EXHIBIT 10.1
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U.S. ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT
by and between
INTERLAKE PACKAGING CORPORATION
and
▇▇▇▇▇▇ STRAPPING SYSTEMS (TENNESSEE), INC.
dated
October 1, 1996
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TABLE OF CONTENTS
SECTION PAGE
ARTICLE 1
DEFINITIONS.......................................................... 2
1.1 Previously Defined Terms...................................... 2
1.2 Definitions................................................... 2
1.3 Interpretation................................................ 18
ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE,
ALLOCATION AND OTHER RELATED MATTERS................................. 18
2.1 Purchase and Sale............................................. 18
2.2 Consideration................................................. 18
2.3 Adjustment to the Purchase Price.............................. 22
2.4 Transfer Taxes................................................ 24
2.5 Allocation of Purchase Price.................................. 25
ARTICLE 3
CLOSING AND CLOSING DATE DELIVERIES.................................. 25
3.1 Closing....................................................... 25
3.2 Closing Deliveries by Seller.................................. 26
3.3 Closing Deliveries by Purchaser............................... 28
3.4 Non-Assignable Contracts...................................... 29
3.5 Cooperation................................................... 30
ARTICLE 4
PRE-CLOSING FILINGS.................................................. 31
4.1 HSR Filing.................................................... 31
4.2 Other Government Filings...................................... 31
ARTICLE 5
PRE-CLOSING COVENANTS................................................ 31
5.1 Title Insurance and Surveys................................... 31
5.2 Conduct of Business Prior to Closing.......................... 33
5.3 Access to Information......................................... 34
5.4 Closing Deliveries; Conditions................................ 35
5.5 Conduct of Business after the Effective Date.................. 35
ARTICLE 6
FINANCIAL STATEMENTS; DISCLOSURE LETTER;
FINANCING COMMITMENT LETTER.......................................... 35
6.1 Pre-Signing Deliveries by Seller.............................. 35
6.2 Pre-Signing Deliveries by Purchaser........................... 35
ARTICLE 7
WARRANTIES AND REPRESENTATIONS OF SELLER............................. 36
7.1 Incorporation and Qualification of Seller..................... 36
7.2 Authority..................................................... 36
7.3 No Conflict................................................... 37
7.4 Consents and Approvals........................................ 37
7.5 Brokers....................................................... 37
7.6 Required Assets; Title........................................ 38
7.7 Intellectual Property......................................... 38
7.8 Financial Statements.......................................... 39
7.9 Compliance with Laws.......................................... 39
7.10 Licenses and Permits.......................................... 40
7.11 Material Contracts............................................ 40
7.12 Real Properties............................................... 42
7.13 [Intentionally omitted]....................................... 42
7.14 Litigation.................................................... 42
7.15 Labor Matters................................................. 42
7.16 Employee Benefit Matters...................................... 43
7.17 Taxes......................................................... 48
7.18 Environmental Compliance...................................... 48
7.19 Inventory..................................................... 49
7.20 Receivables................................................... 50
7.21 Real Property Leases.......................................... 50
7.22 No Notice..................................................... 51
7.23 Customers..................................................... 51
7.24 Full Disclosure............................................... 51
7.25 DISCLAIMER OF WARRANTIES...................................... 51
ARTICLE 8
WARRANTIES AND REPRESENTATIONS OF PURCHASER.......................... 52
8.1 Incorporation and Qualification of Purchaser.................. 52
8.2 Authority..................................................... 52
8.3 No Conflict................................................... 53
8.4 Consents and Approvals........................................ 53
8.5 Litigation.................................................... 54
8.6 Brokers....................................................... 54
8.7 Financial Ability............................................. 54
ARTICLE 9
CONDITIONS TO CLOSING APPLICABLE TO PURCHASER........................ 54
9.1 No Termination................................................ 54
9.2 Bring-Down of Seller's Warranties............................. 55
9.3 Pending Actions............................................... 55
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9.4 Consents and Approvals........................................ 55
9.5 All Necessary Documents....................................... 55
9.6 HSR Act....................................................... 56
9.7 Termination of Certain Liens, Claims and Encumbrances......... 56
9.8 Canadian and U.K. Transactions................................ 56
9.9 Title Policies................................................ 56
9.10 Conveyance of the Transferred Patents and Trademarks.......... 56
9.11 Additional Deliveries......................................... 57
9.12 Material Adverse Change....................................... 57
9.13 Consents under Senior Credit Agreement........................ 57
ARTICLE 10
CONDITIONS TO CLOSING APPLICABLE TO SELLER........................... 57
10.1 No Termination................................................ 57
10.2 Bring-Down of Purchaser Warranties............................ 57
10.3 Pending Actions............................................... 58
10.4 Consents and Approvals........................................ 58
10.5 All Necessary Documents....................................... 58
10.6 HSR Act....................................................... 58
10.7 Canadian and U.K. Transactions................................ 59
10.8 Letters of Credit............................................. 59
10.9 Consents under Senior Credit Agreement........................ 59
ARTICLE 11
TERMINATION.......................................................... 59
11.1 Termination................................................... 59
ARTICLE 12
INDEMNIFICATION...................................................... 60
12.1 Seller Indemnity.............................................. 60
12.2 Limitation.................................................... 61
12.3 Purchaser Indemnity........................................... 65
12.4 Notice of Claims.............................................. 66
12.5 Indemnification Proceeding.................................... 67
12.6 Satisfaction of Claims........................................ 68
12.7 Date of Notice of Claim....................................... 68
ARTICLE 13
CERTAIN OTHER UNDERSTANDINGS......................................... 68
13.1 Records....................................................... 68
13.2 Use of Interlake Name......................................... 70
13.3 Employee Matters.............................................. 70
13.4 Miscellaneous Employee Matters................................ 78
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13.5 Waiver of Bulk Sales Law...................................... 78
13.6 Letters of Credit............................................. 78
13.7 Guarantee by Parents.......................................... 79
13.8 Additional Named Insured...................................... 80
13.9 Covenant Not to Compete....................................... 81
ARTICLE 14
MISCELLANEOUS........................................................ 84
14.1 Cost and Expenses............................................. 84
14.2 Entire Agreement.............................................. 84
14.3 Counterparts.................................................. 84
14.4 Assignment; Successors and Assigns............................ 85
14.5 Savings Clause................................................ 85
14.6 Headings...................................................... 85
14.7 Risk of Loss.................................................. 85
14.8 GOVERNING LAW................................................. 85
14.9 Public Announcements.......................................... 85
14.10 U.S. Dollars.................................................. 86
14.11 Survival...................................................... 86
14.12 Notices....................................................... 86
14.13 Disclosures................................................... 88
14.14 No Third-Party Beneficiaries.................................. 88
14.15 Arbitration................................................... 88
EXHIBITS
Exhibit 2.5 Allocation of Purchase Price
Exhibit 3.2(a) Form of ▇▇▇▇ of Sale and Assignment
Exhibit 3.3(e) Form of Assumption Agreement
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT, dated October 1, 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 ("Seller"), and ▇▇▇▇▇▇ Strapping Systems (Tennessee), Inc., a
Delaware corporation ("Purchaser").
R E C I T A L S:
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A. Seller is engaged in the business of developing, manufacturing,
distributing and selling plastic strapping, and selling the machinery and tools
to apply such strapping, primarily for the newspaper, textile, corrugated box,
graphics, can, bottle and distribution industries (the "Strapping Business").
B. Seller is also engaged in the business of manufacturing and
distributing wire stitching equipment, primarily for the graphic arts, fruit and
produce growing and corrugated box manufacturing industries (the "Stitching
Business"; together with the Strapping Business, the "Businesses").
C. Seller and The Interlake Companies, Inc., a Delaware corporation
("Interlake Companies") that is an Affiliate of Seller, own all of the issued
and outstanding capital stock of Acme Strapping Inc., a company organized under
the laws of Canada ("Acme-Canada").
D. Interlake Companies also owns directly or indirectly
substantially all of the issued and outstanding capital stock of Precis (935)
Limited, a company organized under the laws of the United Kingdom ("Precis").
E. Purchaser desires to acquire from Seller, and Seller desires to
sell to Purchaser, the Businesses and substantially all of the assets of Seller
and any Affiliate used in
connection with the operation of the Businesses on the terms and subject to the
conditions hereinafter set forth.
F. Concurrently with Purchaser's purchase of the Businesses and such
assets hereunder (i) Purchaser's Parent desires to acquire from Seller and
Interlake Companies all of the issued and outstanding capital stock of Acme-
Canada, and (ii) an Affiliate of Purchaser's Parent desires to acquire 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 Canadian Stock 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
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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 Acme-Canada, as
heretofore amended, and (ii) that certain Services Agreement, dated January
1, 1964, between Acme Steel Company and Acme-Canada, as heretofore amended.
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"Acquired Businesses" means the Businesses and the businesses of Acme-
Canada and 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, or (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 Assumption Agreement, the ▇▇▇▇ of
Sale and Assignment, the Pre-Signing Escrow Agreement, the Post-Signing
Escrow Agreement, the License Agreement (as defined in Section 3.2(a)(vi)
of this Agreement) and the Intellectual Property Assignments (as defined in
Section 3.2(a)(vii) of this Agreement).
"Assumed Liabilities" - See Section 2.2(d).
"Assumption Agreement" means the Assumption Agreement to be executed
by and between Purchaser and Seller on the Closing Date, substantially in
the form attached hereto as Exhibit 3.3(e).
"Balance Sheet Liabilities" - See Section 2.2(d).
"▇▇▇▇ of Sale and Assignment" means the ▇▇▇▇ of Sale and Assignment to
be executed by and between Seller and Purchaser on the Closing Date,
substantially in the form attached hereto as Exhibit 3.2(a).
"Business Day" means any day of the year which is neither a Saturday
or Sunday nor a legal holiday on which banks are required or authorized to
be closed in Chicago, Illinois.
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"Businesses" has the meaning specified in the Recitals to this
Agreement.
"Business Plans" - See Section 7.16(a).
"Canadian Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of the date hereof by and among Purchaser's Parent, Seller and
Interlake Companies, as amended or modified from time to time in accordance
with the terms thereof.
"Cass Strapping" means Cass Strapping Corporation, a Michigan
corporation.
"Closing" - See Section 3.1.
"Closing Date" - See Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and 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 Seller, to the effect that, were Seller and Purchaser to have
consummated the transactions contemplated by the Purchase Agreements 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 (as defined in Section 12.1)
which is not the direct or proximate result of any events described in
Section 12.1(a) through (e) or Section 12.3(a) (i) through (vi) of this
Agreement.
"Contingent Liabilities" - See Section 2.2(d)(v).
"Contract Liabilities" - See Section 2.2(d)(ii).
"Contracts" - See clause (e) of the definition of "Purchased Assets"
herein.
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"Covered Employees" - See Section 13.3(h).
"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 Seller to Purchaser upon the execution and
delivery of this Agreement and accepted by Purchaser at such time, a copy
of which is set forth as Exhibit 1.2 hereto.
"DOJ" means the United States Department of Justice.
"Effective Date" means September 29, 1996 at 11:59 p.m., or such other
date and time agreed to in writing by Seller and Purchaser.
"Employees" - See Section 13.3(a).
"Environmental Laws" means any applicable federal, state or local law,
rules, regulations, codes, ordinances, orders, standards, permits,
licenses, actions, policies and requirements (including consent decrees,
judicial decisions and administrative orders) relating to protection,
preservation or conservation of the environment and public or worker health
and safety, all as amended, hereafter amended or reauthorized, including,
without limitation, those relating to: (a) releases or threatened releases
of Hazardous Substances; or (b) the manufacture, handling, transport, use,
treatment, storage or disposal of Hazardous Substances or materials
containing Hazardous Substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Facilities" means the facilities of Seller located on or forming a
part of the real property specified in clause (a) of the definition of
"Purchased Assets".
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"Final Closing Balance Sheet" means (i) the Seller Closing Balance
Sheet in the event the Purchaser does not deliver to Seller the Purchaser
Closing Balance Sheet (as defined in Section 2.3(c) hereof) in accordance
with the terms of Section 2.3 hereof, or (ii) the Purchaser Closing Balance
Sheet in the event (a) the Purchaser delivers to Seller the Purchaser
Closing Balance Sheet (as defined in Section 2.3(c) hereof) in accordance
with the terms of Section 2.3 and Seller does not deliver to Purchaser a
Seller's Notice (as defined in Section 2.3(d) of this Agreement) in
accordance with this Agreement, or (iii) in the event the Seller delivers a
Seller's Notice in accordance with Section 2.3(d) of this Agreement, the
Purchaser Closing Balance Sheet as modified by the resolution of any
objections thereto in accordance with Section 2.3(e) of this Agreement.
"Financial Statements" means the unaudited balance sheets, income
statements and cash flow statements at and for (i) the year ended December
31, 1994, (ii) the year ended December 31, 1995, and (iii) the two quarter
fiscal period ending on June 30, 1996, in each case for each of the
Strapping Business and the Stitching Business, 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.
"FTC" means the United States Federal Trade Commission.
"Gerrard" means ▇.▇. ▇▇▇▇▇▇▇ & Company, an Illinois corporation.
"Gerrard Letter" means that certain letter of intent between Gerrard
and Seller's Parent dated April 12, 1996.
"Hazardous Substances" means (i) hazardous substances, as defined by
the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. (S)9601 et seq.; (ii) hazardous wastes as defined by the Resource
Conservation and Recovery Act,
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42 U.S.C. (S)6901 et seq.; (iii) petroleum, including without limitation,
crude oil or any fraction thereof which is liquid at standard conditions of
temperature and pressure (60 degrees Fahrenheit and 14.7 pounds per square
inch absolute); (iv) any radioactive material, including, without
limitation, any source, special nuclear, or by-product material as defined
in 42 U.S.C. (S)2011 et seq.; (v) asbestos in any form or condition; (vi)
regulated levels of polychlorinated biphenyls; and (vii) any other
material, substance or waste to which liability or standards of conduct are
imposed under any Environmental Laws.
"Hourly Union Employees" - See Section 13.3(a).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Improvements" - see Section 7.22.
"Indemnitee" - See Section 12.4.
"Indemnitor" - See Section 12.4.
"Information" - See Section 13.1.
"Initial Transfer Value" - See Section 13.3(h).
"Intercompany Service and Supply Arrangements" means those
arrangements pursuant to which the Seller or any of its affiliates provided
payroll, treasury, tax, insurance, insurance administration, telephone,
benefits, benefits administration, human resource, management or computer
services to the Businesses or any Persons operating the Businesses prior to
the Closing Date.
"Interlake Companies" has the meaning specified in the Recitals to
this Agreement.
"Interlake Master Trust" means The Interlake Corporation Retirement
and Pension Plans Master Trust Agreement, effective May 29, 1986, as
amended.
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"IRS" means the Internal Revenue Service.
"Leased Real Estate" - See definition of Purchased Assets.
"Letters of Credit - Seller" - See Section 13.6.
"Lien" means a mortgage, pledge, security interest, encumbrance, lien
(statutory or other), hypothecation, assignment, deposit arrangement or
preference, priority or other security agreement or preferential
arrangement of any kind.
"Losses" - See Section 12.1.
"Material Adverse Change" means, relating to any occurrence of
whatever nature, any material adverse change in, or effect on:
(a) the Purchased Assets or the present or projected business,
revenues, financial condition, operations or prospects of the Businesses,
each taken as a whole; or
(b) the ability of Seller or the Interlake Companies to timely and
fully perform any of its material obligations hereunder or under the
Canadian Stock 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 Change shall not include (i) any
industry-wide changes in the industries in which the Businesses are
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 markets in the United States, Canada or the United
Kingdom.
"Multiemployer Plan" - See Section 7.16.
"Non-Transferred Intercompany Accounts" means all intercompany
accounts between Seller and any Affiliates of Seller, other than
Transferred Intercompany Accounts,
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a true and correct list of which, as of the date hereof, is set forth in
Section 1.2 of the Disclosure Letter.
"Non-Union Employees" - See Section 13.3(a).
"Notice of Claim" - See Section 12.4.
"Owned Real Estate" - See definition of Purchased Assets.
"Past Service" means service (a) as an employee of Seller, and (b) as
an employee of Seller's predecessor companies prior to the acquisition of the
Businesses by Seller, but only to the extent such service is continuous through
the Effective Date.
"Past Service Plan" - See Section 13.3(h).
"Permitted Exceptions" means, with respect to the real property
specified in clause (a) of the definition of "Purchased Assets" (i) all
easements, rights of way, covenants, conditions, restrictions of record and
other records noted in that certain commitment for title insurance prepared
by the Title Insurer with respect to the Fountain Inn property currently
dated August 16, 1996, a copy of which has been delivered to Purchaser, and
(ii) 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 other
entity of any kind.
"Plans" - See Section 7.16.
"Post-Effective Date Liabilities" - See Section 2.2(d)(iii).
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"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, Seller's Parent and Purchaser's Parent, as
heretofore or hereafter amended.
"Post-Signing Escrow Agreement" means that certain Escrow Agreement
made and entered as of the day hereof by and among ▇▇▇▇▇▇ Trust & Savings
Bank, as escrow agent, Purchaser and Seller, as heretofore or hereafter
amended.
"Pro Forma Balance Sheet" - See Section 2.3(a)
"Purchase Price" - See Section 2.2.
"Purchased Assets" means substantially all of the assets, properties,
rights and business of Seller and its Affiliates used in connection with
the operation of the Businesses, or of Seller used in connection with the
operation of the Acquired Businesses, of any type, description, kind and
nature, absolute, contingent or otherwise, real, personal and mixed,
tangible and intangible, wherever located and whether or not reflected on
the books and records of Seller or its Affiliates (other than the Retained
Assets), including, without limitation:
(a) all interests in real property used in connection with the
operation of a Business, including, without limitation (i) the owned real
estate described in Section 5.1 of the Disclosure Letter, together with all
buildings, facilities and other structures and improvements located on such
real property (the "Owned Real Estate"), and (ii) the leasehold interests
described in Section 5.1 of the Disclosure Letter (the "Leased Real
Estate");
(b) all machinery, equipment, furniture and tools, leasehold
improvements and all other tangible personal property used in connection
with the operation of a Business;
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(c) to the extent transferable, all licenses, permits, consents and
certificates of any regulatory, administrative and other governmental
agencies and bodies and used in connection with the operation of a
Business;
(d) all trade names, trademarks, trademark registrations, trademark
applications, service marks, service ▇▇▇▇ registrations, service ▇▇▇▇
applications, patents, patent applications, copyrights, copyright
registrations, copyright applications and the licenses therefor, and all
trade secrets, know-how (including, without limitation, proprietary know-
how and use and application know-how), in each case used in connection with
the operation of a Business (other than to the extent relating to or using
the name "Interlake" or any derivative thereof), including, without
limitation, those described in Section 7.7 of the Disclosure Letter;
(e) all right, title and interest in and to the Acme License
Agreements and, to the extent transferable, all contracts, agreements,
license agreements, purchase and sale orders, foreign exchange contracts,
leases of machinery and equipment and motor vehicles (including, without
limitation, the vehicles listed in Schedule 7.13 of the Disclosure Letter
but exclusive of the vehicles used primarily by employees not being offered
employment by Purchaser in accordance with Section 13.3), and conditional
sales contracts and title retention agreements relating to machinery and
equipment, in each case, to which Seller is a party and which arose out of
or in connection with the operation of a Business, and all other
commitments and binding arrangements of Seller which arose out of or in
connection with the operation of a Business other than any such document
which constitutes or evidences a Retained Liability (the "Contracts"),
including, without limitation, the Contracts listed in
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Section 7.11 of the Disclosure Letter, together with such additions thereto
and deletions therefrom as shall have occurred in the ordinary course of
business prior to the Closing Date;
(f) all inventory, including, without limitation (i) raw materials,
work in process, finished goods, replacement and spare parts and supplies
located at a Facility or en route to a Facility, and (ii) finished goods
stored at locations other than a Facility, in each case used or to be used
in connection with the operation of a Business;
(g) all customer lists, vendor lists, distributor or agency
agreements, catalogs and advertising materials used or to be used in
connection with the operation of a Business;
(h) all general and financial records (other than certificates of
insurance obtained from third parties (including, without limitation,
contractors, suppliers and truckers)), correspondence and other files and
records used in connection with the operation of a Business, wherever
located, except for Seller's financial and accounting records unrelated to
the continued operation of a Business;
(i) all accounts receivable, notes receivable, contract receivables
and other receivables which arose out of or in connection with the
operation of a Business (the "Receivables") and all prepaid items and
deposits (or portions thereof) which arose out of or in connection with the
operation of a Business;
(j) to the extent transferable, all right, title and interest in, to
and under all letters of credit relating to either Business and with
respect to which Seller or any Affiliate is a named beneficiary, a list of
which as of the date hereof is set forth in Section 13.6 of the Disclosure
Letter;
(k) all goodwill in each Business;
(l) all research and development related to each Business;
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(m) all Seller's right, title and interest in and to any and all
vehicles used exclusively in the Businesses, if any;
(n) all claims against third persons in respect of unliquidated
rights under warranties, guarantees or similar obligations relating to
items included in the Purchased Assets;
(o) all rights of the sponsor or employer under the Racine Hourly
Pension Plan and as provided in Section 13.3 hereof;
(p) those assets, properties and rights reflected on the balance
sheet of a Business for the two fiscal quarter period ended June 30, 1996,
subject to any changes therein through the Closing Date which occur in the
ordinary course of business and in accordance with the terms hereof; and
(q) all other rights, assets and properties used in connection with
the operation of a Business.
"Purchaser's Parent " means ▇▇▇▇▇▇ Manu-Tech Inc., a corporation
incorporated under the laws of the province of Ontario.
"Purchaser's Trust" - See Section 13.3(g)(i).
"Purchaser Indemnified Persons" - See Section 12.1.
"Racine Hourly Pension Plan" - See Section 13.3(g).
"Real Property Leases" - See Section 7.21.
"Receivables" - See clause (i) of the definition of "Purchased
Assets".
"Replacement Letters of Credit" - See Section 13.6.
"Required Consents" means the consents from the other parties to those
certain Contracts set forth in Schedule 1.2 hereof.
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"Retained Assets" means any assets, properties, rights or interests of
Seller and its Affiliates not part of or included in the Purchased Assets,
including, without limitation, the following:
(a) as of the Effective Date, all cash (and cash equivalents) on
hand, in banks or in transit and all marketable securities;
(b) except to the extent provided in Section 13.3(g) and (h), any and
all rights and interests of Seller in the Interlake Master Trust;
(c) all Non-Transferred Intercompany Accounts;
(d) all contracts of insurance and any claims or rights of Seller
thereunder, including, but not limited to, any claims or rights of Seller
to reserves, unearned premiums or returns of premiums arising thereunder;
(e) Seller's corporate minute books and records, stock record books,
general ledgers and books of original entry, tax returns and other tax
records, reports, data, files, documents relating to the operations of the
Businesses which are not divisible or separable from Seller's records, and
documents which are unrelated to the operation of the Businesses;
(f) any rights, assets and properties not used in or related to the
operation of the Businesses;
(g) claims for refunds of Taxes paid by Seller to the extent such
refunds are not set forth on the Financial Statements as Receivables;
(h) subject to Section 13.2, any and all rights to the name
"Interlake" and any and all derivatives thereof, including, without
limitation, any and all trade names, trademarks, trademark registrations or
trademark applications that include any such names or derivatives thereof;
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(i) all rights of Seller under this Agreement, the Ancillary
Agreements and the other agreements, documents and instruments delivered to
Seller by Purchaser pursuant to this Agreement;
(j) all rights of Seller under the Gerrard Letter;
(k) all rights of Seller under leases for motor vehicles used
primarily by employees not being offered employment by Purchaser in
accordance with Section 13.3; and
(l) the furniture used by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in his office in Hodgkins,
Illinois (desk, round table, two cabinets, credenza, eight chairs, laptop
computer and printer).
"Retained Employee" means any employee who accepts an offer of
continued employment by Seller in accordance with Section 13.3(a).
"Retained Liabilities" - See Section 2.2(d).
"Returns" means all Tax returns and forms required to be filed or
furnished with respect to the Businesses.
"Seller Indemnified Persons" - See Section 12.3.
"Seller's knowledge" or "knowledge of Seller" means the actual
knowledge of the President, any vice president, any chief financial
officer, any chief environmental officer, or any of their equivalents, of
Seller, Seller's Parent, Interlake Companies, Acme-Canada, or any
subsidiary thereof, or any director of Precis or any subsidiary of Precis,
or knowledge which would have been acquired by any of such persons upon
reasonable inquiry.
"Seller's Parent" means The Interlake Corporation, a Delaware
corporation.
"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 Seller's Parent, certain of its subsidiaries, The
Interlake Corporation Employee Stock
-15-
Ownership 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.
"Stitching Business" has the meaning specified in the Recitals to this
Agreement.
"Strapping Business" has the meaning specified in the Recitals to this
Agreement.
"Successor Plan" - See Section 13.3(h).
"Tangible Net Worth" means, as of the Effective Date, the value of the
Tangible Purchased Assets of the Acquired Businesses, minus the Balance
Sheet Liabilities of the Acquired Businesses, in each case as determined in
accordance with Section 2.3 as of the Effective Date.
"Tangible Purchased Assets" means, as of the Effective Date, all
tangible assets of the Acquired Businesses other than the Retained Assets,
including all prepaid assets the direct benefit of which will inure to
Purchaser after the Closing Date.
"Tax" or "Taxes" means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities relating to taxes, together with all interest, penalties and
additions imposed with respect to such amounts and any obligations under
any agreements or arrangements with any other person with respect to such
amounts and including liability for taxes of a predecessor entity.
"Third Anniversary" means the three-year anniversary of the Effective
Date.
"Title Insurer" means Chicago Title Insurance Company.
"Transfer Date" - See Section 13.3(h).
"Transferred Intercompany Account" means the accounts on the books and
records of Seller, on the one hand, and Acme Canada or Precis (or any
direct or indirect subsidiary
-16-
of either thereof), on the other hand, that evidence amounts either payable
by Seller to or receivable by Seller from Acme-Canada or Precis (or any
direct or indirect subsidiary of either thereof), a true and correct list
of which as of the date hereof is set forth in Section 1.2 of the
Disclosure Letter.
"Transferred Patent and Trademarks" means those patents (or
applications therefor) and trademarks (and applications and registrations
therefor) to which title or license to use is held by Seller, Interlake
Companies or any Affiliate thereof and which are used in connection with
the operation of the Businesses, including the Transferred Patents and
Trademarks set forth in Section 7.7 of the Disclosure Letter.
"Transferring Employees" - See Section 13.3(c).
"U.K. Stock Purchase Agreement" means the Stock Purchase Agreement
dated as of the date hereof by and among an Affiliate of Purchaser's
Parent, Interlake Companies and all of the other shareholders of Precis, as
amended or modified from time to time in accordance with the terms thereof.
"Welfare Plan" means a welfare benefit plan as defined in Section 3(l)
of ERISA.
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.
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ARTICLE 2
PURCHASE AND SALE, PURCHASE PRICE,
ALLOCATION 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, Seller shall (or shall
cause one or more of its Affiliates to) sell, assign, convey, transfer and
deliver to Purchaser, and Purchaser shall acquire from Seller (or any such
Affiliate or Affiliates of Seller), the Businesses and the Purchased Assets.
2.2 Consideration.
(a) The purchase price (the "Purchase Price") payable by Purchaser
for the Businesses and the Purchased Assets shall be an amount equal to
FORTY FIVE MILLION DOLLARS ($45,000,000).
(b) At Closing, Purchaser shall pay to Seller for the Businesses and
the Purchased Assets an amount equal to (i) the Purchase Price, as adjusted
pursuant to 2.3(b), minus (ii) TWO MILLION DOLLARS ($2,000,000). Such
amount shall be paid by Purchaser to Seller by wire transfer of immediately
available federal funds at Closing to an account designated in writing by
Seller to Purchaser prior to the Closing Date. (c) A t Closing, TWO
MILLION DOLLARS ($2,000,000) shall be payable by
Purchaser to the Escrow Agent (as defined in the Post-Signing Escrow
Agreement) in accordance with the terms of the Post-Signing Escrow
Agreement, and shall be held and paid out in accordance with the terms of
the Post-Signing Escrow Agreement.
(d) Subject to, and notwithstanding, Purchaser's right to be
indemnified to the extent provided in Article 12 hereof, at Closing,
Purchaser shall, effective as of the Effective
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Date, assume, and be forever thereafter liable and responsible for, the
following (collectively, the "Assumed Liabilities"):
(i) those obligations and liabilities relating to the operation
of the Businesses to the extent set forth on the Seller Closing
Balance Sheet (as defined below) (the "Balance Sheet Liabilities");
(ii) obligations to perform under Contracts entered into in
connection with the operation of a Business prior to the Closing Date
(the "Contract Liabilities");
(iii) excluding any obligations described in clause (i) or (ii)
above, any obligations or liabilities arising or occurring as a result
of the Purchaser's operation of a Business or ownership or use of the
Purchased Assets (the "Post Effective Date Liabilities") after the
Effective Date including, without limitation, any liability or
obligation arising under any Environmental Law;
(iv) excluding any obligations described in clauses (i), (ii) or
(iii), any liabilities or obligations arising under the Racine Hourly
Pension Plan or which are the responsibility of Purchaser in
accordance with Section 13.3 hereof (the "Employer Liabilities"); and
(v) excluding any obligations described in clauses (ii), (iii) or
(iv) above, those obligations and liabilities relating to the
operation of the Businesses or ownership or use of the Purchased
Assets prior to the Effective Date to the extent not set forth on the
Final Closing Balance Sheet including, without limitation, any
liability or obligation arising under any Environmental Law, severance
arrangement, severance obligations arising as a result of the
transactions contemplated by this Agreement, or with respect to any
Taxes of Seller or any Affiliate, other than Taxes
-19-
based on the net income of Seller and/or its Affiliates, Taxes shared
in connection with the transfer of the Purchased Assets hereunder or
any Taxes paid in connection with Seller's gain upon the sale of the
Purchased Assets (the "Contingent Liabilities").
Notwithstanding any provision hereof, Assumed Liabilities shall
not include the liabilities or obligations relating to (hereinafter
referred to as the "Retained Liabilities"):
(a) the Senior Credit Agreement or any other agreement for
borrowed money to which Seller is a party or by which
it is bound other than the Transferred Intercompany
Accounts;
(b) any Retained Assets;
(c) any Plan, other than as specifically provided in
Section 2.2(d);
(d) any Taxes computed on the basis of the income of Seller
or any of its subsidiaries;
(e) Seller's obligations with respect to any Non-
Transferred Intercompany Account, this Agreement or any
Ancillary Agreement;
(f) the Gerrard Letter; or
(g) the following litigation matters: Devalle v. Interlake
Conveyors, Inc. and Interlake Packaging Corp., Sup.
Ct., Orange County, New York (Goshen), No. 3651/93;
Goldsworthy v. Wheels, Inc. and InterPower Packaging
-▇▇-
▇▇▇▇., ▇▇▇▇▇ of Common Pleas, ▇▇▇▇▇▇▇▇▇▇ County,
Pennsylvania (Norristown), No. 93-05831; ▇▇▇▇▇▇, et al.
v. Acme Strapping Inc., Redirack. The Interlake
Companies, Inc. and ▇▇▇▇ ▇▇▇▇▇▇, Ontario Court (General
Division)(Toronto), No. ▇▇-▇▇-▇▇▇▇▇; and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ v. N.J. Malin & Associates, Inc., Texas Conveyor
Controls, Inc., Numatics Incorporated, The Interlake
Companies, Inc., Interlake Conveyors, Inc., The
Interlake Corporation, Interlake, Inc., and Interlake
Packaging Corporation, Circuit Court of ▇▇▇▇ County,
Illinois (Chicago), ▇▇. ▇▇ ▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇ shall not assume, or in any way be liable for, any liabilities,
obligations or responsibilities which are Retained Liabilities.
2.3 Adjustment to the Purchase Price.
(a) One Business Day prior to the Closing Date, Seller shall deliver
to Purchaser an unaudited balance sheet (the "Seller Closing Balance
Sheet") for the Acquired Businesses dated as of the Effective Date setting
forth the Tangible Purchased Assets and the Balance Sheet Liabilities
relating to the Acquired Businesses (but not any Retained Liabilities, as
defined herein or in the Canadian Stock Purchase Agreement) as of such date
and computing the Tangible Net Worth as of such date, which balance sheet
shall be prepared in accordance with generally accepted accounting
principles applied on a basis consistent with Seller's past practices and
in accordance with the judgments (but also subject to the adjustments)
reflected in the pro forma balance sheet dated as of June 30, 1996 (the
"Pro Forma Balance Sheet")
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attached hereto as Schedule 2.3 (the "Agreed Principles"). To the extent it
so chooses, Purchaser may have its representatives in attendance as
observers during the preparation of the Seller Closing Balance Sheet, and
Seller will give Purchaser adequate notice to allow it to do so.
(b) The Purchase Price shall be adjusted downward (the "Adjustment")
on the Closing Date on a dollar-for-dollar basis (the "Adjustment Amount"),
to the extent that the Tangible Net Worth as of the Effective Date as set
forth in the Seller Closing Balance Sheet is less than $30 million.
(c) Within sixty (60) days following the Closing Date, Purchaser shall
deliver (1) to Seller an unaudited balance sheet (the "Purchaser Closing
Balance Sheet") for the Acquired Businesses dated as of the Effective Date
setting forth the Tangible Purchased Assets and the Balance Sheet
Liabilities (but not any Retained Liabilities, as defined herein or in the
Canadian Stock Purchase Agreement) as of such date and computing the
Tangible Net Worth as of such date, which balance sheet shall be prepared
in accordance with the Agreed Principles, and (2) its determination of the
Adjustment Amount. To the extent it so chooses, Seller may have its
representatives in attendance as observers during the preparation of the
Purchaser Closing Balance Sheet, and Purchaser will give Seller adequate
notice to allow it to do so.
(d) Within thirty (30) days following the delivery by Purchaser of the
Purchaser Closing Balance Sheet in accordance with the terms hereof, Seller
shall notify Purchaser in writing ("Seller's Notice") of any objection
Seller has to the Purchaser Closing Balance Sheet or the Adjustment Amount
determined by the Purchaser in accordance with Section 2.3(c), which notice
shall set forth in reasonable detail those aspects of the Purchaser Closing
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Balance Sheet to which Seller objects. If Seller does not so notify
Purchaser within such period, the Purchaser Closing Balance Sheet and the
Adjustment Amount as determined by the Purchaser in accordance with Section
2.3(c) shall become final and binding on all parties at the end of such
period.
(e) If Seller does so notify Purchaser, Purchaser and Seller shall
attempt in good faith to resolve any such objections. If Purchaser and
Seller are unable to resolve any disputed item within twenty (20) days
after Purchaser's receipt of Seller's Notice in accordance with clause (d)
above, such disputed item(s) shall be submitted to one of the five largest
nationally recognized accounting firms or any of their successors (other
than Seller's or Purchaser's regular auditors or their successors) chosen
by lot which shall be instructed to arbitrate such disputed item(s) within
thirty (30) days after such accountants are chosen. The resolution of
disputes by the accounting firm so selected shall be set forth in writing
and shall be conclusive and binding upon and non-appealable by the parties.
The costs of any such resolution by such accounting firm shall be borne by
(i) Purchaser, if the net total dollar amount of the resolved disputed
items is closer to the net total dollar amount of such items submitted to
such accounting firm by Seller than to those submitted by Purchaser, (ii)
Seller, if the net total dollar amount of the resolved disputed items is
closer to the net total dollar amount of such items submitted to such
accounting firm by Purchaser than to those submitted by Seller, or (iii)
Purchaser and Seller equally, if the net total dollar amount of the
resolved disputed items is equal distance from the net total dollar amount
of such items submitted by each of Purchaser and Seller. Prior to the final
determination by such accounting firm of the net total of such items, the
costs of any such resolution by such accounting firm shall be borne equally
by Seller and Purchaser; provided, however, under
-23-
no circumstances shall Purchaser or Seller have any obligation to pay the
other's legal fees or other related costs incurred by such Person in
connection with such resolution by such accounting firm.
(f) Upon the final resolution of any disputed item and the final
determination of the Adjustment Amount, if any, in accordance with this
Section 2.3, payments shall be made to Purchaser or Seller by the Escrow
Agent (as defined in the Post-Signing Escrow Agreement) pursuant to the
Post-Signing Escrow Agreement.
(g) Seller shall fully cooperate with Purchaser in its examination of
the Seller Closing Balance Sheet, and preparation of the Purchaser Closing
Balance Sheet, including, without limitation, by providing Purchaser with
access to Seller's books and records related thereto.
2.4 Transfer Taxes. Seller and Purchaser shall share equally the cost of
any and all transfer, filing, value added or similar taxes and fees which arise
out of the transactions contemplated by this Agreement, including, without
limitation, any transfer tax or filing fee relating to the transfer of real or
personal property, 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 Seller.
2.5 Allocation of Purchase Price. Seller and Purchaser agree that the
Purchase Price shall be allocated among the Purchased Assets as agreed by Seller
and Purchaser promptly upon the final determination of the Adjustment Amount,
and that such allocation shall be determined consistent with Exhibit 2.5 hereto.
Each party agrees to complete IRS Form 8594 in a manner consistent with such
allocation and to cooperate with the other party in the preparation of Form 8594
and to furnish the other party with a copy of such form prepared in draft form
within a reasonable
-24-
period before the filing due date for such form. Neither Seller nor Purchaser
shall file any Return or take a position with a tax authority that is
inconsistent with such allocation.
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
Assets to Purchaser in consideration for the payment to Seller of the Purchase
Price, and the assumption by Purchaser of the Assumed Liabilities, in accordance
with the terms hereof. Subject to Section 11.1 hereof, the Closing shall take
place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as is mutually agreed in writing by
Seller and Purchaser, at 10:00 a.m. Chicago time on the later of (A) October 4,
1996, and (B) fifth Business Day occurring after the later of (i) the expiration
or termination in accordance with the HSR Act of the waiting period applicable
to the consummation of the transactions contemplated hereunder required pursuant
to the provisions of the HSR Act, and (ii) the earliest date on which the
transactions contemplated by the Purchase Agreements can be consummated in
compliance with the merger provisions of the Competition Act (Canada), including
Section 123 of such act regarding pre-notification and expiration of the
applicable 21-day waiting period, 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 Seller. At the Closing on the Closing Date,
Seller shall deliver to Purchaser:
(a) (i) the ▇▇▇▇ of Sale and Assignment executed by Seller;
(ii) (A) special warranty deeds in form and substance
reasonably acceptable to Seller and Purchaser ("Special Warranty
Deeds") executed by Seller,
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and (B) in respect of each lease of each portion of the real property
which consists of a leasehold estate to be assigned pursuant to this
Agreement, an assignment of all right, title and interest as lessee
in, to and under the lease creating such leasehold estate, including
assignable purchase options and renewable rights, if any, pursuant to
an assignment and assumption agreement in form and substance
reasonably acceptable to Seller and Purchaser executed by Seller;
(iii) motor vehicle titles conveying Seller's title to each
vehicle to be transferred to Purchaser pursuant to this Agreement,
if any;
(iv) the Post-Signing Escrow Agreement executed by Seller;
(v) joint written instructions (the "Joint Instructions") to
the Escrow Agent (as defined in the Pre-Signing Escrow Agreement)
executed by Seller's Parent in accordance with Section 4(b) of the
Pre-Signing Escrow Agreement instructing the Escrow Agent to deliver
all amounts included in the Purchaser Fund and the Seller Fund (each
as defined in the Pre-Signing Escrow Agreement) as provided in the
Joint Instructions ;
(vi) a license agreement in form and substance reasonably
acceptable to Seller and Purchaser executed by Seller granting
Purchaser the right to use the name "Interlake" and derivatives
thereof in connection with the operation of the Business until October
4, 1997 (the "License Agreement"); and
(vii) (a) a trademark license agreement in form and substance
reasonably acceptable to Seller and Purchaser dated as of October 4,
1996 and executed by Seller, (b) a trademark assignment in form and
substance reasonably acceptable to Seller and Purchaser, dated as of
October 4, 1996 and executed by Seller, and (c) a
-26-
patent assignment in form and substance reasonably acceptable to
Seller and Purchaser, dated as of October 4, 1996 and executed by
Seller (collectively, the "Intellectual Property Assignments"); and
(viii) such other instruments of assignment or conveyance as
Purchaser may reasonably request as necessary to vest in Purchaser
title to the Purchased Assets;
(b) certified copies of resolutions or unanimous written consents of
the Board of Directors of Seller and, if required, the stockholders of
Seller, approving the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated by this Agreement;
(c) a certificate, dated the Closing Date, executed by an appropriate
officer of Seller, as required by Section 9.2;
(d) (i) the opinion of Winston & ▇▇▇▇▇▇, special counsel for Seller,
dated the Closing Date,in form and substance acceptable to Purchaser (ii)
the opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel of Seller, dated the
Closing Date, (iii) opinion letters in form and substances satisfactory to
Purchaser's Parent dated the Closing Date from legal counsel representing
(a) Interlake Companies regarding various legal issues relating to the U.K.
Stock Purchase Agreement, and (b) the Interlake Companies Seller regarding
various legal issues relating to the Canadian Stock Purchase Agreement;
(e) the Required Consents executed by the parties thereto;
(f) legible copies of all leases of real property, together with (i)
an estoppel certificate executed by the landlord on each Leased Real Estate
parcel in form and substance satisfactory to Purchaser to the extent such
certificate is a Required Consent, (ii) written consent from the landlord
of each Leased Real Estate parcel to the transactions contemplated
-27-
herein to the extent such consent is a Required Consent, and (iii) any
other documents or deliveries required pursuant to the leases in effect
for the Leased Real Estate to the extent such documents or deliveries are
Required Consents;
(g) a standard title policy in conformance with the title insurance
commitment delivered in accordance with Section 5.1 hereof, subject only to
Permitted Exceptions and the preprinted exceptions, and certified surveys
as required pursuant to Section 5.1 hereof; and
(h) such other documents as Purchaser may reasonably request to carry
out the purposes of, and to close the transactions contemplated by, 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 Seller or to the Escrow Agent, as applicable:
(a) the payments to be delivered by Purchaser pursuant to Section 2.2;
(b) certified copies of resolutions 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) (i) the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel for
Purchaser, dated the Closing Date, in form and substance acceptable to
Seller and Purchaser; and (ii) opinion letters in form and substance
satisfactory to Seller and the Interlake Companies dated the Closing Date
from legal counsel representing (a) Purchaser in connection with the
Canadian Stock Purchase Agreement, and (b) Purchaser in connection with
the U.K. Stock Purchase Agreement;
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(d) the certificate, dated the Closing Date, executed by the
appropriate officer of Purchaser, as required by Section 10.2;
(e) the Assumption Agreement executed by Purchaser;
(f) the Post-Signing Escrow Agreement executed by Purchaser;
(g) the Joint Instructions, executed by Purchaser;
(h) the License Agreement executed by Purchaser; and
(i) such other documents as Seller may reasonably request to carry
out the purposes of, and to close the transactions contemplated by, this
Agreement, including, but not limited to, the documents to be delivered
pursuant to Article 10.
3.4 Non-Assignable Contracts.
(a) Seller shall use its reasonable efforts to obtain and deliver to
Purchaser at or prior to the Closing such consents as are required to allow
the assignment by Seller to Purchaser of Seller's right, title and interest
in, to and under each Contract included in the Purchased Assets. To the
extent any such Contract is not capable of being assigned without the
consent or waiver of the other party thereto or any third party (including
a government or governmental unit), or if such assignment or attempted
assignment would constitute a breach thereof or a violation of any law,
decree, order, regulation or other governmental edict, this Agreement shall
not constitute an assignment or an attempted assignment of such Contract.
(b) Anything in this Agreement to the contrary notwithstanding, Seller
is not obligated to transfer to Purchaser any of its rights and obligations
in and to any Contract without first having obtained all necessary consents
and waivers to such transfer. For a reasonable period of time after the
Closing Date, Seller shall use its reasonable efforts, and
-29-
Purchaser shall cooperate with Seller, to obtain the consents and waivers
referred to in Section 3.4(a) and to obtain any other consents and waivers
necessary to convey to Purchaser any Contract.
(c) To the extent that such consents and waivers are not obtained by
Seller (other than with respect to any Required Consent), or Purchaser
does not direct Seller to terminate any foreign exchange contract which
constitutes a Contract, a list of which is set forth in Section 3.4(c)
of the Disclosure Letter (the "Foreign Exchange Contracts"), Seller and
Purchaser shall use their reasonable efforts to establish arrangements
that are reasonable and lawful as to both Seller and Purchaser, and which
provide to Purchaser the benefits, and impose upon the Purchaser the risks
and burdens of, the relevant Contract for the remaining term of such
Contract, without incurring any financial obligation upon Seller or
Purchaser (except that, with respect to the Foreign Exchange Contracts,
Purchaser will make Seller whole with respect to any such Contracts which
Purchaser does not direct Seller to terminate). At Purchaser's direction,
Seller shall terminate any Foreign Exchange Contract. Purchaser shall
indemnify and hold Seller harmless from any Losses incurred by Seller in
connection with any termination of any such Foreign Exchange Contract
pursuant to the immediately preceding sentence.
(d) With respect to the Contracts, Purchaser acknowledges and agrees
that the Required Consents are the only consents the receipt of which
constitutes a condition precedent to Purchaser's obligation to consummate
the purchase and sale of the Purchased Assets contemplated hereby.
3.5 Cooperation. Seller and Purchaser shall, on request on and after the
date hereof, cooperate with one another by furnishing any and all additional
information, executing and
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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, or evidence, the transactions contemplated by
this Agreement.
ARTICLE 4
PRE-CLOSING FILINGS
-------------------
4.1 HSR Filing. Purchaser and Seller each have caused to be filed with
the DOJ and FTC the pre-merger notification and report form required pursuant to
the HSR Act with respect to the transactions contemplated hereby, together with
a request for early termination of the waiting period under the HSR Act, and
such early termination was previously granted. The parties hereto covenant and
agree with each other that with respect to such filing each shall: (a) after any
request by the FTC or DOJ, promptly file any information or documents requested
by the FTC or DOJ; and (b) furnish each other with any correspondence from or
to, and notify each other of any other communications with, the FTC or DOJ which
relates to the transactions contemplated hereunder, and to the extent
practicable, to permit the other to participate in any conferences with the FTC
or DOJ. Purchaser paid the entire amount of the filing fee required by the HSR
Act.
4.2 Other Government Filings. Seller and Purchaser covenant and agree
with each other to (a) promptly file, or cause to be promptly filed, with any
United States agency or any state or local governmental body or agency, all
other notices, applications or other documents as may be necessary to consummate
the transactions contemplated hereby, 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.
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ARTICLE 5
PRE-CLOSING COVENANTS
---------------------
5.1 Title Insurance and Surveys. Prior to the Closing Date, Seller shall
obtain and deliver to Purchaser the following:
(a) with respect to each parcel of Owned Real Estate set forth in
Section 5.1 of the Disclosure Letter, and with respect to each parcel of
Leased Real Estate governed by a ground lease set forth in Section 5.1 of
the Disclosure Letter, if any, an owner's title insurance commitment
together with copies of all documents affecting or relating to title to
said parcels covering a date subsequent to the date hereof, issued by the
Title Insurer or such other title insurance company as is reasonably
acceptable to Purchaser.
(b) Surveys certified by a registered land surveyor licensed in the
jurisdiction in which the real estate is located as of a date subsequent
to the date hereof of the real estate covered by the title commitment
deliverable under Section 5.1(a) showing with respect to such real estate:
(i) the legal description; (ii) all buildings, structures and improvements
thereon and all "setback" lines, restrictions of record and other
restrictions that have been established by an applicable zoning or building
code or ordinance and all easements or rights of way; (iii) any
encroachments upon such parcel or upon adjoining parcels by buildings,
structures, improvements or easements; and (iv) access to such parcel.
(c) Legible and complete copies of all leases affecting the Leased
Real Estate. Any title encumbrances or exceptions which are set forth in
the title report or the survey and to which Purchaser does not object shall
be deemed to be Permitted Exceptions.
The costs and expenses of the title insurance commitments, policies and
surveys referred to in this Section 5.1 and in Section 9.9 shall be shared
equally by Seller and Purchaser, only if the
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transactions contemplated under this Agreement are consummated. In the event
that the transactions contemplated under this Agreement are not consummated for
any reason other than Purchaser's default, Seller shall pay the costs and
expenses of the title insurance reports, policies and surveys set forth in the
preceding sentence; in the event they are terminated due to Purchaser's default,
Purchaser shall pay such costs and expenses.
5.2 Conduct of Business Prior to Closing. During the period from the date
hereof to the Closing Date, Seller shall:
(a) use its reasonable efforts to preserve intact the business
organization of the Businesses, to keep available the services of the
present employees of the Businesses and to preserve the current material
relationships of Seller with the customers, suppliers and other Persons
having a business relationship with either Business;
(b) operate the Businesses in the ordinary course in substantially the
same manner as they are presently operated;
(c) except with the prior written consent of Purchaser, not: (i)
materially change its accounting methods, principles or practices; (ii)
establish or 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 Seller in
connection with either Business, except as set forth in Section 5.2(c) of
the Disclosure Letter; or (iii) sell, transfer, mortgage or otherwise
dispose of any Purchased Assets other than in the ordinary course of
business consistent with prior practice;
(d) not amend, terminate or waive any right under any Contract except
in the ordinary course of business consistent with past practices;
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(e) except as specifically set forth in Section 13.10, not, nor permit
its directors, officers, employees, representatives, investment bankers,
agents or Affiliates to, directly or indirectly (i) solicit or encourage
submission of any inquiries, proposals or offers by, (ii) participate in
any negotiations with, (iii) offer any access to the properties, books of
records of Seller or any affiliate, or (iv) otherwise assist, facilitate or
encourage, or enter into any agreement or understanding with, any person,
entity or group (other than Purchaser) in connection with any proposal
relating to the possible acquisition of the Acquired Businesses or any of
the Purchased Assets, whether by way of merger, stock purchase, asset
purchase or otherwise (a "Seller Proposal"); and
(f) (i) maintain its property in as good repair, order and condition
as on the date hereof, normal wear and tear thereof accepted, (ii) maintain
and keep in full force existing insurance, (iii) maintain its records in
the usual, regular and ordinary manner on a basis consistent with past
practices, and (iv) perform and comply with all of its obligations under
Contracts.
Purchaser acknowledges that Seller intends, prior to or at the Closing, to
cancel all Intercompany Service and Supply Arrangements, and that such
cancellations will not be deemed a breach of this Agreement.
5.3 Access to Information. From the date hereof until the Closing, upon
reasonable notice, Seller shall, and shall cause each of its 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 relating to
the Businesses, 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,
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properties, goodwill and business of the Businesses and the Purchased Assets
and Assumed Liabilities 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 Seller or any of its Affiliates or
subsidiaries. Purchaser will be permitted to make copies of such books and
records as may be reasonably necessary. No investigation by Purchaser or its
agents shall affect or limit the scope of Seller's representations and
warranties or limit Seller's liability for any breach thereof.
5.4 Closing Deliveries; Conditions. Notwithstanding any provision herein,
each of Seller and Purchaser shall use its best efforts to obtain and deliver
its closing deliveries on the Closing Date as set forth herein and to satisfy
the conditions of Closing applicable to it on such date.
5.5 Conduct of Business after the Effective Date. Unless this Agreement
is terminated in accordance with Section 11.1, the Business shall be operated
from the Effective Date by Seller, until Closing, for the account of Purchaser
and in the ordinary course of business, and any amounts due Seller or Purchaser
as a result thereof shall be settled in accordance with Section 13.11.
ARTICLE 6
FINANCIAL STATEMENTS; DISCLOSURE LETTER;
FINANCING COMMITMENT LETTER
---------------------------
6.1 Pre-Signing Deliveries by Seller. Seller has heretofore delivered to
Purchaser:
(a) the Financial Statements; and
(b) the Disclosure Letter, together with (or preceded by) a copy of
each Contract listed in Section 7.11 of the Disclosure Letter, and
containing all of the information required by the terms of this Agreement
to be contained therein.
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6.2 Pre-Signing Deliveries by Purchaser. Purchaser has heretofore
delivered to Seller a true and complete copy of the written binding commitment
of a reputable lending institution to provide the funds necessary for Purchaser
and Purchaser's Parent to purchase the Acquired Businesses.
ARTICLE 7
WARRANTIES AND REPRESENTATIONS OF SELLER
----------------------------------------
Seller warrants and represents to Purchaser (which warranties and
representations shall survive the Closing subject to the limitations of Article
12 of this Agreement) as follows:
7.1 Incorporation and Qualification of Seller. 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 use the
Purchased Assets it now owns, operates or uses to engage in the operation of the
Businesses in which it is currently engaged, and to perform all of its
obligations under the contracts to which it is a party or by which it is bound.
7.2 Authority. Seller has all requisite corporate power and authority
to enter into this Agreement and the Ancillary Agreements and to carry out the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Ancillary Agreements by Seller, the performance by Seller
of its obligations hereunder and thereunder and the consummation by Seller of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of Seller. This Agreement has been
duly executed and delivered by Seller and (assuming the due authorization, valid
execution and delivery hereof and thereof by Purchaser) is, and as of the
Closing will be, and as of the Closing each Ancillary Agreement will be, duly
executed and delivered by Seller and (assuming the due authorization, valid
execution and delivery hereof and thereof by Purchaser, as appropriate), as of
the Closing, will be, a legal, valid
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and binding obligation of Seller, each enforceable against 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. Except as described in Section 7.4, or as may result
from any facts relating solely to Purchaser, the execution, delivery and
performance of this Agreement and the Ancillary Agreements by Seller do not and
will not: (a) conflict with or violate any provision of the Certificate of
Incorporation or By-Laws of Seller; (b) 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 any Person any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Lien on any of the Purchased Assets pursuant to, any instrument, license,
agreement or commitment to which Seller is a party or by which any of the
Purchased Assets are bound; or (c) conflict with or violate any law, rule,
regulation, order, writ, judgment, injunction or decree applicable to the
Purchased Assets or the Businesses.
7.4 Consents and Approvals. The execution and delivery by Seller of
this Agreement and the Ancillary Agreements do not or will not, and compliance
by Seller with the terms hereof and thereof and consummation by Seller of the
transactions contemplated hereby and thereby will not, require Seller 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 HSR Act, and (c) as may be
necessary as a result of any facts or circumstances relating solely to Purchaser
or Purchaser's Parent.
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7.5 Brokers. Neither this Agreement nor the sale of the Purchased
Assets or any other transaction contemplated by this Agreement was induced or
procured through any Person acting on behalf of or representing Seller or any of
its Affiliates as broker, finder, investment banker, financial advisor or in any
similar capacity.
7.6 Required Assets; Title. The Purchased Assets constitute substantially
all of the material rights and properties used in connection with conducting the
Businesses as presently conducted, except for the Retained Assets. Except as set
forth in Section 7.6 of the Disclosure Letter, Seller and its Affiliates own all
of the Purchased Assets, free and clear of any Liens whatsoever other than
Permitted Exceptions. Upon consummation of the transactions provided herein in
accordance with the terms hereof, Purchaser will be vested with title to the
Purchased Assets, free and clear of any Liens other than Permitted Exceptions.
7.7 Intellectual Property.
(a) To the knowledge of Seller, 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 Seller of any valid patent, trademark, trade name,
service ▇▇▇▇, copyright or trade secret in connection with the operation of
a Business and which is owned by any other Person, and there is not now any
existing or, to the knowledge of Seller, threatened claim asserted in
writing against Seller of any infringement, misuse or misappropriation in
any material respect by Seller of any patent, trademark, trade name,
service ▇▇▇▇, copyright or trade secret which relates to either Business.
All material patents, trademarks, service marks, tradenames,
copyrights, and all applications and registrations thereof, used in
connection with the operation of the
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Businesses 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, Seller and/or its 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 7.7 or Section 7.14 of the
Disclosure Letter, there is no pending or threatened claim by Seller
against any other Person for infringement, misuse or misappropriation of
any patent, trademark, trade name, service ▇▇▇▇, copyright or trade secret
owned by Seller and which is utilized in the conduct of either Business.
7.8 Financial Statements. Each of the Financial Statements is consistent
with the books and records of Seller and fairly presents in all material
respects the financial condition, assets and liabilities of the Businesses as
of its respective date and the results of operations for the periods related
thereto in accordance with generally accepted accounting principles consistently
applied among the periods which are the subject of the Financial Statements.
7.9 Compliance with Laws. Except as set forth in Section 7.9 of the
Disclosure Letter, Seller is currently in compliance in all material respects
with all laws, rules, ordinances, statutes, regulations, writs, injunctions,
judgments, decrees and orders ("Law") applicable to it in connection with the
ownership or use of the Purchased Assets or the operation of each Business, and
has not received any notice of any alleged claim or threatened claim, violation
of or liability or potential responsibility under any such Law in connection
with the ownership or use of the Purchased Assets or the operation of any
Business which has not been resolved; provided, however, that Purchaser
acknowledges and agrees that Seller's representations and warranties under this
Section 7.9 are not made with respect to any applicable Environmental Laws and
that Seller's representations and warranties to Purchaser with respect to
applicable Environmental Laws are made only in Section
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7.18. There are no writs, injunctions, judgments, decrees or orders applicable
to Seller which require the payment of money which have not been paid as of the
Effective Date.
7.10 Licenses and Permits. Except as set forth in Section 7.10 of the
Disclosure Letter, Seller has all material governmental licenses, franchises,
permits, approvals, authorizations, exemptions, certificates, registrations and
similar documents or instruments necessary to carry on the Businesses as each is
currently conducted, provided, however, that Purchaser acknowledges and agrees
that Seller's representations and warranties under this Section 7.10 are not
made with respect to any applicable Environmental Laws and that Seller's
representations and warranties to Purchaser with respect to applicable
Environmental Laws are made only in Section 7.18.
7.11 Material Contracts.
(a) Section 7.11 of the Disclosure Letter lists or describes (1) all
Contracts to be assigned to Purchaser and existing as of the date hereof
which involve an executory obligation of more than $100,000 in any one
calendar year, except Contracts which are terminable by Seller without
penalty on no more than thirty (30) days' notice, and (2) each and every
contract in effect described below which constitutes a Purchased Asset (the
"Material Contracts"):
(i) any existing or proposed collective bargaining or similar
arrangement with any labor union;
(ii) any contract for capital expenditures or the acquisition or
construction of fixed assets involving an executory obligation of more
than $100,000 per annum;
(iii) any contract for the purchase or the sale of materials,
supplies, merchandise or services except any contract made in the
ordinary course of business;
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(iv) any contract relating to environmental matters involving
an executory obligation of more than $100,000 per annum;
(v) any contract granting to any Person a first-refusal,
first-offer or similar preferential right to purchase any of the
Purchased Assets;
(vi) any contract with any manufacturer's representative or
other sales agent or distributor, or advertising or marketing entity, which
is not terminable by Seller without penalty on 180 calendar days' or less
notice;
(vii) any lease of real property to which Seller is a party;
(viii) any material non-governmental license or sublicense which
Seller has granted or received;
(ix) any contract providing for the indemnification by Seller
of any of its officers, directors, or employees or any other Person, the
obligation of which might reasonably be expected to exceed, in the
aggregate, $100,000;
(x) any contract prohibiting Seller from, or restricting it
in, conducting the Business anywhere in the world;
(xi) any joint venture or partnership contract;
(xii) any tax sharing agreements;
(xiii) any contract containing covenants by Seller not to
compete in either Business;
(xiv) any contract relating to the acquisition of any business
on or after the Effective Date;
(xv) any consulting contract requiring any payment or payments
of greater than, in the aggregate, $100,000; and
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(xvi) any employment contract having an express term of greater
than 1 year.
(b) Neither Seller nor, to the knowledge of Seller, any other Person, is in
material breach of, or material default under, any material Contract to be
conveyed to Purchaser under this Agreement, and no event or action has occurred,
is pending or, to the knowledge of 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 Seller or, to the knowledge of
Seller, any other Person, under any material Contract to be conveyed to
Purchaser under this Agreement.
7.12 Real Properties. Section 5.1 of the Disclosure Letter contains a
true and correct description of all of the Owned Real Estate and the Leased Real
Estate relating to the Businesses. Seller has fee simple title to the Owned Real
Estate and a valid leasehold interest in the Leased Real Estate, in each
instance, subject only to Permitted Exceptions and except as set forth in
Section 7.6 of the Disclosure Letter.
7.13 [Intentionally omitted].
7.14 Litigation. Except as set forth in Section 7.14 of the Disclosure
Letter, there are no actions, claims, proceedings or governmental investigations
pending or, to the knowledge of Seller, threatened against Seller, either
Business or any of the Purchased Assets at law or in equity, before or by any
federal, state or municipal court, agency or other governmental entity, or by
any other Person which are material and adverse to either Business or any of the
Purchased Assets.
7.15 Labor Matters. Section 7.15 of the Disclosure Letter contains a list
of the collective bargaining agreements to which Seller is a party relating to
employees employed by Seller in connection with the Businesses. Except as
disclosed in Section 7.15 of the Disclosure Letter (a) there are no labor
controversies pending or, to the knowledge of Seller, threatened against either
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Business or Seller relating to any Business; and (b) there are no grievances
outstanding, or unfair labor practice complaints pending, before the National
Labor Relations Board, against Seller in respect of employees employed by Seller
in connection with either Business under any such agreement or contract, in each
case which might be material and adverse to either Business or the Purchased
Assets.
7.16 Employee Benefit Matters.
(a) Except as is described in Section 7.16 of the Disclosure Letter or as
will not give rise to any liability to Purchaser, neither Seller nor any current
or former Plan Affiliate (as defined below) of Seller has at any time
maintained, sponsored, adopted, made contributions to, obligated itself or had
any liability with respect to any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA); any "employee welfare benefit plan" (as
such term is defined in Section 3(1) of ERISA); personnel policy (including
vacation time, holiday pay, service awards, bonus programs, moving expense,
reimbursement programs and sick leave) or material fringe benefit; any severance
agreement or plan or any medical, life or disability benefit; any excess benefit
plan, bonus or incentive plan (including stock options, restricted stock, stock
bonus or deferred bonus plans), top hat plan or deferred compensation plan,
salary reduction agreement, change of control agreement, employment agreement,
consulting agreement; or any other benefit plan, policy, program, arrangement,
agreement or contract, whether or not written or terminated or provided pursuant
to a collective bargaining agreement, with respect to any employee, former
employee, director, independent contractor, or any beneficiary or dependent
thereof. All such plans, policies, programs, arrangements, agreements and
contracts, including those that are set forth in Section 7.16 of the Disclosure
Letter and those which will not result in any liability to Purchaser, are
referred to in this Agreement as "Plans". Any Plan set forth on Section 7.16 of
the Disclosure Schedule as a
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"Scheduled Plan" is referred to herein as a "Scheduled Plan"; and any Plan,
other than a Scheduled Plan, in which Employees (or descendants or beneficiaries
thereof by virtue of such status) are currently participating or under which
such persons are currently covered, relating to the operation of the Business
but for which Purchaser will not have any liability (except in the case of those
Plans described in Section 7.11 of the Disclosure Schedule) shall be referred to
as a "Business Plan".
(b) Seller has delivered to Purchaser a complete and accurate copy of each
written Scheduled Plan, together with a copy of audited financial statements,
actuarial reports and Form 5500 Annual Reports (including required schedules) to
the extent required by ERISA or the Code, if any, for the three (3) most recent
plan years, the most recent IRS determination letter or IRS recognition of
exemption; each other material letter, ruling or notice issued by a governmental
authority with respect to each such plan, a copy of each trust agreement,
insurance contract or other funding vehicle, if any, with respect to each such
plan, the most recent PBGC Form 1 with respect to each such plan, if any, the
current summary plan description and summary of material modifications with
respect to each such plan, and a copy or description of each other general
explanation or written or oral communication and which describes a material term
of each such plan that has not previously been disclosed to Purchaser pursuant
to this Section. Seller has delivered to Purchaser a complete and accurate copy
of the current summary plan description and summary of material modifications to
the extent required by ERISA with respect to each Business Plan. Section 7.16 of
the Disclosure Letter contains a description of the material terms of each
Business Plan for which there is no summary plan description or summary of
material modifications and of each material term of each Business Plan which has
not previously been disclosed to Purchaser in a summary plan description or
summary of material modification.
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(c) Except as would not reasonably be expected to give rise to any
material liability to Purchaser, (1) each Scheduled Plan (i) has been and
currently complies in form and in operation in all respects with all
requirements of ERISA and the Code, to the extent they are applicable, and any
other applicable legal requirements; (ii) has been and is operated and
administered in compliance with its terms (except as otherwise required by law);
(iii) has been and is operated in compliance with applicable legal requirements
in such a manner as to qualify, where appropriate, for both Federal and state
purposes, for income tax exclusions to its participants, tax-exempt income for
its funding vehicle, and the allowance of deductions and credits with respect to
contributions thereto; and (iv) where appropriate, has received a favorable
determination letter or recognition of exemption from the IRS, (2) with respect
to each Scheduled Plan, there are no claims or other proceedings pending or, to
the knowledge of Seller, threatened with respect to the assets thereof (other
than routine claims for benefits), and there are no facts which could reasonably
give rise to any liability, claim or other proceeding against any Scheduled
Plan, any fiduciary or plan administrator or other person dealing with any
Scheduled Plan or the assets of any such plan (other than routine claims for
benefits), and (3) with respect to each Scheduled Plan, no Person: (i) has
entered into any nonexempt "prohibited transaction," as such term is defined
under ERISA or the Code; (ii) has breached a fiduciary obligation or violated
Sections 402, 403, 405, 503, 510 or 511 of ERISA; (iii) has any liability for
any failure to act or comply in connection with the administration or investment
of the assets of such plan; or (iv) engaged in any transaction or otherwise
acted with respect to such plan in such a manner which could subject Purchaser,
or any fiduciary or plan administrator or any other person dealing with any such
plan, to liability under Sections 409 or 502 (except for claims for benefits
made in the ordinary course) of ERISA or Sections 4972 or 4976 through 4980 of
the Code.
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(d) No Scheduled Plan is a "multi-employer plan" as defined in Section
4001 of ERISA, a "multi-employer plan" within the meaning of Section 3(37) of
ERISA, a "multiple employer plan" within the meaning of Section 413(c) of the
Code or a "multiple employer welfare arrangement" within the meaning of Section
3(40) of ERISA.
(e) Other than Scheduled Plans, the accruals for which are set forth in
the Financial Statements in accordance with SFAS 106, or as will not give rise
to any liability to Purchaser, neither Seller, nor any current or former Plan
Affiliate, has at any time maintained, contributed to or obligated itself or
otherwise had any liability with respect to any funded or unfunded employee
welfare plan, whether or not terminated, which provides medical, health, life
insurance or other welfare type benefits for current retirees or future retirees
or current former employees or future former employees, their spouses or
dependents or any other persons (except for limited continued medical benefit
coverage for former employees, their spouses and other dependents as required to
be provided under Section 4980B of the Code and Part 6 of Subtitle B of Title I
of ERISA and the accompanying proposed regulations or state continuation
coverage laws ("COBRA")).
(f) No Scheduled Plan which is subject to Title IV of ERISA has incurred
an "accumulated funding deficiency" as such term is defined in Section 302 of
ERISA or Section 412 of the Code, whether or not waived, or has posted or is
required to provide security under Code Section 401(a)(29) or Section 307 of
ERISA; no event has occurred which has or could result in the imposition of a
lien under Code Section 412 or Section 302 of ERISA with respect to a Scheduled
Plan that is subject to Title IV of ERISA, nor has any liability to the Pension
Benefit Guaranty Corporation (the "PBGC") (except for payment of premiums) been
incurred or reportable event within the meaning of Section 4043 of ERISA which
could reasonably be expected to give rise to
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any liability to Purchaser occurred with respect to any such plan; and the PBGC
has not threatened or taken steps to institute the termination of any such
Scheduled Plan.
(g) The requirements of COBRA have been satisfied with respect to each
Scheduled Plan to which they relate, other than technical requirements for which
no liability to Purchaser could reasonably be expected to arise.
(h) As of the Closing Date, with respect to the Racine Hourly Pension Plan
and the Past Service Plan, the estimated fair market value of the assets under
each such plan equals or exceeds the estimated present value of all vested and
non-vested accrued benefits under each such plan, determined using the actuarial
methods and assumptions disclosed in the most recent (January 1, 1995) actuarial
valuation report (specifically that [the set of assumptions included therein
using an interest rate of 9.0% per annum, compounded annually and the 1971 Group
Annuity Mortality Tables, without margins, with projection for mortality
improvement to 1976 by Scale E). All contributions, payments, premiums,
expenses, reimbursements or accruals required or due for all periods ending
prior to or as of the Closing Date (including periods from the first day of the
then current plan year to the Closing Date) for the Racine Hourly Pension Plan
and the Past Service Plan (as defined below) shall have been, as of the Closing
Date, made except to the extent accrued on the Final Closing Balance Sheet.
(i) As used in this Agreement, with respect to any Person ("First
Person"), the term "Plan Affiliate" shall mean each other Person with whom the
First Person constitutes or has constituted all or part of a controlled group,
or which would be treated or has been treated with the First Person as under
common control or whose employees would be treated or have been treated as
employed by the First Person, under Section 414 of the Code and any other legal
requirements.
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7.17 Taxes. Except as set forth in Section 7.17 of the Disclosure Letter,
Seller has duly and timely filed all state and local tax Returns required to be
filed by it in respect of the Businesses and paid all Taxes due thereunder.
Except as set forth in Section 7.17 of the Disclosure Letter, Seller has duly
withheld and, if payable, paid all Taxes which it is required to withhold from,
and pay relating to, compensation paid to employees of Seller employed by Seller
in connection with the Businesses.
7.18 Environmental Compliance.
(a) Compliance. To the knowledge of Seller, except as set forth in
Section 7.18 of the Disclosure Letter (i) Seller is in compliance with all
applicable Environmental Laws as in effect on the date hereof, (ii) Seller
possesses all required environmental permits, licenses, certifications and
approvals relating to the use, occupancy or operation of the Purchased Assets or
the Businesses, and (iii) Seller is in compliance with all requirements or
conditions imposed under its environmental permits, licenses, certifications and
approvals, and has filed all required notices and applications.
(b) No Hazardous Substances. To the knowledge of Seller, except as set
forth in Section 7.18 of the Disclosure Letter, Seller has never generated,
used, transported, treated, stored, disposed of or otherwise handled any
Hazardous Substances at any site, location or facility in connection with the
use, occupancy or operation of the Purchased Assets or the Businesses, other
than in compliance with Environmental Laws. To the knowledge of Seller, except
as set forth on in Section 7.18 of the Disclosure Letter, Seller has not owned
or operated any underground storage tanks ("USTs") in connection with the use,
occupancy or operation of the Purchased Assets or the Businesses, other than in
compliance with all applicable Environmental Laws. To the knowledge of Seller,
except as set forth in Section 7.18 of the Disclosure Letter, there has been no
release, spill or discharge of any Hazardous Substances in connection with the
use, occupancy or operation of the Purchased Assets
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or the Businesses in violation of or requiring reporting, removal or remediation
under any Environmental Laws as in effect at the time thereof, which has not
been reported, removed or remediated, as the case may be.
(c) No Actions or Proceedings. To the knowledge of Seller, except as set
forth in Section 7.18 of the Disclosure Letter, the Purchased Assets are not
subject to, nor are the subject of, any threatened private, administrative or
judicial inquiry, investigation, order or action 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 Substances in connection with
the use, occupancy or operation of the Purchased Assets or the Businesses.
(d) Other Conditions. To the knowledge of Seller, except as set forth in
Section 7.18 of the Disclosure Letter, 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 Substances in connection with the use,
occupancy or operation of the Purchased Assets or the Businesses.
7.19 Inventory. All of the inventories which are reflected on 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
Businesses and in a manner consistent with the regular inventory practices
relating to the Businesses, and have been or will be used or sold in the
ordinary and regular course of the Businesses and in a manner consistent with
Seller's regular inventory practices; all of the inventories which are reflected
in the balance sheets constituting a part of the
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Financial Statements were priced at the lower of cost (on the last-in-first-out
basis, except for the portion of the Strapping Business which has been "bought-
in" as opposed to manufactured (e.g., purchased strapping, machines and parts),
which were priced on a first-in-first-out basis) or market, and were (as to
classes of items inventoried and methods of accounting and pricing) determined
in a manner consistent with prior years; and all inventories which have been
purchased or acquired by Seller for the Businesses since June 30, 1996 were
purchased or acquired in the ordinary and regular course of the Businesses and
in a manner consistent with Seller's regular inventory practices and have been
or will be used or sold in the ordinary and regular course of Seller's business
and in a manner consistent with Seller's regular inventory practices.
7.20 Receivables. All of the Receivables which are reflected in the
balance sheet dated June 30, 1996 constituting a part of the Financial
Statements represent, and all of the Receivables set forth on the Seller Closing
Balance Sheet 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 will
be current and enforceable (but no representation is hereby made as to their
collectibility). There is no contest, claim or asserted right of set-off in any
agreement relating to the amount or validity of any Receivable except those
arising in the ordinary course of business. 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 Real Property Leases. Seller has provided Purchaser with a true and
complete copy of each of the leases pertaining to the Leased Real Estate (the
"Real Property Leases"). No payment required pursuant to the Real Property
Leases is past due. The Real Property Leases have not been amended, modified or
assigned except as otherwise disclosed in the Disclosure Letter and are in full
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force and effect. Except as disclosed in Section 7.21 of the Disclosure Letter,
neither Seller nor any lessor under the Real Property Leases is in default
thereunder.
7.22 No Notice. To Seller's knowledge, no notice, action, or proceeding
materially and adversely affecting the Owned or Leased Real Estate has been
served or commenced.
7.23 Customers. Section 7.23 of the Disclosure Letter is a complete list
of the 10 largest customers of each Business for the twelve month period ended
June 30, 1996. Except as noted in such section of the Disclosure Letter, since
June 30, 1996, no such customer has cancelled or otherwise terminated, or to
Seller's knowledge, threatened to cancel or otherwise terminate, its
relationship with a Business, or to Seller's knowledge, threatened to materially
reduce its business with any Business, other than due to normal fluctuations in
requirements and order levels in the ordinary cause of business.
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 Businesses,
the Purchased Assets and the Assumed Liabilities.
7.25 DISCLAIMER OF WARRANTIES. EXCEPT WITH RESPECT TO THE WARRANTIES AND
REPRESENTATIONS SPECIFICALLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO
WARRANTY, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, SUITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, OR QUALITY AS TO THE PURCHASED ASSETS, 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
THE PURCHASED ASSETS ARE TO BE CONVEYED HEREUNDER "AS IS" ON THE DATE HEREOF,
AND IN THEIR PRESENT CONDITION, SUBJECT TO REASONABLE USE,
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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 Seller (which warranties and
representations shall survive the Closing) as follows:
8.1 Incorporation and Qualification of Purchaser. Purchaser 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
currently conducted.
8.2 Authority. Purchaser has all requisite corporate power and authority
to enter into this Agreement and the Ancillary Agreements and to carry out the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Agreements by Purchaser, the performance by
Purchaser of its obligations hereunder and thereunder and the consummation by
Purchaser of the transactions contemplated hereby and thereby have been, or
prior to Closing will be, duly authorized by all requisite corporate action on
the part of Purchaser. Each of this Agreement and the Ancillary Agreements has
been, or prior to Closing will be, duly executed and delivered by Purchaser and
(assuming the due authorization, valid execution and delivery hereof and thereof
by Seller) is, and as of the Closing will be, 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
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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 Seller, the execution, delivery and performance of this
Agreement and the Ancillary Agreements by Purchaser do not and will not: (a)
conflict with or violate any provision of the Certificate of Incorporation or
Bylaws of Purchaser; (b) except as would not have a material adverse effect on
Purchaser or its ability to consummate the transactions contemplated hereby or
by the Ancillary Agreements, as the case may be, 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 or by the Ancillary Agreements,
as the case may be, 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 and the Ancillary Agreements do not, and compliance
by Purchaser with the terms hereof and thereof and consummation by Purchaser of
the transactions contemplated hereby and thereby 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 HSR Act, (b) where failure to obtain such consents, approvals,
authorizations or actions, make such filings or give such notice
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would not prevent Purchaser from consummating the transactions contemplated
hereby and performing any of its material obligations under this Agreement or
the Ancillary Agreements, as the case may be, and (c) as may be necessary as a
result of any facts or circumstances relating solely to Seller.
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 or any federal, state 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 or
by the Ancillary Agreements, as the case may be.
8.6 Brokers. Neither this Agreement nor the purchase of the Purchased
Assets 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 Assets and consummate the
transactions contemplated hereby.
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 Seller shall have terminated
this Agreement pursuant to Section 11.1.
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9.2 Bring-Down of Seller's Warranties. The warranties and representations
made by Seller herein to Purchaser shall be true and correct in all material
respects as of the date hereof and 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 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 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 shall be
pending on the Closing Date which challenges, or is reasonably likely to result
in a challenge to, and no injunction issued by an order of any court shall be in
effect which prohibits, this Agreement or any transactions contemplated hereby.
9.4 Consents and Approvals. All consents, approvals or authorizations of
any governmental authority which are required to consummate the transactions
contemplated hereby, and the Required Consents, shall have been duly obtained
and shall be in full force and effect as of the Closing Date, and Seller 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.
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.
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9.6 HSR Act. The waiting period applicable to the consummation of the
transactions contemplated hereunder required pursuant to the provisions of the
HSR Act shall have expired or been terminated in accordance with the HSR Act.
9.7 Termination of Certain Liens, Claims and Encumbrances. Purchaser
shall have received evidence, in form and substance reasonably satisfactory to
it, of the termination, cancellation and release of all liens, claims and
encumbrances which are not Permitted Exceptions.
9.8 Canadian and U.K. Transactions. The "Closing" contemplated under each
of the Canadian Stock Purchase Agreement and the U.K. Stock Purchase Agreement
shall be consummated concurrently with the Closing hereunder.
9.9 Title Policies. At the Closing, Seller shall have delivered to
Purchaser owner's title insurance policies dated the Closing Date, covering the
real estate covered by the commitments referred to in Section 5.1(a), issued by
the Title Insurer insuring the fee simple title of Purchaser in the real estate
in the amount to be set forth in Section 5.1 of the Disclosure Letter, subject
only to Permitted Exceptions and the preprinted exceptions.
9.10 Conveyance of the Transferred Patents and Trademarks. At the Closing,
Seller and its affiliates shall have delivered to Purchaser or, if requested by
Purchaser, to Cass Strapping, an assignment of the Transferred Patents and
Trademarks in form and substance reasonably satisfactory to Purchaser, duly
executed by Interlake Companies or its affiliates, as appropriate, pursuant to
which Interlake Companies and each appropriate Affiliate thereof shall assign to
Purchaser (or Cass Strapping, as the case may be) all of its rights, title and
interest in and to the Transferred Patents and Trademarks.
9.11 Additional Deliveries. Seller shall have delivered to Purchaser, at
Closing, all deeds, assignments, transfer tax declarations and such other
documents, instruments and agreements as may
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be necessary or desirable in order to convey to Purchaser title to the Owned
Real Estate and the leasehold estates created under the Real Property Leases,
free and clear of all liens, claims and encumbrances other than Permitted
Exceptions.
9.12 Material Adverse Change. Since June 30, 1996, there shall not have
been any Material Adverse Change. Purchaser shall have the right to waive any of
the foregoing conditions precedent, except for the condition set forth in
Section 9.6.
9.13 Consents under Senior Credit Agreement. All consents required under
the Senior Credit Agreement and the documents and instruments executed and
delivered in connection therewith to permit Seller to consummate the
transactions contemplated hereby shall have been delivered to Seller.
ARTICLE 10
CONDITIONS TO CLOSING APPLICABLE TO SELLER
------------------------------------------
The obligation of Seller to consummate the transactions herein contemplated
is subject to the following conditions precedent:
10.1 No Termination. Neither Purchaser nor 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 Seller 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 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, Seller shall have received a
certificate executed by the President or any Vice President of Purchaser to the
foregoing effect.
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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, and no injunction issued by an order of any court shall be in
effect which prohibits, this Agreement or any transaction contemplated hereby.
10.4 Consents and Approvals. All consents, approvals or authorizations of
any governmental authority which are required to consummate the transactions
contemplated hereby, and the Required Consents, 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 Seller, and Seller shall have received copies of such documents as
it may reasonably request in connection with said transactions, including
without limitation, those documents to be delivered pursuant to Section 3.3.
10.6 HSR Act. The waiting period applicable to the consummation of the
transactions contemplated hereunder required pursuant to the HSR Act shall have
expired or been terminated in accordance with the HSR Act.
10.7 Canadian and U.K. Transactions. The "Closing" contemplated under each
of the Canadian Stock Purchase Agreement and the U.K. Stock Purchase Agreement
shall be consummated concurrently with the Closing hereunder.
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10.8 Letters of Credit. At the Closing on the Closing Date, Purchaser
shall have caused the Replacement Letters of Credit to be in full force and
effect and shall have delivered a copy of each Replacement Letter of Credit to
Seller.
10.9 Consents under Senior Credit Agreement. All consents required under
the Senior Credit Agreement and the documents and instruments executed and
delivered in connection therewith to permit Seller to consummate the
transactions contemplated hereby shall have been delivered to Seller.
Seller shall have the right to waive any of the foregoing conditions
precedent, except for the condition set forth in Section 10.6.
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 Seller;
(b) by Purchaser or by 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 default under
this Agreement;
(c) by Purchaser or by Seller if any representation or warranty made
herein for the benefit of Purchaser or Seller, respectively, or in any
certificate, schedule or documents furnished to Purchaser or Seller,
respectively, pursuant to this Agreement is untrue in any
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material respect, or if Seller or Purchaser, respectively, shall have
defaulted in any material respect in the performance of any material
obligation under this Agreement; or
(d) by Seller 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, dated as of the date of Seller's notice of
termination, shall have been delivered to Seller by Purchaser within five
Business Days after the date of delivery of Seller's notice of termination
under this Section 11.1(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 Seller nor Purchaser shall have any further rights
hereunder.
ARTICLE 12
INDEMNIFICATION
---------------
12.1 Seller Indemnity. After the Closing Date, Seller agrees to indemnify,
defend and hold Purchaser, its Affiliates and their officers and directors
(collectively, the "Purchaser Indemnified Persons") harmless against any losses,
liabilities, costs, damages or expenses (including reasonable attorneys' fees),
other than Consequential Damages (collectively, the "Losses"), suffered as the
result of (a) any breach by Seller of any of its covenants or agreements
contained in this Agreement or any Ancillary Agreement; (b) any inaccuracy in or
breach of any of the representations or warranties made by Seller herein, in any
Ancillary Agreement or in the Disclosure Letter; (c) any inaccuracy or
misrepresentation in a certificate or affidavit delivered by Seller in
accordance with the provisions of this Agreement; (d) the assertion by a third
party of any Contingent Liabilities or the compliance
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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(b), (c) and (d) is subject to the following specific limitations (other
than in the case of any obligation arising as a result of fraudulent activity on
the part of Seller, which instances are not subject to such limitations):
(a) (i) After the Third Anniversary, no Purchaser Indemnified Person
shall be entitled to assert any right of indemnification pursuant hereto
with respect to Section 7.18 for any Loss suffered by such Purchaser
Indemnified Person or with respect to Section 12.1(d) relating to any
Contingent Liability arising as a result of or in connection with Seller's
non-compliance with Environmental Laws, except that if, as of the Third
Anniversary, there shall then be pending any such claim under Section
12.1(b), (c) or (d) of which such Purchaser Indemnified Person shall have
notified Seller in writing on or prior to the Third Anniversary with
respect to such Section 7.18 or 12.1(d), 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 the
Code or any other applicable law with respect to the underlying Tax or
ERISA Plan liability of Seller that forms the 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(b), (c)
or (d) with respect to any Loss suffered by such Purchaser Indemnified
Person with respect to the representations and warranties set forth in
Section 7.16 or Section 7.17 or with respect to Section 12.1(d) with
respect to any Contingent Liability arising as a result of or in
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connection with any Taxes of Seller other than Retained Liabilities or
transfer Taxes payable in accordance with the terms hereof, except that if,
as of the expiration of any such statute of limitations, there shall then
be pending any such claim under Section 12.1(b), (c) or (d) of which such
Purchaser Indemnified Person shall have notified Seller in writing on or
prior to such expiration date with respect to such Section 7.16, 7.17 or
12.1(d), such Purchaser Indemnified Person shall continue to have the right
to be indemnified with respect to such claim.
(iii) Except as otherwise set forth in clause (i) and (ii) above,
after the First Anniversary, no Purchaser Indemnified Person shall be
entitled to assert any other right of indemnification under Section
12.1(b), (c) or (d) (except with respect to Section 7.12) for any Loss
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(b), (c) or (d) of which such Purchaser Indemnified Person shall have
notified Seller 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.
(b) No Purchaser Indemnified Person shall be entitled to
indemnification hereunder for any indemnification claims under Section
12.1(b), (c) or (d) until the amount of the aggregate Losses required to be
indemnified by Seller pursuant to such sections, together with the amount
of the aggregate losses, damages and expenses required to be indemnified by
the "Sellers" under Sections 12.1 of each of the Canadian Stock Purchase
Agreement and the U.K. Stock Purchase Agreement, exceed, in the aggregate,
$750,000 (said amount is hereinafter sometimes referred to as the "Seller
Threshold"), whereupon the Purchaser Indemnified Persons shall be entitled
to indemnification under such sections from
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Seller only for the aggregate of indemnification claims in excess of the
Seller Threshold. For the purposes of this Section 12.2, in computing such
individual or aggregate amounts of claims, and the amount set forth in
clause (c) below, any concept of materiality contained in any warranty or
representation of Seller contained in this Agreement or in connection with
any obligation of Seller or any of its Affiliates shall be deemed not to
exist, and such representation, warranty or obligation shall be read
without such language relating to materiality and the amount of Loss shall
be calculated as if no such concept was present therein; provided, however,
the amount of each claim shall be deemed to be an amount (i) net of any tax
benefit realized by a Purchaser Indemnified Person 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), 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), and (ii) net of
any insurance proceeds and any indemnity, contribution or other similar
payment recovered by a Purchaser Indemnified Person from any third party
with respect thereto.
(c) The maximum liability of Seller under this Agreement and the
"Sellers" under the Canadian Stock Purchase Agreement and the U.K. Stock
Purchase Agreement to the Purchaser Indemnified Persons for indemnification
claims hereunder and thereunder, other than those arising in connection
with the Retained Liabilities or as a result of a breach by Seller of any
of its covenants or agreements hereunder, shall be $25,000,000 in
aggregate.
(d) As a condition to accepting the benefits of Section 12.1, each
Purchaser Indemnified Person acknowledges and agrees that its remedies with
respect to any and all
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claims relating to the subject matter of this Agreement shall be, except as
otherwise set forth herein, in accordance with the indemnification
provisions set forth in this Article 12.
(e) 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 Businesses and the Purchased Assets contemplated
hereby, to rescind this Agreement or any of the transactions contemplated
hereby.
(f) Each Purchaser Indemnified Person shall take all reasonable steps
to mitigate all liabilities and damages for which a claim may be made
against Seller pursuant 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.
(g) Notwithstanding any provision hereof, after the Tangible Net Worth
is finally calculated in accordance with Section 2.3, no Purchaser
Indemnified Person shall have any right to indemnification for any Loss
suffered as a result of any breach of the warranty contained in Section 7.8
(to the extent such Loss arises out of matters which were finally
determined in accordance with Section 2.3), Section 7.19 or Section 7.20.
(h) In the event that Seller 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, Seller shall
be entitled to pursue claims and conduct litigation on behalf of such
Purchaser Indemnified Person and any of such Person's 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.
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Only those limitations set forth in Section 12.2(d), (e), (f), (f) and (h) shall
have any effect relating to Seller's obligations to indemnify Purchaser
Indemnified Parties arising under Section 12.1(a) or (e).
12.3 Purchaser Indemnity. (a) After the Closing Date, Purchaser agrees to
indemnify, defend and hold Seller, its Affiliates and their officers and
directors (collectively, the "Seller Indemnified Persons") harmless against any
Loss suffered as the result of (i) any breach by Purchaser of any of its
covenants or agreements contained in this Agreement or any Ancillary Agreement,
(ii) any inaccuracy in or breach of any of the representations or warranties
made by Purchaser herein or in any Ancillary Agreement, (iii) any inaccuracy or
misrepresentation in a certificate or affidavit delivered by Purchaser at the
Closing in accordance with the provisions of this Agreement, (iv) any Balance
Sheet Liabilities, (v) any Contract Liabilities, (vi) any Post Effective Date
Liabilities, and (vii) except to the extent that Seller has an obligation to
indemnify any Purchaser Indemnified Person in accordance with this Section 12
therefor, any Contingent Liabilities.
(b) After the First Anniversary, no Seller Indemnified Person shall be
entitled to assert any right of indemnification under Section 12.3(a)(ii) or
(iii) for any Loss suffered by such Seller Indemnified Person, except that if,
as of the First Anniversary, there shall then be pending any such claim under
Section 12.3(a) in writing on or prior to the First Anniversary, such Seller
Indemnified Person shall continue to have the right to be indemnified with
respect to such claim.
(c) In the event that Purchaser makes any payment to a Seller Indemnified
Person for indemnification for which such Seller Indemnified Person could have
collected on a claim against a third party, Purchaser shall be entitled to
pursue claims and conduct litigation on behalf of such Seller Indemnified Person
and any of such Person's successors, to pursue and collect on any
indemnification or other remedy available to such Seller Indemnified Person with
respect to such
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claim and generally to be subrogated to the rights of such Seller Indemnified
Person with respect thereto.
(d) As a condition to accepting the benefits of Section 12.3(a), each
Seller Indemnified Person acknowledges and agrees that its remedies with respect
to any and all claims relating to the subject matter of this Agreement shall be
in accordance with the indemnification provisions set forth in this Article 12.
(e) Each Seller Indemnified Person shall take all reasonable steps to
mitigate all liabilities and damages for which a claim may be made against
Purchaser pursuant to Section 12.3(a) upon and after becoming aware of any event
which could reasonably be expected to give rise to such liabilities or damages.
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.
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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 being defended
in good faith, and subject to the resolution of any disputes hereunder in
accordance with Section 14.15, Indemnitor shall satisfy its obligations
hereunder within thirty (30) days after the Date of Notice of Claim.
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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 14.12.
ARTICLE 13
CERTAIN OTHER UNDERSTANDINGS
----------------------------
13.1 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 further agrees that it shall preserve and keep all books
and records relating to the Businesses, including, without limitation, the
Purchased Assets, in Purchaser's possession for six years after the date
hereof. 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 Seller, and Seller shall be
given an opportunity, at its cost and expense, to remove and retain all or
any part of such books and records as Seller may select. Duly authorized
representatives of Seller shall, upon reasonable notice, have 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 Seller 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
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Seller reasonable access, during normal business hours, to the offices,
properties, books and records of Purchaser with respect to the Businesses;
(ii) furnish to the officers, employees and authorized agents and
representatives of Seller such additional financial and other information
regarding the Businesses as Seller may from time to time reasonably
request; and (iii) make available to Seller, the employees of Purchaser
whose assistance, testimony or presence is necessary to assist Seller 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 Purchaser or any of its
Affiliates or subsidiaries.
(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 Businesses, including, without limitation, the
Purchased 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.
13.2 Use of Interlake Name. No later than twelve months following the
Closing Date, Purchaser shall forever cease (and shall cause all of its
Affiliates to forever cease) to use the name "Interlake" and all derivatives
thereof (including all logos incorporating either of such names or any
derivatives thereof) in connection with the Businesses or in any other way
whatsoever. Purchaser and Seller agree that money damages would not be a
sufficient remedy for any breach of the terms of this Section 13.2, and that in
addition to all other remedies, Seller shall be entitled to specific
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performance and injunctive or other equitable relief as a remedy for such
breach. Purchaser hereby waives any requirement for the securing or posting of
any bond in connection with any such remedy.
13.3 Employee Matters.
(a) Obligation to Hire Employees. On the Closing Date, Purchaser
agrees to hire each of Seller's salaried and non-union hourly personnel
(other than those individuals identified in Section 13.3(a) of the
Disclosure Letter) then employed by Seller (including, without limitation,
any employees who are on leave of absence due to disability or otherwise as
of the Closing Date, all such employees as of the date hereof being listed
in Section 13.3(a) of the Disclosure Letter) exclusively in connection with
the Businesses (collectively, the "Non-Union Employees") at a comparable
job and on comparable terms and with, in the aggregate, substantially
comparable benefits (specifically excluding Seller's employee stock
ownership plan, any right to invest in employer stock under any Seller
defined contribution plan and the Past Service Plan), and agrees to hire
all of Seller's unionized hourly personnel then employed by Seller
exclusively in connection with the Businesses (the "Hourly Union
Employees"; together with the Non-Union Employees, the "Employees") subject
to the terms and conditions of the collective bargaining agreement
applicable to such employees existing on or after the Closing Date.
(b) Seller's Reliance. Purchaser understands and acknowledges that
Seller is relying on Purchaser's agreement to hire all the Employees as of
the Closing Date. In that regard, Purchaser retains sole responsibility for
any obligations or liabilities to such Employees under the Worker
Adjustment and Retraining Notification Act (WARN), Pub.
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Law 100-379, 102 Stat. 890 (1988), as amended, and agrees to hold Seller
harmless from any Losses arising from such obligations or liabilities.
(c) Health Care. Seller shall be responsible for the health care
claims of any former employees of the Businesses and their families or
dependents who, at the time of the Closing, are receiving or are eligible
to receive continuation coverage required by COBRA. After the Closing Date,
Seller shall extend to Employees and other eligible Persons the option of
continuing health care coverage under Seller's Welfare Plans if, and to the
extent, required by COBRA. Purchaser shall be responsible for providing
health care continuation coverage as required by COBRA to any Employees who
are employed by Purchaser on or after the Closing Date ("Transferring
Employees"). Purchaser will reimburse Seller for the cost of providing
health care continuation coverage as required by COBRA to any Employee that
does not accept employment with Purchaser and to any Transferring Employee,
less the amount of premiums payable by Employee and subject to a maximum
limit equal to the lesser of $200,000 per Employee or the Seller's stop-
loss attachment point then in effect. Notwithstanding any other provision
of this Section 13.3(c), any obligation of Purchaser with respect to any
such reimbursement shall be treated as a Contingent Liability for purposes
of Section 12 hereof.
(d) Past Service and Vacations. Transferring Employees will receive
credit for Past Service in determining vacation entitlement under
Purchaser's applicable vacation policy. Except to the extent that
Transferring Employees receive payment from Seller for earned but unused
vacation and/or accrued vacation (determined as of the Closing Date),
Purchaser will give credit to Transferring Employees for such vacation.
Purchaser shall have no obligation to pay wages in lieu of earned, but
unused, or accrued vacation to any
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Employee. For purposes of this Section 14.3(d), "earned" vacation shall
mean vacation earned under Seller's vacation policy with respect to service
from July 1, 1995 through June 30, 1996, but to be taken in 1996, while
"accrued" vacation shall mean vacation accrued under Seller's vacation
policy with respect to service since July 1, 1996 but available only in
1997.
(e) Participation in Purchaser's Plans. Purchaser will give credit for
Past Service for purposes of determining eligibility for participation and
vesting in a plan maintained by Purchaser (and will waive or cause to be
waived any pre-existing illness exclusions) for which a Transferring
Employee is eligible under the terms thereof (but only to the extent such
service was granted under the corresponding Business Plan). Transferring
Employees will also receive credit toward any deductible for the current
plan year under Purchaser's medical plans for expenses incurred under
Seller's corresponding plans and shall similarly be charged against any
maximum limitations under Purchaser's medical plans (i.e., lifetime limits
or annual limits) for expenses incurred under Seller's corresponding plans.
(f) Medical Claims and Workers' Compensation. Purchaser is not
assuming Seller's medical and other Welfare Plans. Purchaser shall assume
all of the Employees' workers' compensation claims, both medical and
disability, that relate to occurrences on or after the Effective Date. With
respect to Employees' claims for medical, dental, health, accident or
disability benefits, Seller agrees that any claims incurred for services
rendered prior to the Effective Date or, in the case accident or disability
benefits, for the period prior to the Effective Date, shall remain the
responsibility of Seller and either be paid by Seller or a plan sponsored
by Seller and Purchaser agrees that any claims incurred for services
rendered on or after the Effective Date or, in the case of accident or
disability benefits for any
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period beginning on or after the Effective Date, shall be assumed by
Purchaser and either paid by Purchaser or a plan sponsored by Purchaser;
provided that, should either Seller or Purchaser (or a plan of Seller or
Purchaser) pay a claim that pursuant to this sentence is the responsibility
of the other, such other party agrees to make reimbursement for such
payment promptly following written notice thereof.
(g) Racine Hourly Pension Plan. Purchaser shall assume and become the
plan sponsor under the Interlake Packaging Corporation Racine Hourly
Employees Pension Plan (the "Racine Hourly Pension Plan") in accordance
with the following:
(i) Purchaser shall provide to Seller prior to the Closing Date a
certified copy of the trust agreement establishing the trust
designated by Purchaser to receive the assets of the Racine Hourly
Pension Plan (the "Purchaser's Trust") together with an opinion of
legal counsel reasonably acceptable to Seller to the effect that the
Purchaser's Trust satisfies the applicable requirements of Sections
401(a) and 501(a) of the Code.
(ii) Seller shall cause the trustee of the assets of the Racine
Hourly Pension Plan to transfer the assets of the Racine Hourly
Pension Trust to the Purchaser's Trust in cash (or other assets
reasonably acceptable to Purchaser), as follows:
(a) within 30 days of the Closing Date, Seller shall cause
90% of such assets, measured as of the Effective Date,
to be transferred to the Purchaser's Trust, and
(b) Seller shall cause the transfer of the remaining
balance of such assets, measured as of the Effective
Date and adjusted to
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reflect benefit payments, plan expenses and actual
earnings from the Effective Date to the date the
transfer described in (a) was made (the "Transfer
Date"), plus interest on the remaining balance from the
Transfer Date at the rate earned by the Bank of New
York Short Term Investment Fund in which short term
monies of the Racine Hourly Pension Plan are from time
to time invested, which second transfer shall be made
within 30 days of the Transfer Date.
(h) Past Service Plan. Effective as of the Closing Date, Purchaser
shall assume Seller's obligations as to the Employees and former employees
of the Businesses under the Consolidated Pension Plan -- Chem-tronics,
Interlake ARD and Past Service Plans (the "Past Service Plan") in
accordance with the following:
(i) Within 60 days after the Closing Date, but effective on the
Closing Date, Purchaser shall establish a defined benefit pension plan
(the "Successor Plan") for the benefit of the Employees and former
employees of the Business who are participating under the Past Service
Plan as of the Closing Date. The Successor Plan shall be in
substantially the same form as the Past Service Plan and shall provide
the Employees and former employees of the Businesses (the "Covered
Employees") their full accrued benefits under the Past Service Plan.
The Successor Plan shall also provide that each such Covered
Employee's credited service under the Past Service Plan as of the
Closing Date shall be given equivalent credit under the Successor Plan
with respect to eligibility, vesting and benefits. Within the same 60
day period, Purchaser shall furnish to Seller a certified copy of the
Successor Plan and related
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trust agreement and an opinion of counsel reasonably acceptable to
Seller to the effect that the Successor Plan will qualify under
Sections 401(a) and 501(a) of the Code.
(ii) No later than the Closing Date, Seller shall cause all
benefits provided to Covered Employees under the Past Service Plan to
be frozen so that the portion of the Past Service Plan including the
Covered Employees would not fail to comply with Section 401(a)(26) of
the Code as of the Closing Date assuming such portion were a stand-
alone plan established on such date, and such plan had less than 50
participants, and assuming reasonable actuarial assumptions were used.
Within 30 days after the Closing Date, Seller shall cause its
designated actuary to calculate the minimum amount of assets that is
required by Section 414(l) of the Code to be transferred from the Past
Service Plan to the Successor Plan, determined as of the Closing Date
(the "Past Service Plan Assets"). Seller shall forward to Purchaser
such calculation and all necessary supporting data, including a
statement of the actuarial assumptions and methods. Seller shall cause
the trustee of the Interlake Corporation Retirement and Pension Plans
Master Trust to transfer the Past Service Plan Assets to the Successor
Plan Trust in cash (or other assets reasonably acceptable to
Purchaser), as follows:
(a) within 60 days of the Closing Date, Seller shall cause
90% of the Past Service Plan Assets to be transferred
to the Successor Plan Trust, and
(b) Seller shall cause the transfer of the remaining
balance of such assets, measured as of the Effective
Date and adjusted to
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reflect benefit payments, plan expenses and actual
earnings from the Effective Date to the date the
transfer described in (a) was made (the "Transfer
Date"), plus interest on the remaining balance from the
Transfer Date at the rate earned by the Bank of New
York Short Term Investment Fund in which short term
monies of the Past Service Plan are from time to time
invested, which second transfer shall be made within 30
days of the Transfer Date.
(iii) On or before the Closing Date, the Past Service Plan shall
cease accruing benefits for the Covered Employees and all Covered
Employees shall cease to participate in the Past Service Plan (except
that benefits of the Covered Employees in pay status shall continue to
be paid from the Past Service Plan from the Closing Date to the
Transfer Date).
(i) Defined Contribution Plans. As of the Effective Date, Seller
shall cause each Transferring Employee to be 100% vested in his or her
accrued benefit, if any, under the Interlake Packaging Corporation Fountain
Inn Plant Profit Sharing Plan ("Fountain Inn Plan") and The Interlake
Corporation Amended and Restated Salaried Employees Retirement Savings Plan
("Retirement Savings Plan"). Seller shall cause to be contributed to the
Fountain Inn Plan and the Retirement Savings Plan all contributions that
are accrued for the employees of the Businesses as soon as practicable
after the Closing Date.
(j) Retiree Benefits. For each former employee of the Businesses (and
each Transferring Employee who has given notice that he or she is retiring
on or before December
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31, 1996, and is electing to receive the retiree benefits set forth below)
identified in Section 13.3(j) of the Disclosure Letter, Purchaser agrees
with Seller to provide at Purchaser's own cost and expense, from and after
the Effective Date, medical, dental, life insurance and health benefits and
arrangements substantially comparable to, and on substantially similar
terms and conditions as, the insurance, benefits and arrangements described
in Section 7.16 of the Disclosure Letter and being provided by Seller to
retirees immediately prior to the Closing. Notwithstanding this Section
13.3(j), Purchaser shall not assume any Plan of Seller under which such
benefits or coverage have been provided.
(k) Collective Bargaining Agreements. Purchaser recognizes that
Seller is a party to the collective bargaining agreement listed in Section
7.15 of the Disclosure Letter with respect to the Hourly Union Employees
(the "Collective Bargaining agreement"), which agreement, including the
obligation to provide benefits to the employees covered thereby, is a
Contract.
13.4 Miscellaneous Employee Matters.
(a) To the extent permitted by applicable law, Purchaser shall have
the right to assume the unemployment experience of Seller in the States of
South Carolina and Wisconsin, insofar as it relates to the operations of
the Businesses, effective as of the Effective Date. Purchaser and Seller
agree to adopt the standard procedure described in Section 4 of Revenue
Procedure 84-77 as promulgated by the IRS (and Purchaser agrees to comply
with the applicable provisions of said Section 5) to enable Purchaser to
constitute a successor employer solely for purposes of FICA and the
withholding of federal and state income taxes. Purchaser further agrees to
file and issue IRS Forms W-2 required to be filed and issue Forms 1099
required to be issued after the Closing Date.
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(b) This Agreement is being entered into solely for the benefit of the
parties hereto and, where expressly indicated, their respective Affiliates,
officers and directors, and the parties do not intend that any Employee or
any other Person shall be a third-party beneficiary of the covenants by
either Seller or Purchaser contained in this Agreement.
13.5 Waiver of Bulk Sales Law. The parties hereto acknowledge and agree
that no filings with respect to any bulk sales or similar laws have been made,
nor are they intended to be made, nor are such filings a condition precedent to
the Closing.
13.6 Letters of Credit.
(a) In connection with certain purchases of supplies, inventory and
equipment made by Seller from time to time from third parties and certain
services contracted for by Seller from time to time, in each case relating
to the Businesses, Seller has arranged for certain financial institutions
to issue letters of credit to the Persons providing such supplies,
inventory, equipment and services. Each of such letters of credit that is
in effect on the date hereof is described in Section 13.6 of the Disclosure
Letter (together with any other letters of credit issued on Seller's behalf
in the ordinary course of business between the date hereof and the Closing
Date, the "Letters of Credit - Seller").
(b) Purchaser hereby agrees that it will, at its own cost and expense,
cause to be issued, effective as of the Closing, letters of credit,
substantially in the form of the Letters of Credit - Seller (or with such
modifications as are acceptable to the named beneficiaries of the Letters
of Credit - Seller) (the "Replacement Letters of Credit"), to the extent
possible, in replacement of each of the Letters of Credit - Seller or, if
such replacement is not possible, then the Replacement Letters of Credit
shall be issued to Seller as beneficiary to secure the Letters of Credit -
Seller not replaced.
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(c) Purchaser agrees that Seller may, effective as of the Closing,
cause to be canceled any of the Letters of Credit - Seller which were
replaced with the third party beneficiary.
(d) Included in the Purchased Assets are any letters of credit issued
by customers of the Businesses to Seller as beneficiary. Seller agrees
that to the extent possible it will attempt to have Purchaser named as
beneficiary thereunder as of the Closing Date and if Purchaser is not named
as a beneficiary thereunder Seller will, upon the direction of Purchaser,
enforce its rights thereunder after the Closing Date and pay any proceeds
to Purchaser.
13.7 Guarantee by Parents. (a) Purchaser's Parent hereby irrevocably,
absolutely and unconditionally guarantees, as primary obligor and not merely as
surety, for the benefit of Seller and each other Seller Indemnified Person (i)
the due and punctual payment when due of all amounts that are or may become due
and payable by Purchaser under this Agreement, any Ancillary Agreement or any
other agreement, document or instrument executed and delivered by Purchaser in
connection with the transactions contemplated hereby and (ii) the due and
punctual performance when due of all covenants and agreements of Purchaser under
this Agreement, any Ancillary Agreement or any other agreement, document or
instrument executed and delivered by Purchaser in connection with the
transactions contemplated hereby, in each case strictly in accordance with the
terms hereof or thereof.
(b) Seller's Parent hereby irrevocably, absolutely and unconditionally
guarantees, as primary obligor and not merely as surety, for the benefit of
Purchaser and each other Purchaser Indemnified Person (i) the due and punctual
payment when due of all amounts that are or may become due and payable by Seller
under this Agreement, any Ancillary Agreement or any other
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agreement, document or instrument executed and delivered by Seller in connection
with the transactions contemplated hereby, and (ii) the due and punctual
performance when due of all covenants and agreements of Seller under this
Agreement, any Ancillary Agreement or any other agreement, document or
instrument executed and delivered by Purchaser in connection with the
transactions contemplated hereby, in each case strictly in accordance with the
terms hereof or thereof.
13.8 Additional Named Insured. Seller shall use all reasonable efforts to
cause each of its insurance carriers to name Purchaser as an additional insured
under each of the general liability insurance policies related to the
Businesses, the Purchased Assets or the Retained Liabilities for occurrences
prior to the Closing Date. Purchaser shall pay any costs payable to any such
insurance carrier relating to such carrier so naming Purchaser as an additional
insured. To the extent that Seller is not able to cause such insurance carriers
to so name Purchaser as an additional insured, Seller shall use its reasonable
efforts to obtain any benefits it has under any such insurance policies of such
carriers for the benefit of Purchaser and its affiliates. Seller makes no
representation or warranty as to the adequacy of such insurance, nor shall
Seller be deemed to be acting as an advisor to Purchaser with respect to
insurance matters.
13.9 Covenant Not to Compete.
(a) Seller hereby agrees that it shall not, and shall cause each of its
Affiliates not to, during the ten-year period commencing on the date hereof,
directly or indirectly, as agent, consultant, stockholder, director, co-partner
or in any other individual or representative capacity, own, operate, manage,
control, engage in, invest in or participate in any manner in, act as a
consultant or adviser to, render services for (alone or in association with any
Person) or otherwise assist, any Person that engages in or owns, invests in,
operates, manages or controls any venture or
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enterprise engaging or proposing to engage in the business engaged in by either
Business as of the Closing Date anywhere in the World; provided, that nothing
herein shall be deemed to prohibit Seller's Parent or any of its Affiliates
engaging in businesses other than the Businesses from engaging in commercial
relationships with any Person in any of the Businesses.
(b) If any court of competent jurisdiction shall at any time deem the term
of any covenant set forth in this Section 13.9 too lengthy or too extensive, the
other provisions of this Section 13.9 shall nevertheless stand, the restricted
period herein shall be deemed to be the longest period permissible by law under
the circumstances and the territory herein shall be deemed to comprise the
largest territory permissible by law under the circumstances. The court in each
case shall reduce the time period and/or territory to the maximum permissible
duration or size.
(c) Seller hereby acknowledges and agrees that such restrictions, rights
and remedies are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to the Purchaser, do not stifle the
inherent skill and experience of Seller, would not operate as a bar to Seller's
sole means of support, are fully required to protect the legitimate interests of
the Purchaser following the consummation of the transactions contemplated hereby
and do not confer a benefit upon the Purchaser disproportionate to the detriment
to Seller.
(d) Seller acknowledges and agrees that the covenants contained in this
Section 13.9 are reasonable and necessary for the protection of the Purchaser's
business interests, that irreparable injury will result to the Purchaser if
Seller breaches any of the terms of said covenants, and that in the event of
Seller's actual or threatened breach of any such covenants, the Purchaser will
have no adequate remedy at law. Seller accordingly agrees that in the event of
any actual or threatened breach by it of any of such covenants, Purchaser shall
be entitled to immediate temporary injunctive and other equitable relief,
without bond and without the necessity of showing actual monetary
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damages, subject to a hearing as soon thereafter as possible. Nothing contained
herein shall be construed as prohibiting Purchaser from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of any damages which it is able to prove.
13.10 Seller Proposals. Nothing in Section 5.2(e) or elsewhere in this
Agreement shall prevent or be deemed to prevent Seller or any of its
representatives from at any time engaging in any of the activities set forth in
Section 5.2(e) with Gerrard and its representatives.
13.11 Further Actions.
(a) Seller and Purchaser agree that from and after the Closing Date,
if reasonably requested by the other, it will execute and deliver such
further instruments of conveyance and transfer and take such other
reasonable action as may be necessary or desirable (i) to convey and
transfer more effectively to Purchaser the Businesses and the Purchased
Assets, (ii) for Purchaser to more effectively assume the Assumed
Liabilities, (iii) to retain more effectively in Seller the Retained Assets
and the Retained Liabilities and (iv) to evidence the transactions
contemplated herein.
(b) If Purchaser shall, at any time after the Closing, receive any
Retained Asset or any payment with respect thereto, it shall promptly
deliver such Retained Asset or payment to Seller. If Seller shall, at any
time after the Closing, receive any Purchased Asset, any other asset of
Purchaser or any payment with respect thereto, Seller shall promptly
deliver such Purchased Asset, asset of Purchaser or payment to Purchaser.
(c) Notwithstanding the provisions of Section 13.11(b), Seller and
Purchaser acknowledge that, between the Effective Date and the Closing
Date, Seller will discharge certain Assumed Liabilities on Purchaser's
behalf, including, without limitation, payroll and the payment of certain
accounts payable. Seller and Purchaser also acknowledge that, from
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and after the Effective Date, Seller will likely receive payments from time
to time which constitute or represent the settlement of certain Purchased
Assets. Seller and Purchaser agree that, until the third Business Day after
the Closing Date, Seller need not remit to Purchaser any receipts
constituting or representing the settlement of Purchased Assets, and
Purchaser need not reimburse Seller for any payment made by Seller in
satisfaction of Assumed Liabilities. On the third Business Day following
the Closing Date, and each Business Day thereafter, Seller will make a
payment to Purchaser representing the excess of Purchased Assets (or
settlements with respect thereto) received by Seller over the payments made
by Seller in satisfaction of Assumed Liabilities, or Purchaser will make a
payment to Seller representing the excess of payments made by Seller in
satisfaction of Assumed Liabilities over the Purchased Assets (or
settlements with respect thereto) received by Seller, as the case may be.
Seller and Purchaser shall work together in good faith to settle the
account between them from time to time in accordance with Section 13.11(b).
ARTICLE 14
MISCELLANEOUS
-------------
14.1 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 Ancillary Agreements and the consummation
of the transactions contemplated hereby and thereby.
14.2 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
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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's Parent, to Mr. W. ▇▇▇▇▇▇ ▇▇▇▇,
Chairman, President and Chief Executive Officer of Seller's Parent, regarding
the transaction contemplated hereby and the Mutual Confidentiality Agreement
dated as of April 26, 1996 between Seller's Parent and Purchaser's Parent. 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.
14.3 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.
14.4 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 party. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
14.5 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. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid
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and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
14.6 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.
14.7 Risk of Loss. Risk of loss, damage or destruction of the Purchased
Assets shall be upon Seller until the Closing, and shall thereafter be upon
Purchaser.
14.8 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.
14.9 Public Announcements. No press release or other public statement with
respect to this Agreement or the transactions contemplated hereby shall be
issued by either party without such party having consulted with and obtained the
written consent of the other party, 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.
14.10 U.S. Dollars. All amounts expressed in this Agreement and all
payments required by this Agreement are in United States dollars.
14.11 Survival. All representations and warranties made by any party in
this Agreement shall be deemed made for the purpose of inducing the other party
to enter into this Agreement and, subject to Section 12.2(a), shall survive the
Closing.
14.12 Notices. (a) All notices, requests, demands 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:
-85-
To Seller:
---------
Interlake Packaging Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: 630/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Vice President - Finance and
Chief Financial Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President, Secretary and
General Counsel
with a copy to:
--------------
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 312/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
To Purchaser:
------------
▇▇▇▇▇▇ Strapping Systems (Tennessee), Inc.
c/o ▇▇▇▇▇▇ Manu-Tech Inc.
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: 416/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
-86-
with a copy to:
--------------
▇▇▇▇▇ ▇▇▇▇▇
Scotia Plaza
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Fax: 416/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Zavis
Suite 1600
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: 312/▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(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 14.12 if
delivered personally, 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 or
Canadian mail, postage prepaid.
14.13 Disclosures. All matters disclosed by Seller in any Section of the
Disclosure Letter shall be deemed a disclosure by Seller for purposes of all
relevant Sections of this Agreement.
14.14 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
-87-
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.
14.15 Arbitration.
(a) Exclusive Procedure. Except as otherwise set forth herein, any
dispute arising out of or relating to this Agreement will be resolved in
accordance with the procedures specified in this Section 14.15, 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 Chief Executive Officer of Seller's
Parent and the President of Purchaser's Parent (as of the date hereof, W.
▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇), 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 14.15 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 such 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
honored.
-88-
(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 14.15 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.
-89-
(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 14.15.
(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 14.15 (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.
(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.
(h) Effectiveness. This Agreement shall not become effective until
each of the Canadian Stock Purchase Agreement and the U.K. Stock Purchase
Agreement have been executed and delivered by all of the parties thereto.
[SIGNATURE PAGE FOLLOWS]
-90-
IN WITNESS WHEREOF, the parties hereto have executed this Asset Purchase
Agreement as of the date first written above.
INTERLAKE PACKAGING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title: President
-----------------------------
▇▇▇▇▇▇ STRAPPING SYSTEMS
(TENNESSEE), INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Director
-----------------------------
Agreed to, and Accepted this
1st day of October, 1996, as to
Section 13.7(a) only, by:
▇▇▇▇▇▇ MANU-TECH, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Title: Director
-------------------------
Agreed to, and Accepted this
1st day of October, 1996, as to
Section 13.7(b) only, by:
THE INTERLAKE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title: Vice President-Finance
-------------------------
-91-
EXHIBIT 2.5
($000's)
--------
===========================================================================================
Head
Plastics Stitching Office Licence Total
-------- --------- ------ ------- -----
-------------------------------------------------------------------------------------------
Leasehold Improvements -- 100 -- -- 100
-------------------------------------------------------------------------------------------
Land 400 -- -- -- 400
-------------------------------------------------------------------------------------------
Buildings 1,800 -- -- -- 1,800
-------------------------------------------------------------------------------------------
Equipment 10,000 2,600 100 -- 12,700
-------------------------------------------------------------------------------------------
Licence -- -- -- 15,000* 15,000
------
-------------------------------------------------------------------------------------------
30,000
------
Add/Minus: Actual Working Capital,
other assets and Retirement liabilities ?
------
Add/Minus: Article 2.3(b), 2.3(c) and
(f) Adjustments to Goodwill/Intangibles ?
---
------
$ ?
---
======
-----------------------
* Allocation to Acme License Agreements
EXHIBIT 3.2(a)
TO
ASSET PURCHASE AGREEMENT
------------------------
FORM OF
▇▇▇▇ OF SALE AND ASSIGNMENT AGREEMENT
-------------------------------------
THIS ▇▇▇▇ OF SALE AND ASSIGNMENT AGREEMENT dated as of October 4, 1996 is
by and between Interlake Packaging Corporation, a Delaware corporation
("Seller"), and ▇▇▇▇▇▇ Strapping Systems (Tennessee), Inc., a Delaware
corporation ("Purchaser").
RECITALS:
--------
WHEREAS, Seller and Purchaser have entered into that certain Asset
Purchase Agreement dated as of October 4, 1996 (as amended from time to time in
accordance with the terms thereof, the "Purchase Agreement"), providing, subject
to the terms and conditions set forth therein, for the sale, assignment,
conveyance, transfer and delivery by Seller (or one or more of its Affiliates)
to Purchaser of the Purchased Assets (as such term is defined in Section 1.2 of
the Purchase Agreement);
WHEREAS, Seller and Purchaser have simultaneously herewith executed an
Assumption Agreement pursuant to which Purchaser has assumed certain obligations
relating to the Purchased Assets; and
WHEREAS, the parties hereto desire to execute and deliver this ▇▇▇▇ of
Sale and Assignment Agreement for the purpose of effecting the sale, assignment,
conveyance, transfer and delivery of the Purchased Assets as contemplated
pursuant to Section 2.1 of the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in the Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, each capitalized
term used herein shall have the meaning assigned thereto in the Purchase
Agreement.
2. Sale and Assignment of the Purchased Assets.
(a) Seller by this instrument does hereby sell, assign , convey,
transfer and, deliver to Purchaser, its successors and permitted assigns, all of
Seller's right, title and interest in, to and under the Purchased Assets.
(b) Notwithstanding anything in this instrument to the contrary,
Seller is retaining title to, and possession of, and is not selling, assigning,
conveying, transferring or delivering to Purchaser hereunder or otherwise, any
rights, title or interest of Seller in, to or under, the Retained Assets.
3. Further Action. At any time, or from time to time after the date
hereof, the Seller shall execute and deliver or cause to be executed and
delivered to Purchaser such other instruments as Purchaser may reasonably
request to carry out the intent and purpose of the Purchase Agreement and this
▇▇▇▇ of Sale and Assignment Agreement, and to more effectively vest title to the
Purchased Assets in Purchaser and, to the full extent permitted by law, to put
Purchaser in exclusive and absolute and total control of the Purchased Assets.
4. No Third-Party Beneficiaries. Nothing in this ▇▇▇▇ of Sale and
Assignment Agreement, express or implied, is intended or shall be construed to
confer upon or give to any Person, other than the parties hereto, or their
respective successors or permitted assigns, any rights, remedies or other
benefits under or by reason of this ▇▇▇▇ of Sale and Assignment Agreement.
5. Counterparts. This ▇▇▇▇ of Sale and Assignment 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.
6. GOVERNING LAW. THIS ▇▇▇▇ OF SALE AND ASSIGNMENT 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.
7. Successors and Assigns. The rights, title, benefits and
obligations of Seller and Purchaser under this ▇▇▇▇ of Sale and Assignment
Agreement shall inure to the benefit of and be binding upon their respective
successors and permitted assigns.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties hereto has caused this ▇▇▇▇ of Sale
and Assignment Agreement to be duly executed as of the date first written above.
INTERLAKE PACKAGING CORPORATION
By:
----------------------------------------------
Its:
▇▇▇▇▇▇ STRAPPING SYSTEMS (TENNESSEE), INC.
By:
----------------------------------------------
Its:
EXHIBIT 3.3(e)
TO
ASSET PURCHASE AGREEMENT
------------------------
FORM OF ASSUMPTION AGREEMENT
----------------------------
THIS ASSUMPTION AGREEMENT (the "Assumption Agreement") dated as of October
4, 1996 is by and between ▇▇▇▇▇▇ Strapping Systems (Tennessee), Inc., a Delaware
corporation ("Purchaser"), and Interlake Packaging Corporation, a Delaware
corporation ("Seller").
RECITALS:
--------
WHEREAS, Seller and Purchaser have entered into that certain Asset Purchase
Agreement dated as of October 4, 1996 (as amended from time to time in
accordance with the terms thereof, the "Purchase Agreement"), providing, subject
to the terms and conditions set forth therein, for the sale, assignment,
conveyance, transfer and delivery by Seller (or one or more of its Affiliates)
to Purchaser of the Purchased Assets (as such term is defined in Section 1.2 of
the Purchase Agreement);
WHEREAS, Seller and Purchaser have simultaneously herewith executed a ▇▇▇▇
of Sale and Assignment Agreement pursuant to which Purchaser has purchased the
Purchased Assets; and
WHEREAS, the parties hereto desire to execute and deliver this Assumption
Agreement for the purpose of effecting Purchaser's assumption of the Assumed
Liabilities as contemplated pursuant to Section 2.2(d) of the Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in the Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, each capitalized term
used herein shall have the meaning assigned thereto in the Purchase Agreement.
2. Assumption of Liabilities. Purchaser hereby assumes, agrees to perform
and in due course pay and discharge, and agrees to indemnify Seller against and
hold it harmless from, all Assumed Liabilities.
3. Liabilities Not Assumed. Purchaser does not assume, nor agree to pay,
perform or discharge or indemnify Seller against, or hold it harmless from, any
of the Retained Liabilities.
4. Contest. Nothing in the Purchase Agreement or this Assumption
Agreement shall preclude or prohibit Purchaser from contesting in good faith in
the legality, validity or enforceability of the Assumed Liabilities.
5. No Third-Party Beneficiaries. Nothing in this Assumption Agreement,
express or implied, is intended or shall be construed to confer upon or give to
any Person, other than the parties hereto, or their respective successors or
permitted assigns, any rights, remedies or other benefits under or by reason of
this Assumption Agreement.
6. Interpretation. In the event of any conflict or inconsistency between
the terms, provisions and conditions of this Assumption Agreement and the
Purchase Agreement, the terms, provisions and conditions of the Purchase
Agreement shall govern.
7. Counterparts. This Assumption 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.
8. GOVERNING LAW. THIS ASSUMPTION 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.
9. Successors and Assigns. The rights and obligations of Seller and
Purchaser under this Assumption Agreement shall inure to the benefit of and be
binding upon their respective successors and permitted assigns.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Assumption
Agreement to be duly executed as of the date first written above.
▇▇▇▇▇▇ STRAPPING SYSTEMS (TENNESSEE),
INC.
By:
--------------------------------------
Its:
-------------------------------------
INTERLAKE PACKAGING CORPORATION
By:
--------------------------------------
Its:
-------------------------------------