breach of
any representation or warranty made by Buyer in this Agreement (ii) the
failure to perform or breach of any covenant or agreement made by Buyer
under this Agreement or (iii) any Taxes for tax periods beginning after the
Closing Date.
(c) For the avoidance of doubt, the Expiration Date, the
Deductible and the Cap will not apply to Seller's indemnification
obligations under Section 8.2(a)(ii), (iii), (iv), (v) or (vi) even if
claims for indemnification under those sections might also be made under
Section 8.2(a)(i).
8.3 Indemnification Amounts. Notwithstanding any provision to the
contrary contained in this Agreement, Seller will not be obligated to
indemnify Buyer for any Damages resulting from a breach of a representation
or warranty (other than Damages resulting from a breach of the
representations or warranties contained in Section 4.3 and Section 4.4) made
by Seller (a) unless and until the amount of all such Damages exceeds
$500,000 (the "Deductible"), in which event, Buyer may assert its right to
indemnification only for the amount of the Damages in excess of the
Deductible (subject to clause (b) below), and (b) to the extent that the
aggregate amount of all such payments for Damages to Buyer does not exceed
$17,000,000 ("Cap").
8.4 Claims.
(a) If an Indemnified Party intends to seek indemnification
pursuant to this Article VIII, such Indemnified Party shall promptly notify
the Indemnifying Party in writing of such claim describing such claim in
reasonable detail; provided, that the failure to provide such notice will
not affect the obligations of the Indemnifying Party unless it is actually
prejudiced thereby, subject, however, to the time periods specified in
Section 8.1 hereof. If such claim involves a claim by a third party against
the Indemnified Party, the Indemnifying Party will have thirty (30) days
after receipt of such notice to decide whether it will undertake, conduct
and control, through counsel of its own choosing and at its own expense, the
settlement or defense thereof, and if it so decides, the Indemnified Party
shall cooperate with it in connection therewith; provided, that the
Indemnified Party may participate in such settlement or defense through
counsel chosen by it; and provided further, that the fees and expenses of
such counsel are to be borne by the Indemnified Party. The Indemnifying
Party shall not, without the written consent of the Indemnified Party,
settle or compromise any action in any manner that would materially and
adversely affect the Indemnified Party. If the Indemnifying Party does not
notify the Indemnified Party within thirty (30) days after the receipt of
the Indemnified Party's notice of a claim of indemnity hereunder that it
elects to undertake the defense thereof, the Indemnified Party will have the
right to contest, settle or compromise the claim but shall not thereby waive
any right to indemnity therefor pursuant to this Agreement. As long as the
Indemnifying Party is contesting any such claim in good faith, the
Indemnified Party shall not pay or settle any such claim. Notwithstanding
the foregoing, the Indemnified Party has the right to pay or settle any such
claim; provided, that the Indemnified Party has delivered the Indemnifying
Party reasonable advance notice of any proposed settlement or payment.
(b) The Indemnified Party shall cooperate fully in all aspects
of any investigation, defense, pretrial activities, trial, compromise,
settlement or discharge of any claim in respect of which indemnity is sought
pursuant to Article VIII, including, but not limited to, by providing the
other party with reasonable access to employees and officers (including as
witnesses) and other information.
8.5 Exclusive Remedy. The indemnification provisions of this Article
VIII are the exclusive remedy following the Closing for any breaches or
alleged breaches of any representation, warranty or other provision of this
Agreement or the transactions contemplated hereby and, without limitation on
the foregoing, Buyer hereby waives any and all rights that are or may
otherwise be available to it at law or equity in respect of the purchase and
sale of the Shares. Buyer has no right to set-off against any payments to be
made by Buyer pursuant to this Agreement or otherwise. Each of the parties
hereto, on behalf of itself and its officers, directors, employees,
shareholders, partners, affiliates, agents or representatives (collectively,
such party's "Representatives") agrees not to bring any actions or
proceedings, at law, equity or otherwise, against any other party or its
Representatives, in respect of any breaches or alleged breaches of any
representation, warranty or other provision of this Agreement, except
pursuant to the express provisions of this Article VIII. The parties hereby
acknowledge that no party has made any representations and warranties,
express or implied, with respect to this Agreement or the matters
contemplated hereby, except as explicitly set forth in this Agreement.
8.6 Tax and Insurance. The amount of any Damages suffered by an
Indemnified Party is to be reduced by any net tax, insurance or: other
benefits that such party receives in respect of or as a result of such
Damages or the facts or circumstances relating thereto, If any Damages for
which indemnification is provided hereunder are subsequently reduced by any
net tax benefit, insurance payment or other recovery from a third party, the
amount of such reduction is to be remitted to the Indemnifying Party.
ARTICLE IX
EMPLOYEE AND BENEFIT MATTERS
9.1 Employment. Buyer shall cause the Company to continue to employ,
on the terms required by this Article IX, for a period of six (6) months
after the Closing Date all individuals who are employed by the Company
immediately prior to the Closing Date, including those who are on lay-off,
leave of absence, or short-term disability as set forth on Schedule 9 1
(collectively "Continuing Employees"), provided that the foregoing, except
as otherwise required by the Employee Retention Incentive Agreements, does
not require Buyer to cause the Company to continue to employ any Continuing
Employee who resigns or otherwise voluntarily terminates his or her
employment with the Company or who is terminated by the Company for cause.
9.2 Compensation and Employee Benefits.
(a) In General. Subject to the provisions of Section 9.2(c), for
a period of six (6) months after the Closing Date, Buyer shall cause the
Company to provide each Continuing Employee compensation and employee
benefits which, in the aggregate, are substantially equivalent to those
provided by Buyer to similarly situated employees immediately prior to the
Closing Date. Subject to the foregoing and the other provisions of this
Article IX and the provisions of the Employee Retention Incentive
Agreements, Buyer has the right to determine the compensation and employee
benefits of the Continuing Employees.
(b) Service Credit. For purposes of any employee benefit plan,
program or arrangement established for or made available to Continuing
Employees by the Company or Buyer (the "Buyer Plans"), Buyer shall, or shall
cause the Company to, credit such Continuing Employees with service for all
periods of service prior to the Closing Date with Seller, the Company or any
Affiliate of either Seller or the Company except that Buyer shall have no
obligation to give such credit to ▇▇▇▇ ▇▇▇▇▇▇ for purposes of Buyer's
severance plan. Such service will be credited for purposes of determining
eligibility for, vesting in, and the amount of benefits under all of the
Buyer Plans and for all other purposes for which service is either taken
into account or recognized; provided, however, such service need not be
credited to the extent that it would result in duplication of coverage or
benefits.
(c) Welfare Benefit Plans. Until the later of the Closing Date
or December 31, 1999 ("Cut-Off Date"), Seller shall take such steps as are
reasonably required in order to provide coverage for all Continuing
Employees and their respective dependents under the Company ERISA Plans and
Company Benefit Arrangements which are welfare benefit plans within the
meaning of Section 3(1) of ERISA (the "Seller Welfare Plans"). Promptly on
receipt of invoices therefor in such detail as Seller is able reasonably to
provide, Buyer shall reimburse Seller for all expenses incurred by Seller
and its Affiliates in order for Seller and its Affiliates to perform their
obligations under the preceding sentence. Coverage for Continuing Employees
and their respective dependents under the Seller Welfare Plans will
terminate as of the Cut-Off Date. The Buyer Plans which are welfare benefit
plans within the meaning of Section 3(1) of ERISA (the "Buyer's Welfare
Plans") shall provide coverage and benefits to Continuing Employees (and the
eligible dependents of the Continuing Employees) beginning on the Cut-off
Date. In addition, no pre-existing condition, limitation, exclusion or
waiting period applicable with respect to any Buyer Welfare Plan will apply
to any Continuing Employee to the extent that such limitations, exclusions
or waiting periods exceed those in effect under the Seller Welfare Plans.
(d) Savings and Pension Plans.
(i) Effective as of the Closing Date, Seller will, at its
expense, cause all Continuing Employees to become fully vested in
their account balances under the Echlin Incentive and Savings
Investment Plan (the "Savings Plan") and their accrued benefits under
the Pension Plan for Echlin Inc. Employees (the "Pension Plan").
(ii) With respect to each Continuing Employee who has an
outstanding loan under the Savings Plan, Buyer shall lend to such
Continuing Employee, upon execution of a promissory note acceptable to
Buyer, an amount sufficient to repay such outstanding loan.
9.3 WARN Act and Severance. Buyer shall not engage in a "mass layoff'
or "plant closing" as defined in the United States Worker Adjustment and
Retraining Notification Act (the "WARN Act") without furnishing the notice
required by Section 3 of the WARN Act. Buyer shall defend, indemnify and
hold harmless Seller and its Affiliates from any claims, charges, suits,
demands, damage, or liability arising out of or relating to noncompliance
with the WARN Act from and after the Closing Date.
ARTICLE X
TERMINATION OF AGREEMENT
10.1 Termination. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time prior to the Closing
Date:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer or Seller, upon written notice to the other party,
if the transactions contemplated by this Agreement have not been consummated
on or prior to a date 3 months from the date of this Agreement (the "Outside
Date"), unless such failure of consummation is due to the failure of the
party seeking such termination to perform or observe in all material
respects the covenants and agreements hereof to be performed or observed by
such party;
(c) by Buyer or Seller, upon written notice to the other party,
if a Governmental Authority of competent jurisdiction has issued an Order
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and such Order has become final and
non-appealable; provided, however, that the party seeking to terminate this
Agreement pursuant to this clause (c) has used its reasonable best efforts
to remove such Order;
(d) by Buyer or Seller, if any condition to such party's
obligation to consummate the transactions contemplated hereby has not been
satisfied as of the Closing Date or if satisfaction of such condition
becomes impossible (other than through the failure of such party to comply
with its or his obligations under this Agreement) and the other party has
not waived such condition on or before the Closing Date; or
(e) by Seller prior to October 21, 1999 if Dana's Board of
Directors does not approve this Agreement.
10.2 Effect of Termination. The termination of this Agreement is to be
effected by delivery of written notice of such termination by the party
terminating the Agreement to the other party. In the event of termination of
this Agreement pursuant to Section 10,1, no party will have any liability or
any further obligation to any other party, except as provided in this
Section 10,2 and except that nothing herein shall release, or be construed
as releasing, any party hereto from any liability or damage to any other
party hereto arising out of the breaching party's willful and material
breach in the performance of any of its covenants, agreements, duties or
obligations arising under this Agreement. The obligations of the parties to
this Agreement under Sections 4.16, 5,6, 6,2 and 11.1 shall survive any
termination of this Agreement. If Seller terminates this Agreement pursuant
to Section 10.1(e) and within one year after such termination Seller or any
of its Affiliates enters into any agreement intended to result in a Control
Transaction with any Person other than Buyer, ▇▇▇▇ or their respective
Affiliates, then promptly upon the closing of such Control Transaction
Seller shall pay Buyer a fee of $3,000,000.
ARTICLE XI
MISCELLANEOUS AND GENERAL
11.1 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, all costs and expenses (including all legal,
accounting, broker, finder or investment banker fees) incurred in connection
with this Agreement and the transactions contemplated hereby are to be paid
by the party incurring such expenses except as expressly provided herein and
except that the filing fee in connection with the HSR Act filing is to be
shared equally by Seller and Buyer.
11.2 Successors and Assigns This Agreement is to be binding upon and
inures to the benefit of the parties hereto and their respective successors
and permitted assigns, but is not assignable by any party hereto without the
prior written consent of the other parties hereto except that Buyer may,
upon written notice to Seller, assign its rights hereunder to an Affiliate
of Buyer, but no such assignment shall relieve Buyer of any of its
obligations hereunder.
11.3 No Third Party Beneficiaries. Each party hereto intends that this
Agreement does not benefit or create any legal or equitable right, remedy or
claim in or on behalf of any Person other than the parties hereto, and as a
result this Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
11.4 Notices. Any notice or other communication provided for herein or
given hereunder to a party hereto will be sufficient if in writing, and sent
by facsimile transmission (electronically confirmed), delivered in person,
mailed by first class registered or certified mail, postage prepaid, or sent
by Federal Express or other overnight courier of national reputation.
addressed as follows:
If to Buyer:
▇▇▇▇ ▇▇▇▇▇
Colfax Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇'▇▇▇▇▇
Colfax Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller:
Echlin Inc.
c/o ▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, Day. ▇▇▇▇▇▇ & ▇▇▇▇▇
North Point
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇)▇▇▇-▇▇▇▇
or to such other address with respect to a party as such party notifies the
other in writing as above provided.
11.5 Complete Agreement. This Agreement and the exhibits and schedules
hereto, and the other documents delivered by the parties in connection
herewith, together with the Confidentiality Agreement, contain the complete
and exclusive statement of the terms of the agreement between the parties
hereto with respect to the transactions contemplated hereby and thereby and
supersede all prior agreements and understandings between the parties hereto
with respect thereto.
11.6 Captions; References. The captions contained in this Agreement
are for convenience of reference only and do not form a part of this
Agreement. When a reference is made in this Agreement to a clause, a Section
or an Article, such reference will be to a clause, a Section or Article of
this Agreement unless otherwise indicated.
11.7 Amendment. This Agreement may be amended or modified only by a
written agreement duly executed by the parties to this Agreement.
11.8 Waiver. At any time prior to the Closing Date, the parties hereto
may (a) extend the time for the performance of any of the obligations or
other acts of the parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein, to the extent permitted by applicable Law. Any
agreement on the part of a party hereto to any such extension or waiver will
be valid only if set forth in a writing signed on behalf of such party.
11.9 Governing Law. This Agreement is to be governed by, and
construed and enforced in accordance with, the laws of the State of Ohio,
without regard to its rules of conflict of laws.
11.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the
provision is to be interpreted to be only so broad as is enforceable.
11.11 Further Assurances. Seller shall, at the written request and
expense of Buyer, at any time and from time to time following the Closing,
execute and deliver to Buyer all such further instruments and take all such
further action as may be reasonably necessary or appropriate in order to
more effectively sell, assign, transfer and convey to Buyer the Shares or
otherwise to confirm or carry out the provisions of this Agreement. Buyer
shall, and shall cause the Company to, at any time and from time to time
following the Closing hereunder, execute and deliver to Seller all such
further instruments and take all such further action as may be reasonably
necessary or appropriate in order to confirm or carry out the provisions of
this Agreement.
11.12 Disclosure Schedule Supplements. From time to time prior to the
Closing, Seller shall promptly supplement or amend the Schedules to this
Agreement (the "Disclosure Schedules") with respect to any matter which, if
existing, occurring or known at the date of this Agreement, would have been
required to be set forth or described in the Disclosure Schedules. The
Disclosure Schedules will be deemed amended by all such supplements and
amendments for all purposes except for purposes of determining whether the
conditions set forth in Section 7.3(a) have been satisfied. Notwithstanding
the foregoing, no such supplement or amendment will be effective for any
purpose, including for purposes of modifying, altering, limiting or
otherwise affecting the representations, warranties and indemnities
contained herein to the extent that Seller had knowledge of the matters
stated therein as of the date hereof.
11.13 Mutual Drafting. This Agreement is the result of the joint
efforts of Buyer and Seller, and each provision hereof has been subject to
the mutual consultation, negotiation and agreement of the parties and there
is to be no construction against either party based on any presumption of
that party's involvement in the drafting thereof.
11.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which is to be deemed an original but all of which is
to constitute but one instrument.
APPENDIX A
"Actions" means any action, suit or legal, administrative or arbitral
proceeding or investigation before any Governmental Authority.
"Affiliate" means with respect to any Person, any Person which
directly or indirectly controls, is controlled by or is under common control
with such Person.
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Business" means the business of distributing the Current Products to
the global marine and power equipment aftermarkets.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banks in Illinois are authorized or obligated by Law or executive
order to close.
"Buyer" has the meaning set forth in the preamble to this Agreement.
"Buyer Financials" has the meaning set forth in Section 5.8. "Buyer
Plans" has the meaning set forth in Section 9.2(b). "Buyer Reports"
has the meaning set forth in Section 5.8. "Buyer's Accountants" has
the meaning set forth in Section 2.3(c). "Buyer's Welfare Plans" has
the meaning set forth in Section 9.2(c). "Buyer's Knowledge" has the
meaning set forth in Section 5.4(a). "▇▇▇▇▇▇▇▇" has the meaning set
forth in Section 4.16. "Cap" has the meaning set forth in 8.3(b).
"Clearwater Lease" means the lease agreement, dated November 20, 1995,
by and between New England Mutual Life Insurance Company and Seller.
"Closing" has the meaning set forth in Section 3.1.
"Closing Net Working Assets Statement" has the meaning set forth in
Section 2.3(b).
"Closing Date" has the meaning set forth in Section 3.1.
"Closing Net Working Assets" has the meaning set forth in Section
2.3(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the recitals of this Agreement.
"Company Benefit Arrangements" has the meaning set forth in Section
4.9. "Company Contracts" has the meaning set forth in Section 4.10.
"Company ERISA Plans" has the meaning set forth in Section 4.9.
"Confidentiality Agreement" has the meaning set forth in Section
6.2(b).
"Consents" means any consent, approval, authorization, qualification,
waiver or notification of a Governmental Authority or any other
Person.
"Continuing Employees" has the moaning set forth in Section 9.1.
"Control Transaction" means any transaction or series of related
transactions as a result of which any Person acquires from Seller or any of
its Affiliates the Shares, substantially all the assets of the Company or
other assets or securities of the Company sufficient to give such Person
control over the business of the Company.
"Current Competitors" means those competitors of the Company set forth
on Exhibit A.
"Current Customers" means any Person which Seller can reasonably
demonstrate was a customer of the Company in the six-(6) months prior to
Closing.
"Current Products" means those products of the Company listed in the
most recently updated product catalogue of the Company as of the Closing
Date.
" Cut-off Date" has the meaning set forth in Section 9.2(c). "Damages"
has the meaning set forth in Section 8.2. "▇▇▇▇" has the meaning set
forth in Section 2.2. "Deductible" has the meaning set forth in
Section 8.3.
"Designated Accounting Arbitrator" has the meaning set forth in
Section 2.3(d).
"Disclosure Schedules" has the meaning set forth in Section 11.12.
"Dispute Notice" has the meaning set forth in Section 2.3(d).
"Employee Retention Incentive Agreements" means the Employee Retention
Incentive Agreements by and between ▇▇▇▇ and certain management members of
the Company set forth at Exhibit C.
"Environmental Claim" has the meaning set forth in Section 4.14(a).
"Expiration Date" has the meaning set forth in Section 8.1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Final Net Working Assets Statement' has the meaning set forth in
Section 2.3(f).
"Freight Agreement" means the Echlin Freight Group Membership
Contract, by and between Echlin Freight Group and the Company, in the form
set forth at Exhibit D.
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any government or political
subdivision, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any
federal, state, local or foreign court or arbitrator.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnifying Party" and "Indemnified Party" have the meanings set
forth in Section 8.1.
"Intellectual Property" has the meaning set forth in Section 4.15(c).
"June Balance Sheet" has the meaning set forth in Section 4.6.
"Laws" means any law, statute, code, ordinance, regulation or other
legally enforceable requirement of any Governmental Authority.
"Liens" means any mortgage, lien, Option, encumbrance, restriction,
pledge, adverse claim, interest, charge or other similar encumbrance.
"Litchfield Facility Lease" means the Lease by and between Brake
Parts Inc., as lessee, and the Company, as lessor, in the form of Exhibit
E.
"Material Adverse Effect" means, with respect to the Company or Buyer,
a material adverse effect on the business, assets, liabilities or financial
condition of such party and its Subsidiaries, if any, taken as a whole
(other than effects which result from changes in general economic
conditions).
"Material Equipment" has the meaning set forth in Section 4.8(d).
"NAPA Business Practices" has the meaning set forth in Section 6.8.
"Option" means any option, warrant, call, convertible or exchangeable
security, subscription, preemptive right or voting trust, or agreement, any
agreement restricting sale or transfer, or other agreement or right of a
similar nature.
"Orders" means any order, judgment, ruling, injunction, award, decree
or writ of any Governmental Authority.
"Outside Date" has the meaning set forth in Section 10.1(b). "Pension
Plan" has the meaning set forth in Section 9.2(d)(i).
"Permits" means any license, permit, authorization, grant, approval,
franchise, waiver, Consent, qualification or similar document: or authority
issued or granted by any Governmental Authority.
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability company, joint venture, unincorporated
society or association, trust or other entity or Governmental Authority.
"Purchase Price" has the meaning set forth in Section 2.2.
"Real Property" means all of the Company's real property and interests
in real property, leaseholds and subleaseholds, purchase options, easements,
licenses, rights to access, rights of way, all buildings and other
improvements thereon, and other real property interests used in the business
or operations of the Company together with any additions thereto between the
date of this Agreement and the Closing Date.
"Representatives" has the meaning set forth in Section 8.5.
"Restricted Territory" means the geographic area within a 100 mile
radius of any and all of the Company locations where the Company maintains
an office or a facility during the two year period following the date of
this Agreement.
"Savings Plan" has the meaning set forth in Section 9.2(d)(i).
"SEC' has the meaning set forth in Section 5.8.
"Section 338(h)(10) Election" has the meaning set forth in Section
6.6(e).
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Welfare Plans" has the meaning set forth in Section 9.2 (c).
"Seller's Accountants" has the meaning set forth in Section 2.3(c).
"Seller's Knowledge" means the actual knowledge of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ or ▇▇ ▇▇▇.
"Shares" has the meaning set forth in the recitals of this Agreement.
"Specified Accounting Principles" means the Specified Accounting
Principles set forth in Exhibit E.
"Subsidiaries" means any Person of which at least a majority of the
outstanding shares or other equity interests having ordinary voting power
for the election of directors or comparable managers of such Person are at
the time owned, directly or indirectly, by such Person, by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries.
"Supply Agreement" means the Supply Agreement, by and between Seller
and the Company, in the form set forth at Exhibit G.
"Tax or Taxes" means any domestic or foreign federal, state or local
income, franchise, business, occupation, sales/use, manufacturer's excise,
payroll, withholding, Federal Insurance Contributions Act and employment and
unemployment taxes, personal and real property taxes and all other taxes or
charges (including all interest and penalties) measured, assessed, levied,
imposed or collected by any Governmental Authority.
"Tax Returns" means all Tax returns (including information returns)
and reports that are or were required to be filed by, or with respect to,
the Company or its income, properties or operations.
"Transitional Services Agreement" means the Transitional Services
Agreement, by and between Seller and the Company, in the form set forth at
Exhibit H.
"Trucking Agreement" means the DTF Trucking Agreement, by and between
DTF Trucking, Inc. and the Company, in the form set forth at Exhibit I.
"WARN Act" has the meaning set forth in Section 9.3.