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ASSET PURCHASE AGREEMENT
BY AND AMONG
MULTI-COLOR CORPORATION AS ("MCC") AND MCC-UNIFLEX, LLC
(AS "BUYER")
UNIFLEX
(AS "SELLER")
AND
▇▇▇▇ ▇▇▇▇▇▇▇▇, MEIWA CORPORATION
AND
RYOHSEI PLASTIC INDUSTRIES CO., LTD.
(COLLECTIVELY, AS "SHAREHOLDERS")
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June 5, 2000
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TABLE OF CONTENTS
SECTION PAGE
1. Definition of Certain Terms..............................................1
2. Purchase and Sale of Assets..............................................2
2.1 Purchase and Sale..................................................2
2.2 Excluded Assets....................................................4
2.3 Assumed Liabilities................................................5
2.4 Retained Liabilities...............................................6
2.5 Purchase Price.....................................................8
2.6 Adjustment of Purchase Price.......................................8
2.7 Determination of Net Assets Value and Adjustment Amount............8
2.8 Inventory..........................................................9
2.9 Allocation of Purchase Price.......................................9
3. Closing ..............................................................10
4. Representations and Warranties of Seller and Shareholders...............10
4.1 Corporate Status..................................................10
4.2 Financial Statements..............................................11
4.3 Absence of Undisclosed Liabilities................................11
4.4 Absence of Certain Events.........................................11
4.5 [Intentionally Left Blank].........................................14
4.6 Accounts Receivable...............................................14
4.7 Assets Necessary To Business......................................15
4.8 Authority; Consents; Enforcement: Noncontravention;
Noncompetes...............................................15
4.9 Books and Records.................................................17
4.10 Compliance With Legal Requirements; Governmental
Authorizations............................................17
4.11 Computer Systems; Software.......................................19
4.12 Condition and Sufficiency of Assets...............................21
4.13 Contracts........................................................21
4.14 Customers of Seller; Conditions Affecting Seller.................22
4.15 Employee Benefits................................................22
4.16 Employees and Compensation.......................................25
4.17 Environmental Matters............................................27
4.18 Insurance........................................................30
4.19 Intellectual Property............................................30
4.20 Inventory........................................................32
4.21 Labor Relations; Compliance......................................32
4.22 Litigation; Orders...............................................33
4.23 No Agent or Broker...............................................34
4.24 Notices of Violation.............................................34
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TABLE OF CONTENTS
SECTION PAGE
4.25 Personal Property................................................34
4.26 Products.........................................................35
4.27 Real Property....................................................35
4.28 Similar Business Ownership.......................................36
4.29 Status of Contracts..............................................36
4.30 [Intentionally Left Blank]........................................37
4.31 Subsidiaries and Investments.....................................37
4.32 Taxes; Tax Returns; Tax Elections................................37
4.33 Title to Properties..............................................38
4.34 Completeness of Statement; Effect of Representations
and Warranties............................................39
5. Representations and Warranties of Buyer.................................39
5.1 Corporate Status..................................................39
5.2 Authority; Consents; Enforcement; Noncontravention;
Noncompetes...............................................39
5.3 No Agent or Broker................................................41
5.4 Completeness of Statements; Effect of Representations
and Warranties............................................41
6. [Intentionally Left Blank]...............................................41
7. [Intentionally Left Blank]...............................................41
8. Covenants of the Parties................................................41
8.1 Transition of the Business........................................41
8.2 Employment of Business's Employees................................42
8.3 Further Assurances................................................42
8.4 Insurance.........................................................42
8.5 Proration of Expenses and Other Charges of the Business...........43
8.6 Filing of Taxes; Payment..........................................43
8.7 Sales and Other State Taxes.......................................43
8.8 Use of Names......................................................44
8.9 Termination of Employee Benefit Plans..............................44
8.10 Environmental Matters.............................................44
9. [Intentionally Left Blank]...............................................44
10. [Intentionally left blank]..............................................44
11. [Intentionally Left Blank]..............................................44
12. Deliveries and Actions To Be Taken At Closing..........................44
12.1 Deliveries by Seller and Shareholders............................44
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TABLE OF CONTENTS
SECTION PAGE
12.2 Deliveries by Buyer..............................................46
12.3 Covenants and Agreements Not-To-Compete..........................46
12.4 Leases ..........................................................46
12.5 Assumption Agreement.............................................47
12.6 Change of Name...................................................47
12.7 [Intentionally Left Blank]........................................47
13. Indemnification; Remedies..............................................47
13.1 Survival; Right to Indemnification...............................47
13.2 Indemnification and Payment of Damages By Seller
and Shareholders..........................................47
13.3 Remedies of Buyer Indemnities Not Exclusive......................48
13.4 Use of Insurance to Indemnify Buyer Indemnitees for
Liability Related to Environmental Matters................48
13.5 Indemnification By Buyer.........................................49
13.6 Remedies of Seller Indemnities Not Exclusive.....................50
13.7 Time Limitations.................................................50
13.8 Indemnity Claims.................................................50
13.9 Right of Set-Off.................................................53
13.10 Limitations on Indemnification by Seller
and Shareholders..........................................53
14. [Intentionally Left Blank]..............................................54
15. Miscellaneous Provisions...............................................54
15.1 Arbitration......................................................54
15.2 Amendment; Waiver................................................55
15.3 Agreement Non-Assignable; Binding Effect.........................55
15.4 Construction and Interpretation of Agreement.....................55
15.5 Severability of Provisions.......................................56
15.6 Confidentiality of Certain Information...........................57
15.7 Confidentiality of Agreement.....................................57
15.8 Exclusive Forum..................................................58
15.9 Exhibits and Schedules...........................................58
15.10 Counterparts....................................................58
15.11 Entire Agreement................................................58
15.12 Independent Contractor Relationship.............................59
15.13 Expenses........................................................59
15.14 Further Assurances..............................................59
15.15 Governing Law...................................................59
15.16 No Public Announcement..........................................59
15.17 Notices.........................................................60
15.18 Recovery of Expenses by Prevailing Party........................61
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15.19 Cumulative Remedies; Specific Performance.......................61
15.20 Time of Essence.................................................61
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EXHIBITS
DESCRIPTION EXHIBIT
Excluded Assets..............................................................A
Assumption Agreement.........................................................B
Purchase Price Allocation....................................................C
Sales and Other Taxes........................................................D
Seller and Shareholder Resolutions ..........................................E
▇▇▇▇ of Sale and Assignment Agreement........................................F
Seller's Opinion of Counsel..................................................G
Buyer's Resolutions .........................................................H
Shareholders' Noncompetition Agreement.......................................I
Seller's Noncompetition Agreement............................................J
Yamasaki's Noncompetition Agreement..........................................K
Real Property Leases.........................................................L
SCHEDULES
DESCRIPTION SCHEDULE
Operating Cash, Investments, Securities, Notes Receivable
and Deposits..........................................................2.1(b)
Assumed Contracts.......................................................2.1(g)
Claims..................................................................2.1(k)
Prepaid Expenses........................................................2.1(m)
Other Liabilities.......................................................2.3(g)
Adjustment to Purchase Price...............................................2.6
Corporate Status...........................................................4.1
Absence of Undisclosed Liabilities.........................................4.3
Absence of Certain Events..................................................4.4
Accounts Receivable........................................................4.6
Seller's Consent........................................................4.8(b)
Compliance with Legal Requirements.....................................4.10(a)
Governmental Authorizations............................................4.10(b)
Computers..............................................................4.11(a)
Software Rights........................................................4.11(b)
Condition and Sufficiency of Assets.......................................4.12
Contracts.................................................................4.13
Customers of Seller.......................................................4.14
Benefit Plans..........................................................4.15(a)
Employees and Compensation................................................4.16
Environmental Matters..................................................4.17(a)
Environmental Claims...................................................4.17(b)
Environmental Orders...................................................4.17(c)
Environmental Liabilities..............................................4.17(d)
Hazardous Materials....................................................4.17(e)
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Release.................................................................4.17(f)
Transferable Environmental Permits......................................4.17(i)
Other Intellectual Property..........................................4.19(a)(1)
Intellectual Property Licenses..........................................4.19(b)
Marks...................................................................4.19(d)
Inventory..................................................................4.20
Labor Relations............................................................4.21
Litigation.................................................................4.22
Personal Property..........................................................4.25
Product Warranty........................................................4.26(a)
Leased Property.........................................................4.27(b)
Similar Business Ownership.................................................4.28
Status of Contracts and Leases.............................................4.29
Studies....................................................................4.30
Tax Returns.............................................................4.32(a)
Tax Clearance Certificate...............................................4.32(d)
Title to Properties........................................................4.33
Buyer's Consent..........................................................5.2(b)
Insurance...................................................................8.4
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into and effective
as of June 5, 2000, by and among (i) Multi-Color Corporation, an Ohio
corporation ("MCC"), (ii) MCC-Uniflex, LLC, an Ohio limited liability company
("Buyer"), (iii) Uniflex, a California corporation ("Seller") and (iv) ▇▇▇▇
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇"), Meiwa Corporation ("Meiwa"), a corporation organized
under the laws of Japan ("Meiwa"), and Ryohsei Plastic Industries, Co., Ltd., a
corporation organized under the laws of Japan and a subsidiary of Meiwa
("Ryohsei") (also individually a "Shareholder," collectively "Shareholders").
RECITALS:
A. Seller, all of the outstanding capital stock of which is owned by
Shareholders, is engaged in the manufacturing of heat shrink specialty labels
(the "Business") with its principal place of business located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇&▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and general offices located at ▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, all of the Business, and all of the assets and properties owned or used
by Seller in the conduct of the Business, for the consideration and upon the
other terms and conditions set forth in this Agreement.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITION OF CERTAIN TERMS. Certain capitalized terms used in this
Agreement are defined in the Appendix of Defined Terms attached hereto, and when
used herein have the meaning set forth in the Appendix.
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2. PURCHASE AND SALE OF ASSETS.
2.1 PURCHASE AND SALE. Upon the terms and subject to the conditions of this
Agreement, at the Closing (as such term is defined in SECTION 3), Seller shall
sell, transfer, convey, assign and deliver to Buyer, and Buyer shall purchase
and acquire from Seller, free and clear of all Encumbrances, all the right,
title and interest that Seller possesses and has the right to transfer under, in
and to the Business and all of Seller's property and assets, real, personal or
mixed, tangible and intangible, of every kind and description, wherever located,
belonging to Seller as of the date hereof or which relate to the Business, as a
going concern, other than the "Excluded Assets" (as defined in SECTION 2.2),
including the following (the "Acquisition Assets"):
(a) ACQUISITION BALANCE SHEET ASSETS. All of the assets and
properties reflected on the Acquisition Balance Sheet (as defined in SECTION
4.2), except those disposed of in the ordinary course of business, and including
those acquired in the ordinary course of business, since the date thereof.
(b) CASH, INVESTMENTS AND DEPOSITS. Cash in the amount of Eight
Hundred Thousand Dollars ($800,000) ("Operating Cash"), all securities and
investments and notes receivable, including those identified on SCHEDULE 2.1(b),
and all deposits in connection with real and personal property leases to which
Seller is a party ("Investments").
(c) REAL PROPERTY. All leasehold and other interests in and to all
real property, including the real property and leasehold interests identified on
SCHEDULE 4.27(b), together with all improvements, buildings and fixtures located
thereon or therein and all construction in progress ("Real Property Leases").
(d) PERSONAL PROPERTY. All machinery, equipment, fixtures,
computer hardware and software (subject to any restrictions by the licensor on
the assignment thereof) tools, supplies, spare parts, furniture, vehicles and
all other tangible personal property and assets owned or leased by Seller,
including, without limitation those identified on SCHEDULE 4.25 ("Personal
Property").
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(e) INVENTORIES. All inventories of raw materials, work-in-process
and finished goods of Seller, wherever located, including inventories located in
or about Seller's facilities, in transit to Seller's facilities, provided that
title has passed to Seller, or in transit to any customer of Seller, provided
that title has not passed to such customer of Seller ("Inventories").
(f) ACCOUNTS RECEIVABLE. All accounts receivable, notes
receivable, premiums receivable, commissions receivable, and other rights to
receive payments from customers of Seller or from others, including all trade
accounts receivable representing amounts payable to Seller in respect of goods
shipped, products sold, or services rendered, to customers or clients of Seller
on or prior to the date hereof, and the full benefit of all security for such
accounts, and all claims, remedies and other rights related to any thereof,
including those identified on SCHEDULE 4.6 ("Receivables").
(g) CONTRACTS. All the interest (including all rights, benefits,
duties and obligations) that Seller possesses and has the right to transfer in
all written or oral contracts, agreements, indentures, warranties, notes, bonds,
loans, instruments, leases, conditional sales contracts, mortgages, licenses,
franchises, insurance policies, commitments or other arrangements or agreements
and understandings, including, without limitation, those identified on SCHEDULE
2.1(g), and all outstanding offers or solicitations to enter into any of the
foregoing ("Contracts").
(h) GOVERNMENTAL AUTHORIZATIONS. All Governmental Authorizations
owned, held or utilized by Seller in connection with the ownership of the
Acquisition Assets and the operation of the Business, and all pending
applications therefor, in each case to the extent transferrable to Buyer,
including those listed on SCHEDULE 4.10(b).
(i) DATA AND RECORDS. All operating data and records of Seller,
including customer lists and records, supplier agreements, rebate details,
general commercial information, referral sources, research and development
reports and records, production reports and records, equipment logs, operating
guides and manuals, copies of financial, accounting and personnel records,
correspondence and other similar documents and records ("Data and Records").
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(j) INTELLECTUAL PROPERTY. All of the intangible and intellectual
property which Seller possesses and has the right to transfer, including all
Internet domain names, Marks, whether registered or unregistered, and all post
office box numbers, Trade Secrets, all telephone and facsimile numbers and other
listings and numbers used primarily in connection with the Business, including
those identified on SCHEDULE 4.19(a).
(k) CLAIMS. All claims of Seller against third parties relating to
the Business or the Acquisition Assets, whether ▇▇▇▇▇▇ or inchoate, known or
unknown, contingent or otherwise, including without limitation, all such claims
listed on SCHEDULE 2.1(k);
(l) INSURANCE PROCEEDS. All insurance proceeds arising in
connection with damage or loss to any Acquisition Assets occurring prior to the
date hereof, to the extent not expended for the repair or restoration of the
Acquisition Assets ("Insurance Proceeds");
(m) PREPAID EXPENSES. All prepaid expenses relating to the
Acquisition Assets, including those listed on SCHEDULE 2.1(m) ("Prepaid
Expenses").
(n) GOODWILL. The going concern value and goodwill of Seller.
(o) OTHER ASSETS. Other properties and assets of every kind,
character or description, tangible or intangible, owned by Seller or used or
held for use in connection with the Business, whether or not similar to the
items or types specifically set forth above ("Other Assets").
2.2 EXCLUDED ASSETS. There shall be excluded from the Acquisition Assets
only those assets described on EXHIBIT A ("Excluded Assets").
2.3 ASSUMED LIABILITIES. At the Closing, Buyer shall deliver to Seller an
undertaking and assumption, in the form of EXHIBIT B (the "Assumption
Agreement"), pursuant to which Buyer shall
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assume and agree to discharge only the following specifically enumerated
obligations and Liabilities of Seller (the "Assumed Liabilities"):
(a) all Liabilities for payment of trade accounts payable
reflected on the Closing Balance Sheet remaining unpaid on the date hereof,
other than the account payable to Meiwa in an amount equal to Six Hundred
Twenty-Five Thousand Three Hundred Fifty Dollars ($625,350.00);
(b) all Liabilities for payment of accrued payroll, accrued
vacation and accrued sick leave and other accrued liabilities reflected on the
Closing Balance Sheet;
(c) all Liabilities to Seller's customers or clients under
purchase orders for products or services not delivered, purchased or otherwise
completed on the date hereof;
(d) all Liabilities to Seller's customers under express, written
warranties with respect to Seller's products or services customarily given by
Seller to its customers in the Ordinary Course of Business;
(e) all Liabilities arising out of or relating to the product
liability claims identified on SCHEDULE 2.1(k);
(f) all Liabilities of Seller arising after the Closing (other
than any Liability for, or resulting from, any breach or default thereunder
which occurred prior to the Closing) under the Contracts identified on SCHEDULE
2.1(g), or under any contract entered into by Seller in the Ordinary Course of
Business as of the date hereof (for which disclosure is not required on SCHEDULE
2.1(g)), including without limitation the purchase orders entered into by Seller
in the Ordinary Course of Business, to the extent not already satisfied by
Seller prior to the date hereof; and
(g) the other Liabilities of Seller described on SCHEDULE 2.3(g)
hereto.
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2.4 RETAINED LIABILITIES. Except Assumed Liabilities, Buyer shall not
assume, and Seller shall remain solely responsible for, and shall retain, pay,
perform and discharge, any and all other Liabilities of Seller on the Business
(the "Retained Liabilities"). Notwithstanding anything to the contrary contained
herein, and without limiting the foregoing, the following shall be considered
"Retained Liabilities" of Seller for the purposes of this Agreement:
(a) any Liability or obligation of Seller arising under this
Agreement;
(b) any Liability or obligation arising from any product Liability
of Seller or the Business not included in the Assumed Liabilities in respect of
products or services of the Business manufactured, sold or provided to
customers, clients or others, prior to the Closing;
(c) any Liability for any Tax, including (1) any Taxes arising out
of, or resulting from, Seller's ownership or operation of the Business or the
Acquisition Assets before the Closing, (2) any Taxes arising out of, or
resulting from, the sale of the Acquisition Assets pursuant to this Agreement,
and (3) any Liability for deferred Taxes of any nature;
(d) any Environmental, Health and Safety Liabilities, including,
and not limited to those listed on SCHEDULE 4.17(a);
(e) any Liability arising under any Contract not transferred to
Buyer under this Agreement;
(f) any Liability to indemnify any shareholder, officer, director,
employee or agent of Seller;
(g) any Liability of the Business to Seller or any Related Persons
(except as specifically assumed by Buyer);
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(h) any Liability relating to accrued payroll, accrued vacation,
accrued sick leave or other accrued liabilities, not reflected on the Closing
Balance Sheet, and any Liability for pension benefits, employee stock option or
profit-sharing plans, health care plans or benefits, or any other benefits of
any kind for employees or former employees, or both;
(i) any Liability under any employment, severance, retention or
termination agreement with any employee of Seller or any Related Person;
(j) any Liability arising out of or related to any employee
grievance commenced or relating to periods prior to the date hereof whether or
not the affected employees become employees of Buyer;
(k) any Liability under any Contract transferred to Buyer
hereunder as part of the Acquisition Assets which arises after the date hereof
and which is attributable to or associated with (1) any material breach of or
material default under (or an event which, with the passing of time or the
giving of notice, or both, constitutes a material breach of or material default
under) any such transferred Contract, which breach, default or event occurred
prior to the Closing, or (2) any service provided or to have been provided by
Seller under any such transferred Contract prior to the date hereof;
(l) any Liability to distribute to the Shareholders of Seller, or
otherwise apply all or any part of the consideration paid by Buyer hereunder;
(m) any Liability arising out of any Proceeding, whether or not
set forth in any Exhibit or Schedule hereto, or any other Proceeding arising out
of, or relating to, any occurrence or event happening before the Closing;
(n) any Liability based upon acts or omissions of Seller occurring
after the date hereof;
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(o) any other Liability of Seller not included in the Assumed
Liabilities, including any Liability directly or indirectly arising out of or
relating to the operation of the Business or ownership of the Acquisition Assets
prior to the Closing.
2.5 PURCHASE PRICE. The purchase price for the Acquired Assets shall be
Seven Million Dollars ($7,000,000), subject to adjustment as provided in SECTION
2.6 ("Purchase Price"). The Purchase Price shall be paid by Buyer at the Closing
by wire transfer or delivery of other immediately available funds in the amount
of Seven Million Dollars ($7,000,000) to an account designated by Seller.
2.6 ADJUSTMENT OF PURCHASE PRICE. The parties hereto negotiated the
Purchase Price on the basis that the net assets value of the Business,
determined as provided in SECTION 2.7 ("Net Assets Value") as of the Effective
Date (as hereinafter defined) would be adjusted dollar-for-dollar for the
changes from the Net Assets Value of the Business as of the date of the
Acquisition Balance Sheet. Set forth on SCHEDULE 2.6 is the Acquisition Balance
Sheet and estimated Closing Balance Sheet. In the event that the Net Assets
Value of the Business as of the Effective Date shall be less or greater than
that amount, the Purchase Price shall be reduced or increased by an amount equal
to the difference between that amount and the Net Assets Value as of the
Effective Date (the "Adjustment"). Upon final determination of the Adjustment
as provided in SECTION 2.7, Seller or Buyer shall wire transfer or deliver to an
account designated by the other immediately available funds equal to the
Adjustment plus interest thereon from the date hereof through date of payment
calculated at the rate of eight percent (8%) per annum.
2.7 DETERMINATION OF NET ASSETS VALUE AND ADJUSTMENT AMOUNT. Within 90 days
of the Effective Date, Buyer's accounting firm, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇"),
shall (a) determine the Net Assets Value of the Business as of the Effective
Date, and the amount of the Adjustment, if any, provided for in SECTION 2.6, in
accordance with Generally Accepted Accounting Principles ("GAAP"), applied in a
manner consistent with the methods used in the Seller Financial Statements, and
(b) shall give written notice of its determination to Buyer and Seller,
including in such notice the computations made in accordance with GAAP on which
its determination is based (the
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"Adjustment Notice"). If Seller does not give written notice to Buyer disputing
Grant's determinations within 15 days of the Adjustment Notice, the
determination in the Adjustment Notice shall be final, and the Purchase Price
shall be adjusted in accordance with such determination as provided in SECTION
2.6. If Seller disputes Grant's determination in the Adjustment Notice by
written notice thereof to Buyer within 15 days of the Adjustment Notice, Buyer
and Seller shall thereafter attempt to resolve such dispute within 15 days of
Seller's notice. If the parties cannot resolve the dispute within that 15 day
period, Seller shall then appoint BDO ▇▇▇▇▇▇▇ ("BDO") as its representative, who
shall meet with Grant and review the disputed determination. If the two
accounting firms cannot resolve the dispute within 30 days following the
appointment of BDO, Deloitte & Touche, L.L.P. ("Deloitte") shall be mutually
appointed by Buyer and Seller as the third accounting firm to review the
determination, and the decision of Deloitte shall be final and binding on the
parties hereto. Buyer shall pay the costs and expenses of Grant, Seller shall
pay the costs and expenses of BDO, and, if appointed, Buyer and Seller shall
each pay half of the costs and expenses of Deloitte. GAAP shall be applied in a
manner consistent with the methods used in the Seller Financial Statements by
all parties and accounting firms in determining Net Assets Value and the
Adjustment hereunder. Neither the determination of Net Assets Value nor the
adjustment of the Purchase Price pursuant to SECTIONS 2.6 and 2.7 shall limit,
reduce, or otherwise affect or alter the representations, warranties and
covenants of the parties contained herein, including, without limitation, their
indemnification obligations under SECTION 13.
2.8 INVENTORY. For purposes of determining the Net Assets Value as provided
in SECTION 2.7, and the Adjustment pursuant to SECTION 2.6, Seller and Buyer, at
Buyer's expense, shall conduct and complete a physical count and valuation of
the Business's Inventories on the date hereof. The Inventories reflected thereby
shall be valued in accordance with GAAP in a manner consistent with the methods
used in the Seller Financial Statements.
2.9 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Acquisition Assets as specified in EXHIBIT C hereto. After the
Closing, the parties agree to make consistent use of the allocation, fair market
values and useful lives specified in EXHIBIT C for all Tax purposes and in any
and all filings, declarations and reports with the Internal Revenue Service (the
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"IRS") in respect thereof, including without limitation, the reports required to
be filed under Section 1060 of the IRC, if applicable, it being understood that
Buyer shall prepare and deliver IRS Form 8594 to Seller within forty-five (45)
days after the date hereof if such form is required to be filed with the IRS. In
any Proceeding related to the determination of any Tax, no party hereto shall
contend or represent that such allocation is not correct.
3. CLOSING. Consummation of the purchase and sale of the Acquisition Assets as
contemplated in this Agreement (the "Closing") shall take place telephonically
at the offices of MCC's and Buyer's counsel, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ Chemed Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and at the
offices of Seller's counsel, ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 3:00 p.m., Eastern Standard Time, on June
5, 2000, or at such other time and place as the parties may mutually agree. The
Closing shall be effective the as of the close of business on the last business
day preceding the day on which the transaction is closed (the "Effective Date").
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS. Seller and each
Shareholder, jointly and severally, hereby represent and warrant to Buyer as
follows:
4.1 CORPORATE STATUS. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. Seller
has, and, to the Knowledge of Seller, at all times has had, full corporate power
and authority to own and lease its properties as such properties are now owned
and leased and to conduct its business as and where such business has and is now
being conducted. Set forth on SCHEDULE 4.1 are true and complete copies of the
organizational documents of Seller, as amended to the date hereof. To the
Knowledge of Seller, neither the nature of the business of Seller, nor the
character and location of the properties owned or leased by Seller, makes its
qualification as a foreign corporation necessary under the laws of any
jurisdiction, except as set forth on SCHEDULE 4.1, and except where the failure
to be so qualified would not have any Adverse Effect. Shareholders own all of
the issued and outstanding capital stock of Seller as set forth on SCHEDULE 4.1.
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4.2 FINANCIAL STATEMENTS. Seller has delivered to Buyer the following
financial statements of Seller and the Business (the "Seller Financial
Statements"): (a) unaudited consolidated balance sheets of Seller and the
Business, for each of the fiscal years ending December 31, 1997, 1998 and 1999,
and the related unaudited consolidated statements of income and cash flow for
each of the periods then ended and (b) an unaudited consolidated balance sheet
of Seller and the Business as at November 30, 1999 (the "Acquisition Balance
Sheet"), and the related unaudited consolidated statements of income and cash
flow for the period then ended, including in each case the notes thereto. The
Seller Financial Statements and notes thereto fairly present the financial
position and the results of operations, changes in shareholders' equity, and
cash flow of Seller and the Business, as at the respective dates of, and for the
periods referred to in, Seller Financial Statements, all in accordance with
GAAP, subject, in the case of interim financial statements, to normal recurring
year-end adjustments (the effect of which will not, individually or in the
aggregate, have an Adverse Effect) and the absence of notes to the Seller
Financial Statements (that, if presented, would not differ materially from those
included in the Acquisition Balance Sheet), consistently applied throughout the
periods covered by the Seller Financial Statements involved, except as disclosed
in the notes thereto. No financial statements of any Person other than Seller
are required by GAAP to be included in the consolidated financial statements of
Seller. The Seller Financial Statements have been prepared from and are in
accordance with the books and records of Seller and the Business.
4.3 ABSENCE OF UNDISCLOSED LIABILITIES. As of November 30, 1999, Seller had
no material Liabilities except as shown (and in the amounts shown) on the
Acquisition Balance Sheet or as shown on SCHEDULE 4.3. Since November 30, 1999,
except as shown on SCHEDULE 4.3, Seller has not incurred or become subject to
any material Liability, other than Liabilities incurred in the Ordinary Course
of Business, all of which have been paid in full in the Ordinary Course of
Business or are reflected on Seller's regular books of account on the date
hereof and none of which is inconsistent with the representations, warranties
and covenants of Seller and Shareholders contained herein or with any other
provisions of this Agreement.
4.4 ABSENCE OF CERTAIN EVENTS. Since November 30, 1999, Seller and
Shareholders have not, with respect to Seller and the Business, except as set
forth on SCHEDULE 4.4:
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(a) waived or released any debts, claims or rights of value or
suffered any extraordinary loss or written down the value of any inventories or
other assets or written down or off any receivable in excess of Five Thousand
Dollars ($5,000) for any one event or in excess of Twenty-Five Thousand Dollars
($25,000) in the aggregate;
(b) made any capital expenditures or capital commitments outside
the Ordinary Course of Business in excess of $5,000 for any single one or series
of related transactions or in excess of Twenty-Five Thousand Dollars ($25,000)
in the aggregate;
(c) made any change in the Business or the manner of conducting
the Business, other than changes in the Ordinary Course of Business, none of
which has, and which in the aggregate have not had, an Adverse Effect;
(d) terminated, placed on probation, disciplined, warned, or
experienced any material dissatisfaction with, any officer, supervisory employee
or outside salesperson of Seller;
(e) experienced any resignations of, or had any disputes involving
the employment or agency relationship with any employee or agent of Seller which
could reasonably be expected to have an Adverse Effect and, concerning any
branch manager or outside salesperson, whether or not the same, to the Knowledge
of Seller, could reasonably be expected to have an Adverse Effect;
(f) suffered any casualty, damage, destruction or loss to any of
its properties not covered by insurance in excess of Five Thousand Dollars
($5,000) for any one event or in excess of Twenty-Five Thousand Dollars
($25,000) in the aggregate;
(g) declared, set aside or paid any dividends or distributions in
respect of shares of common stock of Seller, except in the Ordinary Course of
Business;
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(h) paid or obligated itself to pay any bonuses, except bonuses in
the Ordinary Course of Business, or extraordinary compensation to, or made any
increase (except increases in the Ordinary Course of Business) in the
compensation payable (or to become payable by it) to, any of its directors,
officers, employees, agents, Shareholders or other representatives of Seller;
(i) terminated or amended or suffered the termination or amendment
of any material contract, lease, agreement, license or other instrument to which
it is or was a party, other than any of such actions which occur in the Ordinary
Course of Business or which does not have an Adverse Effect;
(j) adopted, modified or amended any plan or agreement listed on
SCHEDULE 4.15(a) so as to increase the benefits due the employees of Seller
under any such plan or agreement;
(k) made any loan or advance to any Person (except a normal travel
or other reasonable expense advance to its officers and employees);
(l) to the Knowledge of Seller, suffered an Adverse Effect;
(m) subjected any of its assets or properties to any Encumbrances
or to any other similar charge of any nature whatsoever;
(n) paid any funds to any of its officers or directors, or to any
family member of any of them, or any Person in which any of the foregoing have
any direct or indirect interest, except for the payment of installments of
annual salaries and the bonuses accrued at December 31, 1999;
(o) disposed of or encumbered, or agreed to dispose of or encumber
any of its assets or properties, other than in the Ordinary Course of Business;
(p) entered into any material transactions other than in the
Ordinary Course of Business;
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(q) made any change in accounting principles, methods or
practices;
(r) entered into any agreement, contract, lease or license (or
series of related agreements, contracts, leases or licenses) other than purchase
orders entered into in the Ordinary Course of Business, which either involve
more than Ten Thousand Dollars ($10,000) or were made outside the Ordinary
Course of Business;
(s) delayed or postponed the payment of any material accounts
payable and other Liabilities outside the Ordinary Course of Business;
(t) been a party to any other occurrence, event, incident, action,
failure to act, or transaction outside the Ordinary Course of Business involving
Seller other than entering into the letter of intent with Buyer; or
(u) entered into any agreement or commitment (whether or not in
writing) to do any of the above;
and Seller has:
(v) used its Best Efforts to preserve the Business and the
organization of Seller, and to keep available, without entering into any binding
agreement, the services of Seller's employees, and to preserve the goodwill of
Seller's customers and others having business relationships with Seller; and
(w) continued the Business and maintained its operations and
equipment, books of account, records and files in the Ordinary Course of
Business.
4.5 [INTENTIONALLY LEFT BLANK].
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4.6 ACCOUNTS RECEIVABLE. All trade accounts Receivable on the date hereof
represent (a) valid and bona fide obligations arising from sales actually made
or services actually rendered by Seller in the Ordinary Course of Business, (b)
are correct as to amount, legally enforceable according to their terms and (c)
to the Knowledge of Seller have no rights of defense, counterclaim or set-off
against them, including any relating to the amount or validity of such
Receivable. SCHEDULE 4.6 contains a complete and accurate list of all such
Receivables as of the Effective Date, and sets forth an accurate aging of all
such Receivables.
4.7 ASSETS NECESSARY TO BUSINESS. Seller owns or leases, the Acquisition
Assets including all properties and assets, tangible and intangible, which are
necessary for Buyer to conduct the Business as heretofore conducted by Seller,
and necessary or appropriate for the continued conduct of the Business after the
date hereof in substantially the same manner as conducted prior to the date
hereof. Seller has all required and proper permits and licenses, including
franchises, titles (including motor vehicle titles and current registrations),
fuel permits and any other similar documents constituting a material entitlement
or otherwise material to the operation of the Business (collectively,
"Permits"), and Seller is a party to all other material contracts and agreements
necessary to permit it to carry on the Business as presently conducted.
4.8 AUTHORITY; CONSENTS; ENFORCEMENT: NONCONTRAVENTION; NONCOMPETES.
(a) AUTHORITY. Seller has the corporate power and authority to
execute, deliver and perform this Agreement and all other agreements,
certificates or documents contemplated hereby ("Seller Ancillary Documents"),
and has taken all actions required to authorize, execute, deliver and perform
this Agreement and the Seller Ancillary Documents, including approval by its
board of directors and Shareholders. Shareholders have full power, authority and
capacity to execute, deliver and perform this Agreement and the Seller Ancillary
Documents.
(b) CONSENTS. Except as set forth on SCHEDULE 4.8(b), no consent,
approval, action or authorization of any third party, including any Governmental
Authorization or application to, or other notice or filing with, any
Governmental Body, is required for the execution, delivery or
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performance of this Agreement or the Seller Ancillary Documents by Seller or any
Shareholder ("Seller's Consents").
(c) ENFORCEMENT. This Agreement and the Seller Ancillary Documents
have been duly executed and delivered by Seller and Shareholders and constitute
the legal, valid and binding obligations of Seller and Shareholders, enforceable
in accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and to the principles of equity (whether enforcement is sought in a
proceeding in equity or at law.
(d) NONCONTRAVENTION. The execution and delivery of this Agreement
and the Seller Ancillary Documents by Seller and Shareholders does not violate
any provision of the Organizational Documents of Seller or any Shareholder and
will not result in a breach or violation or default under any Order which Seller
or any Shareholder is subject or result in a breach by Seller or any Shareholder
under any material contract or obligation to which it or they are bound. Neither
the execution and the delivery of this Agreement and the Seller Ancillary
Documents, nor compliance with, or fulfillment of, the terms, conditions and
provisions hereof or thereof, will (a) violate any Legal Requirement of Seller
or any Shareholder; (b) materially conflict with, result in a material breach
of, constitute a material default under, any Contract or Order to which Seller
or any Shareholder is a party; (c) create in any party the right to accelerate,
terminate, modify, or cancel, any Contract to which Seller or any Shareholder is
a party; (d) accelerate any Liability of Seller, any Shareholder or the
Business; (e) result in the imposition of or creation of any Encumbrance upon or
with respect to any of the Acquisition Assets; (f) require any notice under any
Contract or Order to which Seller or any Shareholder is a party or by which it
or they are bound or to which any of its or their assets or properties are
subject; or (g) require the approval, consent, authorization or act of, or the
making by Seller or any Shareholder of any declaration, filing or registration
with, any Person.
(e) RESTRICTION ON COMPETITION. Neither Seller nor any Shareholder
is a party to or subject to any contract, arrangement or commitment containing
covenants by Seller or any Shareholder prohibiting or restricting competition in
any line of business or activity, or restricting
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the customers from whom, or the area in which, Seller or any Shareholder may
solicit or conduct business.
4.9 BOOKS AND RECORDS. Prior to the execution of this Agreement, Seller
made available to Buyer for its examination the books of account, records and
minute and stock books of Seller ("Books and Records"). The Books and Records
are true and complete in all material respects and have been prepared in the
usual and customary manner in accordance with sound business practices,
including the maintenance of an adequate system of internal controls. There has
been duly and completely entered in the Books and Records all monies due or to
become due from or to or owing by Seller and all Liabilities of Seller by reason
of any transaction, matter, or cause whatsoever. To the Knowledge of Seller, the
minute books of Seller contain accurate and complete records of all meetings
held of, and corporate action taken by, the Shareholders, the board of directors
and the committees of the board of directors of Seller. No material changes or
additions to the books and records of Seller have been made from the date such
books and records were first made available to Buyer and nothing which should be
set forth in said books and records, if prepared in the usual and customary
manner of Seller, has occurred from the date such books and records were first
made available to Buyer, except for such changes, additions or events which have
been made or have occurred, as the case may be, in the Ordinary Course of
Business.
4.10 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) COMPLIANCE WITH LEGAL REQUIREMENTS. To the Knowledge of
Seller, and except as set forth on SCHEDULE 4.10(a):
(1) Seller is, and, at all times since its inception has been,
in full compliance with each Legal Requirement that is or was applicable to
it or to the conduct or operation of the Business or the ownership or use
of any of the Acquisition Assets;
(2) no event has occurred, nor does any circumstance exist,
that (with or without notice or lapse of time) (A) may constitute or result
in a violation by Seller of, or a failure on the
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part of Seller to comply with, any Legal Requirement, or (B) may give rise
to any material obligation on the part of Seller to undertake, or to bear
all or any material portion of the cost of, any remedial action of any
nature; and
(3) Seller has not received, at any time since its inception,
any notice or other communication (whether oral or written) from any Person
regarding (a) any actual, alleged, possible material violation of, or
failure to comply with, any Legal Requirement, or (b) any material actual,
alleged, possible or potential obligation on the part of Seller to
undertake, or to bear all or any portion of the cost of, any remedial
action of any nature.
The failure of Seller to comply with any Legal Requirement will not have an
Adverse Effect on Buyer.
(b) GOVERNMENTAL AUTHORIZATIONS. SCHEDULE 4.10(b) contains a
complete and accurate list of each Governmental Authorization that is held by
Seller or that otherwise relates to the Business, or to any of the assets owned
or used by Seller, and is material to the operation of the Business. Each
Governmental Authorization listed or required to be listed on SCHEDULE 4.10(b)
is valid and in full force and effect except where the failure to do so would
not have an Adverse Effect. SCHEDULE 4.10(b) also sets forth the name of any
third party from whom consent must be obtained in order to effect a transfer to
Buyer of the Permits to be acquired as a result of the transactions contemplated
herein; and, except as set forth on SCHEDULE 4.10(b), Seller has obtained all
such consents except where the failure to be so valid and in force and effect
would not have an Adverse Effect. To the Knowledge of Seller, and except as set
forth on SCHEDULE 4.10(b):
(1) To the Knowledge of Seller, Seller is, and at all times
since its inception has been, in material compliance with all of the terms
and requirements of each Governmental Authorization identified or required
to be identified on SCHEDULE 4.10(b);
(2) no event has occurred, nor does any circumstance exist,
that shall (with or without notice or lapse of time) (A) constitute or
result directly or indirectly in a violation of or
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a failure to comply with any material term or requirement of any
Governmental Authorization listed or required to be listed on SCHEDULE
4.10(b), or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any material
modification to, any Governmental Authorization listed or required to be
listed on SCHEDULE 4.10(b);
(3) Seller has not received, at any time since its inception,
any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any actual, alleged,
possible, or potential violation of or failure to comply with any material
term or requirement of any Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or material modification to any Governmental
Authorization; and
(4) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed
on SCHEDULE 4.10(b) have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to have
been made with respect to such Governmental Authorizations have been duly
made on a timely basis with the appropriate Governmental Bodies.
The Governmental Authorizations listed on SCHEDULE 4.10(b) collectively
constitute all of the Governmental Authorizations necessary to permit Seller to
lawfully conduct and operate the Business in the manner it is currently
conducted and operated and to permit Seller to own and use its assets in the
manner in which it currently owns and uses such assets, to the Knowledge of
Seller, and there will not be an Adverse Effect in the Governmental
Authorizations as a result of the consummation of the transactions contemplated
herein, nor to the Knowledge of Seller, will there be any Adverse Effect on
Buyer for any failure of Seller to have any Governmental Authorization in full
force and effect.
4.11 COMPUTER SYSTEMS; SOFTWARE.
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(a) CONDITION OF COMPUTERS. All computers and computer systems
owned, leased or used by Seller in connection with the Business (including
software, communication links and storage media) (collectively, "Computers"):
(1) are in full operating order and fulfill the purposes for
which they were acquired, established and are currently used;
(2) have adequate capacity for the present needs of the
Business;
(3) have adequate security, back-ups, duplication, hardware
and software support and maintenance (including emergency cover) and
trained personnel to ensure that breaches of security, errors and
breakdowns are kept to a minimum and that no material disruption will be
caused to the Business or any material part thereof in the event of a
breach of security, error or breakdown;
(4) are under the sole control of Seller, are located at
branch locations of Seller, are not shared with, used by or on behalf of
or, to the Knowledge of Seller, accessible by any other Person and, except
for software properly licensed to Seller, are owned by Seller;
(5) are, except as set forth on SCHEDULE 4.11(a), properly
established and documented by written technical descriptions and manuals so
as to enable them to be used and operated by any reasonably qualified
personnel; and
(6) may be assigned by Seller to Buyer, without the consent of
any third person.
(b) CONDITION OF SOFTWARE. All software used on or stored or
resident in the Computers ("Software"):
(1) performs efficiently in accordance with its specifications
and does not contain any defect or feature which may have an Adverse Effect
on its performance;
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(2) is lawfully held and used and, to the Knowledge of Seller,
does not infringe the intellectual property rights of any Person and, to
the Knowledge of Seller, all copies held have been lawfully made; and
(3) standard packaged Software is licensed to Seller on an
express or implied license which does not require Seller to make any
further payments, is not terminable without the consent of Seller and which
imposes no material restrictions except as to copying on the use or
transfer of the Software.
(c) OWNERSHIP OF SOFTWARE. No Software owned by or licensed to
Seller is used by or licensed or sublicensed by Seller to any other Person.
(d) OPERATION OF COMPUTERS. To the Knowledge of Seller, no Person
is in a position, by virtue of rights in, knowledge of or access to the
Computers, to currently prevent or impair the proper and efficient functioning
of the Computers. To the Knowledge of Seller, Seller's employees are adequately
trained to enable them to use and operate the Computers for the purposes for
which they have been acquired by Seller. All Data and Records stored by
electronic means are capable of ready access through the Computers. The
transactions contemplated in this Agreement will not cause any license
agreements as referred to in this SECTION 4.11 to be terminated or the terms
varied or any rates or royalties payable to be materially increased.
4.12 CONDITION AND SUFFICIENCY OF ASSETS. Except as disclosed on SCHEDULE
4.12, the tangible Acquisition Assets are structurally sound, are free from
material defects (patent and latent), and have been maintained in accordance
with the manufacturer's recommendations or normal industry practice. Except as
disclosed on SCHEDULE 4.12, the material tangible Acquisition Assets are in good
operating condition and repair (subject to normal wear and tear), and are
suitable for the purposes for which they are presently used and presently
proposed to be used, and none of the tangible Acquisition Assets are in need of
material maintenance or repairs. Except as set forth on SCHEDULE
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4.12, the Acquisition Assets are sufficient for the continued conduct of the
Business after the Closing in substantially the same manner as conducted prior
to the Closing.
4.13 CONTRACTS. SCHEDULE 4.13 contains a list of each contract to which
Seller is a party, except for (a) sales or purchase orders entered into in the
Ordinary Course of Business, (b) contracts involving Seller's receipt or payment
of less than $25,000 in any 12-month period, and (c) contracts cancelable
without penalty or payment upon no more than 30 days notice. Seller has
furnished Buyer with a true and complete copy of each written contract listed on
SCHEDULE 4.13. Each such Contract set forth on SCHEDULE 2.1(g) is legal, valid,
binding, enforceable and in full force and effect, and shall, as to Buyer,
continue to be legal, valid, binding, enforceable and in full force and effect
on identical terms following the Closing. To the Knowledge of Seller, no party
to any such Contract set forth on SCHEDULE 2.1(g) is in breach or default, and
no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration, under
the Contract; and (d) no party has repudiated any provision of any Contract set
forth on SCHEDULE 2.1(g). All of the Contracts which are specifically set forth
on SCHEDULE 2.1(G) are assignable by Seller to Buyer and such assignment may be
made without the consent of any other party to the Contract and will not result
in a breach, violation or default under any such Contract, except as set forth
on SCHEDULE 2.1(g) .
4.14 CUSTOMERS OF SELLER; CONDITIONS AFFECTING SELLER. SCHEDULE 4.14 sets
forth the 10 largest customers of Seller by dollar value of aggregate purchases
from Seller over the 24 months ended December 31, 1999. Except as set forth on
SCHEDULE 4.14, none of the customers identified on SCHEDULE 4.14 have terminated
their relationship with Seller, or otherwise ceased doing business with Seller
or otherwise indicated to Seller, that the amount of revenue or gross margin
accounted for by such customer is likely to be materially less after the date
hereof than the amount reflected for such customers on SCHEDULE 4.14. To the
Knowledge of Seller, there are no conditions existing with respect to markets,
services, facilities, personnel or suppliers to Seller which are likely to have
an Adverse Effect on Seller. Seller has disclosed to Buyer its standard terms
and conditions of sale, and identified all customers with annual purchases in
excess of Twenty Thousand Dollars ($20,000) which have been granted a deviation
from such standard terms and conditions of sale.
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4.15 EMPLOYEE BENEFITS.
(a) BENEFIT PLANS. Except as set forth on SCHEDULE 4.15(a), Seller
is not a "Plan Sponsor" (as defined in section 3(16)(B) of ERISA) or an "ERISA
Affiliate" (which shall mean, with respect to Seller, any other Person that,
together with Seller, would be treated as a single employer under section 414 of
the IRC), nor has Seller or an ERISA Affiliate contributed, and neither Seller
nor an ERISA Affiliate does now contribute, to any "employee pension benefit
plans" ("Pension Plans") or "employee welfare benefit plans" ("Welfare Plans")
(as defined in section 3(2) and (1), respectively, of ERISA), or to any "multi
employer plan" ("Multiemployer Plans") (as defined in either section 3(37) of
ERISA or section 414(f) of the IRC). Except as set forth on SCHEDULE 4.15(a),
neither Seller nor an ERISA Affiliate has, any obligation, arrangement,
practice, plan or agreement to provide present or future benefits, other than
salary and bonuses awarded in the Ordinary Course of Business, as compensation
for services rendered, to any of its present or former employees, officers,
directors, agents or representatives, nor any voluntary employees' beneficiary
association under section 501(c)(9) of the IRC ("VEBA") whose members include
employees of Seller or an ERISA Affiliate, nor any obligation, arrangement,
practice, plan or agreement providing stock options, stock purchase, deferred
compensation, severance, "fringe benefits" (as described in section 132 of the
IRC), or any other employee benefits of any nature whatsoever ("Compensation
Plans"). Welfare Plans, Pension Plans and Compensation Plans are collectively
referred to as "Benefit Plans."
(b) COMPLIANCE OF BENEFIT PLANS WITH ERISA AND IRC. Seller has
performed all of its obligations under all Benefit Plans and has made
appropriate entries in its financial records and statements for all Liabilities
under all Benefit Plans that have accrued but are not due. All of the Benefit
Plans and any related trust agreements or annuity contracts (or any funding
instrument) materially comply currently, and materially have complied in the
past, with the applicable and material provisions of ERISA and the IRC, where
required in order to be a qualified plan under section 401(a) of the IRC and tax
exempt under section 501 of the IRC, and all other Legal Requirements. To the
Knowledge of Seller, no event has occurred or circumstance exists that will
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or could give rise to disqualification or loss of tax exempt status of any such
Plan or trust. Neither Seller, nor any Person who is a fiduciary or otherwise
has a relationship to a Benefit Plan, has any liability to the IRS or the
Pension Benefit Guaranty Corporation with respect to a Benefit Plan, or any
Liability under sections 502 or 4071 of ERISA. All filings required by ERISA and
the IRC as to each Benefit Plan have been timely filed, and all material notices
and disclosures to participants required by either ERISA or the IRC have been
timely provided. Other than routine claims for benefits submitted by
participants or beneficiaries in the ordinary course, no claim against, or
Proceeding involving any Benefit Plan is pending or Threatened.
(c) POST-RETIREMENT BENEFITS. Except to the extent required under
section 4980B of the IRC or Part 6 of Subtitle B of Title I of ERISA, Seller
does not provide Welfare Benefits for any retired or former employee nor is it
obligated to provide any Welfare Benefits to any active employee following such
employee's retirement or other termination of service.
(d) ADMINISTRATION AND COST OF PLANS. To the Knowledge of Seller,
each of the Welfare Plans and Pension Plans has been administered in substantial
compliance with the requirements of the IRC and ERISA and all material reports
required by any governmental agency with respect to each such Plan have been
timely filed. Neither Seller nor an ERISA Affiliate has filed a notice of intent
to terminate any Plan or has adopted any amendment to treat a Plan as
terminated.
(e) NO PROHIBITED TRANSACTIONS. To the Knowledge of Seller,
neither Seller nor any of its directors, officers or employees who are
fiduciaries, nor any other fiduciary of any of the Pension Plans or Welfare
Plans, has engaged in any transaction in violation of section 406 of ERISA (for
which no exemption exists under section 408 of ERISA) or any "prohibited
transaction" (as defined in section 4975(c)(1) of the IRC) for which no
exemption exists under sections 4975(c)(2) or 4975(d) of the IRC.
(f) COMPLIANCE OF HEALTH PLANS. To the Knowledge of Seller, each
"group health plan" (as defined in section 4980B(g)(2) of the IRC) maintained by
Seller has been administered in material compliance with the continuation
coverage and notice requirements of section 601 et seq.
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of ERISA, section 4980B of the IRC (and the regulations thereunder) and all
other Legal Requirements.
(g) COPIES OF DOCUMENTS. Seller has furnished or made available to
Buyer a true and complete copy of all documents that set forth the terms of each
Benefit Plan described on SCHEDULE 4.15(a) and the summary plan description
which Seller or an ERISA Affiliate is obligated to prepare for such plans, and
all summaries and descriptions furnished to participants and beneficiaries
regarding Benefit Plans for which a summary plan description is not required. In
addition, Seller has furnished or made available to Buyer:
(1) a written description of any Benefit Plan that is not
otherwise in writing;
(2) all Seller's personnel, payroll, and employment manuals
and policies currently in effect;
(3) all insurance policies currently in effect purchased by or
to provide benefits under any Benefit Plan;
(4) all contracts with third party administrators, actuaries,
investment managers, consultants, and other independent contractors that
relate to any Benefit Plan;
(5) a true and correct copy of any favorable determination
letter as to the qualification under the IRC of each of the Pension Plans
and each amendment thereto that has been issued by the IRS; and
(6) the annual return (Form 5500 or Form 990 series) filed in
each of the most recent three plan years with respect to each Benefit Plan,
including all schedules thereto and the opinions of independent
accountants, if any.
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4.16 EMPLOYEES AND COMPENSATION.
(a) LISTING OF EMPLOYEES. SCHEDULE 4.16 identifies all officers
and employees of Seller as of the date hereof, the amount of their current
annual salaries or hourly rates, their bonuses paid in 1999, their current job
titles and vacation accrued, and a complete description of any written
commitments to such employees and officers with respect to compensation payable
hereafter. To the Knowledge of Seller, Seller has not, because of past practices
or previous commitments with respect to its officers or employees, established
any legally enforceable rights or reasonable expectations on the part of such
officers or employees to receive additional compensation inconsistent with past
practices with respect to any period after the date hereof. To the Knowledge of
Seller, none of Seller's employees would make an undesirable or ineffective
employee of Buyer. None of Seller's employees has given written notice to Seller
that such employee intends to leave Seller's employment. Except as set forth on
SCHEDULE 4.16, to the Knowledge of the Sellers, none of Seller's employees will
leave such employment or would leave the employment of Buyer, should Buyer
employ such person. Set forth on SCHEDULE 4.16 is a description of all written
material claims made against Seller by officers or employees of Seller within
the last 36 months. No officer or employee of Seller is employed by Seller
outside the United States of America.
(b) AGREEMENTS WITH EMPLOYEES. Except as described on SCHEDULE
4.16, Seller is not a party to or bound by any written or, to the Knowledge of
Seller, oral:
(1) employment agreement (other than employment agreements
under which the only monetary obligation of Seller is to make current wage
or salary payments and provide current employee benefits and other employee
benefits required by any Legal Requirement), consulting, advisory or
service agreement, confidentiality agreement or covenant not to compete;
(2) contract or agreement with any officer, employee or
Shareholder (other than employment agreements disclosed in response to
clause (1) or excluded from the scope of clause (1)), agent, or
attorney-in-fact of Seller; or
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(3) obligation to provide, presently or in the future, retiree
medical insurance coverage, retiree life insurance coverage, and other
benefits for retired employees or directors of Seller, or their dependents,
except as required by any Legal Requirement, and, to the extent of any such
obligation, the name, pension benefit, pension option election, medical
insurance coverage, and life insurance coverage for such retirees has been
disclosed to Buyer or is described on SCHEDULE 4.16.
(c) CONFIDENTIALITY AND NONCOMPETITION AGREEMENTS. Except as
described on SCHEDULE 4.16, to the Knowledge of Seller, no officer or employee
of Seller is a party to, or is otherwise bound by, any written agreement or
arrangement with any Person, including any confidentiality, noncompetition, or
proprietary rights agreement, that has, had or will have an Adverse Effect on:
(a) the performance of his or her duties as an officer or employee of Seller or
(b) the ability of Seller to conduct its business as presently conducted.
(d) ADDITIONAL EMPLOYEE MATTERS. Set forth on SCHEDULE 4.16 is a
list of each employee of Seller, and each qualified beneficiary of an employee
of Seller, who has incurred a qualifying event, and has elected, or is eligible
to elect, continuation coverage under Seller's group health plan pursuant to
section 4980B of the IRC and section 601 et seq. of ERISA. To the Knowledge of
Seller, further set forth on SCHEDULE 4.16 is a list of each employee of Seller,
and each qualified beneficiary of an employee of Seller, who, as a result of the
transactions contemplated herein, will incur a qualifying event and will be
eligible to elect continuation coverage pursuant to section 4980B of the IRC and
section 601 et seq. of ERISA. Further set forth on SCHEDULE 4.16 is a list of
each employee of Seller who has requested or is on a leave of absence pursuant
to the provisions of the Family and Medical Leave Act.
4.17 ENVIRONMENTAL MATTERS.
(a) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth on
SCHEDULE 4.17(a), to the Knowledge of Seller, Seller is, and at all times has
been, in full compliance with, and has not been and is not in violation of or
liable under, any Environmental Law. Neither Seller nor any
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Shareholder, nor any other Person for whose conduct they are held to be
responsible, has received any actual or Threatened Order, written notice, or
other written communication from any Governmental Body or private citizen acting
in the public interest, or from the current or prior owner or operator of any
Facilities, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened material obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which Seller has or had a material interest, or
with respect to any property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used, or processed by
Seller from which Hazardous Materials have been transported, treated, stored,
handled, transferred, disposed, recycled or received prior to the date hereof.
(b) NO ENVIRONMENTAL CLAIMS. Except as set forth on SCHEDULE
4.17(b) there are no pending or, to the Knowledge of Seller, Threatened claims,
Liens, Encumbrances or other restrictions of any nature, resulting from any
Environmental, Health, and Safety Liabilities or arising under or pursuant to
any Environmental Law, with respect to or affecting any of the Facilities or any
other properties and assets (whether real, personal, or mixed) in which Seller
has or had an interest.
(c) NO ENVIRONMENTAL ORDERS. Except as set forth on SCHEDULE
4.17(c), neither Seller nor any Shareholder has any basis to expect, nor has any
of them or any other Person for whose conduct they are or may be held
responsible, has received any written citation, directive, inquiry, notice,
Order, summons, warning, or other written communication that relates to
Hazardous Activity, Hazardous Materials or any alleged, actual, or potential
material violation or failure to comply with any Environmental Law, or of any
alleged, actual, or potential material obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities with respect to any of the
Facilities or any other properties or assets (whether real, personal or mixed)
in which Seller, or Shareholders have or had a material interest, or with
respect to any property or Facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used or processed by Seller have
been transported, treated, stored, handled, transferred, disposed, recycled or
received prior to the date hereof.
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(d) NO ENVIRONMENTAL LIABILITIES. Except as set forth on SCHEDULE
4.17(d), neither Seller nor any Shareholder, nor any other Person for whose
conduct they are or may be held responsible, has any Environmental, Health, and
Safety Liabilities with respect to the Facilities or with respect to any other
properties and assets (whether real, personal, or mixed) in which Seller, or any
predecessor of Seller have or had an interest, or at any property geologically
or hydrologically adjoining the Facilities.
(e) NO HAZARDOUS MATERIALS. Except as set forth on SCHEDULE
4.17(e), there are no Hazardous Materials present on or in the Environment at
the Facilities or at any geologically or hydrologically adjoining property,
including any Hazardous Materials contained in barrels, above or underground
storage tanks, landfills, land deposits, dumps, equipment (whether moveable or
fixed) or other containers, either temporary or permanent, and deposited or
located in land, water, sumps, or any other part of the Facilities or such
adjoining property, or incorporated into any structure therein or thereon.
Neither Seller, any Shareholder, nor any other Person has permitted or
conducted, or is aware of, any Hazardous Activity conducted with respect to the
Facilities or any other properties or assets (whether real, personal, or mixed)
in which Seller or had a material interest.
(f) NO RELEASE. Except as set forth on SCHEDULE 4.17(f), there has
been no Release, to the Knowledge of Seller or any Shareholder, Threat of
Release, of any Hazardous Materials at or from the Facilities or at any other
locations where any Hazardous Materials were generated, manufactured, refined,
transferred, produced, imported, used or processed from or by the Facilities, or
from or by any other properties and assets (whether real, personal, or mixed) in
which Seller or any Shareholder has or had an interest, or any geologically or
hydrologically adjoining property, whether by Seller or any Shareholder or any
other Person.
(g) DELIVERY OF REPORTS, ETC. Seller has delivered to Buyer true
and complete copies and results of all reports, studies, analyses, tests or
monitoring possessed or initiated by Seller or any Shareholder pertaining to
Hazardous Materials or Hazardous Activities in, or under, the Facilities,
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or concerning compliance by Seller or any Shareholder or any other Person for
whose conduct they are or may be held responsible with Environmental Laws.
(h) FAILURE TO COMPLY WITH ENVIRONMENTAL LAW. The failure, if any,
of Seller or Shareholders to comply with any Environmental Law will not have an
Adverse Effect on Buyer.
(i) TRANSFERABLE ENVIRONMENTAL PERMITS. Except as set forth on
SCHEDULE 4.17(i), all permits, licenses, registrations and authorizations
required to operate manage and maintain the Facilities in compliance with
Environmental Law (Permits) are transferable to Buyer with no limitations,
restrictions, alterations, fees or assessments. Seller agrees to use its Best
Efforts to assist Buyer in completing the transfer of Permits within thirty (30)
days of the date hereof.
4.18 INSURANCE. Seller has delivered to Buyer copies of each insurance
policy (including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) to which Seller is a
party, a named insured, or otherwise the beneficiary of coverage.
4.19 INTELLECTUAL PROPERTY.
(a) DEFINITION OF INTELLECTUAL PROPERTY. The term "Intellectual
Property" as used in this Agreement shall mean all of the intangible and
intellectual property of Seller, including, but not limited to the following:
(1) all post office box numbers, Internet domain names
(registered and unregistered), telephone and facsimile numbers and all
other listings used in the Business, each of which is set forth on SCHEDULE
4.19(a)(1);
(2) the name "Uniflex," and all other Marks (as hereinafter
defined);
(3) all Trade Secrets (as hereinafter defined).
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(b) OWNERSHIP OF INTELLECTUAL PROPERTY. Seller owns or has the
right to use all of the Intellectual Property material to the operation of the
Business as it is currently conducted. Except for the Intellectual Property
licensed by Seller as a licensee, a copy of each such license is attached to
SCHEDULE 4.19(b) and, to the Knowledge of Seller, except as otherwise disclosed
on SCHEDULE 4.19(b), Seller owns all right, title, and interest in and to all of
the Intellectual Property, free and clear of all Liens, security interests,
charges, Encumbrances, equities, and other adverse claims, and has the right to
use all of such Intellectual Property without payment to a third party. All
Intellectual Property is assignable by Seller to Buyer and such assignment may
be made without the consent of any third party and will not result in any
material breach, violation or default under any material agreement involving
Intellectual Property.
(c) PATENTS. Seller owns no patents ("Patents") or design
registrations:
(1) To the Knowledge of Seller, none of the products
manufactured and sold, nor any process or know-how used, by Seller
infringes or is alleged to infringe any patent or other proprietary right
of any third party.
(d) MARKS. Set forth on SCHEDULE 4.19(d) is a complete and
accurate list and summary description of all marks ("Marks"). Except as
disclosed on SCHEDULE 4.19(d):
(1) Seller is the owner of all right, title and interest in
and to each of the Marks, free and clear of all Liens, security interests,
charges, Encumbrances, equities and other adverse claims;
(2) no ▇▇▇▇ has been or is now involved in any opposition,
invalidation, cancellation or infringement action and, to the Knowledge of
Seller, no such action is Threatened against any of the Marks;
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(3) none of the Marks used by Seller infringes or is alleged
to infringe any trade name, trademark or service ▇▇▇▇ of any third party,
nor, to the Knowledge of Seller, is there any potentially interfering
trademark or trademark application of any third party;
(e) COPYRIGHTS. Seller owns no copyrights ("Copyrights"); and
(f) TRADE SECRETS. Each material trade secret ("Trade Secret"),
and the documentation relating to such Trade Secret, is current, accurate and
sufficient in detail and content to identify and explain it and to allow its
full and proper use without reliance on the knowledge or memory of any
individual. Seller and Shareholders have taken all reasonable precautions to
protect the secrecy, confidentiality and value of Seller's Trade Secrets. Seller
has good title and an absolute, exclusive right to use the Trade Secrets. To the
Knowledge of Seller, the Trade Secrets are not part of the public knowledge or
literature and have not been used, divulged or appropriated either for the
benefit of any other Person or to the detriment of Seller. No Trade Secret is
subject to any adverse material claim or has been challenged or threatened in
any material way.
(g) EMPLOYEE AGREEMENTS. No former or current employee of Seller
has executed a written agreement that assigns to a person other than Seller any
or all rights to any inventions, improvements, discoveries or information
relating to the Business. Any inventions, improvements, discoveries or
information relating to the Business and developed by former or current
employees of Seller in the course of their employment with Seller are owned by
Seller. To the Knowledge of Seller, no employee of Seller has entered into any
agreement that restricts or limits in any way the scope or type of work in which
the employee may be engaged or requires the employee to transfer, assign or
disclose information concerning his work to anyone other than Seller.
4.20 INVENTORY. All Inventories on the date hereof consist of items of a
quality and quantity useable or saleable in the Ordinary Course of Business as
presently conducted, except for obsolete items and items of below-standard
quality, all of which have been written off or written down to net realizable
value in the Acquisition Balance Sheet or on the accounting records of Seller as
of the date hereof, as the case may be. No items included in the Inventories are
pledged as collateral or held by
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Seller on consignment from another, except as set forth on SCHEDULE 4.20. The
inventories are valued at the lower of cost or market, net realizable value on
the average cost method, consistent with past practices, and were so valued at
the date of the Acquisition Balance Sheet. The quantities of each item of
Inventory (whether raw materials, work-in-process, or finished goods) are not
excessive, but are reasonable in the present circumstances of Seller and the
Business. The inventory obsolescence policies of Seller are appropriate for the
nature of the products sold and the marketing methods used by Seller and the
reserve for inventory obsolescence contained in the Acquisition Balance Sheet
fairly reflects the amount of obsolete inventory as of the date thereof. Seller
shall conduct physical inventories on April 30, 2000 and May 31, 2000 and will
make full and complete adjustments to its perpetual records pursuant to such
physical inventories.
4.21 LABOR RELATIONS; COMPLIANCE. Seller has not been, nor is it, a party
to any collective bargaining or other labor contract. Except as set forth on
SCHEDULE 4.21, there has not been, there is not presently pending or existing,
and to the Knowledge of Seller there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance process, (b) any
Proceeding against or affecting Seller relating to the alleged violation of any
Legal Requirement pertaining to labor relations or employment matters, including
any material written charge or complaint filed by an employee or union with the
National Labor Relations Board, the Equal Employment Opportunity Commission, or
any comparable Governmental Body, organizational activity, or other labor or
employment dispute against or affecting Seller or its premises, or (c) any
application for certification of a collective bargaining agent. To the Knowledge
of Seller, no event has occurred or circumstance exists that could provide the
basis for any material work stoppage or other material labor dispute. There is
no lockout of any employees by Seller, and no such action is contemplated by
Seller. To the Knowledge of Seller, Seller is in substantial compliance in all
material respects with all Legal Requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health, and plant closing. Except as set forth on SCHEDULE 4.21,
Seller is not liable for the payment of any compensation, damages, taxes, fines,
penalties, or other amounts, however designated, for material failure to comply
with any of the foregoing Legal Requirements.
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4.22 LITIGATION; ORDERS.
(a) PROCEEDINGS. Except as set forth on SCHEDULE 4.22, there is no
Proceeding pending or, to the Knowledge of Seller, Threatened against or
relating to Seller or its property or assets. To the Knowledge of Seller there
is no basis or alleged basis for any such Proceedings or of any governmental
investigation relative to Seller, its property or assets, and no event has
occurred, nor does any circumstance exist, that may give rise to or serve as a
basis for the commencement of any such Proceedings which may have an Adverse
Effect on Buyer. No event or condition of any nature which might have an Adverse
Effect on Buyer has occurred, exists or, to the Knowledge of Seller, is
anticipated. The Proceedings listed on SCHEDULE 4.22 will not have an Adverse
Effect on Buyer.
(b) ORDERS. Except as set forth on SCHEDULE 4.22, (1) there is no
Order to which Seller, or any of the assets owned or used by Seller, is subject,
other than Orders generally affecting the industry in which Seller conducts the
Business; (2) nor is any Shareholder subject to any Order that relates to the
business of, or any of the assets owned or used by, Seller; and (3) to the
Knowledge of Seller, no officer, director, agent, or employee of Seller is
subject to any Order that prohibits such officer, director, agent, or employee
from engaging in or continuing any conduct, activity, or practice relating to
the Business. Except as set forth on SCHEDULE 4.22, (1) Seller and each
Shareholder are in full compliance with all of the material terms and
requirements of each Order to which they, or any of the assets owned or used by
them, is or has been subject; (2) no event has occurred, nor does any
circumstance exist that may constitute or result in (with or without notice or
lapse of time) a material violation of or material failure to comply with any
material term or requirement of any Order to which Seller, or any of the assets
owned or used by Seller, is subject which may have an Adverse Effect on Buyer;
and (3) neither Seller nor any Shareholder has received, any notice or other
communication (whether oral or written) from any Body or any other Person
regarding any actual, alleged, possible or potential material violation of, or
material failure to comply with, any term or requirement of any Order to which
Seller, or any of the assets owned or used by Seller, are or have been subject,
which may have an Adverse Effect on Buyer.
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4.23 NO AGENT OR BROKER. Except for Barrington Associates, whose fee shall
be paid by Seller, no agent or broker or other Person acting pursuant to
authority given by Seller or any Shareholder is entitled to any commission,
finder's fee or other compensation, from Buyer in connection with the
transactions contemplated by this Agreement.
4.24 NOTICES OF VIOLATION. Seller has received no notice, and, to the
Knowledge of Seller, there is no pending notice, of violation of any Legal
Requirement, nor the pendency of any Proceedings, threatened or otherwise, which
could have an Adverse Effect on the ability of Seller to effect the material
transactions contemplated in this Agreement.
4.25 PERSONAL PROPERTY. SCHEDULE 4.25 contains a detailed list of all
machinery, equipment, fixtures, computer hardware and software, tools, supplies,
spare parts, furniture, all vehicles purchased for or used in connection with
the Business and all other tangible personal property and assets owned or leased
by Seller which are used in or relating to the Business.
4.26 PRODUCTS.
(a) PRODUCT WARRANTIES. Each product manufactured, fabricated,
assembled, sold, leased or delivered by Seller has been in material conformity
in all material respects with all applicable contractual commitments and all
express and implied warranties, and Seller has no material Liability (and, to
the Knowledge of Seller, there is no basis for any present or future Proceedings
against it giving rise to any material Liability) for replacement or repair
thereof or other material damages in connection therewith. No product
manufactured, fabricated, assembled, sold, leased or delivered by Seller is
subject to any guaranty, warranty or other indemnity beyond the applicable
standard terms and conditions of sale or lease. SCHEDULE 4.26(a) includes copies
of the standard terms and conditions of sale or lease for Seller (containing
applicable guaranty, warranty, and indemnity provisions).
(b) PRODUCT LIABILITY. Seller has no material Liability (and, to
the Knowledge of Seller, there is no basis for any present or future Proceedings
against it giving rise to any material Liability)
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arising out of any injury to individuals or property as a result of the
ownership, possession or use of any product manufactured, fabricated, assembled,
sold, leased or delivered by Seller prior to the date hereof.
4.27 REAL PROPERTY.
(a) OWNED REAL PROPERTY. Seller owns no real property.
(b) LEASED REAL PROPERTY. SCHEDULE 4.27(b) lists and describes
briefly all real property leased or subleased to Seller. Seller has delivered to
Buyer correct and complete copies of the leases and subleases listed on SCHEDULE
4.27(b), as amended. With respect to each lease and sublease listed on SCHEDULE
4.27(b), and except as set forth therein:
(1) there are no disputes, oral agreements or forbearance
programs in effect as to the lease or sublease;
(2) Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in the leasehold or
subleasehold;
(3) all Facilities leased or subleased thereunder have
received all approvals of Governmental Authorities (including licenses and
permits) which to the Knowledge of Seller, required in connection with the
operation thereof and have been operated and maintained in material
accordance with applicable Legal Requirements; and
(4) all Facilities leased or subleased thereunder are supplied
with utilities and other services necessary for the operation of said
Facilities.
4.28 SIMILAR BUSINESS OWNERSHIP. Neither the Shareholders, nor any officer
or director of Seller, nor any family member of any of them, owns, directly or
indirectly, any interest in, or is an officer, director or principal of, any
corporation, partnership, proprietorship, association or other
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entity which is engaged in a business similar to that of Seller, which has
conducted any business of any material type whatsoever with Seller, or which is
a party to any material contract or agreement to which Seller is a party or to
which it may be bound, except as set forth on SCHEDULE 4.28. Neither
Shareholders, nor any officer or director of Seller, nor any family member of
any of them has, directly or indirectly, engaged in any material transaction
with Seller, except transactions inherent in the capacity of such Person as an
officer, director or employee of Seller, and except as set forth on SCHEDULE
4.28.
4.29 STATUS OF CONTRACTS. Except as set forth on SCHEDULE 4.29, each of the
Contracts listed on SCHEDULES 2.1(g), 4.15(a) and 4.27(b) (collectively, the
"Seller Agreements") constitutes a legal, valid, binding and enforceable
obligation of the Seller and is in full force and effect and the transactions
contemplated herein shall not have an Adverse Effect on the Seller Ancillary
Agreements and, despite the transactions contemplated herein, they shall
continue in full force and effect immediately after the Closing with Buyer as a
party thereto instead of Seller, in each case without breaching the terms
thereof or resulting in the forfeiture or impairment of any rights thereunder
and without the consent, approval or act of, or the making of any filing with,
any other party. Seller has fulfilled and performed its obligations under each
of the Seller Agreements, and Seller is not in, or, to the Knowledge of Seller,
alleged to be in, breach or default under, nor is there or is there alleged to
be any basis for termination of, any of the Seller Agreements and, to the
Knowledge of Seller, no other party to any of the Seller Agreements has breached
or defaulted thereunder, and no event has occurred and no condition or state of
facts exists which, with the passage of time or the giving of notice or both,
would constitute such a materially default or breach by Seller or, to the
Knowledge of Seller, by any such other party. Seller is not currently
renegotiating any of the Seller Agreements or paying liquidated damages in lieu
of performance thereunder. To Seller's knowledge, none of the Seller Agreements
contains terms unduly burdensome or harmful to Buyer, upon assignment to Buyer.
True and complete copies of each of the Seller Agreements have heretofore been
delivered to Buyer by Seller.
4.30 [INTENTIONALLY LEFT BLANK].
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4.31 SUBSIDIARIES AND INVESTMENTS. Seller does not, directly or indirectly,
(a) own, of record or beneficially, any outstanding voting securities or other
equity interests in any corporation, partnership, joint venture or other entity
or (b) control any corporation, partnership, joint venture or other entity which
is involved in or relates to Seller.
4.32 TAXES; TAX RETURNS; TAX ELECTIONS.
(a) TAX RETURNS. Seller has prepared, signed and filed all Tax
Returns required to be filed prior to the date hereof and has provided to Buyer
copies of all income and sales Tax Returns filed by Seller since December 31,
1997. All Tax Returns were correct and complete in all material respects, and
Seller has timely paid or accrued all Taxes or installments thereof of every
kind and nature whatsoever which were due and owing on Tax Returns or which were
or are otherwise due and owing under all applicable laws and regulations for any
periods for which Tax Returns were due, whether or not reflected on the Tax
Returns, and which may have an Adverse Effect on Buyer. The provision for Taxes
in the Acquisition Balance Sheet reasonably approximates the required payment of
all Taxes attributable to all periods ended on or before its date, and
reasonably adequate accruals have been made by Seller for all liabilities for
Taxes accruing since its date. Seller has timely paid in full all ad valorem
property taxes and other assessments levied on its assets and properties which
have heretofore become due and payable. There are no Proceedings, investigations
or claims now pending, nor, to the Knowledge of Seller, proposed against Seller,
nor are there any matters under discussion with the IRS, or any other
Governmental Authority, relating to any Taxes or assessments, or any claims or
deficiencies with respect thereto. Seller has not undergone any income or sales
Tax audits by the IRS or relevant state authorities, except as set forth on
SCHEDULE 4.32(a).
(b) TAX ELECTIONS. Seller has not made an election under section
1362 of the IRC to be subject to income tax as an S corporation. Seller is not a
"foreign person" within the meaning of section 1445 of the IRC.
(c) WITHHOLDINGS. Seller has withheld proper and accurate amounts
from its employees in full and complete compliance with the tax withholding
provisions of the IRC and other applicable
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Legal Requirements, and has filed proper and materially accurate federal,
foreign, state and local Tax Returns and reports for all years and periods (and
portions thereof) for which any Tax Returns were due with respect to employee
income, income tax withholding, withholding taxes, social security taxes and
unemployment taxes. All payments due from Seller on account of employee tax
withholdings, including income tax withholdings, social security taxes or
unemployment taxes in respect to years and periods (and portions thereof) ended
on or prior to the date hereof were paid prior to such date on or before their
due date.
(d) TAX CLEARANCE. Except as provided on SCHEDULE 4.32(d) and
SECTION 8.7, (a) Seller is not liable for any sales or use Tax; (b) no sales Tax
will be imposed on the sale of the Acquisition Assets to Buyer; and (c) Buyer is
not required to withhold any portion of the Purchase Price on account of any
sales or use Tax.
4.33 TITLE TO PROPERTIES. Seller has good and marketable title to all of
the Acquisition Assets (excluding leased properties). Except as set forth on
SCHEDULE 4.33, all Acquisition Assets are free and clear of all Encumbrances,
except the Lien for current ad valorem taxes not yet due and payable.
4.34 COMPLETENESS OF STATEMENT; EFFECT OF REPRESENTATIONS AND WARRANTIES.
Seller and Shareholders have disclosed to Buyer in separate writings or in the
Schedules attached hereto, all material adverse facts known to them relating to
the representations and warranties. The representations and warranties of Seller
and Shareholders in this Agreement, as qualified by the disclosures made on the
Schedules attached hereto, are true and complete in all respects. No
representation or warranty of Seller or Shareholders in this Agreement, as
qualified by the disclosures made on the Schedules attached hereto, contains any
untrue statement of a material fact, omits any material fact necessary to make
such representation or warranty, under the circumstances which it was made, not
misleading, or contains any misstatement of a material fact. All of the
representations and warranties made by Seller and Shareholders, as qualified by
the disclosures made on the Schedules attached hereto, are made with the
knowledge, expectation, understanding and desire that Buyer place complete
reliance thereon.
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5. REPRESENTATIONS AND WARRANTIES OF BUYER. MCC and Buyer, jointly and
severally, hereby represent and warrant to Seller and Shareholders as follows:
5.1 CORPORATE STATUS. MCC is a corporation duly incorporated and existing
under the laws of the State of Ohio and is authorized to transact business
therein. Buyer is a limited liability company duly organized and existing under
the laws of the State of Ohio and is authorized to transact business therein.
Each MCC and Buyer has, and at all times has had, full corporate or other
applicable power and authority to own and lease its properties as such
properties are now owned and leased and to conduct its business as and where
such businesses have and are now being conducted.
5.2 AUTHORITY; CONSENTS; ENFORCEMENT; NONCONTRAVENTION; NONCOMPETES.
(a) AUTHORITY. Each of MCC and Buyer has the corporate or other
applicable power and authority to execute, deliver and perform this Agreement,
the Note and all other agreements, certificates or documents contemplated hereby
to which it is a party ("Buyer Ancillary Documents"), and has taken all actions
required to authorize, execute, deliver and perform this Agreement and the Buyer
Ancillary Documents, including approval by the board of directors of MCC or
approval of the Members of Buyer.
(b) CONSENTS. Except as set forth on SCHEDULE 5.2(b), no consent,
action, approval or authorization of or registration, declaration or filing with
any third party including Governmental Authorization or application to, or other
notice or filing with, any Governmental Body, is required for the execution,
delivery or performance of this Agreement or the Buyer Ancillary Documents by
MCC or Buyer, as the case may be ("Buyer's Consents").
(c) ENFORCEMENT. This Agreement and the Buyer Ancillary Documents
have been duly executed and delivered by MCC or Buyer, as the case may be, and
constitute the legal, valid and binding obligations of MCC or Buyer, as the case
may be, enforceable in accordance with their terms.
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(d) NONCONTRAVENTION. The execution and delivery of this Agreement
and the Buyer Ancillary Documents by MCC or Buyer, as the case may be, does not
violate any provision of the Organizational Documents of either MCC or Buyer and
will not result in a breach or violation or default under any Order of any court
or governmental authority to which MCC or Buyer is subject or result in a breach
by MCC or Buyer under any contract or obligation to which it is bound. Neither
the execution and the delivery of this Agreement and the Buyer Ancillary
Documents, nor the compliance with, or fulfillment of, the terms, conditions and
provisions hereof or thereof, will (a) violate any Legal Requirement MCC or
Buyer, any provision of its charter or bylaws, (b) conflict with, result in a
breach of, constitute a default under, any contract, agreement, lease, license,
instrument or other arrangement or order to which MCC or Buyer is a party or is
bound by, (c) result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or result in the imposition of or
creation of any Encumbrance upon or with respect to any of the assets or
properties owned or used by MCC or Buyer, (d) require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
MCC or Buyer is a party or by which it is bound or to which any of its assets or
properties are subject or (e) require the approval, consent, authorization or
act of, or the making by MCC or Buyer of any declaration, filing or registration
with, any Person.
5.3 NO AGENT OR BROKER. Except for Barrington Associates, whose fees, costs
and expenses shall be paid by Seller, no agent or broker or other Person acting
pursuant to authority given by MCC or Buyer is entitled to any commission or
finder's fee, or other compensation, in connection with the transactions
contemplated by this Agreement.
5.4 COMPLETENESS OF STATEMENTS; EFFECT OF REPRESENTATIONS AND WARRANTIES.
Each of MCC and Buyer has disclosed to Seller in other writings or in the
Schedules attached hereto, all material adverse facts known to it relating to
the representations and warranties of MCC or Buyer, as the case may be. The
representations and warranties of MCC and Buyer in this Agreement, as qualified
by the disclosures made on the Schedules attached hereto, are true and complete
in all respects. No representation or warranty of MCC or Buyer in this
Agreement, as qualified by the disclosures made on the Schedules attached
hereto, contains any untrue statement of a material fact, omits any material
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fact necessary to make such representation or warranty, under the circumstances
which it was made, not misleading, or contains any misstatement of a material
fact. All of the representations and warranties made by MCC or Buyer (as
qualified by the disclosure made on the Schedules attached hereto) are made with
the knowledge, expectation, understanding and desire that Seller place complete
reliance thereon.
6. [INTENTIONALLY LEFT BLANK].
7. [INTENTIONALLY LEFT BLANK].
8. COVENANTS OF THE PARTIES.
8.1 TRANSITION OF THE BUSINESS. Seller and Shareholders covenant with Buyer
to cooperate with Buyer to effect the smooth transition of the control and
operation of the Business from Seller to Buyer, as contemplated herein,
including the retention of the customers of the Business, by such means that
Buyer may reasonably request. Seller and Shareholders covenant to cooperate with
Buyer in providing all information required hereunder and access thereto and
whatever is reasonably required to carry out the purposes and intent of the
transactions contemplated by this Agreement.
8.2 EMPLOYMENT OF BUSINESS'S EMPLOYEES. Prior to the Closing, Buyer will
offer employment to those of the Business's employees who are active employees
on the date hereof and who execute a MCC's or Buyer's standard Confidentiality
Agreement.
8.3 FURTHER ASSURANCES. Each of the parties agrees that it or he will, at
any time, and from time to time, after the date hereof, upon the request and at
the expense of the requesting party, do, execute, acknowledge and deliver, or
will cause to be done, executed, acknowledged and delivered, all such further
acts, assignments, transfers, conveyances and such further acts, assignments,
transfers, conveyances and assurances as may be required to complete the
transactions contemplated herein. After the date hereof, at the expense of
Seller, Seller and Shareholders shall, and shall use
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their Best Efforts to cause any necessary third party to, execute such documents
and to such acts and things as Buyer may reasonably require for the purpose of
giving to Buyer the full benefit of all the provisions of this Agreement and as
may be reasonably required to complete the transactions contemplated herein.
After the date hereof, at the expense of Buyer, MCC and Buyer shall, and shall
use their Best Efforts to cause any necessary third party to, execute such
documents and do such acts and things as Seller and/or Shareholder may
reasonably require for the purpose of giving to Seller or any Shareholder the
full benefit of all the provisions of this Agreement and as may be reasonably
required to complete the transactions contemplated herein.
8.4 INSURANCE. For a period ending on March 31, 2002 and commencing on the
date hereof, Seller shall maintain insurance in the amount of not less than
Seven Million Dollars ($7,000,000) for claims that may be made on and after the
date hereof with reference to environmental matters during the conduct of the
Business prior to the date hereof (the "Environmental Matters Insurance
Policy"). Such insurance policy shall name Buyer as an additional named insured,
shall provide that such policy shall not be canceled without 30 days prior
notice to Buyer and shall have the premiums for the entire period prepaid. A
certificate evidencing the binding of such insurance policy shall be delivered
to Buyer at Closing by Seller in the form as set forth on SCHEDULE 8.4 .
8.5 PRORATION OF EXPENSES AND OTHER CHARGES OF THE BUSINESS. On the date
hereof, the periodic charges of the Business, including rent, prepaid expenses,
utility and license fees and all liabilities related to salaries, wages,
vacation pay and other benefits, shall be apportioned on a time basis so that
such part of the relevant charges attributable to the period prior to the date
hereof shall be borne by Seller and such part of the relevant charges
attributable to the period after the date hereof shall be borne by Buyer. All
periodic rents, royalties and other similar sums receivable in respect of the
Business shall be apportioned between Buyer and Seller on like terms.
8.6 FILING OF TAXES; PAYMENT. Seller shall, for all periods through the
date hereof:
(a) prepare and timely file (including extensions) all Tax Returns
that it is required to file under all applicable laws;
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(b) timely pay all Taxes it is required to pay;
(c) withhold and timely pay over to the applicable authorities all
Taxes that it is required to withhold and pay over; and
(d) pay all Taxes on any sales and the income and gain, if any,
that it realizes on the transactions contemplated by this Agreement, including
the sale of the Assets.
8.7 SALES AND OTHER STATE TAXES. Attached hereto as EXHIBIT D is a summary
of the various obligations of Seller to file sales and/or use tax returns in the
states where Seller does business. Seller has given notice to the taxing
authorities which require notice prior to the completion of the transactions
contemplated herein as shown on EXHIBIT D and on the date hereof filed the
required notices with the other taxing authorities.
8.8 USE OF NAMES. From and after the date hereof, Seller and Shareholders
shall not, in any manner whatsoever, use the name "Uniflex," or any derivative
thereof, or any other Marks of Seller included in the Acquisition Assets.
8.9 TERMINATION OF EMPLOYEE BENEFIT PLANS. Seller shall terminate any and
all Employee Benefit Plans in a timely and appropriate fashion including the
filing of any reports, forms or returns with the appropriate Governmental Body.
8.10 ENVIRONMENTAL MATTERS. Seller shall timely complete the items listed
on SCHEDULE 4.17(a)
9. [INTENTIONALLY LEFT BLANK].
10. [INTENTIONALLY LEFT BLANK].
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11. [INTENTIONALLY LEFT BLANK].
12. DELIVERIES AND ACTIONS TO BE TAKEN AT CLOSING.
12.1 DELIVERIES BY SELLER AND SHAREHOLDERS. At the Closing, Seller and
Shareholders shall deliver to Buyer (duly executed where appropriate):
(a) SELLER'S RESOLUTIONS. Certified copies of resolutions of the
Shareholders and the board of directors of Seller approving this Agreement and
the transactions contemplated herein in the form of EXHIBIT E attached hereto.
(b) ▇▇▇▇ OF SALE AND ASSIGNMENT. A ▇▇▇▇ of Sale and Assignment for
the Acquisition Assets in the form of EXHIBIT F attached hereto.
(c) VEHICLE REGISTRATION, OWNERSHIP DOCUMENTS. Registration, title
and motor vehicle transfer forms for, and other required documentation to
transfer to Buyer and enable Buyer to properly license, each motor vehicle which
is part of the Acquisition Assets.
(d) POSSESSION OF ACQUISITION ASSETS. Possession of all the
Acquisition Assets, free of the possession of all third parties.
(e) PAYMENT OF LIENS AND ENCUMBRANCES. Confirmation that the
Encumbrances set forth on SCHEDULE 4.33 have been paid or are being paid
simultaneously with the Closing.
(f) OPINION OF COUNSEL. An opinion from counsel for Seller and
Shareholders in the form of EXHIBIT G attached hereto.
(g) [INTENTIONALLY LEFT BLANK]
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(h) INSURANCE CERTIFICATES. A certificate or certificates for the
insurance coverage required pursuant to SECTION 8.4.
(i) WIRE TRANSFER. Wire transfer of the $800,000 referred to in
SECTION 2.1(b) in immediately available funds to an account designated by Buyer.
(j) LEASE CONSENTS; TERMINATIONS. Consents of Landlords for all
leases assumed, Termination of Lease Agreements for all current leases that will
be canceled and replaced and consents of all other parties to the Contracts
being assigned to and assumed by Buyer hereunder, where such consent is required
for the assumption of such Contracts.
(k) PAYMENT TO MEIWA. On or before the date hereof, Seller shall
pay Meiwa an amount equal to Three Hundred Forty Thousand Dollars ($340,000)
which represents certain accounts payable invoices.
12.2 DELIVERIES BY BUYER. At the Closing, MCC and Buyer shall deliver to
Seller and Shareholders (duly executed where appropriate):
(a) BUYER'S RESOLUTIONS. Certified copies of the Resolutions of
the Board of Directors of MCC and of the Members of Buyer approving the
transactions contemplated by this Agreement in the forms of EXHIBIT H attached
hereto.
(b) PURCHASE PRICE. The Purchase Price as provided for in SECTION
2.5.
(c) CONSENTS. All Consents required pursuant to SECTION 5.2(b).
(d) WIRE TRANSFER. Wire transfer of the Purchase Price in
immediately available funds to an account or accounts designated by Seller.
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12.3 COVENANTS AND AGREEMENTS NOT-TO-COMPETE. At the Closing, MCC, Buyer,
Seller and Shareholders, as the case may be, shall execute and deliver the
following:
(a) SHAREHOLDERS' COVENANTS AND AGREEMENTS NOT-TO-COMPETE.
Covenant and Agreement Not-To-Compete by Shareholders in the form of EXHIBIT I
attached hereto.
(b) SELLER'S COVENANT AND AGREEMENT NOT-TO-COMPETE. Covenant and
Agreement Not- To-Compete of Seller in the form of EXHIBIT J attached hereto.
(c) YAMASAKI'S COVENANT AND AGREEMENT NOT-TO-COMPETE. Covenant and
Agreement Not-To-Compete of ▇▇▇▇▇▇▇▇, including the Nonqualified Stock Option
Agreement attached as EXHIBIT A thereto, in the form of EXHIBIT K attached
hereto.
12.4 LEASES. At the Closing, MCC, Buyer, Seller and Shareholders, as the
case may be, shall execute and deliver the Assignment and Assumption of Leases
attached hereto as EXHIBIT L.
12.5 ASSUMPTION AGREEMENT. At the Closing, MCC, Buyer, Seller and
Shareholders, as the case may be, shall execute and deliver the Assumption
Agreement in the form of EXHIBIT B attached hereto.
12.6 CHANGE OF NAME. Seller shall amend its Organizational Documents to
change its name to a name which does not include "Uniflex" or any name similar
thereto, by properly filing the appropriate amendment in Seller's jurisdiction
of organization, and in all jurisdictions where Seller is qualified to do
business, and properly filing withdrawals of assumed names in all jurisdictions
in which Seller had filed assumed name certificates or such comparable documents
in recognition of the sale and assignment of Seller's name to Buyer, and
Seller's agreement not to hereafter use the name "Uniflex," or any other Marks
of Seller or any derivative thereof.
12.7 [INTENTIONALLY LEFT BLANK].
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13. INDEMNIFICATION; REMEDIES.
13.1 SURVIVAL; RIGHT TO INDEMNIFICATION. All representations, warranties,
covenants and obligations in this Agreement, the Schedules, and any other
certificate or document delivered pursuant to this Agreement, shall survive the
Closing, unless MCC or Buyer knew or had reason to know of any misrepresentation
or breach of warranty, covenant or obligation at the time of Closing and
continue in full force and effect until March 31, 2002.
13.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER AND SHAREHOLDERS.
Seller and each Shareholder, jointly and severally, shall indemnify and hold MCC
and Buyer and each of their respective directors, officers, shareholders,
managers, members, Affiliates, successors and assigns ("Buyer Indemnitees")
harmless from, and shall pay to the Buyer Indemnitees the amount of, all
damages, arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Seller or
Shareholders in this Agreement, other than those contained in SECTION 4.17;
(b) any breach by Seller or Shareholders of any covenant,
agreement or obligation of Seller or Shareholders in this Agreement;
(c) all Liabilities of Seller, and all claims, demands and
Proceedings made or brought against Buyer by reason of the transactions
contemplated herein, but excluding the Assumed Liabilities; and
(d) any product shipped or fabricated by, or any services provided
by, Seller prior to the Closing.
13.3 REMEDIES OF BUYER INDEMNITIES NOT EXCLUSIVE. Subject to the dollar
limitations contained in SECTIONS 13.4 AND 13.10 the indemnification remedies
provided in SECTIONS 13.2 AND
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13.4 will not be exclusive of or limit any other remedies that may be available
to Buyer Indemnitees with respect to the transactions contemplated by this
Agreement.
13.4 USE OF INSURANCE TO INDEMNIFY BUYER INDEMNITEES FOR LIABILITY
RELATED TO ENVIRONMENTAL MATTERS. In addition to the provisions of SECTION
13.2, Seller and Shareholders shall purchase and maintain the Environmental
Matters Insurance Policy mentioned in SECTION 8.4 for a period commencing with
the Closing Date and concluding March 31, 2002. Seller and Shareholders, jointly
and severally, shall be liable for any and all environmental damages described
in this SECTION 13.4 in an amount up to Seven Million Dollars ($7,000,000) for
the aggregate of such damages less (a) any proceeds paid to Buyer for such
damages under the Environmental Matters Insurance Policy and (b) any amounts
paid to Buyer for such damages under SECTION 13.2. Seller and the Shareholders,
shall jointly and severally indemnify and hold the Buyer Indemnitees harmless
for any and all such environmental damages, including costs of Cleanup,
containment, or other remediation) arising, directly or indirectly, from or in
connection with:
(a) any Liabilities arising out of or relating to: (1)(A) the
ownership, operation, or condition at any time on or prior to the date hereof of
any properties and assets (whether real, personal, or mixed and whether tangible
or intangible) in which Seller or Shareholders have or had a material ownership
interest; or (B) any Hazardous Materials or other contaminants that were present
on such properties and assets at any time on or prior to the date hereof; or
(2)(A) any Hazardous Materials or other contaminants, wherever located, that
were, or were allegedly, generated, transported, stored, treated, Released or
otherwise handled by Seller or Shareholders or by any other Person for whose
conduct they are held responsible at any time on or prior to the date hereof; or
(B) any Hazardous Activities that were, or were allegedly, conducted by Seller
or Shareholders or by any other Person for whose conduct they are held
responsible; or
(b) any bodily injury (including illness, disability and death,
and regardless of when any such bodily injury occurred, was incurred or
manifested itself), personal injury, property damage (including trespass,
nuisance, wrongful eviction and deprivation of the use of real property) or
other damage of or to any Person, including any employee or former employee of
Seller, or Shareholders,
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or any other Person for whose conduct they are held responsible, in any way
arising from or allegedly arising from any Hazardous Activity conducted or
allegedly conducted with respect to the Facilities or the operation of Seller
prior to the date hereof, or from Hazardous Material that was (1) present or
reasonably suspected to be present on or before the date hereof on or at the
Facilities (or present or reasonably suspected to be present on any other
property, if such Hazardous Material emanated or allegedly emanated from any of
the Facilities and was present or reasonably suspected to be present on any of
the Facilities on or prior to the date hereof); or (2) Released by Seller, any
predecessor of Seller, Shareholders or any other Person for whose conduct they
are held responsible, at any time on or prior to the date hereof.
Buyer, Seller and Shareholders shall cooperate with respect to any Cleanup,
any related Proceeding, and, except as provided in the following sentence, any
other Proceeding with respect to which insurance proceeds may be paid under the
Environmental Matters Insurance Policy or indemnity may be sought under this
SECTION 13.4.
13.5 INDEMNIFICATION BY BUYER. MCC and Buyer shall indemnify and hold
Seller and Shareholders and their directors, officers, shareholders, Affiliates,
successors and assigns ("Seller Indemnitees") harmless for, and will pay to the
Seller Indemnitees the amount of, all damages arising directly or indirectly
from or in connection with:
(a) any breach of any representation or warranty made by Buyer in
this Agreement;
(b) any breach by Buyer of any covenant, agreement or obligation
of Buyer in this Agreement; and
(c) any claim, demand or Proceeding made or brought against Seller
or the Shareholders resulting from Buyer's operation of the Acquired Assets
after the date hereof.
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13.6 REMEDIES OF SELLER INDEMNITIES NOT EXCLUSIVE. The remedies provided in
SECTION 13.5 will not be exclusive of or limit any other remedies which may be
available to Seller Indemnitees with respect to the transactions contemplated by
this Agreement.
13.7 TIME LIMITATIONS. Seller and Shareholders shall have no liability for
indemnification hereunder with respect to any representation or warranty, unless
on or before March 31, 2002 Buyer or MCC notifies Seller and each Shareholder of
a claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Buyer or MCC and Buyer shall have no liability for
indemnification hereunder with respect to any representation or warranty unless
on or before March 31, 2002 Seller or any Shareholder notifies MCC and Buyer of
a claim specifying the factual basis of that claim in reasonable detail to the
extent then known by Seller or such notifying Shareholder.
13.8 INDEMNITY CLAIMS.
(a) NOTIFICATION OF CLAIMS. In the event that any claim ("Claim")
is hereafter asserted by a party hereto as to which such party may be entitled
to indemnification hereunder, such party ("Indemnitee") shall, in writing,
notify the party required by the terms of this Agreement to indemnify the
Indemnitee ("Indemnifying Party") thereof ("Claims Notice") within 30 days after
(1) receipt of written notice of commencement of any third-party litigation
against such Indemnitee, (2) receipt by such Indemnitee of written notice of any
third-party claim pursuant to an invoice, notice of claim or assessment, against
such Indemnitee or (3) such Indemnitee becomes aware of the existence of any
other event in respect of which indemnification may be sought from the
Indemnifying Party. The Claims Notice shall describe the Claim and the specific
facts and circumstances in reasonable detail, shall include a copy of the notice
referred to in (1) and (2), above, shall indicate the amount, if known, or an
estimate, if possible, of damages that have been or may be incurred or suffered,
and shall state the name of the executive who shall represent the Indemnitee in
the mediation provided for in SECTION 15.1.
(b) DEFENSE OF THIRD PARTY CLAIM BY INDEMNIFYING PARTY. The
Indemnifying Party may, at any time, elect to defend or compromise any Claim by
a third party ("Third Party Claim"), at its
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or his own expense and sole discretion and by its or his own counsel, who shall
be reasonably acceptable to the Indemnitee. The election by the Indemnifying
Party to defend or compromise a claim shall constitute an avowal by the
Indemnifying Party that the Indemnifying Party is obligated to indemnify the
Indemnitee with respect to such claim. The Indemnitee may participate, at its or
his own expense, in the defense of any Claim assumed by the Indemnifying Party.
Without the approval of the Indemnitee, which approval shall not be unreasonably
withheld or delayed, the Indemnifying Party shall not agree to any compromise of
a Claim defended by the Indemnifying Party which would impose upon the
Indemnitee injunctive or other equitable relief.
(c) ASSUMPTION OF DEFENSE BY INDEMNITEE. Notwithstanding the
foregoing, if an Indemnitee determines in good faith and reasonable judgment
that there is a reasonable probability that a Proceeding may adversely and
materially affect it or its Affiliates other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the Indemnitee may, by notice to the Indemnifying Party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the Indemnifying
Party will not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its prior written consent (which may
not be unreasonably withheld or delayed).
(d) CONSENT TO JURISDICTION BY SELLER AND SHAREHOLDERS. Seller and
Shareholders hereby consent to the non-exclusive jurisdiction of any court in
which a Proceeding is brought against any Buyer Indemnitee for purposes of any
Claim that a Buyer Indemnitee may have under this Agreement with respect to such
Proceeding or the matters alleged therein, and agree that process may be served
on Seller and Shareholders with respect to such a Claim anywhere in the world.
(e) BUYER'S CONSENT TO JURISDICTION. MCC and Buyer hereby consent
to the non- exclusive jurisdiction of any court in which a Proceeding is brought
against any Seller Indemnitee for purposes of any Claim that a Seller Indemnitee
may have under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on MCC and Buyer with
respect to such a Claim anywhere in the world.
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(f) DEFENSE OF CLAIM BY INDEMNITEE. If, within 30 days of the
Indemnifying Party's receipt of a Claim Notice involving a Third Party Claim,
the Indemnifying Party shall not have notified the Indemnitee of its or his
election to assume the defense, the Indemnitee shall have the right to assume
control of the defense or compromise of such Claim, and the reasonable costs and
expenses of such reasonable defense, including costs of investigation and
reasonable attorneys' fees, shall be added to the Claim.
(g) COOPERATION OF PARTIES. The party assuming the defense of any
Claim shall keep the other party reasonably informed at all times of the
progress and development of the party's defense of and compromise efforts with
respect to such Claim and shall furnish the other party with copies of all
relevant pleading, correspondence and other papers. In addition, the parties to
this Agreement shall cooperate with each other, and make available to each other
and their representatives all available relevant records or other materials
required by them for their use in defending, compromising or contesting any
Claim. The failure to timely notify the Indemnifying Party of the commencement
of such actions in accordance with SECTION 13.8(A) shall relieve the
Indemnifying Party from the obligation to indemnify under SECTION 13.2, 13.4, OR
13.5, as the case may be, but only to the extent the Indemnifying Party
establishes by competent evidence that it or he is or has been materially and
adversely prejudiced thereby.
13.9 RIGHT OF SET-OFF. In the event that any Buyer Indemnitee is entitled
to indemnification as provided in SECTION 13.2 OR 13.4, Buyer shall have the
right, subject to the provisions of SECTION 13.10 to set-off the entire amount
thereof against the amounts, if any, which Buyer shall owe Seller under SECTION
2.6 of the Adjustment. In the event the right of set-off in the preceding
sentence is not sufficient to fully indemnify Buyer Indemnitee, Buyer shall have
the right to set-off any remaining indemnity amount against any amounts which
Buyer shall owe ▇▇▇▇▇▇▇▇ as consideration for the Agreement Not to Compete duly
executed and delivered to Buyer by ▇▇▇▇▇▇▇▇, provided, it shall be a condition
to the exercise of the right of set-off that Buyer shall give Seller and/or
▇▇▇▇▇▇▇▇, as the case may be, notice specifying in reasonable detail the basis
for such set-off. Neither the exercise of, nor the failure to exercise, such
right of set-off will constitute an election of
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remedies or limit Buyer in any manner in the enforcement of any other remedies
that may be available to it.
13.10 LIMITATIONS ON INDEMNIFICATION BY SELLER AND SHAREHOLDERS.
Notwithstanding the provisions of SECTION 13.2 to the contrary:
(a) the obligation of Seller and Shareholders, collectively, to
indemnify Buyer Indemnitees hereunder shall not exceed Two Million Five Hundred
Thousand Dollars ($2,500,000.00) in the aggregate (the "Basket"); provided,
however, that the Basket shall not apply to indemnification covered by SECTION
13.4. No Buyer Indemnitees shall be entitled to indemnification pursuant to
SECTION 13.2, and no Seller Indemnitees shall be entitled to indemnification
pursuant to SECTION 13.5, with respect to any damages as set forth in SECTION
13.2 (excluding any damages which are covered by both SECTIONS 13.2 AND 13.4)
and SECTION 13.5, respectively, until the aggregate of all damages for which
such indemnified party is entitled to indemnification hereunder shall equal or
exceed Twenty-Five Thousand Dollars ($25,000), in which event the indemnifying
party shall be liable for the amount of all such damages; and
(b) any Adjustment under SECTION 2.6 shall not give rise to a
claim for indemnification by Buyer Indemnitees against Seller and Shareholders
under SECTION 13.2 OR 13.4 or to a claim for indemnification by Seller
Indemnitees against MCC and Buyer.
14. [INTENTIONALLY LEFT BLANK].
15. MISCELLANEOUS PROVISIONS.
15.1 ARBITRATION.
(a) If any dispute under this Agreement arises and the parties are
unable to resolve such dispute, the unresolved matter shall be resolved by
arbitration if a party requests arbitration by making a written demand for
arbitration to the other parties. The arbitration proceedings shall be conducted
in accordance with the CPR Rules for Non-Administered Arbitration of Business
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Disputes, or if the parties so agree, the relevant rules of another arbitration
organization. In any case, regardless of any rules of the selected arbitration
organization to the contrary, only one arbitrator shall be used to decide the
outcome of the arbitration. Such arbitration shall be held in Cincinnati, Ohio,
or if the parties agree upon another location, that other location. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
ss.ss.1-16.
(b) The parties shall have the right of discovery in accordance
with the Federal Rules of Civil Procedure except that discovery may commence
immediately upon the service of the demand for arbitration. A party's
unreasonable refusal to cooperate in discovery shall be deemed to be refusal to
proceed with arbitration and, until an arbitrator has been designated, the
parties may enforce their rights (including the right of discovery) in the
courts. Such enforcement in the courts shall not constitute a waiver of a
party's right to arbitration. Upon his or her appointment, the arbitrator shall
have the power to enforce the parties' discovery rights.
(c) The parties shall be bound by the decision of the arbitrator
and accept his or her decision as the final determination of the matter in
dispute. The prevailing party shall be entitled to enter a judgment in any court
upon any arbitration award made pursuant to this SECTION 15.1. The arbitrator or
arbitrators shall award the costs and expenses of the arbitration, including
reasonable attorneys' fees, disbursements, arbitration expenses, arbitrators'
fees and the administrative fee of the arbitration organization, to the
prevailing party as shall be determined by the arbitrator.
15.2 AMENDMENT; WAIVER. This Agreement may be amended, modified or
superseded only by a written instrument signed by all of the parties to this
Agreement. No party shall be deemed to have waived compliance by another party
of any provision of this Agreement unless such waiver is contained in a written
instrument signed by the waiving party and no waiver that may be given by a
party will be applicable except in the specific instance for which it is given.
The failure of any party to enforce at any time any of the provisions of this
Agreement or to exercise any right or option contained in this Agreement or to
require at any time performance of any of the provisions of this Agreement, by
any of the other parties shall not be construed to be a waiver of such
provisions and shall not affect the validity of this Agreement or any of its
provisions or the right of such party
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thereafter to enforce each provision of this Agreement. No course of dealing
shall operate as a waiver or modification of any provision of this Agreement or
otherwise prejudice such party's rights, powers and remedies.
15.3 AGREEMENT NON-ASSIGNABLE; BINDING EFFECT. No party shall assign any of
its rights or obligations under this Agreement, whether by operation of law or
otherwise, without obtaining the prior consent of the other parties to this
Agreement. Subject to the foregoing, all of the provisions of this Agreement
shall be binding upon and shall inure to the benefit of and be enforceable by
the parties to this Agreement and their respective heirs, legal representatives,
successors and assigns.
15.4 CONSTRUCTION AND INTERPRETATION OF AGREEMENT.
(a) Section titles or captions in this Agreement are included for
purposes of convenience only and shall not be considered a part of the Agreement
in construing or interpreting any of its provisions. All references in this
Agreement to Sections shall refer to Sections of this Agreement unless the
context clearly otherwise requires.
(b) When used in this Agreement, the word "including" shall have
its normal common meaning and any list of items that may follow such word shall
not be deemed to represent a complete list of the contents of the referent of
the subject.
(c) The parties have participated jointly in the negotiation and
drafting of this Agreement. If any ambiguity or question of intent or
interpretation arises, no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
(d) Unless the context otherwise requires, when used in this
Agreement, the singular shall include the plural, the plural shall include the
singular, and all nouns, pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, as the identity of the Person or
Persons may require.
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(e) The parties do not intend that this Agreement shall confer on
any third party any right, remedy or benefit or that any third party shall have
any right to enforce any provision of this Agreement.
15.5 SEVERABILITY OF PROVISIONS. If a court in any Proceeding holds any
provision of this Agreement or its application to any Person or circumstance
invalid, illegal or unenforceable, the remainder of this Agreement, or the
application of such provision to Persons or circumstances other than those to
which it was held to be invalid, illegal or unenforceable, shall not be
affected, and shall be valid, legal and enforceable to the fullest extent
permitted by law, but only if and to the extent such enforcement would not
materially and adversely frustrate the parties' essential objectives as
expressed in this Agreement. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties intend that the court add to this
Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be valid and enforceable, so as to effect the original intent
of the parties to the greatest extent possible.
15.6 CONFIDENTIALITY OF CERTAIN INFORMATION.
(a) The parties and their respective agents and employees shall
hold and keep confidential all Information which is proprietary in nature and
non-public or confidential, in whole or in part (the " Confidential
Information") which any of them may receive from any other party concerning such
other party. Failure to ▇▇▇▇ any of the Confidential Information as non-public,
proprietary or confidential shall not affect its status as Confidential
Information under the terms of this Agreement. Confidential Information shall
not include any information in the possession of the receiving party (1) that is
developed by the such party without reference to and independent of any
Confidential Information, (2) is learned from a third party not under any duty
of confidence to the disclosing party or (3) becomes part of the public domain
through no fault of the receiving party or any of its Affiliates, directors,
officers, employees, agents, Shareholders or other of its representatives.
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(b) None of the parties nor their respective agents or employees
shall, without the prior consent of the disclosing party, disclose or use any
such Confidential Information, in whole or in part, except in connection with
the performance of the transactions described in this Agreement. Unless
otherwise required by law, none of the parties shall disclose any Confidential
Information acquired as a result of this Agreement to any Person or entity,
other than its respective counsel and other representatives, and such other
third parties (such as bankers and lessors) with whom it must communicate to
consummate the transactions described by this Agreement, all of whom must agree
to keep the Confidential Information confidential. If the Closing does not
occur, each party will destroy or return, as requested by the disclosing party,
to the disclosing party all copies of documents that contain that party's
Confidential Information.
15.7 CONFIDENTIALITY OF AGREEMENT. Unless otherwise required by law, no
party shall disclose either the terms or existence of this Agreement to any
Person other than a party's counsel and its other representatives or such other
third parties with whom it must communicate to consummate the transactions
described in this Agreement.
15.8 EXCLUSIVE FORUM. Any action to enforce any provision of this Agreement
shall be instituted exclusively in the United States District Court for the
Southern District of Ohio or, if such Court does not have jurisdiction to
adjudicate such action, in the courts of the State of Ohio located in ▇▇▇▇▇▇▇▇
County, Ohio. The parties irrevocably and unconditionally waive and shall not
plead, to the fullest extent permitted by law, any objection that they may now
or hereafter have to the jurisdiction of such courts over the parties, the
laying of venue or the convenience of the forum of any action related to this
Agreement that is brought in the United States District Court for the ▇▇▇▇▇▇▇
District of Ohio or in the Courts of the State of Ohio located in ▇▇▇▇▇▇▇▇
County, Ohio.
15.9 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this Agreement,
if any, shall constitute part of this Agreement and shall be deemed to be
incorporated in this Agreement by reference and made a part of this Agreement as
if set out in full at the point where first mentioned. The parties intend that
each representation, warranty, covenant and obligation contained in this
Agreement shall have independent significance. If any party has breached any
representation,
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warranty, covenant or obligation contained in this Agreement in any respect,
merely because there exists another representation, warranty, covenant or
obligation relating to the same subject matter (regardless of the relative
levels of specificity) which the party has not breached shall not detract from
or mitigate the party's breach of the first representation, warranty, covenant
or obligation.
15.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.
15.11 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding of the parties related to its subject matter and supersedes all
prior proposals, understandings, agreements, correspondence, arrangements and
contemporaneous oral agreements relating to subject matter of this Agreement. No
representation, promise, inducement or statement of intention has been made by
any party which has not been embodied in this Agreement.
15.12 INDEPENDENT CONTRACTOR RELATIONSHIP. Regarding all matters relating
to this Agreement, this Agreement creates an independent contractor relationship
among the parties. Nothing contained in this Agreement shall be construed to (a)
give any party the power to direct and control the day-to-day activities of the
other, (b) constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking or (c) constitute any
party, its agents or employees as employees of any other party or grant any of
them the power or authority to act for, bind or otherwise create or assume any
obligation on behalf of any of the other parties for any purpose whatever.
15.13 EXPENSES. Except as otherwise expressly provided for in this
Agreement, each party will bear its own expenses incurred in connection with the
preparation, execution and performance of its obligations under this Agreement,
including all fees and expenses of agents, representatives, counsel and
accountants.
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15.14 FURTHER ASSURANCES. Each party shall execute and deliver such
additional documents or take such additional actions as may be requested by
another party to this Agreement if such requested document or action is
reasonably necessary to effect the transactions described in this Agreement.
15.15 GOVERNING LAW. This Agreement shall be governed by, and shall be
construed and enforced in accordance with, the laws of Ohio, without giving
effect to any conflict of law rule or principle of such state.
15.16 NO PUBLIC ANNOUNCEMENT. No party shall make any press release or
other public announcement regarding this Agreement or the transactions described
in this Agreement, unless such party is obligated by law or the rules of any
stock exchange upon which its shares are traded to make such a disclosure. When
a party determines that it is obligated by law or the rules of a stock exchange
to make such a disclosure, it shall notify all of the other parties prior to
such disclosure and all of the parties shall cooperate to cause a mutually
agreeable release or announcement to be issued.
15.17 NOTICES. All notices, requests, consents, approvals, waivers, demands
and other communications required or permitted to be given or made under this
Agreement shall be in writing and shall be deemed delivered to the parties (a)
on the date of personal delivery or transmission by facsimile transmission, (b)
on the first Business Day following the date of delivery to a nationally
recognized overnight courier service or (c) or the third Business Day following
the date of deposit in the United States Mail, postage prepaid, by certified
mail, in each case, addressed as follows, or to such other address, Person or
entity as any party may designate by notice to the others in accordance
herewith:
If to: Multi-Color Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
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With a copy to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ PLLC
2800 Chemed Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
If to Seller: ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to Shareholders: c/o Uniflex Corporation
▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
15.18 RECOVERY OF EXPENSES BY PREVAILING PARTY. The party prevailing in any
civil action, arbitration or other Proceeding shall be entitled to recover from
the nonprevailing party, in addition to any damages the prevailing party may
have been awarded, all reasonable expenses that the prevailing party may have
incurred in connection with such Proceeding, including accounting fees
attorneys' fees and expert witnesses' fees.
15.19 CUMULATIVE REMEDIES; SPECIFIC PERFORMANCE. No right or remedy
conferred upon or reserved to any of the parties under the terms of this
Agreement is intended to be, nor shall it be
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deemed, exclusive of any other right or remedy provided in this Agreement or by
law or equity, but each shall be cumulative of every other right or remedy. The
parties understand and acknowledge that a party may be damaged irreparably by
reason of a failure of another party to perform any obligation under this
Agreement. Accordingly, if any party attempts to enforce the provisions of this
Agreement by specific performance (including preliminary or permanent injunctive
relief), the party against whom such action or Proceeding is brought waives the
claim or defense that the other party has an adequate remedy at law.
15.20 TIME OF ESSENCE. Time is of the essence to the performance of the
obligations set forth in this Agreement.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
[SIGNATURE PAGES TO FOLLOW]
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MCC-UNIFLEX, LLC
By: /S/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and CEO
("Buyer")
[SIGNATURE PAGE OF ASSET PURCHASE AGREEMENT]
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UNIFLEX CORPORATION
By: /S/▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
("Seller")
[SIGNATURE PAGE OF ASSET PURCHASE AGREEMENT]
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/S/▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
("Shareholder")
[SIGNATURE PAGE OF ASSET PURCHASE AGREEMENT]
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MEIWA CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
("Shareholder")
[SIGNATURE PAGE OF ASSET PURCHASE AGREEMENT]
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RYOHSEI PLASTIC INDUSTRIES CO., LTD.
By: /S/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
("Shareholder")
[SIGNATURE PAGE OF ASSET PURCHASE AGREEMENT]
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APPENDIX OF DEFINED TERMS
"ACQUISITION ASSETS" shall have the meaning set forth in SECTION 2.1.
"ACQUISITION BALANCE SHEET" shall have the meaning set forth in SECTION 4.2.
"ACQUISITION BALANCE SHEET ASSETS" shall have the meaning set forth in SECTION
4.2.
"ADJUSTMENT" shall have the meaning set forth in SECTION 2.6.
"ADJUSTMENT NOTICE" shall have the meaning set forth in SECTION 2.7.
"ADVERSE EFFECT" means any condition, change or event that would materially and
adversely affect the business, operations, properties (including intangible
properties) or financial condition of Seller taken as a whole.
"AFFILIATES" means (1) a Person that, directly or indirectly, through one or
more intermediaries, controls or is controlled by, or is controlled by a Person
that controls, such Person; (2) any trust or estate in which such Person has a
beneficial interest or as to which such Person serves as a trustee or in another
fiduciary capacity; or (3) any spouse, parent or lineal descendent of such
Person. As used in this definition, "control" shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies,
whether through ownership of securities, partnership or other ownership
interests, by contract or otherwise.
"AGREEMENT" means this Agreement, the Exhibits and the Schedules.
"ASSUMED LIABILITIES" shall have the meaning set forth in SECTION 2.3.
"ASSUMPTION AGREEMENT" shall have the meaning set forth in SECTION 2.3.
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"BASKET" shall have the meaning set forth in SECTION 13.10(a), 13.10(a).
"BEST EFFORTS" means taking or causing to be taken, any action, and to do, or
cause to be done, things necessary, proper or advisable under applicable laws
and regulations, each case in the exercise of commercially reasonable judgment
and diligence.
"BOOKS AND RECORDS" shall have the meaning set forth in SECTION 4.9.
"BUSINESS" shall have the meaning set forth in the Recitals to this Agreement.
"BUSINESS DAY" means a day of the year on which banks are not authorized to be
closed in the City of New York.
"BUYER" means MCC-Uniflex, LLC.
"BUYER ANCILLARY DOCUMENTS" shall have the meaning set forth in SECTION 5.2(a).
"BUYER INDEMNITEES" shall have the meaning set forth in SECTION 13.2.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"CLAIMS" shall have the meaning set forth in SECTION 13.8.
"CLAIMS NOTICE" shall have the meaning set forth in SECTION 13.8(a).
"CLEANUP" shall have the meaning set forth in the definition of Environmental,
Health & Safety Liabilities.
"CLOSING" shall have the meaning set forth in SECTION 3.
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"CLOSING BALANCE SHEET" shall have the meaning set forth in SECTION 2.6.
"COMPENSATION PLANS" shall have the meaning set forth in SECTION 4.15(a).
"COMPUTERS" shall have the meaning set forth in SECTION 4.11(a).
"CONTRACTS" shall have the meaning set forth in SECTION 2.1(g).
"COPYRIGHTS" shall have the meaning set forth in SECTION 4.19(a).
"DATA AND RECORDS" shall have the meaning set forth in SECTION 2.1(i).
"DOLLARS"; "$" means lawful currency of the United States of America.
"EFFECTIVE DATE" shall have the meaning set forth in SECTION 3.
"ENCUMBRANCE" means any charge, claim, community property, interest, condition,
equitable interest, lien, option, pledge, right of refusal, security interest or
restriction of any kind, including any restriction on use, voting, transfer,
receipt of income or exercise of any other attribute of ownership.
"ENVIRONMENT" means soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other environmental medium
or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" means any material cost,
damages, expense, liability, obligation or other responsibility arising from or
under Environmental Law or Occupational Safety and Health Law and consisting of
or relating to:
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(a) any environmental, health or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative Proceedings, damages, losses, claims, demands and response and
investigative, remedial, or inspection costs and expenses arising under
Environmental Law or Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for Cleanup costs or corrective action, including any
investigation, Cleanup, removal, containment or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, investigative or remedial
measures required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action," include the types
of activities covered by CERCLA and any equivalent state law.
"ENVIRONMENTAL LAW" means any Legal Requirement that requires or relates to:
(a) advising appropriate authorities, employees and the public of
intended or actual Releases of pollutants or hazardous substances or materials,
violations of discharge limits or other prohibitions and of the commencements of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the Release of
pollutants or hazardous substances or materials into the Environment;
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(c) reducing the quantities, preventing the Release or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged and used
so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the
transportation of hazardous substances, pollutants, oil or other potentially
harmful substances;
(g) cleaning up pollutants that have been Released, preventing the
threat of Release or paying the costs of such Cleanup or prevention;
(h) making responsible parties pay private parties, or groups of them,
for damages done to their health or the Environment or permitting self-appointed
representatives of the public interest to recover for injuries done to public
assets; or
(i) Occupational Safety and Health Law.
"ENVIRONMENTAL MATTERS INSURANCE POLICY" shall have the meaning as set forth in
SECTION 8.4.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"ERISA AFFILIATE" shall have the meaning set forth in SECTION 4.15(a).
"EXCLUDED ASSETS" shall have the meaning set forth in SECTION 2.2.
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"FACILITIES" means any real property, leaseholds or other real property
interests owned by Seller, and any buildings, plants, structures or equipment
(including motor vehicles), that are owned or leased both as of the date hereof.
"FLSA" means the Fair Labor Standards Act.
"GAAP" means generally accepted accounting principles in effect in the United
States consistently applied.
"GOVERNMENTAL AUTHORIZATIONS" means any approval, consent, license, permit,
waiver or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" means any (1) nation, state, county, city, town, village,
district or other jurisdiction of any nature; (2) federal, state, local,
municipal, foreign or other governmental organization or body; (3) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official or entity and any court or other tribunal);
(4) multi-national organization or body; or (5) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature.
"HAZARDOUS ACTIVITY" means the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation or thing that materially increases the danger, or risk of
danger, or poses an unreasonable and material risk of harm to Persons or
property on or off the Facilities, or that materially affects the value of the
Facilities or Seller.
"HAZARDOUS MATERIALS" means any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a
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contaminant under or pursuant to any Environmental Law, including any admixture
or solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.
"INDEMNITEE" shall have the meaning set forth in SECTION 13.8(a).
"INDEMNIFYING PARTY" shall have the meaning set forth in SECTION 13.8(a).
"INSURANCE PROCEEDS" shall have the meaning set forth in SECTION 2.1(l).
"INTELLECTUAL PROPERTY" shall have the meaning set forth in SECTION 4.19(a).
"INVENTORIES" shall have the meaning set forth in SECTION 2.1(e).
"INVESTMENTS" shall have the meaning set forth in SECTION 2.1(b).
"IRC" shall mean the Internal Revenue Code of 1986, as amended.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, with respect to Buyer, the actual knowledge (without any duty
of independent investigation) of those persons holding executive offices of
Buyer, and with respect to Seller, the actual knowledge (without any duty of
independent investigation) of those persons holding executive offices of Seller
and the actual knowledge (without any duty of independent investigation) of the
Shareholders including, with respect to Meiwa and Ryohsei, the actual knowledge
(without any duty of independent investigation) of those persons holding
executive offices of Meiwa and Ryohsei, respectively, and, with respect to
▇▇▇▇▇▇▇▇, the actual knowledge (without any duty of independent investigation)
of ▇▇▇▇▇▇▇▇.
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"LEGAL REQUIREMENT" means any applicable federal, state, local, municipal,
foreign, international, multinational or other administrative Order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty, the failure to comply with which would have an Adverse Effect.
"LIABILITIES" means any claim, obligation, expense or cost whether fixed,
contingent, matured, unmatured, known or unknown, accrued or unaccrued.
"LIEN" means any lien, claim, Encumbrance, security interest, option, mortgage,
mortgage note, deed of trust, easement, license, leasehold interest, right of
way, title defect, charge, restriction or right of any third party of any kind
upon any properties or assets in which Seller has an interest.
"MARKS" shall have the meaning set forth in SECTION 4.19(d).
""MCC" means Multi-Color Corporation.
"MULTIEMPLOYER PLANS" shall have the meaning set forth in SECTION 4.15(a).
"NET ASSETS VALUE" shall have the meaning set forth in SECTION 2.6.
"OCCUPATIONAL SAFETY AND HEALTH LAW" means any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (including
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"OPERATING CASH" shall have the meaning set forth in SECTION 2.1(b).
"ORDER" means any award, decision, injunction, judgment, unit, decree, subpoena
or verdict entered, issued, as made or rendered by any court administration
agency or other Governmental Body or by any arbitrator.
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"ORDINARY COURSE OF BUSINESS" shall mean conduct occurring in the usual and
customary operation of the Business.
"ORGANIZATIONAL DOCUMENTS" for each party means the charter, articles of
incorporation and by laws, or the articles of organization and operating
agreement, and a statement of good standing.
"OSHA" means Occupational Safety and Health Act.
"OTHER ASSETS" shall have the meaning set forth in SECTION 2.1(o).
"PATENTS" shall have the meaning set forth in SECTION 4.19(c).
"PENSION PLANS" shall have the meaning set forth in SECTION 4.15(a).
"PERMITS" shall have the meaning set forth in SECTION 4.7.
"PERSON" means any individual, corporation, partnership, firm, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental or regulatory body or other entity.
"PERSONAL PROPERTY" shall have the meaning set forth in SECTION 2.1(d).
"PLAN SPONSOR" shall have the meaning set forth in SECTION 4.15(a).
"PREPAID EXPENSES" shall have the meaning set forth in SECTION 2.1(m).
"PROCEEDING" means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted or heard by or before, or otherwise
involving, a Governmental Body or arbitrator.
"PURCHASE PRICE" shall have the meaning set forth in SECTION 2.5.
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"REAL PROPERTY" shall have the meaning set forth in SECTION 2.1(c).
"RECEIVABLES" shall have the meaning set forth in SECTION 2.1(f).
"RELATED PERSON" shall have the meaning set forth 267(b) of the Code.
"RELEASE" means any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping or other releasing into the Environment, whether
intentional or unintentional.
"RETAINED LIABILITIES" shall have the meaning set forth in SECTION 2.4.
"ROYALTIES" shall have the meaning set forth in SECTION ?.
"SELLER" means Uniflex Corporation.
"SELLER AGREEMENTS" shall have the meaning set forth in SECTION 4.29.
"SELLER ANCILLARY DOCUMENTS" shall have the meaning set forth in SECTION 4.8(a).
"SELLER FINANCIAL STATEMENTS" shall have the meaning set forth in SECTION 4.2.
"SELLER INDEMNITEES" shall have the meaning set forth in SECTION 13.5.
"SHAREHOLDERS" means ▇▇▇▇ ▇▇▇▇▇▇▇▇, Meiwa Corporation and Ryohsei Plastic
Industries Co., Ltd..
"TAX" means any taxes, however denominated, including income tax, capital gains
tax, value-added tax, sales tax, property tax, gift tax, estate tax, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, sales, use, transfer, registration, alternative or
add-on minimum, estimated or other tax of any kind whatsoever and any related
charge or amount (including any fine, penalty, interest or addition to tax),
imposed, assessed or collected by or under
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the authority of any Governmental Body or payable pursuant to any tax-sharing
agreement or any other arrangement relating to the sharing or payment of any
such tax, levy, assessment, tariff, duty, deficiency or fee, including any
interest, penalty or addition thereto, whether disputed or not.
"TAX RETURNS" means any return (including any information return), report,
declaration of estimated Taxes, statement, schedule, notice, form or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
"THREATENED" means any demand or statement made in writing or any notice given
in writing asserting a claim, Proceeding, dispute, action or other matter.
"THIRD PARTY CLAIM" shall have the meaning set forth in SECTION 13.8(b).
"TRADE SECRETS" shall have the meaning set forth in SECTION 4.19(f).
"VEBA" shall have the meaning set forth in SECTION 4.15(a).
"WELFARE PLANS" shall have the meaning set forth in SECTION 4.15(a).
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