1
EXHIBIT 2.1
================================================================================
STOCK PURCHASE AGREEMENT
Dated as of March 25, 1998
by and between
NCI BUILDING SYSTEMS, INC.
and
BTR AUSTRALIA LIMITED
for the purchase and sale
of
the outstanding capital stock
of
AMATEK HOLDINGS, INC.
and joined in for certain limited purposes
by
BTR PLC
================================================================================
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
PURCHASE AND SALE OF SHARES...................................................1
1.1 Purchase and Sale of Shares............................................................1
1.2 Purchase Price.........................................................................2
1.3 Payment of the Purchase Price..........................................................2
1.4 Purchase Price Adjustment. ............................................................2
1.5 Delivery of Shares.....................................................................4
1.6 Further Assurances.....................................................................4
ARTICLE II
THE CLOSING...........................................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES................................................5
3.1 Representations and Warranties of the Seller...........................................5
(a) Organization, Good Standing, Qualification and Power.................5
(b) Authority; Enforceability; No Violation; No Approvals................5
(c) Subsidiaries; Equity Investments.....................................6
(d) Capital Structure; Title to Shares...................................6
(e) Financial Information................................................7
(f) Ordinary Course......................................................7
(g) Agreements...........................................................8
(h) Litigation...........................................................9
(i) Title to Assets......................................................9
(j) Intellectual Property...............................................10
(k) Benefit Plans; ERISA Matters........................................11
(l) Transactions with Related Parties...................................11
(m) Insurance...........................................................12
(n) Taxes...............................................................12
(o) Compliance with Laws................................................13
(p) Environmental Matters...............................................13
(q) Brokers.............................................................14
(r) Qualification of Representations and Warranties.....................14
-i-
3
3.2 Representations and Warranties of the Purchaser.......................................14
(a) Organization, Good Standing, Qualification and Power................14
(b) Authority; Enforceability; No Violation; Etc........................15
(c) Brokers.............................................................15
(d) Investment Intent...................................................15
(e) Purchaser's Financing...............................................16
ARTICLE IV
ADDITIONAL AGREEMENTS AND CONDUCT OF BUSINESS.......................................16
4.1 Termination of Certain Agreements.....................................................16
4.2 Access to Information.................................................................16
4.3 Operation of Business.................................................................16
4.4 Efforts to Consummate.................................................................17
4.5 Amendments to Schedules...............................................................17
4.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Compliance..........................................................18
4.7 Permissible Inter-Company Transactions; Seller's
Assumption of Certain Liabilities; Employee Trusts....................................18
4.8 Actions After the Closing.............................................................20
(a) Cooperation..................................................................20
(b) Record Retention....................................................20
(c) Intellectual Property; Change Amatek Name...........................20
4.9 Change of Control Amendments or Waivers...............................................21
4.10 Covenants by BTR......................................................................21
4.11 Material Adverse Changes in NCI.......................................................21
4.12 Inter-Company Payables and Receivables................................................22
4.13 CFM Acquisition.......................................................................23
ARTICLE V
CONDITIONS OF CLOSING.....................................................24
5.1 Conditions to Obligation of the Purchaser.............................................24
5.2 Conditions to Obligation of the Seller................................................25
ARTICLE VI
INDEMNIFICATION........................................................27
6.1 Survival..............................................................................27
6.2 General Indemnification...............................................................27
6.3 Environmental Indemnification.........................................................30
6.4 Limitation of Recourse................................................................33
-ii-
4
ARTICLE VII
TERMINATION..........................................................34
7.1 Right of Termination..................................................................34
7.2 Effect of Termination.................................................................34
ARTICLE VIII
TAXES.............................................................34
8.1 Liability for Taxes...................................................................34
8.2 Refunds or Credits....................................................................35
8.3 Contests..............................................................................36
8.4 Cooperation...........................................................................37
8.5 Covenants.............................................................................38
8.6 Transfer Taxes........................................................................39
8.7 Tax Sharing Agreements................................................................39
ARTICLE IX
MISCELLANEOUS.........................................................39
9.1 Interpretative Provisions; Certain Definitions........................................39
9.2 NO ADDITIONAL REPRESENTATIONS.........................................................40
9.3 Expenses..............................................................................41
9.4 Entire Agreement; Amendment...........................................................41
9.5 Severability..........................................................................42
9.6 Public Announcements..................................................................42
9.7 Notices...............................................................................42
9.8 Counterparts..........................................................................44
9.9 GOVERNING LAW; WAIVER OF JURY TRIAL...................................................44
9.10 CONSENT TO JURISDICTION AND SERVICE OF
PROCESS...............................................................................45
9.11 Benefits of Agreement.................................................................46
9.12 Construction..........................................................................46
-iii-
5
SCHEDULES
1.4 - MBCI Net Worth Calculation
3.1(a) - Qualification
3.1(b) - Authority and Enforceability - Seller
3.1(c) - Subsidiaries
3.1(d) - Capital Structure
3.1(e) - Financial Statements
3.1(f) - Changes
3.1(g) - Contracts, Agreements, and Purchase Orders
3.1(h) - Litigation and Claims
3.1(i) - Title to Assets
3.1(j) - Intellectual Property
3.1(k) - Employee Benefit Plans, Employees and Consultants
3.1(l) - Transactions with Related Parties
3.1(m) - Insurance Policies
3.1(n) - Taxes
3.1(o) - Compliance with Laws
3.1(p) - Environmental Matters
3.2(b) - Authority and Enforceability - Purchaser
4.1 - Contracts to be Terminated At Closing
EXHIBITS
EXHIBIT A - Form of Opinion of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, Special Counsel for the Seller
EXHIBIT B - Form of Opinion of Richie & ▇▇▇▇▇▇▇▇▇, P.C., Texas
Counsel for the Seller
EXHIBIT C - Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇, Australian Counsel for
the Seller
EXHIBIT D - Form of Opinion of General Counsel of BTR plc
EXHIBIT E - Form of Opinion of Gardere & ▇▇▇▇▇, L.L.P., Counsel
for the Purchaser
EXHIBIT F - Form of CFM Contract for the Sale of Assets
-iv-
6
DEFINITIONS
The following capitalized terms, which may be used in more than one
Section or other location of this Agreement, are defined in the following
Sections or other locations:
TERM SECTION
---- -------
Agreement.........................................................................................Preamble
Amatek............................................................................................Recitals
BTR...............................................................................................Preamble
CFM....................................................................................................1.2
CFM Adjustment.........................................................................................1.2
Closing.........................................................................................Article II
Closing Date....................................................................................Article II
Closing Date Balance Sheet..........................................................................1.4(a)
Closing Date Net Worth..............................................................................1.4(c)
Code................................................................................................3.1(k)
Common Stock........................................................................................3.1(d)
Companies.........................................................................................Recitals
Compliance Losses................................................................................6.3(a)(i)
Confidentiality Agreement...........................................................................9.4(a)
Defaulting Party.......................................................................................7.2
Defense Notice......................................................................................6.2(d)
Documents...........................................................................................3.1(b)
Doublecote..........................................................................................3.1(e)
Employee Plan.......................................................................................3.1(k)
Encumbrances...........................................................................................1.1
Environmental Laws...............................................................................3.1(p)(i)
Environmental Losses................................................................................6.3(a)
Environmental Permits............................................................................3.1(p)(i)
ERISA...............................................................................................3.1(k)
ERISA Affiliate.....................................................................................3.1(k)
Facility............................................................................................6.3(a)
Financial Statements................................................................................3.1(e)
Governmental Authority..............................................................................3.1(b)
Hazardous Substance..........................................................................3.1(p)(iv)(A)
HSR Act................................................................................................4.6
Indemnitee..........................................................................................6.2(c)
Indemnitor..........................................................................................6.2(c)
Independent Accounting Firm....................................................................1.4(e)(iii)
-v-
7
Laws.............................................................................................3.1(o)(i)
Listed Intellectual Property........................................................................3.1(j)
Loss(es)............................................................................................6.2(a)
Material Adverse Effect..........................................................................3.1(a)(i)
Material Contracts..................................................................................3.1(g)
MBCI................................................................................................3.1(e)
Minimum Net Worth...................................................................................3.1(e)
Net Worth...........................................................................................1.4(f)
1997 Balance Sheet..................................................................................3.1(e)
1997 Financial Statements...........................................................................1.4(a)
Permits.........................................................................................3.1(o)(ii)
Person..............................................................................................3.1(c)
Purchase Price.........................................................................................1.2
Purchaser.........................................................................................Preamble
Qualifying Facility Loss............................................................................6.3(a)
Remediation Losses..............................................................................6.3(a)(ii)
Returns.............................................................................................3.1(n)
Securities Act......................................................................................3.2(d)
Seller............................................................................................Preamble
Shares............................................................................................Recitals
Subsidiaries......................................................................................Recitals
Survival Period........................................................................................6.1
Tax Benefits........................................................................................8.2(d)
Tax(es).............................................................................................3.1(n)
Third Party Claim...................................................................................6.2(d)
-vi-
8
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of March 25, 1998 (this "AGREEMENT"),
by and between NCI BUILDING SYSTEMS, INC., a Delaware corporation ("PURCHASER"),
and BTR AUSTRALIA LIMITED, a company organized under the laws of Australia
("SELLER"), and joined in for the limited purposes described in Section 4.10 by
BTR PLC, a company organized under the laws of the England ("BTR").
W I T N E S S E T H:
WHEREAS, BTR owns directly or indirectly all of the outstanding capital
stock of the Seller, and the Seller owns all of the outstanding capital stock of
Amatek Holdings, Inc., a Texas corporation ("AMATEK"), consisting of 119,500
shares of common stock, without par value (the "SHARES");
WHEREAS, Amatek owns directly or indirectly the outstanding capital
stock of the corporations and the ownership interests in the limited liability
company set forth on Schedule 3.1(c) (the "SUBSIDIARIES" and, collectively with
Amatek, the "COMPANIES"); and
WHEREAS, the Purchaser desires to purchase the Shares from the Seller,
and the Seller desires to sell the Shares to the Purchaser, in each case upon
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE OF SHARES.
On the terms and subject to the conditions contained in this Agreement,
at the Closing (as hereinafter defined), the Seller shall sell, transfer, convey
and assign to the Purchaser, and the Purchaser shall purchase and acquire from
the Seller, the Shares, free and clear of all Encumbrances (other than
restrictions on transfer arising under applicable federal and state securities
laws). As used herein, the term "ENCUMBRANCES" shall mean and include any
security interests, mortgages, liens, pledges, charges, easements, reservations,
restrictions, rights of way, servitudes, options, rights of first refusal,
rights of first offer, community property interests, restrictions of any kind
and all other
9
encumbrances, whether or not relating to the extension of credit
or the borrowing of money.
1.2 PURCHASE PRICE.
(a) The aggregate purchase price to be paid at Closing by the
Purchaser to the Seller for the Shares shall be an amount equal to (i)
$550,000,000, plus (ii) if California Finished Metals, Inc. ("CFM") is acquired
by the Companies on or prior to the Closing Date, an amount, not to exceed
$20,000,000 in the aggregate (the "CFM ADJUSTMENT"), equal to the purchase price
of CFM plus the transaction expenses related to such acquisition incurred by the
Companies, less (iii) the Net Inter-Company Payables Amount (as defined in
Section 4.12) (the "PURCHASE PRICE"). The Purchase Price shall be adjusted after
the Closing Date in accordance with the terms of Section 1.4.
(b) The Seller and the Purchaser agree that any payments made
by the Seller in satisfaction of its indemnification obligations in Article VI
and Article VIII shall be treated as an adjustment to the Purchase Price.
1.3 PAYMENT OF THE PURCHASE PRICE.
On the Closing Date, the Purchaser shall pay the Purchase Price by wire
transfer of immediately available funds to the account of the Seller designated
in writing by the Seller at least one business day prior to the Closing Date. At
the Closing, the Seller shall be entitled to receive the total Purchase Price
less the aggregate amount, if any, directed by the Seller to be paid on behalf
of the Seller directly to those third parties designated by the Seller for fees,
expenses, costs or other obligations arising out of or in connection with the
transactions contemplated in this Agreement.
1.4 PURCHASE PRICE ADJUSTMENT.
(a) As promptly as practicable, but in any event within 60
days after the Closing Date, the Seller shall prepare or cause to be prepared a
consolidated balance sheet for MBCI and its Subsidiaries audited by Ernst &
Young as of the close of business on the Closing Date (the "CLOSING DATE BALANCE
SHEET"), prepared using U.S. generally accepted accounting principles
consistently applied in the preparation of the 1997 audited consolidated
financial statements of MBCI and its Subsidiaries (the "1997 FINANCIAL
STATEMENTS"), subject to the adjustments and specific statements detailed in
paragraph (b) below. Schedule 1.4 shows the balance sheet so prepared at
December 31, 1997, adjusted in accordance with clause (b) below, and deriving
the Net Worth of MBCI and its Subsidiaries at December 31, 1997 of $202,000,000
plus the CFM Adjustment as detailed in Section 1.2 (if any) (the "MINIMUM NET
WORTH").
-2-
10
(b) The Closing Date Balance Sheet shall:
(i) exclude intercompany payables and receivables
whether to or from MBCI or any of its Subsidiaries on the one hand and,
on the other hand, any of BTR or its other Affiliates (i.e., Affiliates
of BTR other than MBCI and its Subsidiaries);
(ii) be adjusted upward for the CFM Adjustment (if
any) (as shown in Schedule 1.4);
(iii) not consolidate the assets and liabilities of
CFM; and
(iv) be prepared so as to include no charge, accrual,
provision, reserve or write-off in respect of any costs, liabilities or
charges to be incurred after the Closing Date:
(A) as a consequence of the change of
ownership of any Company or any change in management strategy,
direction or priority which results from the change of
ownership; or
(B) in respect of the disposal, closure,
reorganization or restructuring of any operations of any
Company.
(c) If the Minimum Net Worth exceeds the Net Worth (as defined
in paragraph (f) below) shown on the Closing Date Balance Sheet (the "CLOSING
DATE NET WORTH"), the Seller shall pay to the Purchaser, as an adjustment to the
Purchase Price, in immediately available funds, within five days of delivery of
the Closing Date Balance Sheet to the Purchaser, the amount by which the Minimum
Net Worth exceeds the Closing Date Net Worth.
(d) The Purchaser shall provide the Seller and its
representatives with full access to the books, records, facilities and employees
of each Company, and shall cooperate fully with the Seller and its
representatives, to the extent required by the Seller and its representatives in
order to prepare the Closing Date Balance Sheet.
(e) (i) If not disputed by the Purchaser in accordance with
this Section 1.4(e), the Closing Date Net Worth calculation and the Closing Date
Balance Sheet shall be final and binding on the Seller and the Purchaser for
purposes of determining the adjustment to the Purchase Price, if any, under this
Section 1.4.
(ii) If the Purchaser disputes any amounts reflected
on the Closing Date Balance Sheet or Closing Date Net Worth
calculation, the Purchaser shall notify the Seller in writing of each
disputed item within 30 days of the
-3-
11
Purchaser's receipt of the Closing Date Balance Sheet, specifying the
amount thereof in dispute and setting forth, in detail, the basis for
such dispute. In the event of such a dispute, the Purchaser and the
Seller shall negotiate in good faith to reconcile their differences.
(iii) If the Purchaser and the Seller are unable to
reach a resolution, the Purchaser and the Seller shall submit the items
in dispute that the Purchaser shall be entitled to dispute by the terms
of this Section 1.4(e) for resolution to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or an
independent accounting firm mutually acceptable to the Purchaser and
the Seller (the "INDEPENDENT ACCOUNTING FIRM"). The Independent
Accounting Firm shall, within 30 days of such submission, make a
determination and report to the Seller and the Purchaser with respect
to such remaining disputed items, and such report shall be final,
binding and conclusive on the Seller and the Purchaser. In its
determination, the Independent Accounting Firm shall consider and
report on all disputed items submitted to it (but only those disputed
items submitted to it) without regard to the materiality of any such
disputed item with respect to any financial statements taken as a
whole. The fees and disbursements of the Independent Accounting Firm
shall be allocated between the Seller and the Purchaser in the same
proportion that the aggregate amount of such disputed items so
submitted to the Independent Accounting Firm that is unsuccessfully
disputed by each such party (as finally determined by the Independent
Accounting Firm) bears to the total amount of such disputed items so
submitted.
(f) As used herein, "NET WORTH" means, at any date, the amount
by which (A) total consolidated assets at such date exceeds (B) total
consolidated liabilities at such date of MBCI and its consolidated subsidiaries
as derived from and defined by Schedule 1.4 and prepared in accordance with
Sections 1.4(a) and 1.4(b) above.
1.5 DELIVERY OF SHARES.
At the Closing, in consideration of the Purchaser's delivery of the
Purchase Price to the Seller in accordance with Section 1.3, the Seller shall
deliver to the Purchaser a certificate or certificates representing the Shares,
duly endorsed in blank for transfer or accompanied by stock powers duly executed
in blank, sufficient in form and substance to convey to the Purchaser good title
to all of the Shares.
1.6 FURTHER ASSURANCES.
The Seller shall, at any time after the Closing, upon the reasonable
request of the Purchaser and at the Seller's expense, do, execute, acknowledge
and deliver, and cause to be done, executed, acknowledged and delivered, all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney or assurances as may be reasonably required to
-4-
12
transfer, convey, grant and confirm to and vest in the Purchaser good title to
all of the Shares.
ARTICLE II
THE CLOSING
The closing (the "CLOSING") of the transactions contemplated by this
Agreement shall take place as soon as practicable, but in no event later than
five business days, after satisfaction or waiver of each of the conditions set
forth in Article V, at the offices of Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other time and place as shall
be mutually agreeable to the parties hereto (the "CLOSING DATE").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller hereby represents and warrants to the Purchaser as follows:
(a) Organization, Good Standing, Qualification and Power. Each
of the Companies is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization and has all requisite corporate or
limited liability company power and authority to own, lease and operate its
properties and to carry on its business as presently conducted. The Seller has
delivered to the Purchaser correct and complete copies of the certificate of
incorporation and by-laws (or similar organizational documents) of each Company
as in effect on the date hereof. Except as set forth on Schedule 3.1(a), each
Company is, or on the Closing Date will be, duly qualified and in good standing
to do business in each jurisdiction where the conduct of its business requires
such qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition or results of
operations of the Companies taken as a whole (a "MATERIAL ADVERSE EFFECT").
(b) Authority; Enforceability; No Violation; No Approvals The
Seller has all requisite corporate power and authority to execute and deliver
this Agreement and the other agreements, instruments, certificates and documents
necessary for the consummation of the transactions contemplated by this
Agreement (together with this Agreement, collectively, the "DOCUMENTS") to which
it is or will be a party as contemplated hereby and to perform its obligations
under each such Document. The execution and delivery by the Seller of each such
Document and the performance by the Seller of its obligations thereunder have
been duly and validly authorized by all necessary
-5-
13
corporate action on the part of the Seller. Each such Document is, or upon its
execution and delivery will be, a valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except to the
extent that such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and to general principles of equity. Except as set forth on Schedule
3.1(b), neither the execution or delivery by the Seller of any such Document nor
the performance by the Seller of its obligations thereunder will (i) conflict
with or result in a breach of any provision of its certificate of incorporation
or memorandum of association, (ii) violate any law, statute, rule or regulation
or judgment, order, writ, injunction or decree of any Governmental Authority (as
hereinafter defined) applicable to the Seller or its assets, properties or
rights, except, in each case, any such violation which is not reasonably likely
to have a Material Adverse Effect, or (iii) result in the imposition or creation
of any Encumbrance upon or with respect to the Shares (other than restrictions
on transfer arising under applicable securities laws). Except as set forth on
Schedule 3.1(b), no material filing with, and no material permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery of the Documents by the Seller or the performance of its
obligations thereunder. As used in this Agreement, the term "GOVERNMENTAL
AUTHORITY" means any federal, state, local or foreign government, authority,
instrumentality, department, commission, board, bureau, agency or court.
(c) Subsidiaries; Equity Investments. Schedule 3.1(c) sets
forth the name of each Subsidiary and Amatek's direct or indirect ownership
interest therein. Except as set forth on Schedule 3.1(c), Amatek does not,
directly or indirectly, own or have the right to acquire any capital stock of,
or other ownership interest in, any Person. As used in this Agreement, the term
"PERSON" means any individual, corporation, association, partnership, limited
liability company, joint venture or other entity or any Governmental Authority.
(d) Capital Structure; Title to Shares.
(i) The authorized capital stock of Amatek consists
of 121,000 shares of common stock, without par value ("COMMON STOCK").
The Shares constitute all of the outstanding shares of Common Stock.
All outstanding shares of Common Stock are validly issued and
outstanding, fully paid and nonassessable, and are held beneficially
and of record by the Seller. There are no outstanding options,
warrants, rights, calls, agreements, convertible securities or other
commitments or rights to purchase or acquire the Shares, or to purchase
or acquire any unissued capital stock from Amatek. Except as set forth
on Schedule 3.1(d) and in the certificate of incorporation and
memorandum of association of Amatek, there are no material contracts,
commitments, agreements, understandings, arrangements or restrictions
to which Amatek is a party which relate to the Shares.
-6-
14
(ii) Schedule 3.1(d) sets forth the state of
incorporation or organization and the authorized and outstanding equity
capitalization of each Subsidiary. The shares of capital stock or
membership interests of each Subsidiary are validly issued and
outstanding, fully paid and nonassessable, and are owned beneficially
and of record by the Companies as set forth on Schedule 3.1(d), free
and clear of all Encumbrances (other than restrictions on transfer
arising under applicable federal and state securities laws). Except as
set forth on Schedule 3.1(d) or on Schedule 3.1(g), there are no
outstanding options, warrants, rights, calls, agreements, convertible
securities or other commitments or rights to purchase or acquire any of
the issued and outstanding capital stock of or membership interests in
any Subsidiary, or any unissued capital stock or membership interests
from any Subsidiary. Except as set forth in the certificate of
incorporation or operating agreement or similar organizational document
of the Subsidiaries or on Schedule 3.1(d) or Schedule 3.1(g), there are
no material contracts, commitments, agreements, understandings,
arrangements or restrictions to which any Subsidiary is party which
relate to the acquisition of its capital stock or membership interests.
(e) Financial Information. Schedule 3.1(e) contains complete
and accurate copies of (i) the audited consolidated balance sheet of Metal
Building Components, Inc. ("MBCI") as of December 31 of each of 1994, 1995, 1996
and 1997 and the related audited consolidated statements of operations,
stockholders' equity and cash flows for each year then ended, and (ii) the
audited consolidated balance sheet of Doublecote, L.L.C. ("DOUBLECOTE") as of
December 31 of each of 1996 and 1997 and the related audited consolidated
statements of operations, partners' deficiency and cash flows for each year then
ended. The audited consolidated balance sheets of MBCI and Doublecote as of
December 31, 1997 are collectively referred to herein as the "1997 BALANCE
SHEET", and the financial statements described in clauses (i) and (ii) above are
collectively referred to herein as the "FINANCIAL STATEMENTS." Except as set
forth on Schedule 3.1(e), the Financial Statements (A) were prepared in
accordance with the books and records of MBCI or Doublecote, as applicable, (B)
fairly present, in all material respects, the financial condition of MBCI and
its consolidated subsidiaries or Doublecote, as applicable, at and as of the
dates indicated and the results of operations of MBCI and its consolidated
subsidiaries or Doublecote, as applicable, for the periods indicated, and (C)
have been prepared in accordance with United States generally accepted
accounting principles consistently applied. Except as set forth on Schedule
3.1(e), neither Amatek nor Amatek, Inc. owns any assets other than the shares of
capital stock of Amatek, Inc. owned by Amatek and the shares of capital stock of
MBCI owned by Amatek, Inc., and neither Amatek nor Amatek, Inc. has any
liabilities, whether accrued, contingent or otherwise and whether asserted or
unasserted.
(f) Ordinary Course. Except as set forth on Schedule 3.1(f),
and except for the preparation for the transactions contemplated by this
Agreement, since the
-7-
15
date of the 1997 Balance Sheet, the business of the Companies has been operated
in the ordinary and normal course of business.
(g) Agreements. Schedule 3.1(g) sets forth an accurate and
complete list of each contract or agreement, whether written or oral (including
any and all amendments thereto) to which any Company is a party or by which any
Company is bound and which:
(i) relates to the purchase, maintenance or
acquisition, or sale or furnishing of materials, supplies, merchandise,
machinery, equipment, parts or any other property or services
(excluding any such contract made in the ordinary course of business
and which is expected to be fully performed within twelve (12) months
of the date hereof or which involves revenues or expenditures of less
than $1,000,000);
(ii) is a collective bargaining agreement or contract
with any labor union;
(iii) prohibits or restricts such Company from
competing with any business, or otherwise restrains or prevents such
Company from carrying on any lawful business;
(iv) relates to the employment, compensation, or
consulting between such Company and any of its respective officers,
directors, employees or consultants who are entitled to compensation
thereunder in excess of $300,000 per annum;
(v) is a purchase agreement, conditional sales
agreement, occupancy agreement, license, lease or sublease for real
property, which in the case of a license, lease or sublease, has a term
of more than twelve (12) months from the date hereof and involves
annual payments in excess of $1,000,000;
(vi) is a lease, sublease, or other title retention
agreement or conditional sales agreement involving remaining payments
aggregating in excess of $1,000,000 for any machinery, equipment,
vehicle or other tangible personal property (whether such Company is a
lessor or lessee);
(vii) is a contract for capital expenditures or the
acquisition or construction of fixed assets with remaining payments in
excess of $1,000,000;
(viii) is a joint venture or partnership contract or
other material contract involving the sharing of profits, losses, costs
or liabilities; or
-8-
16
(ix) is a promissory note or other instrument
evidencing indebtedness for borrowed money or other indebtedness (other
than trade payables) of the Companies that is intended to have a
balance outstanding following the Closing, and any trust indentures,
mortgages or other security agreements relating to the assets of the
Companies and securing such indebtedness.
The foregoing contracts are collectively referred to herein as the "MATERIAL
CONTRACTS". Except as set forth on Schedule 3.1(g), to the Seller's knowledge:
(A) all of the Material Contracts are in full force and effect and enforceable
in all material respects by the applicable Company in accordance with their
terms, except to the extent that such unenforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and to general principles of equity, and
(B) no Company is in breach of or default under (and no event has occurred which
with notice or the passage of time or both would constitute a breach of or
default under) any Material Contract listed which is reasonably expected to
result in a Material Adverse Effect.
(h) Litigation. Except as set forth on Schedule 3.1(h) and
except for workers' compensation claims incurred in the ordinary course of
business and other claims that are not reasonably expected to result in a
Material Adverse Effect, to the Seller's knowledge, no Company has received
written notice of any action, suit, claim, audit, investigation or legal,
administrative or arbitration proceeding filed or threatened against such
Company, whether at law or in equity, whether civil or criminal in nature and
whether before or by any Governmental Authority. Except as set forth on Schedule
3.1(h), to the Seller's knowledge, there are no judgments, decrees, injunctions
or orders of any Governmental Authority binding upon any Company which are
reasonably expected to result in a Material Adverse Effect.
(i) Title to Assets. Except as set forth on Schedule 3.1(i)
or, with respect to real property, as otherwise identified in any title
insurance policy, to the Seller's knowledge, each Company has good (and, in the
case of real property, marketable) title to all of the material assets and
properties reflected on the 1997 Balance Sheet as being owned by such Company
(except for those assets and properties sold, consumed or otherwise disposed of
since the date of the 1997 Balance Sheet in the ordinary course or as
contemplated by this Agreement), free and clear of all Encumbrances, except:
(i) Encumbrances set forth on Schedule 3.1(d) or
Schedule 3.1(i) (all indebtedness secured by real property described in
the title insurance policies listed in Schedule 3.1(d) has been paid in
full and the related liens discharged);
-9-
17
(ii) liens for taxes not yet due and payable or being
contested in good faith by appropriate proceedings;
(iii) easements, covenants, conditions and
restrictions of record;
(iv) easements, covenants, conditions and
restrictions not of record as to which no material violation or
encroachment exists or, if such violation or encroachment exists, as to
which the cure of such violation or encroachment would not materially
interfere with the conduct of such Company's business as presently
conducted;
(v) any zoning or other governmentally established
restrictions or encumbrances;
(vi) workers' or unemployment compensation liens
arising in the ordinary course of business;
(vii) landlord's, mechanic's, materialman's,
supplier's, vendor's or similar liens arising in the ordinary course of
business securing amounts which are not delinquent;
(viii) deposits made in the ordinary course of
business;
(ix) railroad trackage agreements, utility, slope and
drainage easements, right-of-way easements and leases regarding signs;
(x) leases; and
(xi) other imperfections of title, easements,
covenants, conditions, restrictions or Encumbrances which are not
reasonably expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(j) Intellectual Property. Schedule 3.1(j) sets forth an
accurate and complete list of all material patents, pending patent applications,
trademarks, service marks, pending trademark or service ▇▇▇▇ applications and
trade names licensed to, assigned to, applied for or registered in the name of,
each Company, and all material copyright registrations or pending applications
for copyright registrations of such Company (except for the trademarks, trade
name or other intellectual property rights of BTR plc or the Seller, including
the "BTR" name and logo and any variants thereof and the "Amatek" name, which
are expressly not being conveyed in connection with the transactions
contemplated by this Agreement), including the nature (e.g., patent, trademark,
etc.) of such intellectual property, the application or registration number, the
-10-
18
jurisdiction and the record owner (the "LISTED INTELLECTUAL PROPERTY"). Except
as set forth on Schedule 3.1(j), to the Seller's knowledge:
(i) no registration, patent or other governmental
document relating thereto (if any) has lapsed, expired or been
abandoned or canceled or is the subject of cancellation proceedings or
otherwise has been held invalid or unenforceable with respect to the
Listed Intellectual Property;
(ii) no Company has infringed or misappropriated, and
is not now, in any material respect, infringing or misappropriating,
any intellectual property right belonging to any Person based on the
operations of such Company within the last three years, in each case
which could reasonably be expected to result in a Material Adverse
Effect, and no material claim is pending to the effect that any of the
Listed Intellectual Property is invalid or unenforceable; and
(iii) no Person is infringing upon or violating any
of the Listed Intellectual Property in any material respect.
(k) Benefit Plans; ERISA Matters. Except as set forth on
Schedule 3.1(k), to the Seller's knowledge:
(i) all Employee Plans (as defined below) have been
operated and administered in all material respects in accordance with
ERISA (as defined below) and the Internal Revenue Code of 1986, as
amended (the "CODE"); and
(ii) no Company has any liabilities under any
Employee Plan, except liabilities to make contributions or pay benefits
in the ordinary course or liabilities which are not reasonably expected
to result in a Material Adverse Effect.
As used in this Agreement, "EMPLOYEE PLAN" means any "employee benefit plan", as
that term is defined in Section 3 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), and all other employee profit-sharing, incentive,
deferred compensation, severance, group insurance and other employee benefit
plans, arrangements and practices under which any Company has any present or
future obligation or liability on behalf of its employees or former employees or
their dependents or beneficiaries. The Seller has delivered to the Purchaser, or
provided the Purchaser with access to, correct and complete copies of all
Company Employee Plans. The Purchaser acknowledges and agrees that the only
representations and warranties of the Seller herein as to any ERISA matters are
those contained in this Section 3.1(k).
(l) Transactions with Related Parties. Except as set forth on
Schedule 3.1(l) and except for normal employment arrangements entered into in
the ordinary
-11-
19
course consistent with past practices, since the date of the 1997 Balance Sheet,
no Company has purchased, acquired or leased any property or services from, or
sold, transferred or leased any property or services to, or loaned or advanced
any money to, or borrowed any money from or entered into or been subject to any
management, consulting or similar agreement with, any officer, director or
shareholder of any such Company.
(m) Insurance. Schedule 3.1(m) contains an accurate and
complete list of all material insurance policies currently in effect which are
presently owned or held by any Company and insuring its products, property,
assets, business and operations and its potential liabilities to third parties.
All such insurance policies shall remain in place after the Closing Date in
accordance with their terms, and any and all rights under such policies
(including rights to proceeds for all claims made thereunder) shall remain
rights of the Companies following the Closing.
(n) Taxes. Except as set forth on Schedule 3.1(n):
(i) each Company has filed or will cause to be filed
all material returns, reports, information returns and other documents
(including any related or supporting information) required to be filed
by it prior to the Closing Date relating to any material Taxes (as
defined below) with respect to any income, assets or operations of such
Company, other than those for which extensions shall have been granted
prior to the Closing Date (collectively, the "RETURNS");
(ii) as of the time of filing, such Returns were true
and correct in all material respects;
(iii) each Company has paid, or made adequate
provision for the payment of, all Taxes shown to be due on such
Returns;
(iv) there are no liens for Taxes upon any Company or
its assets except for liens for current Taxes not yet due; and
(v) all Taxes with respect to each Company that are
required to be withheld or collected have been withheld or collected
and, to the extent required, have been paid to the proper taxing
authority or properly deposited as required by applicable law.
The term "TAX" or "TAXES" means, with respect to any Person, all income taxes
(including any tax on or based upon net income, gross income, or income as
specially defined, or earnings, profits, or selected items of income, earnings
or profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment or windfall profits taxes, alternative
or add-on minimum taxes, imposts or customs duties, together with any interest
and any penalties thereon, imposed by any
-12-
20
taxing authority on such Person. The Purchaser acknowledges and agrees that the
only representations and warranties of the Seller herein as to any Tax matters
(other than ERISA matters, which are covered by Section 3.1(k) above) are those
contained in this Section 3.1(n).
(o) Compliance with Laws. To the Seller's knowledge, except as
set forth on Schedule 3.1(o):
(i) each Company is in compliance with all
applicable laws, rules, regulations, ordinances, decrees and orders of
any Governmental Authority (other than Environmental Laws, which are
covered by Section 3.1(p)) (collectively, "LAWS"), except those the
failure to comply with which is not reasonably expected to result in a
Material Adverse Effect; and
(ii) each Company has all governmental permits,
licenses and authorizations necessary for the conduct of its business
as presently conducted ("PERMITS"), except those the failure to obtain
which is not reasonably expected to result in a Material Adverse
Effect.
(p) Environmental Matters. Except as set forth on Schedule
3.1(p), to the Seller's knowledge:
(i) each Company has or has timely applied for all
permits (collectively, the "ENVIRONMENTAL PERMITS") which are required
in connection with the ownership of its assets and properties and the
operation of its business under all federal, state, and local statutes,
laws, codes, regulations, ordinances, rules or regulations relating to
the environment, including relating to health or safety, pollution or
the generation, handling, storage, transport, disposal, discharge or
release of any materials or substances into the environment
(collectively, "ENVIRONMENTAL LAWS"), except those the failure to
obtain which is not reasonably expected to result in a Material Adverse
Effect;
(ii) each Company is in compliance with the terms and
conditions of its applicable Environmental Permits and is in compliance
with all applicable Environmental Laws, except those failures of
compliance with such Environmental Permits and Environmental Laws which
are not reasonably expected to result in a Material Adverse Effect; and
(iii) no Company:
(A) has, in violation of applicable
Environmental Laws, generated, handled, stored, transported,
disposed, discharged or released any toxic or hazardous
substance or waste, including any petroleum-
-13-
21
derived substance or waste or any asbestos containing
material, as defined in applicable Environmental Laws (a
"HAZARDOUS SUBSTANCE"), or arranged for any of the foregoing
for or on behalf of such Company, which violation is
reasonably expected to result in a Material Adverse Effect;
(B) has received notice under any
Environmental Laws of any violation, proceeding, investigation
or lawsuit arising out of or related to the operation of the
business of such Company or any claim for clean up costs,
remedial work or damages in connection with the generation,
handling, storage, transport, disposal, discharge or release
of any Hazardous Substance, which notice has not been
withdrawn, remediated or otherwise settled.
The Seller has delivered to the Purchaser, or provided the Purchaser with access
to, correct and complete copies of all environmental studies, reports, audits,
or analyses in each Company's possession relating to the assets and properties
owned or leased by such Company. The Purchaser acknowledges that it has been
afforded the opportunity to conduct its own investigation with respect to all
environmental matters under this Section 3.1(p) and that such studies, reports,
audits and analyses are provided for information purposes only and that neither
the Seller nor any Company makes any representation or warranty whatsoever with
respect to such studies, reports, audits and analyses. The Purchaser
acknowledges and agrees that the only representations and warranties of the
Company herein as to any environmental matters are those contained in this
Section 3.1(p).
(q) Brokers. No agent, broker, investment banker or other
Person acting on behalf or under the authority of the Seller or any Company is
or will be entitled to any fee or commission from the Purchaser or any Company
in connection with any of the transactions contemplated hereby.
(r) Qualification of Representations and Warranties.
Notwithstanding anything to the contrary, express or implied, contained in this
Agreement, each of the representations and warranties of the Seller contained
herein is modified by reference to the disclosures and information contained in
this Agreement, in the other Documents and in the Schedules hereto.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Seller as follows:
(a) Organization, Good Standing, Qualification and Power. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and has all requisite corporate
power and authority to
-14-
22
own, lease and operate its properties and to carry on its business as presently
conducted. The Purchaser has delivered to the Seller correct and complete copies
of the Purchaser's certificate of incorporation and by-laws as in effect on the
date hereof.
(b) Authority; Enforceability; No Violation; Etc. The
Purchaser has all requisite corporate power and authority to execute and deliver
each of the Documents to which it is or will be a party as contemplated hereby
and to perform its obligations under each such Document. The execution and
delivery by the Purchaser of each such Document and the performance by the
Purchaser of its obligations thereunder have been duly and validly authorized by
all necessary corporate action on the part of the Purchaser. Each such Document
has been, or upon its execution and delivery will be, duly and validly executed
and delivered by the Purchaser and is, or upon its execution and delivery will
be, a valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except to the extent that such unenforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally and to general principles
of equity. Neither the execution or delivery by the Purchaser of any such
Document, nor the performance by the Purchaser of the obligations thereunder,
nor compliance by the Purchaser with any of the provisions thereof, will (i)
conflict with or result in a breach of any provision of the Purchaser's
certificate of incorporation or by-laws, (ii) violate any law, statute, rule or
regulation or judgment, order, writ, injunction or decree of any Governmental
Authority, in each case applicable to the Purchaser or its assets, properties or
rights, or (iii) conflict with or result in a default or breach of any provision
of any material contract or agreement to which the Purchaser is a party or by
which its properties or assets may be bound. Except as set forth on Schedule
3.2(b), no material filing with, and no material permit, authorization, consent
or approval of, any Person is necessary for the execution and delivery of such
Documents by the Purchaser, the performance of its obligations thereunder or the
consummation by the Purchaser of the transactions contemplated by such
Documents.
(c) Brokers. No agent, broker, investment banker, or other
Person acting on behalf of the Purchaser or under the authority of the Purchaser
is or will be entitled to any fee or commission directly or indirectly from the
Seller (or any Company in the event the transactions contemplated hereby do not
occur) in connection with any of the transactions contemplated hereby.
(d) Investment Intent. The Purchaser acknowledges that the
Shares have not been registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and that the Shares may not be resold absent such
registration or unless an exemption therefrom is available. The Purchaser is
acquiring the Shares for its own account, for investment purposes only and not
with a view toward the distribution thereof within the meaning of the Securities
Act.
-15-
23
(e) Purchaser's Financing. On the Closing Date, the Purchaser
will have all funds necessary to pay the Purchase Price in immediately available
funds, subject to no Encumbrances, and to consummate the transactions
contemplated hereby.
ARTICLE IV
ADDITIONAL AGREEMENTS AND CONDUCT OF BUSINESS
4.1 TERMINATION OF CERTAIN AGREEMENTS.
Concurrently with the Closing, each of the contracts and agreements
listed on Schedule 4.1 shall be automatically terminated without any further
action by the parties thereto without any further liability of the Seller or the
Companies thereunder.
4.2 ACCESS TO INFORMATION.
From and after the date hereof until the Closing, the Seller will
afford to the Purchaser, its counsel and authorized representatives, upon
reasonable notice and during normal business hours (but without interruption of
any Company's business), such access to each Company's facilities, management
and books and records relating to such Company's business (including tax returns
filed and in preparation) as the Purchaser may reasonably request.
4.3 OPERATION OF BUSINESS.
From and after the date hereof until the Closing, except as may
otherwise be contemplated by or necessary for the Seller or the Companies to
perform their obligations under this Agreement (including Section 4.7) and the
other Documents to which any of them is or will be a party, or except as
otherwise consented to in writing by the Purchaser, the Seller will cause each
of the Companies:
(i) to conduct its business only in the ordinary
course consistent with past practice;
(ii) not to dispose of any material assets, except
sales of inventories or other assets in the ordinary course of
business;
(iii) to use commercially reasonable efforts to
maintain its business, assets, properties and rights in accordance with
past custom and practice;
-16-
24
(iv) not to reclassify, combine, split, subdivide or
redeem or otherwise repurchase any capital stock, or issue, deliver,
pledge or encumber any additional capital stock or other shares
equivalent to or exchangeable for capital stock;
(v) not to pay, discharge or satisfy any material
claims, liabilities or obligations (whether absolute, accrued,
contingent or otherwise), other than the payment, discharge or
satisfaction of liabilities in the ordinary course of business,
including scheduled payments of indebtedness for money borrowed from
third parties and purchase money indebtedness (including payments of
principal, interest, fees and other charges related thereto),
guarantees with respect to any of the foregoing indebtedness and
indebtedness secured by any Encumbrance on the property or assets of
such Company;
(vi) not to change in any material respect, its
accounting methods or practices; and
(vii) not to amend or modify its certificate of
incorporation or by-laws (or similar organizational documents).
4.4 EFFORTS TO CONSUMMATE.
Subject to the terms and conditions of this Agreement, each party
hereto shall use commercially reasonable efforts to take or cause to be taken
all actions and do or cause to be done all things required under applicable
laws, regulations and ordinances in order to consummate the transactions
contemplated hereby, including (a) obtaining all material permits,
authorizations, consents and approvals of any Person which are required for or
in connection with the consummation of the transactions contemplated hereby and
by the other Documents, (b) taking any and all reasonable actions necessary to
satisfy all of the conditions to such party's obligations hereunder as set forth
in Article V, and (c) executing and delivering all agreements and documents
required by the terms hereof to be executed and delivered by such party on or
prior to the Closing.
4.5 AMENDMENTS TO SCHEDULES.
The Seller may, in its sole discretion, at any time prior to Closing,
amend or modify any of the Schedules attached hereto. The Seller shall promptly
notify the Purchaser of such modification or amendment and deliver copies of
such modified or amended Schedules to the Purchaser. To the extent required by
any such modification or amendment, the Seller and the Purchaser shall adjust
the Purchase Price to equitably reflect the effects of any such modification or
amendment to the Schedules. Any such written notice delivered to the Purchaser
will be deemed to have amended the Schedules
-17-
25
but no such notice or amendment shall be deemed to have cured any
misrepresentation or breach of representation or warranty that otherwise might
have existed hereunder.
4.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ COMPLIANCE.
The Purchaser and the Seller shall each file or cause to be filed with
the Federal Trade Commission and the United States Department of Justice any
notifications required to be filed by their respective "ultimate parent"
companies under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"), and the rules and regulations promulgated thereunder,
with respect to the transactions contemplated herein. The parties shall use
their best efforts to make such filings promptly, to respond to any requests for
additional information made by either of such agencies, to cause the waiting
periods under the HSR Act to terminate or expire at the earliest possible date
and to resist vigorously, at their respective cost and expense, any assertion
that the transactions contemplated herein constitute a violation of the
antitrust laws, all to the end of expediting consummation of the transactions
contemplated herein; provided, however, that neither the Purchaser nor the
Seller shall be required to institute or defend legal proceedings and if either
the Purchaser or the Seller shall determine that continuing such resistance is
not in its best interests, the Purchaser or the Seller may, by written notice to
the other party, terminate this Agreement with the effect set forth in Section
7.2.
4.7 PERMISSIBLE INTER-COMPANY TRANSACTIONS; SELLER'S
ASSUMPTION OF CERTAIN LIABILITIES; EMPLOYEE TRUSTS.
(a) Notwithstanding Section 3.1(f) or Section 4.3, between the
date hereof and the Closing Date, the Seller may cause any Company to (i) pay in
full or in part any trade amounts owed to any of its Affiliates, (ii) repay in
full or in part the then outstanding principal amount of, and interest (if any)
accrued on, any funding loan balance owed by any Company to the Seller or any of
its Affiliates and (iii) declare and pay a dividend or make such other
disbursement of any cash in any Company.
(b) If it is determined that, as of immediately prior to the
Closing Date, Amatek or Amatek, Inc. has (i) any liabilities or obligations
(whether executory, fixed or unfixed, liquidated or unliquidated, whether the
amount thereof can be readily ascertained or has accrued as of such date, or
whether any other liability or obligation of any kind whatsoever) or (ii) any
assets, excluding from such liabilities, obligations or assets InterCompany
Payables and Inter-Company Receivables as defined in Section 4.12, then (x) the
Seller agrees to pay, discharge, satisfy and assume such liabilities, and the
Seller shall have the right to contest such liability in its own name or in the
name of such entity and the Purchaser shall cause such entity to cooperate with
the Seller with respect thereto, and (y) upon request by the Seller, at the
Seller's own expense, the Purchaser shall, or shall
-18-
26
cause Amatek or Amatek, Inc. to, assign such assets to the Seller or its
designee to the extent permitted by applicable law.
(c) With respect to Amatek and Amatek, Inc. and its past or
present Affiliates (other than MBCI and its subsidiaries) only, the Seller shall
indemnify, and hold harmless the Purchaser, MBCI and its Subsidiaries from and
against any liability (whether fixed or unfixed, liquidated or unliquidated),
loss, actual or punitive damage, deficiency, demand, claim, suit, action or
cause of action, cost or expense of any investigation or proceeding, settlement,
compromise (including reasonable fees and expenses of attorneys, expert
witnesses, consultants, engineers and accountants), assessment, penalty or fine
actually suffered or incurred, including, without limitation, compliance,
corrective, remedial, removal, response, abatement, closure, cleanup and
monitoring costs as well as requirements to contribute to the remediation of
third-party operated, off-site waste disposal sites and liabilities for personal
injuries and repair of damage to natural resources that:
(i) arise out of or relate to permitting, reporting, record
keeping, emissions limitations, discharge limitations, monitoring,
procedures for labeling and placarding, storage, handling,
transportation, manifesting or other environmental compliance
obligations; or
(ii) arise out of or result from governmentally mandated
action or third-party claims and relate to a release, spill, leak,
pumping, pouring, emission, emptying, discharge, injecting, escape,
leaching, disposal, transport, storage, generation, origination or
dumping of a Hazardous Substance that occurred prior to the Closing
Date
from, at or onto any manufacturing facility or other real property site in which
Amatek or Amatek, Inc. or any of its past or present Affiliates (other than MBCI
and its Subsidiaries) had or maintains an interest or any third-party operated,
off-site waste disposal facility to which any Hazardous Substance was
transported, disposed or stored by Amatek or Amatek, Inc. or its past or present
Affiliates (other than MBCI and its Subsidiaries). Notwithstanding anything
contained herein to the contrary, this paragraph (c) shall not be deemed to
impose any liability, obligation, cost or expense of any nature whatsoever upon
the Seller that may arise solely from the ownership interests of Amatek and/or
Amatek, Inc. in any of MBCI and its Subsidiaries or any successors thereto.
(d) To the extent any employee trust established for the
beneficiaries of the MBCI Executive Management Deferred Compensation Plan or the
Long Term Management Incentive Scheme are maintained or controlled by the Seller
(or an Affiliate of the Seller), the Seller shall cause such accounts and the
funds deposited therein to be transferred to the control of the Purchaser or its
designee as of the Closing Date.
-19-
27
(e) The term "AFFILIATE" means, as to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person.
4.8 ACTIONS AFTER THE CLOSING.
(a) Cooperation. Subject to any limitations required to
preserve any applicable attorney-client privilege, for a period of five years
from and after the Closing Date, each party agrees to furnish or cause to be
furnished to the other party or its representatives, upon reasonable request and
during normal business hours, such information and assistance relating to the
Companies and their businesses (including the cooperation of officers and
employees and reasonable access to books, records and other data, and the right
to make copies and extracts therefrom) as is reasonably necessary to facilitate
(i) the preparation for or prosecution, defense or disposition of any suit,
action or other proceeding or investigation, (ii) the preparation for and filing
of any tax return or election or audit, (iii) the preparation for and filing of
any other documents requested by any Governmental Authority.
(b) Record Retention. The Purchaser shall, and shall cause
each Company to, preserve and keep the books and records of each Company, and
Seller shall preserve and keep any such books and records that it may retain
with respect to the business of each Company, for a period of six years from and
after the Closing Date, or for any longer period, (i) as may be required by any
Governmental Authority or contract or agreement, (ii) as may be reasonably
necessary for the prosecution, defense or disposition of any suit, action or
other proceeding or investigation that is then pending or threatened, or (iii)
that is equivalent to any applicable statute of limitations (including any
extension thereof) with respect to matters pertaining to Taxes. Such records
shall be made available to the Purchaser or the Seller, as the case may be, as
provided in subsection (a) above. If either party wishes to destroy any records
referred to in this subsection (b) after the applicable retention period, it
shall first notify the other party in writing and the other party may, by
written notice given within 60 days of its receipt of such notice, have the
right to take possession of such records within 60 days after giving such
written notice.
(c) Intellectual Property; Change Amatek Name. The Purchaser
acknowledges that the names "BTR" and "Amatek", and their related logos, and all
variants thereof, are not being conveyed in connection with the transactions
contemplated by this Agreement, and the Purchaser agrees that it has no rights
with respect thereto and will not use such names or variants after the date
hereof. The Purchaser agrees that, promptly after Closing, it will change the
names of Amatek, Inc. and Amatek Holdings, Inc. to any other names that will not
contain the word "Amatek."
-20-
28
4.9 CHANGE OF CONTROL AMENDMENTS OR WAIVERS.
On or prior to Closing, the Seller will use reasonable efforts to take
such actions as may be reasonably requested by the Purchaser and permitted under
such agreements or plans to modify or amend the provisions of any existing
agreements with employees or any existing employee benefit plans of any of the
Companies, including the MBCI Executive Management Deferred Compensation Plan
and the Long Term Management Incentive Scheme, to provide or clarify that none
of the benefits, vesting or payments thereunder will become accelerated or
payable because of the change in control of the Companies to the Purchaser as
contemplated herein, and/or the Seller and the Purchaser will cooperate and use
their reasonable efforts to obtain from all employees entitled to acceleration
of vesting of benefits or to payments because of the change in control of the
Companies to the Purchasers as contemplated herein, a waiver of the
applicability of those provisions.
4.10 COVENANTS BY BTR.
BTR joins in the execution of this Agreement for the express, limited
purpose of covenanting and agreeing with the Purchaser to the same effect and on
the same terms and conditions as the Seller as set forth in (i) Section 1.4,
Section 4.7 and Section 4.12 of this Agreement with respect to post-closing
adjustments to the Purchase Price, the payment, discharge, satisfaction and
assumption of any liabilities (including environmental liabilities) of Amatek
and Amatek, Inc. and certain of their Affiliates, and payment for and releases
of certain intercompany payables and receivables (and the payments and other
actions required in such Sections); (ii) Article VI of this Agreement with
respect to the indemnification for environmental and other matters provided for
therein; (iii) Article VIII of this Agreement with respect to Taxes and the
indemnification for Tax matters provided for therein; and (iv) Article IX of
this Agreement with respect to the various miscellaneous matters, including
notices, consents to jurisdiction and service of process, described or provided
for therein. BTR shall and does hereby make the aforedescribed covenants and
agreements jointly and severally with the Seller.
4.11 MATERIAL ADVERSE CHANGES IN NCI.
If, prior to the Closing, the Seller shall have concluded that a
material adverse change has occurred in the consolidated financial condition of
the Purchaser since October 31, 1997, it shall so notify the Purchaser in
writing and specify with particularity the event or occurrence that it has
concluded constitutes such material adverse change, with a request that the
Purchaser obtain from the proposed lenders providing the financing for the
Purchaser's acquisition of the Shares a written confirmation or statement either
that (i) such event or occurrence does not constitute a material adverse change
in the financial condition of the Purchaser since October 31, 1997, or that the
lenders waive
-21-
29
the same as a condition to their obligation to fund the initial loan request
under the credit facility between the Purchaser and such lenders. If such
written confirmation is not obtained and delivered to the Seller within ten (10)
business days following delivery to the Purchaser of its written request
therefor, the Seller shall have the right for a period of ten (10) additional
days to deliver written notice of its election to terminate this Agreement,
which shall thereupon be terminated without any liability of any party to the
other. Upon such termination, all of the obligations of the parties hereunder
shall terminate except for the obligations of the parties pursuant to Section
7.2 and the Confidentiality Agreement described in Section 9.4(a).
4.12 INTER-COMPANY PAYABLES AND RECEIVABLES.
(a) At Closing, the Purchaser, as agent for the Companies,
shall pay to the Seller (for itself or as agent for its Affiliates to which the
relevant payables are owed) an amount equal to the Inter-Company Payables
Amount.
(b) At Closing, the Seller (for itself or as agent for its
Affiliates), shall pay to the Purchaser (as agent for the Companies to which the
relevant receivables are owed) an amount equal to the Inter-Company Receivables
Amount.
(c) The Seller and the Purchaser shall make the payments which
are due between them under paragraphs 4.12(a) and (b) above by setting the
Inter-Company Payables Amount off against the Inter-Company Receivables Amount
and paying the Net Inter-Company Payables Amount. The Seller shall notify the
Purchaser at least five business days prior to the Closing Date of such net
amount.
(d) The Seller (for itself or as agent for its Affiliates) and
the Purchaser (on behalf of each relevant Company) covenant and agree with each
other that payment of the Net Inter-Company Payables Amount (including by way of
setoff under paragraph (c)) shall be deemed to satisfy, discharge and extinguish
all those liabilities of the Seller and its Affiliates and of the Companies in
respect of the Inter-Company Receivables Amount and the Inter-Company Payables
Amount.
(e) The current income taxes balance outstanding at the
Closing Date of MBCI and its Subsidiaries payable to the Seller and/or its
Affiliates will be utilized as a provision against income taxes due for payment
after the Closing Date but arising from operations of the Companies prior to the
Closing Date, in accordance with Sections 8.1 and 8.5. Accordingly, the current
income taxes balance outstanding as payable to the Seller and/or its Affiliates
at the Closing Date will not be included in the definition of Inter-Company
Payables and will be paid to the Seller or its Affiliates within ninety (90)
days after the Closing Date except to the extent such payable should have been
liquidated prior to the Closing Date pursuant to Section 8.1(c).
-22-
30
(f) The Seller agrees that on the Closing Date there will be
no receivables or payables between MBCI and its Subsidiaries and Amatek, or
between MBCI and its Subsidiaries and Amatek, Inc., or between Amatek and
Amatek, Inc.
(g) All payments referred to in this Section 4.12 shall be
made in available funds without any setoff (save as provided herein),
restriction or condition and without any deduction or withholding (save only as
required by law) in such manner as is the normal business practice.
(h) For purposes of this Section 4.12, the following terms
shall have the following meanings: (i) "AFFILIATE" means, with respect to the
Seller, any Person which controls, is controlled by or is under common control
with the Seller; (ii) "INTERCOMPANY PAYABLES AMOUNT" means, with respect to any
Company, the aggregate of all amounts owed by that Company to the Seller or any
of the Seller's Affiliates outstanding at the close of business on the Closing
Date (subject to the exclusion detailed in Section 4.12(e) above), such amount
to exclude any amounts owed between the Companies; (iii) "INTER-COMPANY
RECEIVABLES AMOUNT" means, with respect to the Seller or any of its Affiliates,
the aggregate of all amounts owed by such entity to any Company outstanding at
the close of business on the Closing Date, such amount to exclude any amounts
owed between the Companies; and (iv) "NET INTER-COMPANY PAYABLES AMOUNT" means
the Inter-Company Payables Amount less the Inter-Company Receivables Amount and
shall not exceed $550,000,000 (for the avoidance of doubt, such amount may be a
negative figure).
4.13 CFM ACQUISITION.
The Purchaser acknowledges and agrees that the Companies intend to
acquire certain assets of CFM on substantially the terms and conditions set
forth in the Contract for the Sale of Assets attached hereto as Exhibit F. To
the extent the representations, warranties and covenants contained in this
Agreement are affected by such acquisition of CFM, such representations,
warranties and covenants shall be deemed amended thereby to the extent necessary
to cure any inaccuracy resulting from the CFM acquisition, provided that the
Seller makes no representation and warranty with respect to CFM or its business.
-23-
31
ARTICLE V
CONDITIONS OF CLOSING
5.1 CONDITIONS TO OBLIGATION OF THE PURCHASER.
The obligation of the Purchaser to perform this Agreement is subject to
the satisfaction on or before the Closing Date of the following conditions,
unless waived in writing by the Purchaser:
(a) Authorization. All corporate or other action necessary to
authorize the execution, delivery and performance of this Agreement and the
other Documents by the Seller and the consummation by the Seller of the
transactions contemplated by this Agreement and the other Documents shall have
been duly and validly taken by the Seller.
(b) Performance of Obligations. The Seller shall have
performed and complied in all material respects with all agreements and
obligations and satisfied all conditions to be performed, complied with and
satisfied by it under this Agreement and the other Documents prior to or at the
Closing.
(c) No Litigation or Legislation. There shall not be any
statute, rule or regulation having the effect of preventing, delaying or making
the transactions contemplated by any of the Documents illegal or otherwise
prohibited or any pending or threatened investigation, hearing, order, decree or
judgment enjoining or seeking to enjoin the performance of any of the Documents
or the transactions contemplated hereby or thereby or involving any challenge
to, or seeking damages, or other relief in connection with such transactions.
(d) Secretary's Certificate. The Purchaser shall have received
a certificate, dated as of the Closing Date, signed by the Secretary of the
Seller and certifying as to:
(i) the accuracy of the Seller's memorandum of
association and articles of association delivered to the Purchaser and
the incumbency of the officers executing each of the Documents to which
the Seller is a party; and
(ii) resolutions of the Board of Directors of the
Seller authorizing the execution, delivery and performance of each of
the Documents to which the Seller is a party.
(e) Representations and Warranties. The representations and
warranties of the Seller set forth in Section 3.1 shall be correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of
-24-
32
such date, without giving effect to amendments to the Schedules pursuant to
Section 4.5 (in each case, other than any representation or warranty that
expressly relates to a specific date, which representation and warranty shall be
correct in all material respects on the date so specified), and the Purchaser
shall have received a certificate of a responsible officer of the Seller dated
as of the Closing Date to such effect.
(f) Consents. The Seller shall have received all consents set
forth on Schedule 3.1(b) required in connection with the transactions
contemplated hereby.
(g) HSR Act. Any applicable waiting period under the HSR Act
shall have expired or been terminated.
(h) Share Certificates. The Purchaser shall have received from
the Seller the certificates representing the Shares as provided in Section 1.4.
(i) Opinion of Counsel to the Seller and BTR. The Purchaser
shall have received an opinion dated the Closing Date from Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the Seller, substantially to the
effect provided in Exhibit A, an opinion dated the Closing Date from Richie &
▇▇▇▇▇▇▇▇▇, P.C., Texas counsel to the Seller, substantially to the effect
provided in Exhibit B, an opinion dated the Closing Date from ▇▇▇▇▇▇▇ ▇▇▇,
Australian counsel to the Seller, substantially to the effect provided in
Exhibit C, and an opinion dated the Closing Date from the General Counsel of
BTR, substantially to the effect provided in Exhibit D.
(j) No Material Adverse Change. There shall not have occurred
a material adverse change in the (i) business, operations, assets, liabilities
or financial condition of MBCI and its Subsidiaries taken as a whole since
December 31, 1997, or (ii) financial condition of the Purchaser and its
subsidiaries taken as a whole since October 31, 1997.
5.2 CONDITIONS TO OBLIGATION OF THE SELLER.
The obligation of the Seller to perform this Agreement is subject to
the satisfaction on or before the Closing Date of the following conditions,
unless waived in writing by the Seller:
(a) Authorization. All corporate or other action necessary to
authorize the execution, delivery and performance or this Agreement and the
other Documents by the Purchaser and the consummation of the transactions
contemplated by this Agreement and the other Documents shall have been duly and
validly taken by the Purchaser and the Purchaser shall have full power and
authority to enter into and consummate the transactions contemplated by this
Agreement and the other Documents.
-25-
33
(b) Performance of Obligations. The Purchaser shall have
performed and complied in all material respects with all agreements and
obligations and satisfied all conditions to be performed, complied with and
satisfied it under this Agreement and the other Documents prior to or at the
Closing.
(c) No Litigation or Legislation. There shall not be any
statute, rule or regulation that makes the sale of the Shares and the other
transactions contemplated by any of the Documents illegal or otherwise
prohibited or any investigation, hearing, order, decree or judgment enjoining or
seeking to enjoin the performance of any of the Documents or the transactions
contemplated hereby and thereby.
(d) Payment of Purchase Price. The Purchaser shall have made
payment of the Purchase Price (as defined in Section 1.2), as it may have been
adjusted pursuant to Section 4.7, as provided in Section 1.3.
(e) Secretary's Certificate. The Seller shall have received a
certificate, dated as of the Closing Date, signed by the Secretary of the
Purchaser and certifying as to:
(i) the accuracy of the Purchaser's certificate of
incorporation and by-laws delivered to the Seller and the incumbency of
the officers executing each of the Documents to which the Purchaser is
a party; and
(ii) resolutions of the Board of Directors of the
Purchaser authorizing the execution, delivery and performance of each
of the Documents to which the Purchaser is a party.
(f) Representations and Warranties. The representations and
warranties of the Purchaser set forth in Section 3.2 and in any other Document
shall be correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of such date, and the Seller
shall have received a certificate of a responsible officer of the Purchaser
dated as of the Closing Date to such effect.
(g) HSR Act. Any applicable waiting period under the HSR Act
shall have expired or been terminated.
(h) Opinion of Counsel to the Purchaser. The Seller shall have
received an opinion dated the Closing Date of Gardere & ▇▇▇▇▇, L.L.P., counsel
to the Purchaser, substantially to the effect provided in Exhibit E.
-26-
34
ARTICLE VI
INDEMNIFICATION
6.1 SURVIVAL.
The representations and warranties of the Seller set forth in Section
3.1(d) (relating to title to shares and to capital structure of the Companies),
the last sentence of Section 3.1(e) (relating to assets and liabilities of
Amatek and Amatek, Inc.), and Section 3.1(n) (relating to Taxes) shall survive
following the Closing Date until expiration of the applicable statute of
limitation. The representations and warranties of the Seller set forth in
Section 3.1(p) (relating to environmental matters) shall survive for a period of
three (3) years following the Closing Date. All other representations and
warranties of the Seller set forth in this Agreement shall survive for a period
of six (6) months following the Closing Date. The respective survival periods
specified in this Section 6.1 are referred to herein as the "SURVIVAL PERIOD".
6.2 GENERAL INDEMNIFICATION.
(a) Subject to the conditions set forth in this Section 6.2,
subsequent to the Closing Date, the Seller shall indemnify and hold harmless the
Purchaser from and against any liability (whether fixed or unfixed, liquidated
or unliquidated), loss, actual or punitive damage, deficiency, demand, claim,
suit, action or cause of action, fine, penalty, or cost or expense of any and
all investigation or proceeding, settlement, compromise (including reasonable
attorney's fees and expenses) actually suffered or incurred, but excluding
consequential, indirect or similar types of damage not the direct result of the
harm suffered or incurred (collectively, "LOSSES") by the Purchaser and arising
out of or resulting from the untruth and inaccuracy of any of the
representations and warranties of the Seller contained in Section 3.1 or from
any breach of the covenants of the Seller set forth in this Agreement; provided,
however, that (i) the Purchaser shall not be entitled to indemnification
pursuant to this Section 6.2(a) with respect to any individual Loss unless such
Loss exceeds $250,000; (ii) the Purchaser shall not be entitled to
indemnification pursuant to this Section 6.2(a) with respect to any individual
Loss in excess of $250,000, until all such Losses (including the first $250,000
of each such individual Loss in excess of $250,000) exceed, in the aggregate,
$15,000,000, in which case the Purchaser shall be entitled to indemnification
only to the extent such Losses exceed $15,000,000; (iii) the Purchaser shall not
be entitled to indemnification pursuant to this Section 6.2(a) with respect to
the untruth or inaccuracy of any representation or warranty contained in Section
3.1 if the Seller can prove by a preponderance of the evidence that any
director, officer, counsel, accountant or other representative of the Purchaser
had actual knowledge at any time on or prior to the Closing Date of the events
or conditions constituting or resulting in such untruth or inaccuracy; (iv)
notwithstanding anything to the contrary contained herein, the Purchaser shall
not be entitled to indemnification hereunder for any
-27-
35
Loss arising from the untruth or inaccuracy of any representation or warranty,
and the amount of any Loss incurred in respect of such untruth or inaccuracy
shall not be included in the calculation of aggregate Losses for purposes of
clause (ii) of this Section 6.2(a), to the extent that a liability arising as a
result of such untruth or inaccuracy is disclosed or reflected as a liability on
the 1997 Balance Sheet; and (v) in no event shall the maximum aggregate
liability of the Seller to indemnify the Purchaser pursuant to this Section
6.2(a) exceed $15,000,000. The foregoing proviso and the limitations set forth
therein shall not be applicable to: (i) the representations and warranties of
the Seller set forth in Section 3.1(d) (relating to title to shares and to
capital structure of the Companies), the last sentence of Section 3.1(e)
(relating to assets and liabilities of Amatek and Amatek, Inc.), Section 3.1(n)
(relating to Taxes) or the covenants of the Seller set forth in Section 4.7
(relating to the payment, discharge, satisfaction and assumption of any
liabilities (including environmental liabilities) of Amatek or Amatek, Inc.);
(ii) Sections 1.4 and 4.12 (relating to payment of post-closing adjustments to
the Purchase Price and to payment of, and the extinguishment of certain
liabilities following payment of, the Net Inter-Company Payables Amount); (iii)
Article VIII (relating to Taxes), which are exclusively addressed in said
Article VIII; or (iv) the representations and warranties with respect to
environmental matters contained in Section 3.1(p) or covenants of the Seller
with respect to environmental matters relating to MBCI and its Subsidiaries
contained in Section 6.3, which are exclusively addressed in said Section 6.3.
(b) Subject to the conditions set forth in this Section 6.2,
subsequent to the Closing Date, the Purchaser shall indemnify the Seller and its
successors and assigns and hold them harmless against any Loss which the Seller
may suffer, sustain or become subject to as a result of any breach by the
Purchaser of any of its covenants, representations, warranties or obligations
set forth herein, and as a result of the ownership and/or operations of the
Companies from and after the Closing Date.
(c) No Person shall be liable for any claim for
indemnification under this Section 6.2 unless written notice of a claim for
indemnification is delivered by the Person seeking indemnification (the
"INDEMNITEE") to the Person from whom indemnification is sought (the
"INDEMNITOR") with respect to breaches of the representation and warranties
before the expiration of the Survival Period and within 30 days after the
Indemnitee has received notice or knowledge of the matter giving rise to such
claim for indemnification. All notices given pursuant to this subsection (c)
shall set forth with reasonable specificity the basis for the claim for
indemnification and the amount of Losses with respect to such claim. Failure of
the Indemnitee to give notice within said 30-day period shall not be deemed a
waiver of its rights under this Section 6.2 except to the extent such failure
shall have actually prejudiced the Indemnitor or caused it to incur additional
costs, expenses or liabilities.
-28-
36
(d) Promptly, and in any event within 30 days, after the
assertion by any third party of any claim, demand or notice (a "THIRD PARTY
CLAIM") against an Indemnitee under this Section 6.2 that results or may result
in the incurrence by such Indemnitee of any Loss for which such Indemnitee would
be entitled to indemnification hereunder, such Indemnitee shall notify the
Indemnitor of such Third Party Claim in writing. By written notice (the "DEFENSE
NOTICE") to the Indemnitee within 30 days after receipt by the Indemnitor of
notice of the Third Party Claim (or sooner if such claim so requires), the
Indemnitor shall notify the Indemnitee that the Indemnitor will conduct, at its
own expense, the diligent defense against the Third Party Claim in its own name
or, if necessary, in the name of the Indemnitee and shall specify the counsel
the Indemnitor shall appoint to defend such Third Party Claim. The Indemnitee
shall have the right to employ separate counsel in any such Third Party Claim
and/or to participate in the defense thereof at its own expense; provided,
however, that if (i) the Indemnitee shall have received an opinion of counsel
reasonably acceptable to the Indemnitor to the effect that the interests of the
Indemnitee and the Indemnitors with respect to the Third Party Claim are
sufficiently adverse to prohibit the representation by the same counsel of both
parties under applicable ethical rules or (ii) the employment of such separate
counsel has been specifically authorized in writing by the Indemnitor, the
reasonable fees and expenses of such separate counsel shall be borne by the
Indemnitor. If the Indemnitor shall fail to give the Defense Notice within such
30-day period (or such shorter period if such claim so requires), the Indemnitor
shall be deemed to have elected not to conduct the defense of the subject claim.
The party conducting the defense of any Third Party Claim shall use reasonable
efforts to keep the other party appraised of all significant developments with
respect thereto. No Third Party Claim may be settled by the Indemnitor without
the written consent of the Indemnitee, which consent shall not be unreasonably
withheld; provided, however, that if such settlement involves the payment of
money only and the Indemnitee is completely indemnified therefor and the
Indemnitee refuses to consent to such settlement, the Indemnitor shall cease to
be obligated for such Third Party Claim. The Indemnitee shall not settle any
Third Party Claim that is being defended in good faith by the Indemnitor.
Failure of the Indemnitee to give timely, complete or accurate notice as
provided in this subsection (d) will not affect the rights or obligations of any
party hereunder except and only to the extent that, as a result of such failure,
any party entitled to receive such notice was deprived of its right to recover
any payment under its applicable insurance coverage or was otherwise damaged or
prejudiced as a result of such failure to give timely notice.
(e) The amount of any Loss subject to indemnification under
this Section 6.2 shall be calculated net of any amounts which have been
previously recovered by the Indemnitee under insurance policies (other than New
Environmental Loss Policies, as defined in Section 6.5) or other collateral
sources (such as contractual indemnities of any Person which are contained
outside this Agreement), and such Indemnitee hereby covenants that it will not
release any such collateral sources from any obligations they
-29-
37
may have. In the event any such amounts that may be recoverable under such
insurance policies or other collateral sources are not received before any claim
for indemnification is paid pursuant to this Section 6.2, then the Indemnitee
shall, at its election, either pursue such insurance policies or collateral
sources with reasonable diligence or assign all such rights to the Indemnitor.
In the event any such recovery is received after any claim for indemnification
is paid by the Indemnitor, the amount of such recovery shall be applied as
follows: first, to reimburse the Indemnitee or the Indemnitor, as the case may
be, for its out-of-pocket expenses (including reasonable attorneys' fees and
expenses) expended in pursuing such recovery; second, to refund any payments
made by the Indemnitor which would not have been so paid had such recovery been
obtained prior to such payment; and third, any excess to the Indemnitee. If the
Indemnitee either fails to pursue any such insurance policies or collateral
sources with reasonable diligence or to assign all such rights to the
Indemnitor, then the Indemnitor shall have the right of subrogation to pursue
such insurance policies or collateral sources and may take any reasonable
actions necessary to pursue such rights of subrogation in its name or the name
of the party from whom subrogation is obtained. The Indemnitee shall reasonably
cooperate with the Indemnitor to pursue any such subrogation claim.
(f) All Losses subject to indemnification hereunder shall be
calculated net of any tax benefits realized by the Indemnitee as a result of the
Losses, net of any taxes payable by the Indemnitee as a result of recoveries of
the Losses, including recoveries pursuant to the indemnification hereunder.
6.3 ENVIRONMENTAL INDEMNIFICATION.
(a) Subject to the conditions set forth in this Section 6.3,
the Seller shall indemnify and hold harmless the Purchaser from and against any
liability (whether fixed or unfixed, liquidated or unliquidated), loss, actual
or punitive damage, deficiency, demand, claim, suit, action or cause of action,
cost or expense of any investigation or proceeding, settlement, compromise
(including reasonable fees and expenses of attorneys, expert witnesses,
consultants, engineers and accountants), assessment, penalty or fine, actually
suffered or incurred, including, without limitation, compliance, corrective,
remedial, removal, response, abatement, closure, cleanup and monitoring costs,
as well as requirements to contribute to the remediation of third-party
operated, off-site waste disposal sites and liabilities for personal injuries
and repair of damage to natural resources (collectively, "ENVIRONMENTAL LOSSES")
that:
(i) arise out of or result from the untruth or inaccuracy of
the representations and warranties of the Seller contained in Section
3.1(p) and relate to permitting, reporting, record keeping, emissions
limitations, discharge limitations, monitoring, procedures for labeling
and placarding, storage, handling,
-30-
38
transportation, manifesting or other environmental compliance
obligation that occurred prior to the Closing Date ("COMPLIANCE
LOSSES"); or
(ii) arise out of or result from governmentally mandated
action or third-party claims and relate to a release, spill, leak,
pumping, pouring, emission, emptying, discharge, injecting, escape,
leaching, disposal, transport, storage, generation, origination or
dumping of a Hazardous Substance that occurred prior to the Closing
Date ("REMEDIATION LOSSES")
from, at or onto any manufacturing facility or other real property site in which
MBCI or any Subsidiaries had or maintains an interest, or any third-party
operated, off-site waste disposal facility to which any Hazardous Substance was
transported, disposed or stored (each such manufacturing facility, real property
site or third-party operated, off-site waste disposal facility being herein
called a "FACILITY").
Notwithstanding the foregoing, the Purchaser shall not be entitled to
indemnification under this Section 6.3(a) with respect to any Compliance Loss or
Remediation Loss suffered or incurred with respect to a single Facility until
such time as either the aggregate amount of all Compliance Losses, on the one
hand, or Remediation Losses, on the other hand, exceeds $250,000 (a "QUALIFYING
FACILITY LOSS"); and (ii) the Purchaser shall not be entitled to indemnification
under this Section 6.3(a) with respect to any single Qualifying Facility Loss
until all such Qualifying Facility Losses (including the first $250,000 of each
such individual Qualifying Facility Loss in excess of $250,000) exceed, in the
aggregate, $3,000,000, in which case the Purchaser shall be entitled to
indemnification with respect to 50% of the aggregate amount of all such
Qualifying Facility Losses that exceed $3,000,000 until such time as the
aggregate amount of all such Qualifying Facility Losses equal, in the aggregate,
$25,000,000. The Purchaser shall not be entitled to any indemnification under
this Section 6.3(a) for Excess Facility Losses that exceed $25,000,000 in the
aggregate and in no event shall the maximum aggregate liability of the Seller to
indemnify the Purchaser under this Section 6.3 and under any Environmental Laws
exceed $11,000,000.
(b) Except as provided below or in Section 6.3(c), no notice
need be given by the Purchaser to the Seller of any individual Compliance Loss
or Remediation Loss. Within a reasonable period after Purchaser has incurred or
determines that it expects to incur an Qualifying Facility Loss, it shall so
notify the Seller and set forth in such notice with reasonable specificity the
basis for its claim or claims for indemnification and the aggregate amount and
nature of the Environmental Losses at such Facility, to the extent then known.
After the Purchaser's initial notice to the Seller with respect to an Qualifying
Facility Loss at any single Facility, the Purchaser thereafter shall report to
the Seller not less than quarterly all Environmental Losses at that Facility
incurred since the last previous report or notice, until such time as all
Environmental
-31-
39
Losses at that Facility have been finally resolved, settled, paid or discharged.
For a period of 45 days following delivery of each such notice or report to the
Seller, the Purchaser shall make available to the Seller and its representatives
such of the books and records and employees of the Purchaser and MBCI and its
Subsidiaries with respect to the Environmental Losses incurred at such Facility
as may be necessary or appropriate for the Seller to verify the amount and
accuracy of the Environmental Losses covered by such notice or report. Subject
to the $3,000,000 aggregate threshold amount for Qualifying Facility Losses and
to the maximum aggregate limits on its indemnification obligations set forth in
Section 6.3(a) above, within 60 days after each such notice or report from the
Purchaser (or within ten days after final resolution of any dispute among the
parties with respect to the Environmental Losses covered thereby), the Seller
shall pay or reimburse to the Purchaser in cash an amount equal to 50% of each
Qualifying Facility Loss as provided in Section 6.3(a). The Seller shall not be
liable for any claim for indemnification under this Section 6.3 unless written
notice of a claim for indemnification is delivered by the Purchaser to the
Seller within three years after the Closing Date. Claims noticed during the
three-year period that are covered by the terms of this Agreement even though
not resolved during such period shall remain subject to the indemnification, and
in the event that the $250,000 Qualifying Facility Loss threshold and/or the
$3,000,000 aggregate threshold amount are exceeded more than three years after
the Closing Date, Seller shall remain liable for such noticed claims as provided
herein. Except as to Purchaser's obligations to deliver notice to Seller within
three years after the Closing Date, failure of Purchaser to give timely,
complete or accurate notice as provided in this Section 6.3(b) will not affect
the rights or obligations of any party hereunder except to the extent such party
is prejudiced by such failure.
(c) Promptly after the assertion by any third party of any
claim, demand or notice that results or may result in a claim for
indemnification under this Section 6.3, the Purchaser shall provide the Seller
with a written notice with respect thereto setting forth the details of such
claim or event. The Purchaser shall have the right to conduct, at its own
expense, all the investigations and defenses against any third party claim and
to settle or compromise the same without the consent or concurrence of the
Seller, provided that the Purchaser shall not settle or compromise a claim that
involves potential liability or admission of wrongdoing by the Seller (other
than with respect to Environmental Losses in accordance with this Section 6.3)
without the prior written consent of the Seller, which consent will not be
unreasonably withheld; provided, however, that the Seller shall have the right
to employ separate counsel in any such third party claim and/or to participate
in the defense thereof at its own expense. In any event, the Purchaser shall use
reasonable efforts to keep the Seller appraised of all significant developments
with respect to such third party claim. Failure of the Purchaser to give timely,
complete or accurate notice as provided in this Section 6.3(c) will not affect
the rights or obligations of any party hereunder except to the extent such party
is prejudiced by such failure.
-32-
40
(d) The amount of any Environmental Loss subject to
indemnification under this Section 6.3 shall be calculated net of any amounts
which have been previously recovered by the Purchaser or the Companies under
insurance policies (other than New Environmental Loss Policies, as defined in
Section 6.5) or other collateral sources (such as contractual indemnities of any
Person which are contained outside this Agreement or claims against third
parties), and the Purchaser hereby covenants that it will not release any such
collateral sources from any obligations they may have. In the event any such
amounts may be recoverable under such insurance policies or other collateral
sources but are not received or recovered before any claim for indemnification
is paid pursuant to this Section 6.3, then the Purchaser shall at its election
either pursue such insurance policies or collateral sources with reasonable
diligence or assign all such rights to the Seller. In the event any such
recovery is received after payment by the Seller or any indemnified
Environmental Loss, the amount of such recovery shall be applied as follows:
first, to reimburse the Purchaser or the Seller, as appropriate, for its
out-of-pocket expenses (including reasonable attorney's fees and expenses)
expended in pursuing such recovery; second, to refund any payments made by the
Seller which would not have been so paid had such recovery been obtained prior
to such payment; and third, any excess to the Purchaser. If the Purchaser either
fails to pursue any such insurance policies or collateral sources with
reasonable diligence or assigns its rights to do so to the Seller, then the
Seller shall have the right of subrogation to pursue such insurance policies or
collateral sources and may take any reasonable actions, including instituting
proceedings against third parties, necessary to pursue such rights of
subrogation in its name or the name of the party from whom subrogation is
obtained. The Purchaser shall reasonably cooperate with the Seller to pursue any
such subrogation claim.
(e) All Losses subject to indemnification hereunder shall be
calculated net of any tax benefits realized by the Indemnitee as a result of the
Losses, net of any taxes payable by the Indemnitee as a result of recoveries of
the Losses, including recoveries pursuant to the indemnification hereunder.
6.4 LIMITATION OF RECOURSE.
The rights of the parties for indemnification relating to this
Agreement and the transactions contemplated hereby shall be strictly limited to
those contained in Section 6.2, Section 6.3 and Article VIII, and such
indemnification rights shall be the exclusive remedy available to the parties
subsequent to the Closing Date with respect to any matter in any way relating to
this Agreement or any of the other Documents or arising in connection herewith
or therewith. To the maximum extent permitted by law, the Purchaser and the
Seller hereby waive and shall cause their Affiliates to waive all other rights
and remedies with respect to any such matter, whether under any Laws (including
any right or remedy under the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., the Comprehensive Environmental Response
-33-
41
Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq., or any other
Environmental Law), at common law or otherwise.
6.5 NEW ENVIRONMENTAL LOSS POLICY PROCEEDS.
If the Purchaser or any Company recovers any proceeds under any New
Environmental Loss Policy (as hereinafter defined), such proceeds shall be
applied as follows:
(i) first, to reimbursement of the Purchaser and the
Companies of the Environmental Loss with respect to which such proceeds
were paid by the insurance company, to the extent such covered
Environmental Loss incurred or suffered exceeds the amount thereof
reimbursed or paid by the indemnitors pursuant to Sections 4.7, 6.2 and
6.3;
(ii) second, to reimbursement of the Purchaser and
the Companies of all other Environmental Losses incurred or suffered by
them that have not been theretofore reimbursed or paid pursuant to
insurance policies, other collateral sources (such as contractual
indemnities of any Person which are contained outside this Agreement,
or claims against third parties) or the indemnity under Sections 4.7,
6.2 and 6.3; and
(iii) thirdly, any remaining proceeds shall be
divided equally among the Purchaser and the Seller.
For purposes hereof, "New Environmental Loss Policies" shall
mean insurance policies purchased by the Purchaser or any Company after the date
hereof covering Environmental Losses.
ARTICLE VII
TERMINATION
7.1 RIGHT OF TERMINATION.
This Agreement may be terminated at any time prior to the Closing by:
(i) the mutual written consent of the Purchaser and
the Seller;
or
(ii) by the Seller or the Purchaser, without
liability on account of such termination (except as otherwise provided
in Section 7.2), if the
-34-
42
conditions to its obligations to consummate the transactions
contemplated hereby shall not have occurred or been waived on or before
June 30, 1998; or
(iii) by the Seller in accordance with Section 4.11;
or
(iv) by either the Seller or the Purchaser if any
permanent injunction or other order of Governmental Authority
preventing the consummation of the transactions contemplated hereby
shall have become final and non-appealable.
7.2 EFFECT OF TERMINATION.
Termination of this Agreement pursuant to Section 7.1 shall terminate
all obligations of the parties hereunder, except for the obligations under this
Section 7.2 and under the Confidentiality Agreement described in Section 9.4(a).
In the case of a willful and intentional breach or fraud by any party hereunder
(the "DEFAULTING PARTY"), the Defaulting Party's liability with respect thereto
shall be limited to reimbursement of the other party or parties expenses
incurred by such party or parties in order to enforce its or their rights under
this Agreement (including reasonable attorneys' fees and expenses).
ARTICLE VIII
TAXES
8.1 LIABILITY FOR TAXES.
(a) The Seller shall be liable for, and shall indemnify and
hold the Purchaser harmless against, all Taxes due or payable by the Companies
for any taxable year or taxable period ending on or before the Closing Date, but
only to the extent that the amount of such Taxes exceeds the amount reserved
therefor on the applicable books and records of the Companies. Neither the
Seller nor any of the Companies is a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code and applicable
regulations thereunder.
(b) The Purchaser shall be liable for, and shall indemnify and
hold the Seller and any Affiliate of the Seller harmless against any and all
Taxes due or payable by the Companies or by the Purchaser with respect to the
Companies for any taxable year or taxable period commencing after the Closing
Date.
-35-
43
(c) The Seller shall or shall cause MBCI and its Subsidiaries
to pay its respective income taxes arising from the first quarter of 1998 in the
ordinary course, and, in satisfaction of its "Income Tax Payable to Parent"
account, the Seller shall cause MBCI and its Subsidiaries to pay its accrued
consolidated income tax liability for the first and each succeeding quarter of
1998 on the April 15, 1998 and each subsequent estimated income tax payment due
date occurring prior to the Closing Date, by paying such amount to the entity
required to file and pay the quarterly estimated income tax for such
consolidated group.
8.2 REFUNDS OR CREDITS.
(a) Except as otherwise set forth in this Agreement, any
refunds or credits of Taxes, to the extent that such refunds or credits are
attributable to taxable periods ending on or before the Closing Date, shall be
for the account of the Seller, and, to the extent that such refunds or credits
are attributable to taxable periods beginning after the Closing Date, such
refunds or credits shall be for the account of the Purchaser. The Purchaser
shall, and shall cause each Company to, promptly forward to the Seller or to
reimburse the Seller for any such refunds or credits due the Seller after
receipt thereof by the Purchaser or any Company.
(b) If the examination of any federal, state, local or other
tax return of the Seller or any Company shall result (by settlement or
otherwise) in any adjustment that decreases deductions, losses or tax credits or
increases income, gains or recapture of tax credits for any period ending on or
before the Closing Date, and that will permit the Purchaser to increase
deductions, losses or tax credits or decrease income, gains or recapture of tax
credits that would otherwise (but for such adjustments) have been taken or
reported with respect to the Purchaser or any Company for one or more periods
ending after the Closing Date, the Seller will notify the Purchaser and provide
it with adequate information so that it can reflect on tax returns of the
Purchaser or any Company such increases in deductions, losses or tax credits or
decreases in income, gains or recapture of tax credits. With respect to such
increases or decreases on tax returns of the Purchaser or any Company, the
Purchaser shall pay to the Seller the amounts by which the aggregate of all Tax
Benefits (as hereinafter defined) which result therefrom exceeds $10,000, such
amounts to be paid when and as such Tax Benefits in excess of $10,000 are
realized.
(c) If the examination of any federal, state, local or other
tax return of the Purchaser or any Company shall result (by settlement or
otherwise) in any adjustment that decreases deductions, losses or other tax
credits for any period beginning after the Closing Date, and that will permit
the Seller or any Company to increase deductions, losses or tax credits or
decrease the income, gains or recapture of tax credits that would otherwise (but
for such adjustment) have been taken or reported with respect to the Seller
-36-
44
or any Company for one or more periods before the Closing Date, the Purchaser
will notify the Seller and provide it with adequate information so that it can
reflect on its return such increases in deductions, losses or tax credits or
decreases in income, gains or recapture of tax credits. The Seller shall pay to
the Purchaser the amounts by which the aggregate of all Tax Benefits which
result therefrom exceeds $10,000, such amounts to be paid when and as such Tax
Benefits in excess of $10,000 are realized.
(d) As used in this Agreement, the term "TAX BENEFITS" shall
mean, in the case of a separate state, local or other tax return, the sum of the
amount by which the tax liability of such corporation or entity to the
appropriate government or jurisdiction is reduced (including by refund) and any
interest from such government or jurisdiction relating to such tax liability,
and in the case of a consolidated federal income tax return or similar state,
local or other tax return, the sum of the amount by which the tax liability of
the affiliated group of corporations or entities to the appropriate government
or jurisdiction is reduced (including by refund), and any interest from such
government or jurisdiction relating to such tax liability.
8.3 CONTESTS.
Whenever any taxing authority sends a notice of an audit, initiates an
examination of any Company, or otherwise asserts a claim, makes an assessment,
or disputes the amount of Taxes for any taxable period ending on or before the
Closing Date, the Purchaser shall promptly notify the Seller, and the Seller
shall have the right to control any resulting proceedings and to determine
whether and when to settle any such claim, assessment or dispute to the extent
such proceedings or determinations affect the amount of Taxes for which the
Seller is liable under this Agreement; provided, however, that the Purchaser
shall, at the Purchaser's own expense, have the right to consult with the Seller
regarding any such claim, assessment or dispute that may affect any of the
Companies after the Closing Date. Notwithstanding the foregoing, the Purchaser
shall have the right to control any such proceedings with respect to any Tax
matter arising after the Closing Date and the Seller shall have the right to
consult with the Purchaser regarding any such proceeding. Failure of the
Purchaser to promptly notify the Seller shall not affect the Purchaser's
indemnity rights hereunder unless and only to the extent the Seller is
prejudiced thereby.
8.4 COOPERATION.
(a) Each of the Purchaser and the Seller shall provide the
other with such assistance as may reasonably be requested by either of them in
connection with the preparation of any tax return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each will retain and provide
the other with any records or information which may be relevant to
-37-
45
such return, audit or examination, proceedings or determination. Such assistance
shall include making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder and shall include providing copies of any relevant tax return and
supporting work schedules. The party requesting assistance hereunder shall
reimburse the other for its reasonable expenses incurred in providing such
assistance. Without limiting the foregoing, the Purchaser hereby agrees that it
will retain, until the appropriate statutes of limitation (including any
extensions) expire, copies of all tax returns, supporting work schedules and
other records or information which may be relevant to such returns of each
Company for all taxable periods which include the dates from January 1, 1989 to
and including the Closing Date, and that such records shall be maintained in
accordance with the Seller's Record Retention Policy, as such policy has been
provided to the Purchaser at or prior to the Closing. Further, the Purchaser
will not destroy or otherwise dispose of any such records without first
providing the Seller with a reasonable opportunity to review, copy or take
possession of such records. If either party wishes to destroy any records
referred to in this subsection (a) after the applicable retention period, it
shall first notify the other party in writing and the other party may, by
written notice given within 60 days of its receipt of such notice, have the
right to take possession of such records within 60 days after giving such
written notice.
(b) Each of the Purchaser and the Seller shall, and shall
cause each Company to, preserve and keep each Company's books and records
related to Taxes for a period of six years from and after the Closing Date, or
for any longer period, (i) as may be required by any Governmental Authority or
contract or agreement, (ii) as may be reasonably necessary for the prosecution,
defense or disposition of any suit, action or other proceeding or investigation
that is then pending or threatened, or (iii) that is equivalent to any
applicable statute of limitations (including any extension thereof). Each party
shall furnish or cause to be furnished to the other party, its counsel or
accountants, upon reasonable request given in writing not less than three
business days in advance, during normal business hours, such information and
assistance (including without limitation the cooperation of its officers and
employees and reasonable access to its books, records and other data and the
right to make copies and extracts therefrom) as is reasonably necessary to: (A)
facilitate the preparation for or the prosecution, defense or disposition of any
suit, action, litigation or administrative, arbitration or other proceeding or
investigation (other than one by or on behalf of one party against the other
party to this Agreement); (B) comply with the provisions of this Article VIII;
or (C) prepare and file any other documents required by any Governmental
Authority. The party requesting assistance hereunder shall reimburse the other
for its reasonable expenses incurred in providing such assistance.
-38-
46
8.5 COVENANTS.
(a) The Seller shall prepare all U.S. federal, state and local
income tax returns for each Company for the taxable period of each Company that
ends on the Closing Date and shall pay or cause to be paid all income taxes
shown as due thereon to the extent that the amount of such taxes exceeds the
amount reserved therefor on the applicable books and records of the Companies.
(b) The Purchaser shall timely file, or cause to be timely
filed, all other returns and reports with respect to Taxes that are required to
be filed with respect to each Company, or any successor(s) to the business
thereof, after the Closing Date, and the Purchaser shall pay or cause to be paid
all Taxes shown as due thereon. To the extent requested by the Seller, the
Purchaser shall participate in the filing of and shall file any required
returns, reports, statements or forms with respect to any period that ends on or
before the Closing Date. The Purchaser shall prepare or cause to be prepared and
shall file or cause to be filed all other tax returns, reports, statements and
forms required of each Company, or in respect of their activities, for any
period ending after the Closing Date that includes the operations of such
Company prior to the Closing Date. The Purchaser shall also prepare or cause to
be prepared the schedules (known as the "BTR federal and state workpaper
packages") containing the tax return information necessary to prepare the
consolidated income tax return and state income tax returns within 90 days after
the Closing Date. The Purchaser, within 90 days after the Closing Date, shall
also cause each Company to prepare (i) year-end schedules for such Company for
the year ending as of the Closing Date; (ii) monthly schedules (known as the "MR
package") for the period commencing on the date of the most recently prepared
monthly schedules and ending (A) if the Closing Date occurs on or after the
tenth day of the month, on the Closing Date, or (B) if the Closing Date occurs
before the tenth day of the month, on the last day of the month immediately
preceding the month in which the Closing Date occurs; and (iii) the U.S. style
"T" schedules, the overseas tax returns and the year-end schedules referred to
in clause (i) above prepared with respect to such Company. Any such tax returns,
reports, statements, forms or schedules that include or relate to tax periods
ending on or before the Closing Date or that include the operations of each
Company prior to the Closing Date shall be on a basis consistent with the last
previous such returns, reports, statements, forms or schedules filed or prepared
in respect of each Company, unless the Seller or the Purchaser, as the case may
be, concludes that there is no reasonable basis for such position.
-39-
47
8.6 TRANSFER TAXES.
Notwithstanding anything contained herein to the contrary, the
Purchaser shall bear all liabilities for any sales, use, transfer stamp,
conveyance or similar Taxes and fees assessed or payable in connection with the
transfer of the Shares to the Purchaser.
8.7 TAX SHARING AGREEMENTS.
All tax sharing agreements or practices among or between the Seller and
any of the Companies and their Affiliates, shall be terminated as of the
Closing. No payment shall be due to any Company from the Seller or any of its
Affiliates in respect of losses of such Company included in any return made on a
consolidated basis for the purposes of federal income taxes for any tax period
ending on or before the Closing.
ARTICLE IX
MISCELLANEOUS
9.1 INTERPRETATIVE PROVISIONS; CERTAIN DEFINITIONS.
(a) Whenever used in this Agreement, the phrases "to the
Seller's knowledge", "to the knowledge of the Seller" and other phrases of
similar import shall mean the relevant facts, circumstances or information that
the Seller or any Company actually knows or should have known in the ordinary
conduct of its business. The inclusion of any information on any Schedule shall
not be deemed to be an admission or acknowledgment by the Seller, in and of
itself, that such information is required to be listed on such Schedule or is
material to or outside the ordinary course of the business of any Company.
Nothing contained herein or in any of the Schedules hereto shall constitute an
admission of liability or an admission against the Seller's or the Purchaser's
interest.
(b) The use in this Agreement of the term "including" means
"including, without limitation." The words "herein", "hereof", "hereunder" and
other words of similar import refer to this Agreement as a whole, including the
schedules and exhibits, as the same may from time to time be amended, modified,
supplemented or restated, and not to any particular section, subsection,
paragraph, subparagraph or clause contained in this Agreement. All references to
sections, schedules and exhibits mean the sections of this Agreement and the
schedules and exhibits attached to this Agreement, except where otherwise
stated. The title of and the section and subsection headings in this Agreement
are for convenience of reference only and shall not govern or affect the
interpretation of any of the terms or provisions of this Agreement. The use
herein of the masculine, feminine or neuter forms shall also denote the other
forms and any reference
-40-
48
to the singular or plural shall include the other, in each case unless the
context otherwise requires.
(c) Unless expressly provided otherwise, the measure of a
period of one month or year for purposes of this Agreement shall be that date of
the following month or year corresponding to the starting date, provided that if
no corresponding date exists, the measure shall be that date of the following
month or year corresponding to the next day following the starting date. For
example, one month following February 18th is March 18th, and one month
following March 31 is May 1.
9.2 NO ADDITIONAL REPRESENTATIONS.
THE PURCHASER ACKNOWLEDGES THAT IT AND ITS REPRESENTATIVES HAVE
UNDERTAKEN AN INDEPENDENT INVESTIGATION AND VERIFICATION OF THE BUSINESS,
ASSETS, OPERATIONS, FINANCIAL CONDITION AND PROSPECTS OF THE COMPANIES. THE
PURCHASER EXPRESSLY ACKNOWLEDGES AND AGREES THAT IT IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY OF THE SELLER WITH RESPECT TO ANY MATTER IN
CONNECTION WITH THE PURCHASER'S INVESTIGATION OR EVALUATION OF THE COMPANIES
(INCLUDING ANY OF THEIR PROPERTIES OR ASSETS), EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3.1. THE SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, OTHER
THAN AS EXPRESSLY SET FORTH IN SECTION 3.1, INCLUDING WITHOUT LIMITATION AS TO
ANY PROJECTIONS, FORECASTS AND ESTIMATES PREPARED OR SUPPLIED TO THE PURCHASER
OR ITS REPRESENTATIVES. SUCH PROJECTIONS, FORECASTS AND ESTIMATES REFLECT
VARIOUS ASSUMPTIONS BY THE SELLER CONCERNING ANTICIPATED RESULTS AND ARE SUBJECT
TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND
CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE SELLER OR THE
COMPANIES. ACCORDINGLY, FORECASTS, PROJECTIONS AND ESTIMATES WILL LIKELY VARY
FROM ACTUAL RESULTS, AND THOSE VARIATIONS MAY BE MATERIAL. THE SELLER ALSO MAKES
NO REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION, VALUE OR QUALITY
OF THE PROPERTIES OR ASSETS, OR THE COLLECTIBILITY OF THE RECEIVABLES, OF THE
COMPANIES, EXCEPT TO THE EXTENT THE SAME ARE ENCOMPASSED WITHIN THE SCOPE OF THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.1. WITHOUT IN ANY WAY
LIMITING THE FOREGOING, THE SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AS TO
ANY INFORMATION OR MATERIAL SUPPLIED AS PART OF THE PURCHASER'S DUE DILIGENCE
-41-
49
INVESTIGATION OF THE COMPANIES, EXCEPT AND ONLY TO THE EXTENT THAT SUCH
INFORMATION OR MATERIAL IS EXPRESSLY MADE SUBJECT TO A REPRESENTATION OR
WARRANTY CONTAINED IN SECTION 3.1. THE SELLER EXPRESSLY DISCLAIMS ANY WARRANTY
OF MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY OF THE
PROPERTIES OR ASSETS OF THE COMPANIES. THE PURCHASER EXPRESSLY ACKNOWLEDGES AND
AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE CONDITION OF
THE BUSINESS OF THE COMPANIES, INCLUDING THEIR PROPERTIES AND ASSETS, SHALL BE
"AS IS" AND "WHERE IS."
9.3 EXPENSES.
Except as otherwise provided in this Agreement, all costs and expenses,
including all legal fees and expenses, incurred in connection with each of the
Documents and the transactions contemplated thereby shall be paid by the parties
incurring such expenses. Notwithstanding the foregoing, the Purchaser shall pay
the following incurred in connection with giving effect to the transactions
contemplated in this Agreement: (i) obtaining the requisite consents from
respective Governmental Authorities, including ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ filing fees, if
such filings are required under applicable laws (as determined jointly by
counsel for the Purchaser and the Seller), (ii) all taxes (including sales,
stock transfer, real property transfer and/or real property transfer gains
taxes, if any), and (iii) all mortgage or other recording fees, if any.
9.4 ENTIRE AGREEMENT; AMENDMENT.
(a) This Agreement, the other Documents and the Exhibits and
Schedules attached hereto and thereto, and the Confidentiality Agreement dated
October 23, 1997 (the "CONFIDENTIALITY AGREEMENT") between BTR Inc. and the
Purchaser, contain the entire agreement among the parties with respect to the
transactions contemplated hereby and supersede all prior agreements and
understandings among the parties with respect thereto.
(b) This Agreement shall not be altered or otherwise amended
except pursuant to an instrument in writing signed by each of the parties
hereto.
9.5 SEVERABILITY.
It is the desire and intent of the parties hereto that the provisions
of this Agreement be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent
-42-
50
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, while maintaining the
intent of the parties, it shall, as to such jurisdiction, be so narrowly drawn,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
9.6 PUBLIC ANNOUNCEMENTS.
The parties will consult with each other before issuing any press
release or otherwise making any public statements with respect to this Agreement
and the transactions contemplated hereby, and no party will issue any such press
release or any such public statement prior to such consultation and the
agreement of the other party, except as may be required by law.
9.7 NOTICES.
All notices or other communications which are required hereunder or
otherwise delivered in connection herewith shall be in writing and shall be
deemed to have been duly given if delivered personally or if sent by
nationally-recognized overnight courier, by facsimile, or by registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
(a) if to the Purchaser, to:
NCI Building Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-43-
51
with a copy to:
Gardere & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Seller, to:
BTR Australia Limited
▇/▇ ▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
BTR plc
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Counsel
Facsimile: 011-44-171-821-3806
Telephone: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
-44-
52
and with a copy to:
BTR Inc.
Stamford Harbor Park
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Assistant General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to BTR plc, to:
BTR plc
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Counsel
Facsimile: 011-44-171-821-3806
Telephone: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
Each party may specify by notice given as provided above a different or
additional address. Any notice or communication hereunder shall be deemed to
have been received (a) in the case of personal delivery, on the date of
delivery, (b) in the case of a nationally-recognized overnight courier, when
received, (c) in the case of facsimile transmission, when received, and (d) in
the case of mailing, on the fifth business day following that on which the piece
of mail containing such communication is posted.
9.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one and the same agreement.
9.9 GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE
STATE OF NEW
-45-
53
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING,
THE INTERNAL LAWS OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY DO SO, TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING ARISING HEREUNDER.
9.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
(a) EACH OF THE PARTIES HEREBY:
(i) IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR
THE PURPOSES OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE OTHER DOCUMENTS OR THE SUBJECT MATTER HEREOF OR
THEREOF AND BROUGHT BY ANY OTHER PARTY;
(ii) WAIVES AND AGREES NOT TO ASSERT, BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION OR PROCEEDING,
ANY CLAIM THAT (A) IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OR
SUCH COURTS, (B) THE ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR (C) THE VENUE OF THE ACTION OR PROCEEDINGS IS IMPROPER; AND
(iii) AGREES THAT, NOTWITHSTANDING ANY RIGHT OR
PRIVILEGE IT MAY POSSESS AT ANY TIME, SUCH PARTY AND ITS PROPERTY ARE
AND SHALL BE GENERALLY SUBJECT TO SUIT ON ACCOUNT OF THE OBLIGATIONS
ASSUMED BY IT HEREUNDER.
(b) EACH PARTY AGREES THAT SERVICE IN PERSON OR BY CERTIFIED
OR REGISTERED U.S. MAIL TO ITS ADDRESS SET FORTH IN SECTION 9.7 SHALL CONSTITUTE
VALID IN PERSONAM SERVICE UPON SUCH PARTY AND ITS SUCCESSORS AND ASSIGNS IN ANY
ACTION OR
-46-
54
PROCEEDING WITH RESPECT TO ANY MATTER AS TO WHICH IT HAS SUBMITTED TO
JURISDICTION HEREUNDER.
(c) EACH PARTY HEREBY ACKNOWLEDGES THAT THIS IS A COMMERCIAL
TRANSACTION, THAT THE FOREGOING PROVISION FOR CONSENT TO JURISDICTION AND
SERVICE OF PROCESS HAVE BEEN READ, UNDERSTOOD AND VOLUNTARILY AGREED TO BY EACH
PARTY AND THAT BY AGREEING TO SUCH PROVISIONS EACH PARTY IS WAIVING IMPORTANT
LEGAL RIGHTS.
9.11 BENEFITS OF AGREEMENT.
All of the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Anything contained herein to the contrary
notwithstanding, this Agreement shall not be assignable by the Seller without
the consent of the Purchaser or by the Purchaser without the consent of the
Seller. Nothing provided herein shall confer upon any Person not a party hereto
any right or remedy of any nature or kind whatsoever or be deemed to construe
any such Person as a third party beneficiary hereof.
9.12 CONSTRUCTION.
The provisions of this Agreement shall be construed according to their
fair meaning and neither for nor against any party hereto irrespective of which
party caused such provisions to be drafted. Each of the parties acknowledge that
it has been represented by legal counsel in connection with the preparation and
execution of this Agreement.
[The following page is the signature page.]
-47-
55
IN WITNESS WHEREOF, each of the parties hereto has caused this Stock
Purchase Agreement to be duly executed by its authorized representative on the
day and year first written above.
NCI BUILDING SYSTEMS, INC.
By: /s/ C. A. ▇▇▇▇▇▇▇, JR.
-------------------------------------
Name: C. A. ▇▇▇▇▇▇▇, Jr.
Title: Chairman of the Board
BTR AUSTRALIA LIMITED
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Attorney in Fact
The undersigned hereby executes this
Agreement for the limited purposes
expressly set forth in Section 4.10.
BTR PLC
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Attorney in Fact