Exhibit 2.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated February 23, 2004 (the "Agreement"), by and
among PFLEIDERER AKTIENGESELLSCHAFT ("PAG"), PFLEIDERER CONSULTING GmbH ("CON"),
HALDE NEUNUNDNEUNZIGSTE VERWALTUNGSGESELLSCHAFT mbH (to be renamed Pfleiderer
Poles & Towers International GmbH) ("PPTI"), PFLEIDERER LEASING VERWALTUNGS -
GmbH ("PLG"), and VALMONT INDUSTRIES, INC., a Delaware corporation ("Buyer").
For purposes of this Agreement, CON, PPTI and PLG are sometimes referred to
individually as a "Seller" and, collectively, "Sellers".
RECITALS:
This Agreement is made with reference to the following facts and
circumstances:
(a) CON owns all of the issued and outstanding shares of the capital stock
of Newmark International, Inc., a Delaware corporation ("Newmark") and
PLG owns all of the issued and outstanding shares of the capital stock
of Pfleiderer Leasing USA, Inc., a Delaware corporation ("PLUSA"). For
purposes of this Agreement, Newmark and PLUSA are sometimes referred
to individually as a "Company" and, collectively, the "Companies".
(b) Pursuant to a spin-off agreement duly notarized on February 17, 2004,
by and between CON and PPTI, certain assets and liabilities of CON,
including all of the issued and outstanding shares of capital stock of
Newmark, were transferred from CON to PPTI, which transfer will become
effective on the date of entry in the respective German company
registers of CON and PPTI and given retroactive effect to January 1,
2004.
(c) Newmark is involved in the production, marketing and sale of concrete
and steel poles for street lighting, electrical transmission,
catenary, flood lighting, advertising, architectural columns, traffic
control and telecommunication (the "Business"). Newmark conducts the
Business substantially from the facilities set forth on Exhibit "A"
attached hereto (each, a "Facility", and, collectively, the
"Facilities").
(d) The real estate, buildings and production equipment used by Newmark at
its Bartow, Florida Facility for the production of concrete poles are
leased from PLUSA.
(e) PAG owns, indirectly, all of the issued and outstanding shares of the
capital stock of CON, PPTI and PLG.
(f) Sellers desire to sell, and Buyer desires to purchase, all of the
issued and outstanding shares of capital stock of the Companies.
AGREEMENT:
In consideration of the foregoing recitals which are incorporated with and
are made a part of this Agreement, and in further consideration of the mutual
covenants and agreements hereinafter contained, the parties hereto agree,
subject to the terms and conditions hereinafter set forth, as follows:
1. Sale and Purchase of Capital Stock. CON and PPTI hereby agree to sell,
transfer, assign, convey and deliver to Buyer all of the issued and outstanding
shares of capital stock of Newmark (the "Newmark Stock"), free and clear of all
liens, claims and encumbrances, and Buyer hereby agrees to purchase and acquire
the Newmark Stock from PPTI or CON, as applicable. PLG hereby agrees to sell,
transfer, sign, convey and deliver to Buyer all of the issued and outstanding
shares of the capital stock of PLUSA (the "PLUSA Stock"), free and clear of all
liens, claims and encumbrances, and Buyer hereby agrees to purchase and acquire
the PLUSA Stock from PLG. For purposes of this Agreement, the Newmark Stock and
the PLUSA Stock are sometimes referred to collectively as the "Capital Stock".
2. Consideration for Capital Stock. The purchase price for the Capital
Stock (the "Purchase Price") shall be an amount equal to One Hundred Five
Million Two Hundred Ninety Nine Thousand Three Hundred Ninety Four Dollars
($105,299,394) in cash. Such number has been derived pursuant to the calculation
set forth on Exhibit 2. The Purchase Price is subject to the adjustment as
provided in Section 4 below. Subject to Sections 3.2.5 and 7.18 below, the
Purchase Price and the other payments set forth in Section 3.1.1 below shall be
paid to Sellers on the Closing Date by wire transfer of immediately available
funds to accounts designated in writing by Sellers to Buyer at least one (1)
business day before the Closing Date. $103,299,394 of the Purchase Price is
attributable to the purchase of the Newmark Stock and $2,000,000 of the Purchase
Price is attributable to the purchase of the PLUSA Stock.
3. Closing. The transfer of the Capital Stock by Sellers to Buyer (the
"Closing") will take place at the offices of ▇▇▇▇▇▇▇ North ▇▇▇▇▇▇ & ▇▇▇▇▇, PC
LLO, at 10:00 a.m. on the second (2nd) business day after the later of (i) the
satisfaction (or, to the extent permitted, the waiver) of all the conditions set
forth in Sections 8 and 9 below, or at such other place or time, and (ii)
Sellers' completion of the transfer of the Fiberglass Pole Business (as defined
in and pursuant to the provisions of Section 7.14 below), or on such other date
as the parties hereto may mutually agree (the "Closing Date"). The Closing shall
be deemed to be effective as of 12:01 a.m. CST on the Closing Date (the
"Effective Time").
3.1 Buyer's Obligations at Closing. At the Closing, Buyer shall:
3.1.1 Payments to Sellers. Pay to Sellers, in the manner set forth in
Section 2 above, immediately available funds equal to (a) the
Purchase Price, subject to Sections 3.2.5 and 7.18 below, (b) the
▇▇▇▇▇▇ Payment (as defined in Section 7.14 below), and (c) the
PLUSA term note payable to PLG in an amount equal to $2,930,644.
3.1.2 Resolutions. Deliver a copy of the resolutions of Buyer's Board
of Directors authorizing and approving this Agreement and the
transactions contemplated by this Agreement, certified by the
Secretary or any Assistant Secretary of Buyer.
3.1.3 Transition Services Agreement. Execute and deliver to Sellers
the Transition Services Agreement in the form attached hereto as
Exhibit 3.1.3 (the "Transition Services Agreement").
3.2 Sellers' Obligations at Closing. At the Closing, Sellers shall:
3.2.1 Stock Certificates. Deliver to Buyer certificates representing
all of the Newmark Stock and all of the PLUSA Stock, duly
endorsed and assigned to Buyer, with all necessary stock transfer
tax and other revenue stamps acquired at Sellers' expense.
3.2.2 Resolutions. Deliver a copy of the resolutions of Sellers'
Boards of Directors, PAG's Board of Directors and PAG's
Supervisory Board authorizing and approving this Agreement and
the transactions contemplated by this Agreement, certified by an
authorized officer of each Seller and PAG.
3.2.3 Resignations. Deliver to Buyer written resignations of (i) all
directors of the Companies, and (ii) those officers of the
Companies listed on Exhibit 3.2.3.
3.2.4 Dividend Termination Agreement. Deliver to Buyer the Dividend
Termination Agreement in the form attached hereto as Exhibit
3.2.4 duly executed by Newmark, CON and PPTI.
3.2.5 FIRPTA Certificates. Deliver to Buyer a certificate, in the
form attached hereto as Exhibit 3.2.5, certifying that the sale
of the Newmark Stock is exempt from withholding under the
Foreign Investment in Real Property Tax Act ("FIRPTA"). In
addition, if Sellers obtain a certificate from the Internal
Revenue Service to the effect that the sale of the PLUSA Stock
is subject to areduced rate of withholding under FIRPTA, Sellers
shall deliver to Buyer a copy of such certificate, and Buyer
shall withhold tax on the Purchase Price and the adjustment
payment required by Section 4.3 hereof, each to the extent
attributable to the PLUSA Stock, in accordance with the
certificate. If no such certificate is delivered to Buyer with
respect to the PLUSA Stock, Buyer shall withhold ten percent
(10%) of the Purchase Price (and any such adjustment payment)
attributable to the PLUSA Stock.
3.2.6 Transition Services Agreement. Execute and deliver to Buyer
the Transition Services Agreement.
4. Post-Closing Purchase Price Adjustment; Purchase Price Allocation.
4.1 The Statement. Within sixty (60) days after the Closing Date, Sellers
shall prepare and deliver to Buyer a statement (the "Statement"),
setting forth Shareholders' Equity (as defined in Section 4.4 below)
as of the close of business on the Closing Date ("Closing
Shareholders' Equity") determined in accordance with United States
generally accepted accounting principles ("GAAP") applied on a basis
consistent with the Companies' accounting principles, practices,
methodologies and policies used in the preparation of the Reference
Statement (as defined in Section 5.9 below) and the PLUSA Balance
Sheet (as defined in Section 5.9 below), except as disclosed in
Section 4.1 of the Disclosure Schedule dated the date of this
Agreement and delivered to Buyer as a separate document (the
"Disclosure Schedule"). After the Closing Date, at Sellers' request,
Buyer shall assist, and shall cause the Companies to assist, Sellers
and their representatives in the preparation of the Statement and
shall provide Sellers and their representatives any information
reasonably requested by them and shall provide them access at all
reasonable times to the personnel, properties, books and records of
the Companies for such purpose.
4.2 Objections; Resolution of Disputes. Unless Buyer notifies Sellers in
writing within thirty (30) days after Sellers' delivery of the
Statement of any objection to any component of the computation of
Closing Shareholders' Equity set forth therein (the "Notice of
Objection"), the Statement shall be final and binding on the parties
for purposes of this Agreement ("Final Statement"). During such thirty
(30) day period Buyer and its representatives shall be permitted to
review the working papers of Sellers relating to the Statement. Any
Notice of Objection shall specify in reasonable detail the basis for
the objections set forth therein. Sellers and Buyer acknowledge that
(i) the purpose of the determination of Closing Shareholders' Equity
is to adjust the Purchase Price so as to reflect any change in
Shareholders' Equity from the Reference Date to the Closing Date, and
(ii) such change can be measured only if the calculation is done using
GAAP applied on a basis consistent with the Companies' accounting
principles, practices, methodologies and policies used in the
preparation of the Reference Statement and the PLUSA Balance Sheet,
except as provided in Section 4.1 of the Disclosure Schedule.
If Buyer provides the Notice of Objection to Sellers within such
thirty (30) day period, Buyer and Sellers shall, during the thirty
(30) day period following Sellers' receipt of the Notice of Objection,
attempt in good faith to resolve Buyer's objections. During the thirty
(30) day period, Sellers and their representatives shall be permitted
to review the working papers of Buyer relating to the Notice of
Objection and the basis therefor. If Buyer and Sellers are unable to
resolve all such objections within such thirty (30) day period, the
matters remaining in dispute shall be submitted to KPMG LLP (or, if
such firm declines to act, to another internationally recognized
public accounting firm mutually agreed upon by Buyer and Sellers and,
if Buyer and Sellers are unable to so agree within ten (10) days after
the end of such thirty (30) day period, then Buyer, on the one hand,
and Sellers, on the other hand, shall each select such a firm and such
firms shall jointly select a third internationally recognized firm to
resolve the disputed matters (such determining firm being the
"Independent Expert")). The parties shall instruct the Independent
Expert to render its reasoned written decision as promptly as
practicable but in no event later than sixty (60) days after its
selection. The resolution of disputed items by the Independent Expert
shall be final and binding for purposes of this Agreement and shall be
reflected in the Final Statement. The fees and expenses of the
Independent Expert shall be borne equally by Buyer, on the one hand,
and Sellers, on the other hand. After final determination of Closing
Shareholders' Equity, Buyer shall have no further right to make any
claims with respect to adjustment of the Purchase Price against any
Seller in respect of any element of Closing Shareholders' Equity that
Buyer raised, or could have raised, in the Notice of Objection.
4.3 Adjustment Payment. The Purchase Price shall be increased by the
amount by which Closing Shareholders' Equity set forth on the Final
Statement exceeds $34,145,032, (which number has been calculated in
accordance with Exhibit 4.3) (the "Reference Shareholders' Equity"),
and the Purchase Price shall be decreased by the amount by which
Closing Shareholders' Equity set forth on the Final Statement is less
than the Reference Shareholders' Equity (the Purchase Price as so
increased or decreased being hereinafter called the "Adjusted Purchase
Price"). Within ten (10) days after the Closing Shareholders' Equity
has been finally determined in accordance with Section 4.2 above and
the Final Statement is issued, (a) if the Purchase Price is less than
the Adjusted Purchase Price, Buyer shall pay to Sellers an amount
equal to such difference, plus simple interest thereon at a rate of
six and one-half percent (6.5%) per annum from the Closing Date to the
date of payment, and (b) if the Purchase Price is greater than the
Adjusted Purchase Price, Sellers shall pay to Buyer an amount equal to
such difference, plus simple interest thereon at a rate of six and
one-half percent (6.5%) per annum from the Closing Date to the date of
payment. Subject to Section 3.2.5, any such payment hereunder shall be
made by wire transfer of immediately available funds to an account
designated in writing by Buyer or Sellers, as the case may be.
4.4 Shareholders' Equity. The term "Shareholders' Equity" means Total
Assets minus Total Liabilities. The terms "Total Assets" and "Total
Liabilities" mean the total assets and total liabilities,
respectively, of the Companies, calculated in accordance with GAAP
applied on a basis consistent with the Companies' accounting
principles, practices, methodologies and policies used in the
preparation of the Reference Statement and the PLUSA Balance Sheet
(except as provided in Section 4.1 of the Disclosure Schedule).
4.5 Post-Closing Books and Records. Except for the consummation of the
Closing, Buyer and Sellers agree that on the Closing Date itself,
Buyer and Sellers, as applicable, shall cause the Companies to conduct
their respective business in the ordinary course in a manner
substantially consistent with past practice. From and after the
Closing, and until such time as the adjusted payment is made in
accordance with Section 4.3 above, Buyer shall not take any action
with respect to the accounting books and records of the Companies on
which the Final Statement is to be based that would affect the
Reference Statement or the Final Statement. Without limiting the
generality of the foregoing, no changes shall be made in any reserve
or other account existing as of the date of the Reference Statement
that would affect the Reference Statement or the Final Statement
except as required by applicable law or except as the result of events
occurring after the date of the Reference Statement and, in such
event, only in a manner consistent with past practices of the
Companies.
5. Representations and Warranties of Sellers and PAG. Sellers and PAG
hereby, jointly and severally, represent, warrant and covenant to and with Buyer
as follows (it being agreed and understood that for purposes of the following
representations and warranties (a) it is assumed that the transactions
contemplated in Section 7.14 below and in Section 7.14 of the Disclosure
Schedule have been authorized by Newmark pursuant to the Newmark Board of
Director resolutions set forth in Section 5 of the Disclosure Schedule and (b)
such transactions will be treated as if consummated as of the date of this
Agreement):
5.1 Organization, Good Standing and Corporate Power. Newmark is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and PLUSA is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware, and each has the corporate power and all
necessary licenses, permits and franchises required by governmental
authorities to own, operate and lease its properties and carry on the
Business as currently being conducted. The Companies are qualified to
do business in those jurisdictions set forth in Section 5.1 of the
Disclosure Schedule. Such jurisdictions constitute all jurisdictions
in which such qualification or authorization is required, except for
jurisdictions in which failure to be so qualified or authorized would
not have a material adverse effect on the Business of the Companies.
5.2 Articles and By-Laws. Sellers have previously furnished to Buyer
complete and correct copies of (a) the Articles of Incorporation of
each Company, as amended to the date furnished, and (b) the By-Laws of
each Company as in effect on the date furnished, certified by an
authorized officer of each Company. Such Articles of Incorporation and
By-Laws have not been further amended and are in full force and
effect. Sellers have also furnished to Buyer a full and complete copy
of each Company's corporate minute book.
5.3 Authorized Capital. The authorized capital stock of Newmark consists
of 1,000 shares of common stock having a par value of $1.00 per share,
of which 500 shares are issued and outstanding. The authorized capital
stock of PLUSA consists of 2,000 shares of common stock having a par
value of $1.00 per share, of which 1,000 shares are issued and
outstanding. All of such shares are duly authorized, validly issued,
fully paid and nonassessable.
5.4 No Options, Warrants, Rights. Neither Company is a party to or has any
outstanding or authorized options, warrants, calls, rights,
commitments or any other agreements of any character obligating it to
issue any shares of its capital stock or any securities convertible
into or evidencing the right to purchase any shares of its capital
stock. There are no agreements, arrangements or understandings
involving the Companies' shareholders with respect to the voting of
the capital stock of either Company on any matter or the transfer or
assignment of the capital stock of either Company.
5.5 Title to Shares; Authority; Binding Agreement. CON is the lawful and
equitable owner of all of the Newmark Stock, free and clear of all
liens, claims, options, charges and encumbrances as of the date of
this Agreement and either CON or PPTI shall be the lawful and
equitable owner of all of the Newmark Stock, free and clear of all
liens, claims, options, charges and encumbrances as of the Closing.
PLG is the lawful and equitable owner of all of the PLUSA Stock, free
and clear of all liens, claims, options, charges and encumbrances.
Good title, free and clear of all security interests, liens, claims,
rights, charges or other encumbrances whatsoever, other than those
arising from acts of Buyer or its affiliates, to all of the Capital
Stock will pass to Buyer at the Closing upon delivery to Buyer of
certificates representing such Capital Stock, duly endorsed by Sellers
for transfer to Buyer, and upon Sellers' receipt of the Purchase
Price. The execution, delivery and performance of this Agreement by
Sellers and PAG, as well as the transactions contemplated under this
Agreement (other than the transactions contemplated in Section 7.14
below and in Section 7.14 of the Disclosure Schedule), have been duly
and validly authorized and approved by Sellers' Boards of Directors,
PAG's Board of Directors and PAG's Supervisory Board. This Agreement
constitutes the valid and legally binding agreement of Sellers and
PAG, enforceable against each in accordance with its terms.
5.6 No Subsidiaries; Officers and Directors. Except as disclosed in
Section 5.6 of the Disclosure Schedule, neither Company directly or
indirectly controls or owns any equity or other interest in any
corporation, partnership, joint venture or other business association.
Since its formation, Newmark International Ventures, Inc. has at all
times been a dormant corporation and has not conducted any activities
or operations of any nature. Section 5.6 of the Disclosure Schedule
sets forth a list of each Company's officers and directors.
5.7 Effect of Agreement. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by
this Agreement (including the transactions contemplated in Section
7.14 below and in Section 7.14 of the Disclosure Schedule) will not,
with or without the giving of notice or the lapse of time or both, (a)
to the knowledge of Sellers, violate any provision of law, statute,
rule or regulation to which any Seller or either Company is subject;
(b) violate any judgment, order, writ or decree of any court
applicable to any Seller or either Company; (c) have any material
adverse effect on any of the permits, licenses, orders or approvals
held or utilized by either Company; or (d) except as disclosed in
Section 5.7 of the Disclosure Schedule, result in the breach of, or
conflict with, any term, covenant, condition or provision of, result
in the modification or termination of, constitute a default under, or
result in the creation or imposition of any lien, security interest,
charge or encumbrance upon any of the properties or assets of any
Seller or either Company pursuant to, any corporate charter, by-law,
commitment, contract or other agreement or instrument to which either
PAG, any Seller or either Company is a party or by which they or their
respective assets or property is or may be bound or affected or from
which either PAG, any Seller or either Company derives substantial
benefits, except with respect to clause (d) above, any such items that
would not, individually or in the aggregate, have a Companies Material
Adverse Effect.
5.8 No Government or Third Party Authorization Required. Except for (a)
compliance with the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (b) those that may be required
solely by reason of Buyer's (as opposed to any other third party's)
participation in the transactions contemplated by this Agreement, and
(c) those the failure of which to obtain or make would not
individually or in the aggregate reasonably be expected to have a
Companies Material Adverse Effect, no consent, authorization or
approval of, or exemption by, or filings with, any governmental,
public or self-regulatory body or authority or any third party is
required in connection with the execution, delivery and performance by
Sellers of the transactions contemplated by this Agreement or the
taking of any action contemplated by this Agreement (including, in
each instance, the transactions contemplated in Section 7.14 below and
in Section 7.14 of the Disclosure Schedule). Section 5.8 of the
Disclosure Schedule sets forth those consents the failure of which to
obtain would reasonably be expected to have a Companies Material
Adverse Effect.
5.9 Financial Statements. Section 5.9 of the Disclosure Schedule contains
copies of the audited balance sheets and related audited income
statements for Newmark and unaudited balance sheets and related
unaudited income statements for PLUSA as of December 31, 2003,
December 31, 2002 and December 31, 2001. Such Newmark audited balance
sheet as of December 31, 2003 is referred to as the "Reference
Statement" and, together with the other foregoing financial statements
of Newmark and PLUSA referenced in this Section 5.9 are collectively
referred to as the "Financial Statements". Such PLUSA unaudited
balance sheet as of December 31, 2003 is referred to as the "PLUSA
Balance Sheet". Except as disclosed in Section 5.9 of the Disclosure
Schedule, the Financial Statements present fairly in all material
respects the financial position of the Business as of the periods set
forth and its results of operations for the periods then ended in
accordance with GAAP consistently applied. Neither Company has used
any improper accounting practice for the purpose of not reflecting or
incorrectly reflecting in the Financial Statements or books and
records of such Company any properties, assets, liabilities, revenues
or expenses. The Financial Statements do not contain any material
items of special or nonrecurring material items of income or any other
income not earned in the ordinary course of business.
5.10 Absence of Undisclosed Liabilities. The Reference Statement and the
PLUSA Balance Sheet make full and adequate provision for or disclosure
of all obligations, liabilities or commitments (fixed and contingent)
of the Business as of the date thereof, except as disclosed in Section
5.9 of the Disclosure Schedule, and as of such date, neither Company
had any obligations, liabilities or commitments (fixed or contingent)
which were required to be reserved against in the Reference Statement
or the PLUSA Balance Sheet or disclosed in the notes thereto in
accordance with GAAP consistently applied, except (i) as disclosed in
Section 5.9 of the Disclosure Schedule, and (ii) for obligations,
liabilities or commitments incurred in the ordinary course of business
since December 31, 2003 and not in violation of this Agreement.
5.11 Conduct of Business Since December 31, 2003. Except as disclosed in
Section 5.11 of the Disclosure Schedule:
5.11.1 Since December 31, 2003, there has been no Companies Material
Adverse Effect.
5.11.2 From December 31, 2003 to the date of this Agreement, no Seller
has taken any action which, if taken after the date of this
Agreement, would constitute a breach or violation of Section 7.1
below.
5.12 Tax Matters.
5.12.1 Definitions. For purposes of this Agreement:
(a) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(b) "Income Tax" or "Income Taxes" shall mean all U.S. federal,
state, provincial, municipal, city, county, parish, local,
foreign or other governmental taxes imposed on or measured by
gross or net income and any franchise taxes that are equivalent
to gross or net income taxes.
(c) "Post-Closing Tax Period" shall mean all taxable periods or
portions thereof beginning after the Closing Date.
(d) "Pre-Closing Tax Period" shall mean all taxable periods ending on
or before the Closing Date and the portions ending on the Closing
Date of all Straddle Periods (as defined in Section 5.12.3(b)
below).
(e) "Tax" or "taxes" shall mean all taxes, charges, fees, levies,
duties or other like assessments, including income, gross
receipts, capital, excise, stamp, property, land transfer, sales,
use, value added, goods and services, ad valorem, documentary,
license, employment, payroll, withholding, social security,
foreign pension plan contributions, employment insurance
premiums, unemployment compensation, workers compensation levies,
franchise, windfall profit, severance, alternative or add-on
minimum, estimated, business occupation, gains, transfer and
recording taxes, fees and other taxes and like charges, imposed
by the United States, or any state, provincial, municipal, city,
county, parish, local or foreign authority, government or
subdivision or agency thereof whether computed on a consolidated,
unitary, combined, separate or any other basis; and such term
shall include any and all interest, penalties and additions to
tax, as well as the taxes of any person (A) under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local or
foreign law); or (B) as a result of transferee or successor
liability, by contract, law or otherwise.
(f) "Tax Return" shall mean any report, return, declaration,
statement, claim for refund, amended return, election,
disclosure, estimate or other information required or permitted
by law to be filed with a governmental authority in connection
with taxes.
5.12.2 Tax Representations.
(a) Except as disclosed in Section 5.12.2(a) of the Disclosure
Schedule, each Company has duly and accurately prepared and
timely and properly filed with all applicable tax authorities all
Tax Returns required by law to be filed on or before the Closing
Date, and has paid all taxes due with respect to such returns, or
due or payable pursuant to any judgment, settlement, assessment,
deficiency notice, 30-day letter or similar notice received by
either of them. All taxes due and payable either as of the date
of the balance sheet included either in the Reference Statement,
the PLUSA Balance Sheet or in the Final Statement have been paid
in full or properly and fully accrued on any such Reference
Statement, the PLUSA Balance Sheet or Final Statement.
(b) The Internal Revenue Service has audited the U.S. federal income
Tax Returns of the Companies, or the applicable statute of
limitations has expired with respect to the relevant tax
liability, for the taxable periods ending on or before May 31,
1999.
(c) Except as disclosed in Section 5.12.2(c) of the Disclosure
Schedule, all taxes required to be withheld or collected and
remitted by each Company (including withholdings in respect to
dividends, employment taxes, income tax withholdings, and back-up
withholdings) have been collected or withheld, and either paid to
the respective tax authorities or set aside for such purpose, or
fully accrued or reserved as a current liability in the Reference
Statement, the PLUSA Balance Sheet and on the Final Statement.
(d) Neither Company (i) has consented to the provisions of Code
Section 341(f), or (ii) is or has been a "personal holding
company" within the meaning of Code Section 542.
(e) Newmark is not and has not been during the five-year period
ending on the Closing Date a United States real property holding
corporation within the meaning of Code Section 897.
(f) With respect to any period through the Closing Date for which Tax
Returns have not yet been filed, or for which taxes are not yet
due or owing, each Company has incurred and shall incur only
normally recurring liabilities for taxes in the ordinary and
regular course of their business, the accrual for which as a
current tax liability is included in the Reference Statement, the
PLUSA Balance Sheet and on the Final Statement. Neither Company
will incur taxes in a Post-Closing Tax Period for transactions
whose benefits have been economically realized or received by the
Companies (or their predecessors or affiliates, if any) on or
before Closing. There are no adjustments under Code Section 481
(or any similar tax law) in respect of the Companies (or their
predecessors or affiliates, if any) that could affect the
Post-Closing Tax Period.
(g) Except as disclosed in Section 5.12.2(g) of the Disclosure
Schedule, no presently effective agreement extending the period
for assessment or collection of any taxes has been executed or
filed with any applicable taxing authority.
(h) Except as disclosed in Section 5.12.2(h) of the Disclosure
Schedule, neither of the Companies is a party to any pending
claim, action, proceeding or examination, nor is any claim,
action, proceeding, examination, review audit or investigation
being asserted or, to Sellers' knowledge, threatened by any
governmental authority for assessment or collection of any taxes.
(i) Sellers have previously delivered to Buyer materially true,
correct and complete copies of (i) all Tax Returns filed by or on
behalf of the Companies for all completed tax years that remain
open for audit or review by the relevant taxing authority, and
(ii) all material and presently effective ruling requests,
private letter rulings, notices of proposed deficiencies, closing
agreements, settlement agreements, and any similar documents or
communication sent or received by, or relating to, either of the
Companies.
(j) Neither Company is or has been a member of a consolidated,
combined or unitary group for tax purposes since May 1, 1988. To
the knowledge of Sellers, neither Company nor any predecessor has
been a member of a consolidated, combined or unitary group for
tax purposes before May 1, 1988.
(k) Neither of the Companies has engaged in a "listed transaction" as
described in Treas. Reg. Section 1.6011-4(b)(2) (or any Internal
Revenue Service notice or publication issued thereunder).
(l) Neither of the Companies is a party to, is bound by, or has any
obligation under, any tax sharing agreement, tax indemnification
agreement or similar contract or arrangement, excluding leases
entered into in the ordinary course of business, either
individually or in the aggregate, that do not have a material
adverse effect.
(m) No deduction for the Pre-Closing Tax Period of either of the
Companies has been or will be disallowed under Code Sections
162(k), 162(m) or 280G, and neither Company has been, or will be
as a result of the transactions contemplated in this Agreement,
subject to disallowance of a deduction for any tax period under
such Sections of the Code or required to reimburse a person for a
tax imposed under Code Section 4999.
(n) Since May 31, 1999, no claim has been made by any taxing
authority in a jurisdiction in which the Companies do not file
Tax Returns that any such person is or may be subject to taxation
by that jurisdiction.
(o) Section 5.12.2(o) of the Disclosure Schedule lists by type of tax
all the jurisdictions in which the Companies have filed Income
Tax Returns, sales and use Tax Returns, and employment Tax
Returns.
(p) Neither Company nor any predecessor or affiliate, if any, is or
has been an owner, participant, member, partner or beneficiary of
any partnership, association, limited liability company, trust,
or other venture or entity, other than Newmark International
Ventures, Inc., during the ten (10) year period ending on the
Closing Date.
(q) Newmark has withheld all amounts of taxes required to be withheld
on the transfer of the Fiberglass Pole Business (pursuant to
Section 7.14 below). All taxes payable by Newmark as a result of
such transfer, including Income Taxes under Code Section 311(b),
have been or will be fully reserved as a current tax liability on
the Final Statement.
(r) Newmark International Ventures, Inc. has never conducted any
activity, and will not conduct any activity on or before the
Closing Date, that would result in any tax liability at any time
that has not been fully paid or accrued as a liability in the
Reference Statement or the Final Statement. Newmark International
Ventures, Inc. will not incur any tax liability as a result of
the transactions contemplated in this Agreement.
5.12.3 Preparation of Certain Tax Returns and Use of Tax Methods.
(a) Sellers or their authorized representatives shall prepare,
execute (if lawful) and file each Company's applicable Tax
Returns for any taxable period ending on or before the Closing
Date. The expense of preparing all such Tax Returns required to
be prepared and filed pursuant to this Section 5.12.3 shall be
paid by Sellers. Such Tax Returns shall be prepared on a lawful
basis consistent with the past practices of each Company and the
terms of this Agreement. Buyer shall have the right to review
such Tax Returns before filing. Drafts of such Tax Returns will
be submitted to Buyer at least thirty (30) days before they are
due, and Buyer shall have the right to examine and comment on any
such Tax Returns prior to the filing thereof, and such Tax
Returns shall not be filed without the prior written consent of
Buyer, which consent shall not be unreasonably withheld.
(b) For all Tax Returns relating to any complete tax period that
includes but does not end on the Closing Date (a "Straddle
Period"), Buyer shall cause each Company to timely prepare and
file such Tax Returns, and pay all taxes due with respect to
those Tax Returns, provided, however, (i) Buyer shall deliver any
such Tax Returns to Sellers at least thirty (30) days before such
Tax Returns are due, (ii) Sellers shall have the right to examine
and comment on any such Tax Returns prior to the filing thereof,
and (iii) such Tax Returns shall not be filed without the prior
written consent of Sellers, which consent shall not be
unreasonably withheld. In accordance with Section 5.12.6(e)
below, Sellers shall pay to Buyer the amount of taxes for the
Straddle Period for which Sellers are liable under Section
5.12.5(c) below.
(c) After the Closing Date, and except as required by applicable
laws, the Companies shall not, without the prior written consent
of Sellers, file any amended Tax Return for the Pre-Closing Tax
Period if any Seller would be liable for additional taxes on such
Tax Return under Section 5.12.5 below.
5.12.4 Tax Proceedings. Sellers and Buyer agree to cooperate with each
other in connection with any official tax inquiry, tax
examination or tax-related legal proceeding affecting a tax
liability of either Company (whether before or after the Closing
Date) and to make available to the other party for a reasonable
amount of time, at no cost to such party, relevant personnel or
individuals, together with documents, correspondence, reports and
other materials reasonably bearing on such tax inquiry,
examination or proceeding, provided that each party shall be
obligated to reimburse the other for expenses relating to any
matter for which such other party is indemnified hereunder. Any
information obtained by another party will be kept confidential
except as otherwise required by applicable law.
5.12.5 Tax Indemnification.
(a) From and after the Closing Date, PAG and each Seller shall be
liable for, and PAG and Sellers, jointly and severally, shall
indemnify the Companies, Buyer and its affiliates and each of
their respective officers, directors, employees, stockholders,
agents and representatives (the "Buyer Indemnitees") against and
hold them harmless from (i) all liability for taxes of the
Companies and any consolidated, combined or unitary group of
which either Company (or a predecessor thereof) has ever been a
member ("Tax Affiliates") for the Pre-Closing Tax Period, (ii)
all liability as a result of Treas. Reg. Section 1.1502-6(a) (or
any similar provision of state, local or foreign law) for taxes
of such Seller or any other corporation that is or has been
affiliated with such Seller other than the Companies, (iii) all
liability for any taxes of another person for which either
Company or any Tax Affiliate is or becomes liable in respect to
the Pre-Closing Tax Period, by law, contract or otherwise, (iv)
all liability attributable to a breach by Sellers of their
representations, warranties or covenants under Section 5.12.2
above, and (v) all liability for reasonable legal fees and
expenses attributable to any item in clause (i), (ii), (iii) or
(iv) above.
(b) From and after the Closing Date, Buyer and each Company, jointly
and severally, shall indemnify each Seller and its affiliates and
each of their respective officers, directors, employees,
stockholders, agents, representatives (the "Seller Indemnitees")
against and hold them harmless from (i) all liability for taxes
of Buyer and its affiliates other than taxes of the Companies and
their Tax Affiliates, for all taxable periods whether ending
before, on or after the Closing Date, and for taxes of the
Companies and their Tax Affiliates' operations occurring in the
Post-Closing Tax Period, (ii) all liability for taxes
attributable to any action taken on or after the Closing Date by
Buyer, any of its affiliates, including the Companies at Buyer's
instruction, or any transferee of Buyer or any of its affiliates
(other than any action expressly required by applicable law or by
this Agreement), and (iii) all liability for reasonable legal
fees and expenses attributable to any item in clause (i) or (ii)
above. Notwithstanding the foregoing provisions of this Section
5.12.5(b), Buyer and its affiliates, including the Companies,
shall have no obligation to indemnify Seller Indemnitees or to
bear any taxes attributable to the transfer of the Fiber Pole
Business as contemplated by Section 7.14 below. Such taxes are
and shall be the sole responsibility and joint and several
obligation of PAG and Sellers except to the extent such taxes are
specifically reserved for as a current tax liability on the Final
Statement or paid and withheld pursuant to Section 5.12.2(q)
above.
(c) The portion of tax for a Straddle Period that is attributable to
the Pre-Closing Tax Period, which is the sole liability of
Sellers and PAG, shall be:
(i) In the case of Income Taxes, the amount of the Income Tax
that would be payable if the relevant tax period ended on
the Closing Date; and
(ii) In the case of all other taxes, the amount of tax for the
Straddle Period multiplied by a fraction, the numerator of
which is the number of days in the Straddle Period on or
prior to the Closing Date and the denominator of which is
the number of days in the entire Straddle Period.
5.12.6 Procedures for Indemnification of Tax Claims.
(a) If one party is responsible for the payment of taxes pursuant to
Section 5.12.5 above (the "Tax Indemnifying Party"), and the
other party to this Agreement (the "Tax Indemnified Party")
receives a notice of deficiency, proposed adjustment, adjustment,
assessment, audit, examination, suit, dispute or other claim (a
"Tax Claim") with respect to such taxes, the Tax Indemnified
Party shall promptly notify the Tax Indemnifying Party in writing
of such Tax Claim.
(b) The Tax Indemnifying Party shall assume and control the
applicable audit or examination and the defense of a Tax Claim
involving any taxes for which it has an obligation to indemnify
the Tax Indemnified Party pursuant to Section 5.12.5 above. The
Tax Indemnified Party and its affiliates agree to cooperate with
the Tax Indemnifying Party in pursuing such contest.
Notwithstanding anything to the contrary contained in this
Agreement, the Tax Indemnifying Party shall keep the Tax
Indemnified Party informed of all material developments and
events relating to such Tax Claim and the Tax Indemnified Party,
at its own cost and expense, and with its own counsel, shall have
the right to participate in the applicable audit or examination
and defense of such Tax Claim.
(c) In no event shall any Tax Indemnified Party settle or otherwise
compromise any Tax Claim without the Tax Indemnifying Party's
prior written consent. Neither party shall settle a Tax Claim
relating solely to Income Taxes of a Company for a Straddle
Period without the other party's prior written consent.
(d) Notwithstanding the foregoing provisions of this Section 5.12.6,
the Tax Indemnifying Party shall not continue any contest or
defense of any such Tax Claim, and the Tax Indemnifying Party
shall pay in full all liability for indemnified taxes of the Tax
Indemnified Party arising from any such Tax Claim upon the Tax
Indemnified Party's written demand therefore, if the Tax
Indemnified Party (i) shall have received an opinion of
independent tax counsel (which counsel shall be reasonably
acceptable to the Tax Indemnifying Party) to the effect that the
taxing authority should prevail in respect to any such Tax Claim;
and (ii) has a good faith believe that, as a result of a material
adverse change in the financial condition of the Tax Indemnifying
Party since the date of this Agreement, there is a substantial
likelihood that the Tax Indemnifying Party will not be able to
satisfy its obligation to indemnify the Tax Indemnified Party
pursuant to Section 5.12.5 above with respect to the Tax Claim;
provided, in such event, the Tax Indemnifying Party shall be
entitled to continue any contest or defense of any such Tax Claim
if the Tax Indemnifying Party shall have advanced to the Tax
Indemnified Party, in cash or immediately available funds, on an
interest-free basis, the full amount of the taxes arising from
any such Tax Claim, together with the full amount, in cash or
immediately available funds, of any increase required under
Section 11.9 below, with such increase determined as if any such
Tax Claim were then due and payable in full to the applicable
taxing authority. If the Tax Indemnifying Party prevails in any
contest or defense of a Tax Claim after advancing an amount to
the Tax Indemnified Party pursuant to this Section 5.12.6(d), the
Tax Indemnified Party shall repay that amount to the Tax
Indemnifying Party (net of any tax liability of the Tax
Indemnified Party incurred from such advance) within ten (10)
days of receiving notice from the Tax Indemnifying Party of the
final resolution of the Tax Claim.
(e) The Tax Indemnifying Party shall pay to the Tax Indemnified
Party, within ten (10) days of written demand therefor, but in no
event more than ten (10) days prior to the due date thereof, the
amount of all taxes such party is obligated to pay or that is
allocated to it under this Section 5.12.
(f) Notwithstanding anything contained in this Agreement to the
contrary, payments pursuant to this Section 5.12 shall not be
subject to or limited by any indemnity baskets, caps or other
limitations other than Sections 11.9, 11.10, 11.12 and 11.13
below.
5.12.7 Allocation of Income Tax Benefits.
(a) If any adjustment shall be made to any Income Tax Return relating
to either Company or Sellers for the Pre-Closing Tax Period that
results in any Income Tax detriment to Sellers with respect to
such period and any Income Tax benefit to either Company or Buyer
for the Post-Closing Tax Period (to the extent such Income Tax
benefit is realized after the Closing Date), Sellers shall be
entitled to the benefit of such Income Tax benefit to the extent
of the related Income Tax detriment (except to the extent accrued
as an asset in the Reference Statement, the PLUSA Balance Sheet
and on the Final Statement), and Buyer shall or shall cause such
Company to pay to Sellers such amount at such time or times as
and to the extent that the Company actually realizes such benefit
through a refund of Income Tax or reduction in the amount of
Income Tax that it would otherwise have had to pay if such
adjustment had not been made.
(b) If any adjustment shall be made to any Income Tax Return relating
to either Company for the Post-Closing Tax Period that results in
any Income Tax detriment to the Company with respect to such
period and any Income Tax benefit to Sellers for such period,
Buyer shall be entitled to the benefit of such Income Tax
benefits to the extent of the related Income Tax detriment.
Sellers shall pay to Buyer such amount (except to the extent
accrued as a liability in the Reference Statement, the PLUSA
Balance Sheet and on the Final Statement) at such time or times
as and to the extent that Sellers actually realize such benefit
through a refund of Income Tax or reduction in the amount of
Income Taxes that Sellers or any such affiliate would otherwise
have had to pay if such adjustment had not been made.
5.12.8 Refunds and Credits. Except to the extent accrued as an asset
in the Final Statement and taken into account in determining the
Adjusted Purchase Price paid by Buyer, any refund or credit of
taxes of the Companies for the Pre-Closing Tax Period shall be
for the account of Sellers. Notwithstanding the foregoing, any
refunds or credits of taxes for the Pre-Closing Tax Period that
are attributable to the carryback from the Post-Closing Tax
Period or the portion of a Straddle Period that begins on the day
after the Closing Date of any items of loss, deduction or credit
of the Companies or their Tax Affiliates shall be for the account
of Buyer. Any refund or credit of taxes of the Companies for the
Post-Closing Tax Period shall be for the account of Buyer. Any
refund or credit of taxes for the Straddle Period shall be
equitably apportioned between Buyer and Sellers. Buyer shall, if
Sellers so request and at Sellers' expense, cause the Companies
to file for and obtain any refunds or credits to which any Seller
is entitled under this Section 5.12.8. Buyer and the Companies
shall permit Sellers to control the prosecution of such refund
claim, but will follow the procedures of Section 5.12.6(b) below.
5.12.9 Transfer Taxes. All transfer, documentary, sales, use,
registration and other such taxes (including all applicable real
estate transfer or gains taxes) and governmental fees incurred in
connection with this Agreement and the transactions contemplated
by this Agreement shall be borne fifty percent (50%) by Sellers,
on the one hand, and fifty percent (50%) by Buyer, on the other
hand, except as otherwise provided in Section 3.2.1 above.
Sellers and Buyer shall cooperate with each other in preparing
and filing all returns, reports and forms as may be required to
comply with the provisions of such tax laws.
5.12.10 Time Limits. The provisions of this Section 5.12 shall survive
until sixty (60) days after the termination of the applicable tax
statute of limitations, giving effect to any waiver, mitigation
or extensions thereof.
5.13 Title to Properties; Condition of Assets. Except as disclosed in
Section 5.13 of the Disclosure Schedule, each Company has good, valid
and marketable title to all of its assets and properties reflected in
its books and records as being owned, including the assets and
properties reflected as being owned in the Financial Statements, free
and clear of all claims, liens or encumbrances, except for: (a) liens
for taxes and other governmental charges that are not due and payable
or that thereafter may be paid without penalty, (b) mechanics',
carriers', workmen's, repairmen's or other like liens arising or
incurred in the ordinary course of business relating to obligations
that are not delinquent, (c) as respects real property, (i) leases,
subleases and similar agreements set forth in Section 5.14 of the
Disclosure Schedule, (ii) other matters set forth in Section 5.14 of
the Disclosure Schedule, and (iii) both (A) easements, covenants,
rights-of-way of record, and other similar restrictions of record, and
(B) any condition shown by a Survey (as defined in Section 7.15 below)
which does not materially impair the continued use and operation of
the real property to which it relates in the conduct of the Business
as currently conducted, and (d) and other imperfections of title
and/or encumbrances which do not materially impair the continued use
and operation of the real property to which they relate in the conduct
of the Business as currently conducted. Except as disclosed in Section
5.13 of the Disclosure Schedule, to the knowledge of Sellers, all such
assets and properties are free of material defects in their physical
condition which would prevent Buyer from conducting the Business in
substantially the manner it has been conducted by the Companies prior
to the date of this Agreement and have been maintained, in all
material respects, in accordance with good business practices. This
Section 5.13 shall not apply to environmental matters which are
exclusively the subject to Section 5.29 below.
5.14 Real Property. Section 5.14 of the Disclosure Schedule contains a
true, complete and correct list of all real estate currently owned
("Owned Real Estate") or leased by either Company as tenant or
subtenant (collectively, the "Real Estate"). To the knowledge of
Sellers, neither Sellers nor the Companies have received any
notification that there is any material violation of any building,
zoning or other law, ordinance or regulation in respect of such
buildings, structures and other improvements and, to Sellers'
knowledge, no such violation exists. Sellers have furnished to, or
made available for review by, Buyer true and correct copies of all
leases or subleases referred to in Section 5.14 of the Disclosure
Schedule, and neither Company is in material default under any such
lease or sublease.
5.15 Leased Personal Property. Section 5.15 of the Disclosure Schedule
lists all personal property leases that either Company is a party to
and that involve payments of more than $5,000 annually or a term in
excess of one (1) year. Neither Company is in default under any such
lease it is a party to. Each item of such personal property is
presently in such condition that upon the return of such property to
its owner in its present condition, the maintenance and repair
obligations of such Company to such owner or lessor will be
discharged.
5.16 List of Contracts and Other Data. Section 5.16 of the Disclosure
Schedule sets forth a listing of the following:
5.16.1 All policies of liability, theft, fidelity, life, fire and
other forms of insurance currently or within the three (3) years
immediately preceding the date of this Agreement held by or for
the benefit of each Company specifying the insurer, amount of
coverage, type of insurance, policy number, material pending
claims thereunder of which such Company has notice and a summary
of material claims made under such policies of insurance during
the three (3) years immediately preceding the date of this
Agreement.
5.16.2 All existing material contracts and other material legally
binding commitments, whether written or oral, to which each
Company is a party, or to which it or any of its assets or
properties are subject.
5.16.3 The name of each bank in which each Company has an account or
safety deposit box, together with the account numbers and the
persons authorized to draw thereon or procure credit therefrom.
5.17 Licenses, Permits and Orders. Section 5.17 of the Disclosure Schedule
contains a list of all material qualifications, registrations,
filings, privileges, franchises, immunities, approvals,
authorizations, consents, licenses, orders and other permits of all
governmental agencies whether federal, state, or local, owned, held or
utilized by each Company. Except as described in Section 5.17 of the
Disclosure Schedule, each Company has all material qualifications,
registrations, filings, privileges, franchises, immunities, approvals,
authorizations, consents, licenses, orders and other permits necessary
to conduct its business as currently conducted. All such material
permits, licenses, orders and approvals are in full force and effect
and, as of the date of this Agreement, no suspension or cancellation
of any of them is pending or, to Sellers' knowledge, threatened, and
no basis for suspension or cancellation exists.
5.18 Accounts, Notes and Other Receivables. Except as disclosed in Section
5.18 of the Disclosure Schedule, as of the date of this Agreement, (a)
the accounts, notes and other receivables of each Company
(collectively, the "Receivables") arose out of bona fide transactions
in the ordinary course and in a manner materially consistent with past
credit practices, and the reserves shown on the Reference Statement
and PLUSA Balance Sheet have been established in accordance with GAAP
consistently applied, (b) to the knowledge of Sellers, the Receivables
are validly existing and enforceable by each Company in accordance
with the terms of the instruments or documents creating them, and (c)
each Company's reserves with respect to the Receivables set forth in
the Reference Statement and PLUSA Balance Sheet are adequate and have
been established in a manner materially consistent with past credit
practices.
5.19 Inventories. The inventories of each Company consist, in all material
respects, of items suitable and merchantable for filling orders in the
ordinary course of business and at normal prices, except to the extent
reserved in the Reference Statement and PLUSA Balance Sheet. The items
of packaging supplies, office, warehouse, processing, operating and
storage supplies, spare parts, fuel, tools, maintenance equipment and
similar property of the Companies are, in all material respects,
suitable for use in the ordinary course of business.
5.20 Transactions with Management. Except as disclosed in Section 5.20 of
the Disclosure Schedule, no Seller, director, officer or key employee
of either Company, or any immediate relative thereof, directly or
indirectly, (i) owns any shares of stock or other securities of, or
has any other direct or indirect ownership interest or any other
interest in, any person, firm, corporation or entity which has a
material business relationship (as creditor, lessor, lessee, supplier,
dealer, distributor, franchisee, customer or otherwise) with such
Company, (ii) owns, or has any other direct or indirect ownership
interest or any other interest in, any invention, process, know-how,
formula, trade secret, patent, trademark, trade name, service ▇▇▇▇,
service name, copyright or other right, property or asset which is
used in or which may be required in the ownership or operation by such
Company of its properties and assets, or to otherwise carry on and
conduct its businesses and affairs as currently conducted, or (iii)
has any other material business relationship (other than as an
employee, officer or director) with such Company.
5.21 Relationship With Suppliers and Customers. Except as disclosed in
Section 5.21 of the Disclosure Schedule, none of the ten (10) largest
customers of the Companies based on dollar sales and none of the ten
(10) largest suppliers of the Companies based on dollar purchases, in
each case during the year ended December 31, 2003, have, as of the
date of this Agreement, cancelled in writing or threatened in writing
any cancellation of any material agreement with relation to the
Companies.
5.22 Purchase and Sale Obligations. Except as disclosed in Section 5.22 of
the Disclosure Schedule, all currently unfilled material purchase and
sales orders and all other current commitments for purchases and sales
made by each Company have been made in the usual and ordinary course
of business in accordance with, and subject to, normal practices. To
the knowledge of Sellers, as of the date of this Agreement there are
no outstanding contracts, commitments, bids, or sales proposals that,
individually or in the aggregate, will result in any material loss to
either Company upon completion or performance thereof.
5.23 Compliance With Agreements. Except as disclosed in Section 5.23 of the
Disclosure Schedule, neither Company is in default under any material
contract, agreement, lease, indenture, loan agreement or other
material legally binding instrument or agreement to which it is a
party or by which it or any of its assets is bound, and, to the
knowledge of Sellers, no other party is in material default under any
such agreements. All such material contracts, agreements, leases,
indentures and loan agreements are valid, binding and enforceable in
accordance with their respective terms for the period stated therein.
5.24 Litigation. Section 5.24 of the Disclosure Schedule contains a true,
complete and correct list, description and caption of each pending
lawsuit, material administrative proceeding, arbitration, material
labor dispute, governmental inspection or governmental investigation
to which each Company is a party or which involve or affect the
operations or assets of each Company. To the knowledge of Sellers,
there are no material legal actions or governmental investigations
threatened against either Company. No Seller, neither Company nor any
of either Company's officers, directors or, to Sellers' knowledge,
employees have been permanently or temporarily enjoined or barred by
order, judgment or decree of any court or other tribunal or any agency
or self-regulatory body from engaging in or continuing any conduct or
practice in connection with the Business. Neither Sellers nor the
Companies have received written notice of any continuing order,
judgment or decree of any federal, state or local court, arbitrator or
other tribunal or any governmental or administrative agency or
self-regulatory body enjoining either Company from taking or requiring
it to take any action of any kind or to which either Company or its
businesses, properties or assets are subject or by which it is or may
be bound. Section 5.24 shall not apply to environmental matters which
are exclusively the subject of Section 5.29 below.
5.25 Labor Relations. Section 5.25 of the Disclosure Schedule sets forth
the rate and nature of all compensation (including wages, salaries,
bonuses, and benefits under pension, profit sharing, deferred
compensation and similar plans or programs) which has been paid or
will be paid or payable by each Company to any of its salaried
employees or directors. Neither Company has any written obligation to
make any severance payments to any of its directors, officers or
employees. Neither Company is a party to any collective bargaining
agreement. Except as disclosed in Section 5.25 of the Disclosure
Schedule, there are no material controversies pending, or to the
knowledge of Sellers, threatened between either Company and any of its
employees. Except as disclosed in Section 5.25 of the Disclosure
Schedule, each Company is in material compliance with all federal,
state and local laws, rules and regulations respecting employment and
employment practices, terms and conditions of employment and wages and
hours, and has withheld all amounts required by law or agreement to be
withheld from the wages or salaries of its employees and is not liable
for any arrears of wages or any taxes, interest or penalties for
failure to comply with any of the foregoing. Except as disclosed in
Section 5.25 of the Disclosure Schedule, neither Company has been nor
is it engaged in any unfair labor practice, or has discriminated on
the basis of age or sex in its employment conditions or practices;
there are no unfair labor practice or age or sex discrimination
complaints pending, or to the knowledge of Sellers, threatened against
either Company before any federal, state or local board, department,
commission or agency, nor to the knowledge of Sellers, does any basis
exist therefor. There are no existing, or to the knowledge of Sellers,
threatened labor strikes, disputes, grievances, controversies or other
labor troubles affecting either Company, nor to the knowledge of
Sellers, does any basis therefor exist. Except as disclosed in Section
5.25 of the Disclosure Schedule, there are no pending, or to the
knowledge of Sellers, threatened representation questions respecting
the employees of either Company.
5.26 Employee Plans. For purposes of this Section 5.26, the term "Employee
Plan" includes all pension, retirement, disability, medical, dental or
other health insurance plans, life insurance or other death benefit
plans, profit sharing, deferred compensation, stock option, bonus or
other incentive plans, vacation benefit plans, severance plans or
other employee benefit plans or arrangements, including any "pension
plan" ("pension plan"), as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and any
"welfare plan", as defined in Section 3(1) of ERISA, whether or not
any of the foregoing is funded, (a) to which either Company is a party
or by which it is bound; or (b) with respect to which either Company
has made any payments or contributions; or (c) could reasonably be
expected to have any liability. "Employee Plan" shall not include any
government-sponsored employee benefit arrangements. Except as set
forth in Section 5.26 of the Disclosure Schedule or to the extent an
item would result in a de minimum liability:
5.26.1 There are no Employee Plans relating to any past or present
employees of either Company.
5.26.2 Each Employee Plan, the administrator and fiduciaries of each
Employee Plan, and each Company have at all times complied with
all material applicable requirements of ERISA, and of any other
applicable law (including regulations and rulings thereunder)
governing each Employee Plan. No lawsuits or complaints to, or
by, any person or government entity have been filed, are pending,
or are anticipated by Sellers, with respect to any Employee Plan.
5.26.3 Neither any Employee Plan, any administrator or fiduciary of
any Employee Plan, nor either Company has taken any action, or
failed to take any action, that could subject it or him or her or
any other person to any liability for any excise tax or for
breach of fiduciary duty with respect to or in connection with
any Employee Plan.
5.26.4 Neither any Employee Plan, any administrator or fiduciary of
any Employee Plan, either Company, nor any other person has any
liability to any plan participant, beneficiary or other person
under any provision of ERISA or any other applicable law by
reason of any payment of benefits or other amounts or failure to
pay benefits or any other amounts, or by reason of any credit or
failure to give credit for any benefits or rights (such as, but
not limited to, vesting rights) with respect to benefits under or
in connection with any Employee Plan. Neither Company is in
arrears with respect to any contributions under any Employee
Plan.
5.26.5 Each funded Employee Plan that is a Pension Plan is qualified
under Section 401(a) of the Internal Revenue Code ("Code"), and
the trust or trusts maintained in connection with such Employee
Plan is or are exempt from tax under Section 501(a) of the Code.
A favorable Internal Revenue Service determination letter as to
the qualification under the Code has been received for each such
Pension Plan and its related trust or trusts and each Pension
Plan has been, or will be, timely amended for the recent tax
changes commonly referred to as "GUST").
5.26.6 Neither Company is now, nor has ever been a participating
employer in a multi-employer plan (as defined in Section 3(37) of
ERISA).
5.26.7 None of the Pension Plans have incurred an "accumulated funding
deficiency", as defined in Section 412 of the Code, whether
waived or not.
5.26.8 The assets of the Pension Plans do not include any stock or
securities issued by either Company.
5.26.9 The present value of all accrued benefits under each of the
Pension Plans, subject to Title IV of ERISA, do not exceed the
value of the assets of each such plans, based upon actuarial
assumptions set forth in Section 5.26 of the Disclosure Schedule.
5.26.10 All accrued obligations of each Company, whether arising by
operation of law, by contract or by past custom or practice, for
payments by it to trust or other funds or to any governmental or
administrative agency, with respect to pension benefits,
unemployment compensation benefits, social security benefits or
any other benefits for employees of such Company as of the date
of this Agreement have been paid. To the knowledge of Sellers,
none of the foregoing has been rendered not due by reason of any
extension, whether at the request of either Company or otherwise.
5.26.11 All obligations of each Company, whether arising by operation
of law, by contract, by past custom or practice or otherwise, for
salaries, vacation and holiday pay, bonuses and other forms of
compensation which were payable to its officers, directors or
other employees, or properly accruable as at such date, have been
paid as of such date or adequate accruals therefor have been made
in the Reserve Statement and the Final Statement.
5.26.12 Neither Company is a party to, nor is either obligated to make
severance payments to any officer, director or employee of either
Company under, any change of control agreement, golden
parachutes, severance pay plans, or other similar agreements,
whether written or oral.
5.26.13 Each Company has at all times complied with the requirements
of the Consolidated Omnibus Budget Reconciliation Act of 1985.
5.26.14 With respect to each Employee Plan, Sellers have previously
delivered or made available to Buyer complete and correct copies
of the following documents, where applicable (i) the two (2) most
recent annual reports (Form 5500), together with schedules as
required, filed with the Internal Revenue Service or the
Department of Labor as applicable, and any financial statements
and opinions required by Section 103(a)(3) of ERISA or, for each
top hat plan, a copy of all filings with the Department of Labor,
(ii) the most recent determination letter issued by the Internal
Revenue Service, (iii) the most recent summary plan description
and all modifications, (iv) the text of the Employee Plan
document and of any trust, insurance, or annuity contracts
maintained in connection therewith.
5.26.15 There is no arbitration, claim or suit pending or, to the
knowledge of Sellers, threatened, involving an Employee Plan
(other than routine claims for benefits), and there is no basis
for such a claim; and none of the Employee Plans nor any
fiduciary thereof has been the direct or indirect subject of an
order or investigation or examination by a governmental or
quasi-governmental agency, and there are no matters pending
before the Internal Revenue Service, the Department of Labor, or
any other governmental agency with respect to an Employee Plan.
5.27 Patents, Trademarks and Similar Rights. Section 5.27 of the Disclosure
Schedule attached hereto contains a true, complete and correct list
of: (i) all patent registrations and all pending applications for
patent registrations which either Company owns or is using or the use
of which is necessary for the conduct of its business as currently
being conducted ("Patents"), (ii) all registered trademarks, service
marks, domain names and trade names, and all pending applications
relating thereto, which either Company owns or is using or the use of
which is necessary for the conduct of its business as currently being
conducted ("Trademarks"), and (iii) all copyright registrations and
copyright applications which either Company owns or is using or the
use of which is necessary for the conduct of its business as currently
being conducted ("Copyright").
Except as disclosed in Section 5.27 of the Disclosure Schedule, (i)
the Companies own all right, title and interest in and to the
Trademarks, Patents and Copyrights, (ii) all of the Trademarks,
Patents and Copyrights are in good standing, valid and subsisting and
in full force and effect in accordance with their terms, (iii) to
Sellers' knowledge, no impediment exists to the Companies' exclusive
ownership, use and validity of any of the Trademarks, Patents and
Copyrights, (iv) no other person, corporation, partnership, joint
venture, organization, association or entity owns any interest in or,
to Sellers' knowledge, uses in any way any of the Trademarks, Patents
and Copyrights, (v) none of the Trademarks, Patents or Copyrights is
involved in, or the subject of, any pending or, to the knowledge of
Sellers, threatened, infringement, interference, opposition, or
similar action, suit or proceeding or has otherwise been challenged in
any way, and (vi) to Sellers' knowledge, neither the ownership or
operation by the Companies of their properties, nor the production,
manufacture, marketing, sale or distribution by the Companies of their
products, nor the marketing, sale or performance by the Companies of
their services, nor the use of any product of the Companies for the
purposes for which sold, infringes upon or conflicts with any patent,
trademark, trade name, service ▇▇▇▇, copyright, privilege, franchise,
immunity, trade secret or right of any other person, firm, corporation
or entity.
Section 5.27 of the Disclosure Schedule contains a list of all
agreements, contracts and commitments that either Company is a party
to (including licenses and other such agreements), whether written or
oral, which materially and directly affect any of the Trademarks,
Patents or Copyrights. Except as disclosed in Section 5.27 of the
Disclosure Schedule, such licenses and agreements are valid, binding
and enforceable in accordance with their respective terms for the
periods stated therein, and there is no existing default or event of
default thereunder or any event which with notice and/or lapse of time
would constitute a material default.
5.28 Compliance With Laws. Each Company has owned and operated, and
currently owns and operates, its business, properties and assets in
material compliance with all federal, foreign, state and local laws,
ordinances, rules and regulations. Section 5.28 of the Disclosure
Schedule sets forth, for the past twelve (12) months immediately
preceding the date of this Agreement all material investigations,
inspections or citations under any federal, state or local laws or any
rules or regulations under the foregoing and the results thereof,
together with a brief description of all corrective or other action
taken with respect thereto. Neither Company has received any written
notice of a violation that is now pending and unresolved of any such
material applicable law, ordinance, regulation, order or requirement
relating to its operations or properties. This Section 5.28 shall not
apply to environmental matters which are exclusively the subject of
Section 5.29 below.
5.29 Environmental Matters.
For purposes of this Section 5.29, "Hazardous Substances" shall have
the same meaning as the term "Hazardous Substance" in 42 U.S.C.
9601(14) and the term "Pollutants or Contaminants" shall have the same
meanings as the term "Pollutant or Contaminant" in 42 U.S.C. 9601(33).
In addition, "Hazardous Substances" and "Pollutants or Contaminants"
shall include any other dangerous, toxic, or hazardous substances,
materials, or wastes as defined in or governed by any other federal,
state or local statute, law, regulation or other requirement relating
to any Hazardous Substances, Pollutants or Contaminants, or to human
health and safety, or to the environment ("Environmental Laws").
Except as disclosed in Section 5.29 of the Disclosure Schedule:
(a) No person, entity, or governmental agency has asserted against
either Company any written requests for damages, costs, or
expenses, demands, causes of action, or claims, however defined,
arising out of or due to the emission, disposal, discharge or
other release or threatened release of any Hazardous Substances
or Pollutants or Contaminants or any violation of Environmental
Law in connection with or related to either Company's Facilities
or operations or activities of the Companies on any of the
Companies' formerly owned or operated properties, or arising out
of or due to any injury to human health or the environment by
reason of the current condition or operation of either Company's
Facilities, or past conditions and operations or activities on
the Company's Facilities or operations or activities of the
Companies on the Companies' formerly owned or operated
properties. (i) Neither Company is a party to any pending or, to
the knowledge of Sellers, threatened actions for damages, costs,
or expenses, demands, causes of action, claims, lawsuits,
administrative proceedings, enforcement actions, or
investigations, or written notice of any of these related to the
Companies' operations or Assets, (ii) there is no environmental
condition, situation, or incident (including the presence,
releases, transportation or disposal of Hazardous Substances,
Pollutants or Contaminants, disposal areas, underground tanks or
pipelines, or to the knowledge of Sellers, government actions or
investigations) on, at, from or concerning the Companies'
Facilities, or, to the knowledge of Sellers, on the Companies'
formerly owned or operated properties that would reasonably be
expected to give rise to a material action or a material
liability under any Environmental Law, and (iii) neither Company
has any material liability under any Environmental Law.
(b) Neither Company possesses any reports with respect to any
material investigations, inspections or inquiries of any kind
regarding the environmental condition of the Companies' Assets
that have not been made available to Buyer. Neither Company is
currently being charged with any material violation of
Environmental Laws relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances or Pollutants or Contaminants.
(c) No material expenditures will be required outside the ordinary
course of business in order for Buyer after consummation of the
transactions contemplated in this Agreement to comply with any
Environmental Law currently in effect, including the requirements
of any pending environmental permit or license application, in
connection with the Companies' operations as currently conducted.
(d) There are no state or federal liens encumbering the Companies'
Assets resulting from any cleanup or response actions related to
Hazardous Substances or Pollutants or Contaminants at the
Companies' Facilities or from the Companies' Facilities by state
or federal authorities.
(e) The Companies' Facilities are not identified on the National
Priorities List under 40 CFR 300, Appendix B, the Comprehensive
Environmental Response Compensation and Liability Inventory
Systems, or any list arising under similar state law.
(f) The Company is in material compliance with the provisions of any
legal requirement relating to public or community right-to-know
or notification, including the provisions of Sections 102 and 103
of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. 9602 and 9603), Section 311 of the Clean
Water Act (33 U.S.C. 1321), and the Emergency Planning and
Community Right-to-Know Act of 1986.
(g) Sellers have no knowledge of impending changes or events that
will adversely affect in any material respect Buyer's ability to
comply with Environmental Laws currently in effect or to obtain
and maintain in effect the currently required governmental
authorizations or licenses necessary under applicable
Environmental Laws to permit the conduct of the Companies'
operations as currently conducted.
5.30 All Assets. Except as disclosed in Section 5.30 of the Disclosure
Schedule, there are no material assets owned or used by either Company
in the conduct of its Business as currently conducted other than (i)
those assets owned by each Company, (ii) those assets leased or
licensed to each Company pursuant to the agreements listed in Section
5.15 of the Disclosure Schedule, and (iii) those assets leased to each
Company by unrelated third parties pursuant to operating leases, none
of which are material, either individually or in the aggregate. The
assets of the Companies also include all drawings and specifications
for all molds as well as all spinning technology.
5.31 Computer Software and Databases. Section 5.31 of the Disclosure
Schedule identifies all computer software and databases owned,
licensed, leased, internally developed or otherwise used in connection
with the Business. Each Company has all computer software and
databases that are necessary to conduct the Business as currently
conducted and all documentation relating to such computer software in
all material respects and databases. Each Company's computer software
and databases perform in accordance with the documentation relating
thereto or used in connection therewith. The relevant Company owns all
right, title and interest in and to all computer software and
databases designated on Section 5.31 of the Disclosure Schedule as
owned or internally developed by such Company ("Proprietary
Software"). To the knowledge of Sellers, no impediment exists to the
Companies' exclusive ownership and use of any Proprietary Software. To
the knowledge of Sellers, no other person, corporation, partnership,
joint venture, organization, association or entity owns any interest
in or uses in any way any of the Proprietary Software. None of the
Proprietary Software is involved in, or the subject of, any pending,
or to the knowledge of Sellers, threatened, action, suit or proceeding
or has otherwise been challenged in any way. To the knowledge of
Sellers, the ownership or use by the Companies of the Proprietary
Software does not breach any license or other contractual obligation
between either Company and any other person, firm, corporation or
entity. To the knowledge of Sellers, neither the ownership or use by
the Companies of the Proprietary Software infringes upon or conflicts
with any patent, trademark, trade name, service ▇▇▇▇, copyright,
privilege, franchise, immunity, trade secret or right of any other
person, firm, corporation or entity.
5.32 Brokers, Finders. Sellers have retained ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank AG and are
responsible for all their fees and commissions in connection with the
transactions contemplated herein.
5.33 Insurance Matters. Except as disclosed in Section 5.33 of the
Disclosure Schedule, neither Company has during the three (3) years
immediately preceding the date of this Agreement, been denied or had
revoked or rescinded by a carrier any policy of insurance, (ii)
neither Company currently, nor has it in the past, participated in a
self-insured program or large deductible or retrospective premium
policy. There are no pending material (individually or in the
aggregate) product liability claims involving either Company. Neither
Company has failed to give any notice or present any material claim
under any insurance policy in due and timely fashion. Except as
disclosed in Section 5.33 of the Disclosure Schedule, there are no
outstanding requirements or recommendations by any insurance company
that issued any such policy with respect to any of the properties and
assets of either Company or by any Board of Fire Underwriters or
similar body exercising similar functions or by any governmental
authority which requires or recommends changes in the conduct of such
Company's business or requiring any repairs or other work to be done
with respect to any of the properties, assets or operations of such
Company or requiring any equipment or facilities to be installed on or
in connection with any of the properties or assets of such Company.
5.34 Disclosure and Reliance. As of the date of this Agreement, Sellers and
PAG have disclosed to Buyer all facts of a historical nature known to
them which are material to each Company. To Sellers' knowledge, none
of the historical information furnished by Sellers, PAG or any of
their respective representatives to Buyer or any of its
representatives in accordance with this Agreement, as of the date of
this Agreement, is false or misleading in any material respect or
contain any material misstatement of fact or omit to state any
material facts required to be stated to make the statements therein
not misleading. The representations and warranties made herein are
made by Sellers and PAG with the knowledge and expectation that Buyer
is placing reliance thereon. Notwithstanding the foregoing provisions,
this Section 5.34 shall not apply to business plans, future
projections or other prospective or forward-looking information
furnished by Sellers, PAG, either Company or their respective
representatives to Buyer.
6. Representations and Warranties of Buyer. Buyer represents and warrants
to and with Sellers as follows:
6.1 Organization, Good Standing and Corporate Power. Buyer is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has corporate power to
execute and deliver this Agreement and perform its obligations
hereunder.
6.2 Authority. The execution, delivery and performance of this Agreement
by Buyer, as well as the transaction contemplated under this
Agreement, has been duly and validly authorized and approved by
Buyer's Board of Directors. This Agreement constitutes the valid and
legally binding agreement of Buyer, enforceable in accordance with its
terms.
6.3 No Government Authorization Required. Except for (a) compliance with
the HSR Act, and (b) those that may be required solely by reason of
Sellers' (as opposed to any third party's) participation in the
transactions contemplated by this Agreement, and (c) those the failure
of which to obtain or make would not reasonably be expected to have a
material adverse effect on Buyer's ability to consummate the
transactions contemplated by this Agreement, no consent, authorization
or approval of, or exemption by, or filings with, any governmental,
public or self-regulatory body or authority is required in connection
with the execution, delivery and performance by Buyer of the
transactions contemplated by this Agreement or the taking of any
action contemplated by this Agreement.
6.4 Effect of Agreement. The execution, delivery and performance of this
Agreement by Buyer and the consummation of the transactions
contemplated by this Agreement by Buyer will not, with or without the
giving of notice or the lapse of time or both, (a) to Buyer's
knowledge violate any provision of law, statute, rule or regulation to
which Buyer is subject; (b) violate any judgment, order, writ or
decree of any court applicable to Buyer; or (c) result in the breach
of, or conflict with, any term, covenant, condition or provision of,
result in the modification or termination of, constitute a default
under, or result in the creation or imposition of any lien, security
interest, charge or encumbrance upon any of the properties or assets
of Buyer, pursuant to any corporate charter, by-law, commitment,
contract or other agreement or instrument to which Buyer is a party or
by which it or its assets or property is or may be bound or affected
or from which derives substantial benefits, except with respect to
clause (c) above, any such items that would not, individually or in
the aggregate, have a material adverse effect on Buyer's ability to
consummate the transactions contemplated by this Agreement.
6.5 Brokers, Finders. Buyer has retained HalfMoon LLC and is responsible
for their fees and commissions in connection with the transactions
contemplated herein.
6.6 Securities Act. The Capital Stock purchased by Buyer pursuant to this
Agreement is being acquired for investment only and not with a view to
any public distribution thereof, and Buyer shall not offer to sell or
otherwise dispose of, or sell or otherwise dispose of, the Capital
Stock so acquired by it in violation of any of the registration
requirements of the U.S. Securities Act of 1933, as amended.
6.7 Availability of Funds. Buyer has cash available or has existing
borrowing facilities which together are sufficient to enable it to
consummate the transactions contemplated by this Agreement. A true and
correct copy of the lender commitment letter relating to Buyer's
borrowing facilities has been provided to Sellers.
6.8 Proceedings. There are not (a) outstanding judgments, orders or
decrees against Buyer or any of its subsidiaries, (b) suits or legal
actions pending, or to the knowledge of Buyer, threatened against
Buyer or any of its subsidiaries, or (c) investigations by any
Federal, state, local or foreign court of competent jurisdiction,
governmental agency, authority, instrumentality or regulatory body (a
"Governmental Entity") that are pending or threatened against Buyer or
any of its subsidiaries that, in any such case, would reasonably be
expected to have a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement.
7. Covenants of Sellers and PAG.
7.1 Conduct of Business. Except as disclosed in Section 7.1 of the
Disclosure Schedule, during the period from the date of this Agreement
to the Closing Date, Sellers and PAG covenant that the Companies shall
not, without the prior written consent of Buyer, which consent shall
not be unreasonably withheld or delayed.
7.1.1Other than in the ordinary course of business, or to comply with
the terms of any applicable law or any existing plan, agreement
or arrangement, increase in any manner the compensation of any
employees' pay or agree to pay a pension, retirement allowance or
other employee benefit to any employees; or commit itself to pay
additional pension, profit sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, group insurance,
severance pay, retirement or other employee benefit plan,
agreement or arrangement or employee agreement with or for the
benefit of any persons employed by either Company;
7.1.2Permit any current insurance policies to be cancelled or
terminated or any of the coverage thereunder to lapse unless such
policies are replaced with comparable coverage and Sellers give
Buyer prompt notice of such cancellation or termination;
7.1.3Enter into any transaction, contract or commitment which, by
reason of its size, nature or otherwise, is not in the ordinary
course of business, or execute any agreement the terms of which
would be violated by the consummation of the transactions
contemplated by this Agreement;
7.1.4Agree to become subject to any liability or obligation (absolute
or contingent), except liabilities incurred or obligations
arising under contracts entered into in the ordinary course of
business;
7.1.5Enter into or terminate any lease of real or personal property,
except for renewals of leases in the ordinary course of business;
7.1.6Sell, abandon or otherwise dispose of, or pledge, mortgage or
otherwise encumber any of the assets of either Company, other
than in the ordinary course of business, or make any commitment
relating to any such assets or property other than in the
ordinary course of business, or cancel or waive any claim or
right of substantial value;
7.1.7Amend the respective Articles of Incorporation or By-Laws or
other comparable organizational documents;
7.1.8 Enter into any collective bargaining agreement;
7.1.9Declare or make any payment, dividend or distribution to any
Seller, or purchase, redeem or otherwise acquire, any shares of
Capital Stock;
7.1.10 Make any capital expenditures, capital additions, or capital
improvements which involve an amount in excess of $150,000
individually or $1,000,000 in the aggregate;
7.1.11 Merge or consolidate with any other corporation or acquire or
agree to acquire any stock or substantially all of the assets of
any other person, firm, association, corporation or other
business organization;
7.1.12 Change to or use any invalid or materially inconsistent tax or
financial reporting accounting method or practice or make any tax
election for any period without Buyer's prior written consent
(which consent shall not be unreasonably withheld or delayed);
7.1.13 Fail to operate only in the usual, regular and ordinary course
and use commercially reasonable efforts to preserve the Company
intact and keep available the services and present relationships
with persons having business dealings with the Company; and
7.1.14 Incur any new debt, other than debt incurred by the Companies
under Newmark's $5,000,000 line of credit facility with
HypoVereinsbank, up to a limit of $2,500,000, to meet any payable
obligations of the Companies.
7.2 Advise of Changes. Sellers agree that from the date of this Agreement
until the Closing Date they will advise Buyer of: (i) any event which
causes any of the conditions set forth in Section 8 to become
incapable of fulfillment; and (ii) any notice or other communication
from any third party alleging that the consent of such third party is
or may be required in connection with the transactions contemplated by
this Agreement.
7.3 Information and Access. Sellers shall give Buyer and its counsel,
accountants and other representatives access during normal business
hours to all properties, books, contracts, documents and records with
respect to the affairs of the Companies as Buyer may reasonably
request at such times and in such manner as will not disrupt or
interfere with the conduct of the Companies.
7.4 Noncompetition Agreement. In order to further induce Buyer to enter
into this Agreement and consummate the transactions contemplated
hereunder, each Seller and PAG agrees that, for itself and each of its
subsidiaries and affiliates, for a period of five (5) years from and
after the Closing Date, it shall not within the Trade Area (as defined
below) associate in any capacity whatsoever, whether as a promoter,
owner, partner, lessee, lessor, licensor, lender, agent, consultant,
broker or otherwise, in the production, marketing, sale or
distribution of concrete or steel poles for street lighting,
electrical transmission, catenary, flood lighting, advertising,
architectural columns, traffic control or telecommunications (each, a
"Competitive Activity" and, collectively, the "Competitive
Activities"); provided, however, the foregoing shall not prevent
Sellers or any of their subsidiaries or affiliates from owning,
strictly as an investment, securities of any publicly traded
corporation engaged in any Competitive Activities so long as Sellers
do not, directly or indirectly, beneficially own in the aggregate more
than five percent (5%) of all classes of the outstanding equity
securities of any such entity. If any Seller, PAG, or any of its
subsidiaries or affiliates fail to keep and perform every covenant of
this Section 7.4, Buyer shall be entitled to specifically enforce the
same by injunction in equity in addition to any other remedies which
Buyer may have. If any portion of this Section 7.4 shall be invalid or
unenforceable, such invalidity or unenforceability shall in no way be
deemed or construed to affect in any way the enforceability of any
other portion of this Section 7.4. If any court in which Buyer seeks
to have the provisions of this Section 7.4 specifically enforced
determines that the activities, time or geographic area hereinabove
specified are too broad, such court may determine a reasonable
activity, time or geographic area and shall specifically enforce this
Section 7.4, for such activity, time and geographic area. The
covenants on the part of Sellers, PAG, or any of its subsidiaries or
affiliates under this Section 7.4 shall be construed as an agreement
independent of any other provision of this Agreement, and the
existence of any claim or cause of action by Sellers or PAG against
Buyer or any entity affiliated with Buyer, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the
enforcement by Buyer of said covenants. For purposes of this Section
7.4, "Trade Area" shall mean the United States, Canada and Mexico.
Notwithstanding anything to the contrary contained in this Section
7.4, Sellers and its subsidiaries and affiliates shall not be
prevented from (i) continuing to engage in, conducting or having an
ownership interest in any business which it currently is engaging in,
conducting or in which it currently has an ownership interest, and in
each case any reasonable extension or development thereof (other than
the Competitive Activities in the Trade Area), and (ii) treating the
provisions of Section 7.4 above as having terminated at the time and
to the extent that none of Buyer and its subsidiaries continue to
engage in any Competitive Activity.
7.5 Covenant Not to Disclose. Sellers and PAG agree that they and their
subsidiaries and affiliates possess certain data and knowledge of
operations owned by the Companies which are proprietary in nature and
confidential, including certain trade secrets owned by the Companies.
Except as required by law, regulation or legal or administrative
proceedings, none of Sellers, PAG, and any of their subsidiaries or
affiliates will, without the consent of Buyer or the relevant Company,
at any time after the Closing, claim any ownership or other interest
therein or reveal, divulge or make known to any person (other than
Buyer) or use for its own account or for the account of any person,
firm, corporation or organization, any confidential or proprietary
manufacturing or processing method, record, data, trade secret,
pricing policy, bid amount, bid strategy, rate structure, personnel
policy, method or practice of soliciting or obtaining or doing
business, in each case to the extent owned by the relevant Company, or
any other confidential or proprietary information to the extent owned
by either Company.
Buyer acknowledges that the information being provided to it in
connection with the consummation of the transactions contemplated by
this Agreement is subject to the terms of a Confidentiality Agreement
between Buyer and PAG (the "Confidentiality Agreement"), the terms of
which are incorporated herein by reference. Effective upon, and only
upon, the Closing, the Confidentiality Agreement shall terminate with
respect to information relating solely to the Companies; provided,
however, Buyer acknowledges that any and all other information
provided to it by Sellers or their representatives concerning Sellers
and their respective affiliates (other than the Companies) shall
remain subject to the terms and conditions of the Confidentiality
Agreement after the Closing.
7.6 Other Offers and Exclusive Dealing. From the date of this Agreement
until this Agreement is terminated, none of the Companies, Sellers,
PAG and any of their subsidiaries or affiliates, acting in any
capacity, will either directly or indirectly, through any officer,
director, employee, agent or otherwise (A) solicit, initiate,
encourage or entertain submission of proposals or offers from any
person or entity relating to (i) any purchase of all or substantially
all of the assets of either Company, (ii) any merger, sale of
substantial assets, or sale of stock of either Company, or (iii) any
similar transaction involving either Company (other than the
transactions contemplated in Section 7.14 below and in Section 7.14 of
the Disclosure Schedule), (B) participate in any discussions or
negotiations regarding, or, except as required by a legal or judicial
process, furnish to any other person or entity any information with
respect to, or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage, any effort or attempt by any
other person or entity to propose or consummate any of the
transactions described in clauses (A)(i) through (iii) above involving
either Company, or (C) approve or undertake any such transaction. Each
Company and/or Sellers, PAG or any of their subsidiaries or affiliates
shall promptly communicate to Buyer the terms of any such proposal or
offer upon knowledge or receipt of such proposal or offer or upon
knowledge that such a proposal or offer is likely to be made.
7.7 Supplying Financing Statements. From the date of this Agreement until
the earlier to occur of the Closing and the termination of this
Agreement, within fifteen (15) days following the end of each calendar
month, each Company shall deliver to Buyer copies of unaudited balance
sheets of such Company as of the end of each calendar month ending
subsequent to the date of this Agreement and the related unaudited
statements of income for each month then ended.
7.8 Further Assurances. At any time from and after the Closing Date,
Sellers and PAG shall, at the request of Buyer, and, Buyer shall, at
the request of Sellers and PAG, take any and all reasonable actions
necessary to fulfill their respective obligations under this
Agreement; provided, however, that none of the parties shall be
required to incur any expenses, other than immaterial expenses,
pursuant to this Section 7.8.
7.9 Public Announcement. No party hereto will issue any press release or
other public announcement with respect to this Agreement or the
transactions contemplated by this Agreement without the prior written
approval of the other parties, except as such release or announcement
that may be required by law or other regulations of any United States,
German or foreign securities exchange, in which case the party
required to make the release or announcement shall allow the other
party reasonable time to comment on such release or announcement in
advance of such issuance; provided, however, that each of the parties
may make internal announcements to their respective employees that are
consistent with the parties' prior public disclosures regarding the
transactions contemplated by this Agreement.
7.10 Nonsolicitation Agreement. For a period of five (5) years immediately
after following the Closing Date, each Seller and PAG agrees, and
agrees to cause its subsidiaries and affiliates, not to hire or
solicit for employment any employee of either Company; provided,
however, that the foregoing provision shall not apply to (i) a general
advertisement or solicitation program that has not specifically
targeted such persons, or (ii) the employment of any employee of the
Company whose employment by such Company has been terminated and
subsequently initiates contact with Sellers, PAG or their subsidiaries
or affiliates regarding such employment without any encouragement or
solicitation by Seller, PAG or their subsidiaries or affiliates.
7.11 Efforts with Respect to Closing. On the terms and subject to the
conditions of this Agreement, each party shall use its commercially
reasonable best efforts to cause the Closing to occur. Each of Buyer
and each Seller shall not, and shall not permit any of their
respective affiliates to, take any actions that would, or that could
reasonably be expected to result in any of the conditions set forth in
Sections 8 or 9 below not being satisfied.
Each of Buyer and each Seller shall as promptly as practicable
following the execution and delivery of this Agreement, file or cause
to be filed with the United States Federal Trade Commission (the
"FTC") and the United States Department of Justice (the "DOJ") the
notification and report form required for the transactions
contemplated by this Agreement and any supplemental information
requested during the initial thirty (30) day notification period in
connection therewith pursuant to the HSR Act ("Supplemental
Information"). Any such notification and report form and any
Supplemental Information shall be in substantial compliance with the
requirements of the HSR Act. Each of Buyer and each Seller shall
furnish to the other such necessary information and reasonable
assistance as the other may request in connection with its preparation
of the notification and report form required under the HSR Act and any
Supplemental Information. Sellers and Buyer shall keep each other
apprised of the status of any communications with, and any inquiries
or requests for additional information from, the FTC and the DOJ. Each
party shall use its commercially reasonable best efforts to obtain
clearance required under the HSR Act for the consummation of the
transactions contemplated by this Agreement. Sellers and Buyer shall
also cooperate to make any required filings outside the United States
as promptly as practical after the execution and delivery of this
Agreement. The parties agree to discuss, but have no obligation to
respond to or comply with, a second request for additional information
and documentary material from the FTC or DOJ. For purposes of this
Section 7.13, the "commercially reasonable best efforts" of Buyer
shall not include any obligation or requirement to (i) respond to or
comply with a second request for additional information and
documentary material from the FTC or DOJ, (ii) oppose any motion or
action for a temporary, preliminary or permanent injunction against
the transactions contemplated by this Agreement, or (iii) enter into a
consent decree containing Buyer's agreement to hold separate and
divest the products and assets of the Companies or Buyer and its
affiliates, as the case may be, as required by the FTC, the DOJ or any
other Governmental Entity.
7.12 Employee Matters. Buyer shall, or shall cause the Companies to,
recognize all service of the Continued Employees with the Companies
for all purposes of the employee benefit plans which Continued
Employees are permitted to participate in.
7.13 No Further Financial Obligations. In the course of conduct by the
Companies of their respective businesses, Sellers and their respective
affiliates (collectively, but excluding the Companies, the "Seller
Entities") entered into various arrangements which guarantee the
Companies' payment and/or performance obligations under an agreement
to which a Company is a party ("Affiliate Guarantees"). Buyer agrees
that it shall use its commercially reasonable efforts to remove the
Seller Entities from the Affiliate Guarantees which will be in effect
at the Closing or replace the Seller Entities with Buyer as the
guarantor of the Affiliate Guarantees. In the event that Buyer is
unable to satisfy the terms of the immediately preceding sentence,
Buyer and its affiliates shall indemnify, defend and hold harmless the
Seller Entities from and against any and all losses incurred by the
Seller Entities which accrue from and after the Closing Date under the
Affiliate Guarantees.
7.14 Fiberglass Business. Newmark is involved in the production, marketing
and sale of composite poles from facilities owned and/or operated by
Newmark at ▇▇▇▇▇▇ and Early Branch, South Carolina (the "Fiberglass
Facilities") (the "Fiberglass Pole Business"). Prior to the Closing,
Newmark shall transfer to an affiliate of PAG (other than a Company)
(the "▇▇▇▇▇▇ Purchaser"), on an "AS-IS, WHERE-IS" basis and pursuant
to the steps set forth in Section 7.14 of the Disclosure Schedule, all
assets and liabilities (including all contracts, agreements and
commitments) relating to or comprising the Fiberglass Pole Business,
including all assets and liabilities relating to the Fiberglass
Facilities (the "▇▇▇▇▇▇ Transfer") for a cash amount equal to
$1,040,000 (the "▇▇▇▇▇▇ Payment") (such number has been derived
pursuant to the calculation set forth on Exhibit 7.14) and the
assumption of all liabilities of the Fiberglass Pole Business (the
"▇▇▇▇▇▇ Liabilities"). Within thirty (30) days of the ▇▇▇▇▇▇ Transfer,
the ▇▇▇▇▇▇ Liabilities shall be finally determined and recorded on the
books of the Fiberglass Pole Business. If the amount of ▇▇▇▇▇▇
Liabilities as finally determined exceeds the amount of ▇▇▇▇▇▇
Liabilities initially accrued as of the date of the ▇▇▇▇▇▇ Transfer,
(a) Newmark shall pay to the ▇▇▇▇▇▇ Purchaser an amount of cash equal
to such excess ▇▇▇▇▇▇ Liabilities (the "▇▇▇▇▇▇ Purchase Price
Adjustment") within ten (10) days after the Closing Shareholders'
Equity is finally determined in accordance with Section 4.2 above, and
(b) Sellers shall pay to Buyer an amount of cash equal to the ▇▇▇▇▇▇
Purchase Price Adjustment within ten (10) days after the Closing
Shareholders' Equity is finally determined in accordance with Section
4.2 above (it being agreed and understood that in no event shall the
▇▇▇▇▇▇ Purchase Price Adjustment exceed $1,040,000). The transfer of
all assets and liabilities relating to the Fiberglass Pole Business
has been duly and validly authorized and approved by Newmark's Board
of Directors. Sellers and PAG shall, and hereby agree to, jointly and
severally indemnify and hold Buyer and each Company harmless against
and in respect of, all debts, liabilities and obligations, including
reasonable attorneys' fees, accountants' fees, costs of litigation or
other reasonable expenses incurred by them, relating to or arising in
connection with the Fiberglass Pole Business of any nature whatsoever,
whether accrued, absolute, contingent, or known or unknown, including
all debts, liabilities and obligations relating to environmental
matters, tax matters, employee matters and employee health matters.
Sellers' and PAG's indemnity obligation under this Section 7.14 is
separate and apart from Sellers' and PAG's indemnity obligation under
Section 11 and is not subject to any limitations contained in Section
11.
7.15 Surveys. Sellers acknowledge that Buyer has arranged to obtain
ALTA/ACSM land title surveys of all of the Owned Real Estate except
the fabrication and welding shop in Tuscaloosa, Alabama ("Surveys").
Sellers shall cooperate with Buyer's efforts to obtain such Surveys,
including promptly giving the surveyors access to such Facilities upon
request. Buyer shall indemnify and hold Sellers and PAG harmless from
any damage or injury caused by the surveyors in connection with
gaining access to any Facility. Upon receipt of any such Survey, Buyer
shall forward a copy to Sellers and review such Survey to determine
whether it reveals any condition which would reasonably be expected to
materially impair the continued use and operation of such real
property in the conduct of the Business as currently conducted (a
"Condition"). If any Survey reveals a Condition, Buyer shall within
fifteen (15) days after its receipt of a Survey, give written notice
of the Condition to Sellers, after which Sellers shall have a
reasonable period of time to cure the Condition in a manner reasonably
acceptable to Buyer. If Sellers are unwilling or unable to cure the
Condition to Buyer's reasonable satisfaction, then Sellers and PAG
shall, and hereby agree to, jointly and severally, indemnify and hold
Buyer and the Companies harmless against and in respect of any
material impairment with the continued use and operation of the
related property resulting from or arising in connection with the
Condition, including all damages, losses, claims or expenses,
including reasonable attorneys' fees, related thereto. Sellers' and
PAG's indemnity obligation under this Section 7.15 is separate and
apart from Sellers' and PAG's indemnity obligation under Section 11
and is not subject to any limitations contained in Section 11. If
Buyer fails to provide Sellers with the written notice set forth in
this Section 7.15 within said fifteen (15) days, Buyer shall be deemed
to have waived the opportunity to reveal any Conditions with respect
to the Facility in question, and Sellers and PAG shall incur no
further liability in connection therewith.
7.16 Third Party Consents. From the date of this Agreement until the
Closing Date, Sellers shall use their commercially reasonable efforts
to obtain each consent set forth in Section 5.7 of the Disclosure
Schedule (the "Consents"). If Sellers are unable to obtain prior to
the Closing Date all Consents, then Sellers and PAG shall continue to
pursue such Consents but, in all events, shall and hereby agree to,
jointly and severally, indemnify and hold Buyer and the Companies
harmless against and in respective of, all debts, liabilities and
obligations, including reasonable attorneys' fees, accountants' fees,
costs of litigation or other reasonable expenses incurred by them,
arising out of or relating to (i) the failure to obtain such Consents
and/or (ii) the termination of any contract as a result thereof.
Sellers' and PAG's indemnity obligation under this Section 7.16 is
separate and apart from Sellers' and PAG's indemnity obligation under
Section 11 and is not subject to any limitation contained in Section
11.
7.17 Pfleiderer Name and Logo. Buyer shall cause each Company promptly, and
in any event no later than December 31, 2004, to revise print
advertising, product literature and product labeling to delete all
references to the Pfleiderer name and Pfleiderer logo and no later
than December 31, 2004, to change internet domains and web sites,
signage and stationery and otherwise discontinue use of the Pfleiderer
name and logo. In no event shall Buyer or the Companies use the
Pfleiderer name or logo after Closing in any manner or for any purpose
different than the use of the Pfleiderer name and logo by the
Companies during the one (1) year period immediately preceding the
Closing.
7.18 Bay Minette and Claxton Facilities. As disclosed in Section 5.13 of
the Disclosure Schedule, as of the date of this Agreement Newmark is
not the owner of record of fee simple title to either the Bay Minette,
Alabama Facility (the "Bay Minette Facility") or the Claxton, Georgia
Facility (the "Claxton Facility"). If, prior to the Closing, the Bay
Minette Facility is not conveyed to Newmark free and clear of all
liens, claims and encumbrances (except for those title exceptions set
forth in clauses (a) to (d) in Section 5.13 above), then the Purchase
Price shall be reduced by (and Buyer shall not be obligated to pay at
the Closing) Six Million Eight Hundred Thousand Dollars ($6,800,000).
In the event, after the Closing, Sellers or PAG are able to effect the
transfer to Newmark of the Bay Minette Facility free and clear of all
liens, claims and encumbrances (except those title exceptions set
forth in clauses (a) to (d) in Section 5.13 above) (the "Transfer"),
then the Purchase Price shall be increased by (and Buyer shall pay
Sellers) $6,800,000 promptly upon (and in no event later than five (5)
days after) the Transfer, along with simple interest thereon at a rate
of 6.5% per annum from the Closing Date to the actual date of payment.
Further, and in addition to the foregoing provisions of this Section
7.18, if, prior to the Closing, the Bay Minette and/or the Claxton
Facilities have not been conveyed to Newmark free and clear of all
liens, claims and encumbrances (except for those title exceptions set
forth in clauses (a) to (d) in Section 5.13 above), and
notwithstanding Sellers' disclosures in paragraphs 3 and 4 of Section
5.13 of the Disclosure Schedule, Sellers and PAG shall, and hereby
agree to, jointly and severally, indemnify and hold Buyer and Newmark
harmless from and against all damages, losses, obligations, claims and
expenses, including reasonable attorney's fees, resulting from or
arising in connection with Sellers' breach of the first sentence of
Section 5.13 above, Newmark failing to be the owner of record of fee
simple title to the Bay Minette and/or the Claxton Facilities, as
applicable, including operating the Claxton and/or the Bay Minette
Facilities, as applicable, on real estate of which Newmark is not the
owner of record, during the period from and after the Closing to and
until the date on which both the Bay Minette and the Claxton
Facilities have been conveyed to Newmark free and clear of all liens,
claims and encumbrances (except for those title exceptions set forth
in clauses (a) to (d) in Section 5.13 above). Sellers' and PAG's
indemnity obligation under this Section 7.18 is separate and apart
from Sellers' and PAG's indemnity obligation under Section 11 below,
and is not subject to any limitations contained in Section 11.
8. Conditions Precedent to Obligations of Buyer. The obligation of Buyer to
consummate the transactions contemplated herein is subject to the satisfaction,
at or prior to the Closing Date, of all of the following conditions, unless
waived by Buyer:
8.1 Accuracy of Representations and Warranties. The representations and
warranties of Sellers and PAG contained in this Agreement that are
qualified as to materiality or Companies Material Adverse Effect shall
be true and correct, and those not so qualified shall be true and
correct in all material respects, as of the date of this Agreement and
as of the Closing Date as though made on the Closing Date with the
same force and effect, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties that are qualified as to materiality or
Companies Material Adverse Effect shall be true and correct, and those
not so qualified shall be true and correct in all material respects,
on and as of such earlier date).
8.2 Performance of Agreements. The Companies, Sellers and PAG shall have
performed in all material respects all obligations and agreements and
complied with all covenants and conditions contained in this Agreement
to be performed and complied with by them on or prior to the Closing
Date.
8.3 Certificate. At the Closing, Sellers shall have delivered to Buyer a
certificate, dated the Closing Date, stating that each Company and
Sellers and PAG have fulfilled the obligations set forth in Sections
8.1 and 8.2.
8.4 Absence of Injunction. There shall be pending no temporary or
permanent injunction or order from any court or government body or
authority prohibiting, restraining or making unlawful the consummation
of the transactions contemplated by this Agreement or materially
limiting the ability of either Company to operate its business.
8.5 HSR. All waiting periods under the HSR Act shall have expired or been
terminated.
9. Conditions Precedent to Obligations of Sellers. The obligation of
Sellers to consummate the transactions contemplated herein is subject to the
satisfaction, at or prior to the Closing Date, of all of the following
conditions, unless waived by Sellers:
9.1 Accuracy of Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement that are qualified as
to materiality shall be true and correct, and those not so qualified
shall be true and correct in all material respects, as of the date of
this Agreement and as of the Closing Date as though made on the
Closing Date with the same force and effect, except to the extent such
representations and warranties expressly relate to an earlier date (in
which case such representations and warranties that are qualified as
to materiality shall be true and correct, and those not so qualified
shall be true and correct in all material respects, on and as of such
earlier date).
9.2 Performance of Agreements. Buyer shall have performed all obligations
and agreements, and shall have complied in all material respects with
all covenants contained in this Agreement to be performed and complied
with by it at or prior to the Closing Date.
9.3 Certificate. At the Closing, Buyer shall have delivered to Sellers a
certificate, dated the Closing Date, stating that Buyer has fulfilled
the obligations set forth in Sections 9.1 and 9.2.
9.4 Absence of Injunction. There shall be pending no temporary or
permanent injunction or order from any court or government body or
authority prohibiting, restraining or making unlawful the transactions
contemplated by this Agreement on the Closing Date.
9.5 HSR. All waiting periods under the HSR Act shall have expired or been
terminated.
9.6 Frustration of Closing Conditions. Neither Buyer nor Sellers may rely
on the failure of any conditions set forth in Section 8 above or this
Section 9 to be satisfied if such failure was caused by such party's
failure to act in good faith or to use its commercially reasonable
best efforts to cause the Closing to occur, as required by Section
7.11 above.
10. Termination.
10.1 Termination Events. This Agreement may be terminated and the
transactions contemplated by this Agreement may be abandoned on or
prior to the Closing as follows:
10.1.1 Mutual Agreement. By mutual written agreement of Sellers and
Buyer.
10.1.2 Court Order. By Sellers or Buyer if any court of competent
jurisdiction shall have issued a final, nonappealable order
restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated by this Agreement.
10.1.3 Breach of Representation or Warranty or Agreement. By: (a)
Sellers if: (i) any of the conditions set forth in Section 9.1 or
9.2 above shall have become incapable of fulfillment and shall
not have been waived by Sellers; (ii) thirty (30) days have
elapsed since the receipt by Buyer of a written notice by Sellers
of such incapability; and (iii) Buyer shall have failed to
fulfill such condition within such thirty (30) day period; or (b)
Buyer, if: (i) any of the conditions set forth in Section 8.1 or
8.2 above shall have become incapable of fulfillment and shall
not have been waived by Buyer; (ii) thirty (30) days have elapsed
since the receipt by Sellers of a written notice by Buyer of such
incapability; and (iii) Sellers and/or PAG shall have failed to
fulfill such within such thirty (30) day period.
10.1.4 Conditions to Close. By Sellers or Buyer if any condition
precedent to its obligation to close has not occurred as of the
Closing Date (or, to the extent permitted, been waived).
10.1.5 Failure to Close. After July 31, 2004, by either Sellers or
Buyer if the Closing has not occurred for any reason other than a
breach of this Agreement by the terminating party; provided the
party seeking termination pursuant to Sections 10.1.3, 10.1.4 and
10.1.5 above is not then in material breach of any of its
representations, warranties, covenants or agreements contained in
this Agreement.
10.2 Effect of Termination. Upon termination of this Agreement pursuant to
this Section 10, this Agreement shall be void and of no other effect,
and there shall be no liability by reason of this Agreement or the
termination thereof on the part of any party hereto, or on the part of
the respective directors, officers, employees, agents or shareholders
of any of them, except that any termination of this Agreement shall
not affect the rights or obligations of any party arising, or based on
actions or omissions occurring, before such termination including any
breach of any representation or warranty set forth herein.
Notwithstanding the foregoing, the foregoing provisions of this
Agreement shall remain in effect: (i) Section 12.3 below relating to
certain expenses, (ii) Sections 5.32 and 6.5 above relating to
finder's and broker's fees, (iii) this Section 10, (iv) Section 7.9
above relating to publicity, and (v) Section 7.5 above relating to the
obligation of Buyer to keep confidential certain information and data
obtained by it.
10.3 Post-Termination. In the event of termination by Sellers or Buyer
pursuant to Section 10.1 above, written notice thereof shall forthwith
be given to the other parties and the transactions contemplated by
this Agreement shall be terminated, without further action by any
party. If the transactions contemplated by this Agreement are
terminated as provided herein, (i) Buyer shall return all documents
and other materials received from Sellers, the Companies or other
affiliates of Sellers relating to the transactions contemplated by
this Agreement, whether so obtained before or after the execution
hereof, and (ii) all confidential information received by Buyer with
respect to the business of Sellers and their respective affiliates
(including the Companies) shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force and effect
pursuant to its terms notwithstanding the termination of this
Agreement.
11. Indemnification by Sellers and PAG.
11.1 Indemnity. Subject to the limitations set forth in Sections 11.6,
11.7, 11.8, 11.9, 11.11 and 11.12 below, from and after the Closing,
Sellers and PAG shall, and hereby agree to, jointly and severally,
indemnify and hold Buyer and each Company harmless against and in
respect of the following (other than tax matters for which
indemnification is provided under Section 5.12 above), to the extent
not accrued or reserved for on the Final Statement:
11.1.1 All debts, liabilities and obligations of Sellers, PAG and each
Company of any nature, whether accrued, absolute, contingent, or
known or unknown on the Closing Date, existing or arising on or
resulting from events which occurred or failed to occur on or
before the Closing Date;
11.1.2 Any claim, action, loss, damage or cost relating to or arising
by reason of (i) the presence of, or any governmental or third
party requirements relating to the disposal or arranging for
disposal (on-site or off-site), or the release or threatened
release prior to the Closing Date, of any Hazardous Substances,
Pollutants or Contaminants, or (ii) any violation of any
Environmental Laws, in each such case in connection with the
Companies' Facilities, Business or the Companies' formerly owned
or operated properties to the extent arising out of events
occurring or conditions existing on or before the Closing Date;
11.1.3 Any liability, loss, claim, damage or deficiency resulting
directly or indirectly from any misrepresentation, breach of
warranty or covenant or nonfulfillment of any agreement on the
part of Sellers or either Company under this Agreement, or from
any misrepresentation in or omission from any certificate or
other instrument furnished or to be furnished to Buyer hereunder.
11.2 Indemnification by Buyer. Subject to the limitations set forth in
Sections 11.8, 11.9, and 11.12 below, from and after the Closing,
Buyer shall, and hereby agrees to indemnify and hold Sellers harmless
against and in respect of the following (other than tax matters for
which indemnification is provided under Section 5.12 above):
11.2.1 Any liability, loss, claim, damage or deficiency resulting
directly or indirectly from any misrepresentation, breach of
warranty or covenant or nonfulfillment of any agreement on the
part of Buyer under this Agreement, or from any misrepresentation
in or omission from any certificate or other instrument furnished
or to be furnished to Sellers hereunder.
11.2.2 All debts, liabilities and obligations of Buyer and each
Company of any nature, whether accrued, absolute, contingent, or
known or unknown, arising or resulting from events which occur or
fail to occur after the Closing Date.
11.2.3 Any discontinuance, suspension or modification by Buyer on or
after the Closing Date of any employee plan.
11.3 Notice of Claims. Each party (the "Indemnified Party") agrees to give
the other party (the "Indemnifying Party") written notice of any and
all claims asserted against the Indemnified Party for which
indemnification is or may be sought under this Section 11. Such notice
shall be given within a reasonable time after the Indemnified Party's
receipt of written notice of such claim. Failure to give such notice
shall not abrogate or diminish the Indemnifying Party's obligation
under this Section 11 if the Indemnifying Party has or receives
knowledge of the existence of any such claim by any other means or if
such failure does not prejudice the Indemnifying Party's ability to
defend such claim.
11.4 Defense of Claim. In any litigation, administrative proceeding,
negotiation or arbitration pertaining to any third party claim for
which indemnification is sought under this Section 11, the
Indemnifying Party shall have the right to select legal counsel to
represent the Indemnified Party (so long as such counsel is reasonably
acceptable to the Indemnified Party) and to otherwise control such
litigation, proceedings, negotiations and arbitration. If the
Indemnifying Party elects to control such litigation, proceeding,
negotiation or arbitration, the Indemnified Party shall at all times
have the right to fully participate in the defense at its own expense.
If the Indemnifying Party shall, within a reasonable time after
notice, fail to defend, the Indemnified Party shall have the right,
but not the obligation, to undertake the defense of the claim. If the
claim is one that cannot by its nature be defended solely by the
Indemnifying Party, then the Indemnified Party shall make available
all information and assistance as the Indemnifying Party may
reasonably request. Notwithstanding anything to the contrary contained
in Section 11, should the subject matter of any litigation,
proceeding, negotiation or arbitration include a claim seeking
permanent injunctive relief, to the extent that the equitable claim
may be segregated, the Indemnified Party shall have the right to
assume the defense of such claim to the extent that it relates to the
injunctive relief sought. Whether or not the Indemnifying Party has
assumed the defense, such Indemnifying Party will not be obligated to
indemnify the Indemnified Party hereunder for any settlement entered
into or any judgement that was consummated to without the Indemnifying
Party's prior written consent (which consent shall not be unreasonably
withheld or delayed).
11.5 Costs Included. The amounts for which the Indemnified Party may seek
indemnification under this Section 11 shall extend to and include the
reasonable legal fees, accountants' fees, costs of litigation and
other reasonable expenses incurred by them in the defense of any claim
asserted against them and any amounts paid in settlement or compromise
of any claims asserted against them to the extent that the claim
asserted would have been subject to the indemnification provisions of
this Section 11.
11.6 Time Limits. Neither Buyer nor the Companies may seek indemnification
under Section 11.1 above in respect to any claims for which written
notice has not been given to Sellers prior to the second anniversary
of the Closing Date. Notwithstanding the foregoing, the parties agree
that other time limits shall be as follows:
11.6.1 Any claim with respect to Sellers' breach of the
representations and warranties under the first four sentences of
Section 5.5 above and the first sentence of Section 5.13 above,
and the indemnities under this Agreement relating thereto, shall
all survive the Closing without time limitation.
11.6.2 Any claim with respect to any environmental-related matter
affecting either Company, the Facilities, Business or the
Companies' formerly owned or operated properties arising from
events occurring on or prior to the Closing Date including any
claim under Section 11.1.2 above or any claim based on a breach
of Sellers' representations and warranties under Section 5.29
above and the indemnities under this Agreement relating thereto,
shall all survive the Closing for four (4) years. It is hereby
agreed and understood that (a) Buyer shall be entitled to make a
claim for an environmental-related matter under any relevant
provision of this Agreement, but Buyer shall not be entitled to
recovery under more than one such provision for the same claim;
(b) in no event shall Sellers be obligated to indemnify Buyer:
(1) to the extent Buyer, during the four (4) year period from and
after the Closing Date undertakes any drilling or sampling to
investigate environmental conditions at the Facilities other than
as required by applicable Environmental Law, required by a
governmental authority having jurisdiction over the matter, or
pursuant to the reasonable business judgment of Buyer; (2) for
the amounts spent by Buyer which exceed amounts necessary to meet
minimum standards (e.g. non-residential standards) and costs
necessary to bring the environmental condition into compliance
with applicable Environmental Law; or (3) to the extent Buyer
changes the current use of the Facilities to a non-industrial or
non-commercial use during the four (4) year period from and after
the Closing Date; and (c) Buyer shall keep Seller reasonably
informed of any investigation or remediation activities at the
Facilities which are or may be the subject of a claim for
indemnification and Buyer shall promptly provide Sellers with
copies of any material documents in connection therewith,
including draft or final reports, assessments or correspondence
with governmental authorities.
11.6.3 Any claim with respect to a tax-related matter shall survive
for the applicable period as provided in Section 5.12.10 above.
11.7 Maximum Liability. Except for any claim relating to Sellers' breach of
the representations and warranties under the first four sentences of
Section 5.5 above and the first sentence of Section 5.13 above, any
tax-related claim and any claim resulting from intentional
misrepresentation, fraud or criminal misconduct, as to which no limit
on Sellers' and PAG's liability shall exist, the aggregate liability
of Sellers and PAG pursuant to Section 11.1 shall not exceed Twenty
Five Million Dollars ($25,000,000) (in the event that the amount of
any such claim would cause the foregoing limitation in this sentence
to be exceeded, Sellers' and PAG's liability with respect to such
claims shall be limited to the portion of such claim which would not
cause such limitation to be exceeded).
11.8 Basket and Cost-Sharing. Except for any claim relating to Sellers'
breach of the representations and warranties under the first four
sentences of Section 5.5 above and the first sentence of Section 5.13
above, any tax-related claim and any claim resulting from intentional
misrepresentation, fraud or criminal misconduct, Sellers and PAG shall
have no liability pursuant to Section 11.1 above, (i) except to the
extent the aggregate liability pursuant thereto exceeds Three Hundred
Fifty Thousand Dollars ($350,000) and then only to the extent of such
excess, or (ii) for any individual items where the liability pursuant
thereto is less than Ten Thousand Dollars ($10,000) and such items
shall not be aggregated for the purposes of the immediately preceding
clause (i). During the four (4) year period immediately from and after
the Closing, Buyer shall bear responsibility, once the $350,000 basket
referred to in clause (i) above has been satisfied, for ten percent
(10%), up to a maximum of One Million Dollars ($1,000,000), of all
costs and expenses incurred in connection with any Buyer indemnity
claim hereunder regarding any environmental matter at any Facility
which was not in compliance with applicable Environmental Laws (it
being agreed and understood that Buyer shall bear responsibility for
one hundred percent (100%) of any such costs and expenses up and until
the $350,000 basket referred to in clause (i) above has been
satisfied).
Buyer shall have no liability pursuant to Section 11.2 above for any
individual items where the liability pursuant thereto is less than Ten
Thousand Dollars ($10,000).
11.9 Calculation of Indemnity Payments. The amount of any loss for which
indemnification is provided under this Section 11 or Section 5.12
above shall be net of any amounts recovered or recoverable by the
Indemnified Party under insurance policies with respect to such loss
and shall be (a) increased to take account of any net tax cost
actually incurred by the Indemnified Party arising from the receipt of
the indemnity payments hereunder (grossed up for such increase), and
(b) reduced to take account of any net tax benefit actually realized
by the Indemnified Party arising from the incurrence or payment of any
such indemnified amount. In computing the amount of any such tax cost
or tax benefit, the Indemnified Party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before
recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified amount.
11.10Tax Treatment of Indemnification. For all tax purposes, Buyer and
Sellers agree to treat any indemnity payment under this Agreement as
an adjustment to the Purchase Price, unless a final determination,
including the execution of a U.S. Internal Revenue Service Form 870-AD
or successor form, provides otherwise.
11.11Access to Information. Buyer acknowledges that it and its
representatives have received or been afforded the opportunity to
review prior to the date of this Agreement all written materials
delivered by Sellers or made available by Sellers to Buyer pursuant to
this Agreement on or prior to the date of this Agreement. Buyer
acknowledges that it and its representatives have been permitted full
and complete access to the books and records, facilities, equipment,
tax returns, contracts, insurance policies (or summaries thereof) and
other properties and assets of the Companies that it and its
representatives have desired or requested to see and/or review, and
that it and its representatives have had a full opportunity to meet
with the officers and employees of the Companies to discuss the
businesses and assets of the Companies. Buyer further acknowledges and
agrees that (i) other than the representations and warranties of
Sellers and PAG specifically contained in this Agreement, none of
Sellers, PAG, the Companies or any other person has made any
representation or warranty either express or implied (a) with respect
to the Companies or their respective assets and liabilities, the
transactions contemplated by this Agreement or the Capital Stock, or
(b) as to the accuracy or completeness of any information regarding
the Companies furnished or made available to Buyer and its
representatives; and (ii) Buyer shall have no claim or right to
indemnification pursuant to this Section 11 and none of Sellers, the
Companies or any other person shall have or be subject to any
liability to Buyer or any other person with respect to any
information, documents or materials furnished by Sellers, the
Companies or any of their respective affiliates, officers, directors,
employees, agents or advisors to Buyer, including any information,
documents or material made available to Buyer in certain "data rooms",
management presentations or any other form in expectation of the
transactions contemplated by this Agreement. It is hereby agreed and
understood that nothing in this Section 11.11 shall limit Sellers' and
PAG's indemnification obligation under this Agreement to the extent
such obligation arises out of an item included in the Disclosure
Schedule.
11.12Exclusive Remedy. The parties further acknowledge and agree that,
should the Closing occur, their sole and exclusive remedy with respect
to any and all claims relating to this Agreement, the Companies or
their respective assets and liabilities, the transactions contemplated
by this Agreement and the Capital Stock (other than claims of, or
causes of action arising from, fraud, intentional misrepresentation or
criminal misconduct) shall be pursuant to the indemnification
provisions set forth in this Section 11, in the last sentence of
Section 7.13 above, or in Sections 5.12, 7.14, 7.15, 7.16 or 7.18
above, as applicable. In furtherance of the foregoing, each party
hereto hereby waives, from and after the Closing, any and all rights,
claims and causes of action (other than claims of, or causes of action
arising from, fraud, intentional misrepresentation or criminal
misconduct) one party hereto may have against the other party or any
of their respective affiliates or any of their respective directors,
officers and employees arising under or based upon any Federal, state,
local or foreign statute, law, ordinance, rule or regulation or
otherwise (except pursuant to the indemnification provisions set forth
in this Section 11, in the last sentence of Section 7.13 above, or in
Sections 5.12, 7.14, 7.15, 7.16 or 7.18 above).
11.13No Contribution. In the event Buyer or either Company asserts an
indemnity claim against Sellers and PAG hereunder, none of Sellers,
PAG and any of their subsidiaries and affiliates shall have any rights
of contribution from, or subrogation against, either Company (or their
Tax Affiliates) with respect to such claims.
12. Miscellaneous. The following miscellaneous provisions shall apply to
this Agreement:
12.1 Notices. All notices or other communications required or permitted to
be given, pursuant to the terms of this Agreement, shall be in writing
and shall be deemed to be duly given when received if delivered in
person or by telex, telegram or cable and confirmed by mail, or mailed
by registered or certified mail (return receipt requested) or
facsimile, express mail, postage prepaid, as follows:
If to Buyer: Valmont Industries, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ First National Tower
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Phone No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sellers and/or Pfleiderer Aktiengesellschaft
PAG: Ingolstadter Stra(beta)e 51
D-92318 Neumarkt
Germany
Attn: General Counsel
Phone No: (09181) 28-488
Fax No: (09181) 28-185
With a copy to: Cravath, Swaine & ▇▇▇▇▇ LLP
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the party to whom notice is to be given
furnishes in writing to the other party in the manner set forth above.
12.2 Amendments and Waivers. This Agreement may not be modified or amended,
except by instrument or instruments in writing, signed by the party
against whom enforcement of any such modification or amendment is
sought. Either Buyer, on the one hand, or Sellers, on the other hand,
may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Agreement on the part of such other
party to be performed or complied with. No action taken, pursuant to
this Agreement, including any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty or agreement
contained herein. The waiver by any party hereto of a breach of any
term or provision of this Agreement shall not be construed as a waiver
of any subsequent breach.
12.3 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, except as otherwise provided herein,
Sellers, PAG and Buyer shall pay their own expenses incident to the
preparation, execution and consummation of this Agreement, including
the fees of any attorneys, accountants, brokers or advisers employed
by or on behalf of such party. Buyer shall pay any filing fee under
the HSR Act.
12.4 Entire Agreement. This Agreement, the Disclosure Schedule, the
exhibits hereto, any written amendments to the foregoing satisfying
the requirements of Section 12.2 above and the Confidentiality
Agreement constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral and written, among the parties
hereto with respect to the subject matter hereof. All exhibits and
Disclosure Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in the Disclosure Schedule or
any exhibit but not otherwise defined therein shall be defined as set
forth in this Agreement. In the event of any conflict between the
provisions of this Agreement (including the Disclosure Schedule and
the exhibits hereto), on the one hand, and the provisions of the
Confidentiality Agreement, on the other hand, the provisions of this
Agreement shall control.
12.5 Applicable Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and
performed in the State of Delaware.
12.6 Binding Effect, Benefits. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors
and assigns; nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or
their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
12.7 Assignability. Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior
written consent of the other party hereto.
12.8 Effect of Headings. The headings of the various sections and
subsections of this Agreement and of the Disclosure Schedule are
inserted merely as a matter of convenience and for reference and shall
not be construed as in any manner defining, limiting or describing the
scope or intent of the particular sections to which they refer, or as
affecting the meaning or construction of the language in the body of
such sections or subsections.
12.9 Disclosure Schedule. For purposes of this Agreement, any item in the
Disclosure Schedule shall be deemed disclosed only in connection with
the specific representation or warranty to which it is specifically
referenced or, notwithstanding the appearance of the word "none" in
any section of the Disclosure Schedule, such other representation or
warranty to which on its face it reasonably relates.
12.10Severability. Any term or provision of this Agreement, which is
invalid or unenforceable in any jurisdiction, shall be ineffective to
the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the
terms or other provisions of this Agreement in any other jurisdiction.
12.11Construction. The language in all parts of this Agreement shall in
all cases be construed as a whole according to its fair meaning,
strictly neither for nor against any party hereto, and without
implying a presumption that the terms thereof shall be more strictly
construed against one party by reason of the rule of construction that
a document is to be construed more strictly against the person who
himself drafted same. It is hereby agreed that representatives of all
parties have participated in the preparation hereof.
12.12Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be regarded as an original and all
of which together shall constitute one and the same instrument.
12.13Record Retention. Buyer will cause all books and records of the
Companies that are in or come into the possession of the Companies
(the "Records") to be retained for five (5) years after Closing. In
addition, to the extent any books and records of the Business are
retained by Sellers, PAG or any of their subsidiaries or affiliates
following Closing (the "Retained Records"), Sellers shall retain the
Retained Records for five (5) years after Closing. During such term,
each party shall allow the other party and its representatives access
to inspect and copy the Records and Retained Records, as appropriate,
during normal business hours to the extent reasonably required for a
legitimate business purpose, including in respect of litigation,
insurance matters, tax matters and financial reporting of Sellers or
their respective affiliates. In the event a party intends to destroy
any Records or Retained Records in its control at the end of such five
(5) year term, such party shall first notify the other party at which
time the other party shall have the right to remove the Records or
Retained Records, as the case may be, at their own cost.
12.14Jurisdiction. Each party irrevocably submits to the exclusive
jurisdiction of any Delaware state court or Federal court located in
the State of Delaware, for the purpose of any suit, action or other
proceeding arising out of this Agreement or any agreement or any
transaction contemplated hereby. Each party agrees to commence any
such action, suit or proceeding either in a Federal court located in
the State of Delaware or if such suit, action or other proceeding may
not be brought in such court for jurisdictional reasons, in any state
court located in the State of Delaware. PAG and each Seller agrees to
appoint and maintain during the period commencing on the Closing Date
and ending on the date which is the later of four (4) years after
Closing and the end of the time period set forth in Section 5.12.10
above CT Corporation in Delaware as its agent for service of process
in Delaware. Each party further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's
respective agent for service of process in the State of Delaware shall
be effective service of process for any action, suit or proceeding in
Delaware with respect to any matter to which it has submitted
jurisdiction in this Section 12.14. Each party irrevocably and
unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or any
agreement or the transactions contemplated hereby or thereby in any
Delaware state court or any Federal court located in the State of
Delaware, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
12.15Certain Definitions. For purposes hereof:
"affiliate" of any part means any person or entity controlling,
controlled by or under common control with such party.
"business day" shall refer to a day, other than a Saturday or a
Sunday, on which commercial banks are not required or authorized to
close in the City of New York or Frankfurt.
"Companies Material Adverse Effect" means a material adverse effect
(i) on the financial condition or results of operations of the
Companies, taken as a whole, or (ii) on the ability of Sellers or
Buyer to consummate the transactions contemplated by this Agreement.
For purposes of this Agreement, "Companies Material Adverse Effect"
shall exclude any effects to the extent resulting from (A) changes in
the United States, German or other foreign economies in general, (B)
changes in the Companies industries in general but not specifically
relating to the Companies, (C) the announcement of Sellers intention
to sell, and Buyer's intention to buy, the Capital Stock, or (D) the
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement.
"$" or "Dollars" means United States dollars.
"including" means including, without limitation.
"knowledge of Sellers" and "Sellers' knowledge" means the actual
knowledge of ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, both with respect to knowledge which each
such person personally holds and knowledge which each such person
obtains after due and reasonable inquiry of ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ Warwrzeniak.
"person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Entity or other
entity.
"subsidiary" of any person means another person, an amount of the
voting securities, or other voting ownership or voting partnership
interest of which is sufficient to elect at least a majority of its
board of directors or other governing body (or, if there is no such
voting interest, more than fifty percent (50%) of the equity interests
of which) is owned directly or indirectly by such person or by another
subsidiary of such person.
12.16Waiver of Jury Trial. Each party hereby waives to the fullest extent
permitted by applicable statute, law, ordinance or regulation, any
right it may have to a trial by jury in respect to any litigation
directly or indirectly arising out of, under or in connection with
this Agreement or the transactions contemplated by this Agreement or
disputes relating hereto. Each party: (a) certifies that no
representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event
of litigation, seek to enforce the foregoing waiver; and (b)
acknowledges that it and the other parties hereto have been induced to
enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 12.16.
IN WITNESS WHEREOF, PAG, Sellers and Buyer have each executed this
Agreement on the date first above written.
PFLEIDERER AKTIENGESELLSCHAFT PFLEIDERER LEASING VERWALTUNGS - GmbH
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
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Its: CEO Its: Director
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its: Member of the Executive Board Its: Director
HALDE NEUNUNDNEUNZIGSTE VALMONT INDUSTRIES, INC.
VERWALTUNGSGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. Bay
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Its: Director Its: Chairman / CEO
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: Director
PFLEIDERER CONSULTING GmbH
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Its: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: Director