EXECUTIVE VERSION
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made
and entered into as of this 19th day of September, 2002 by and
between Vyncolit North America Inc., a Delaware corporation
("Buyer"), Perstorp Composites Holding B.V., a company organized
under the laws of the Netherlands ("Parent") and Xxxxxx
Corporation, a Massachusetts corporation ("Seller"). Each of
Buyer, Parent and Seller is sometimes referred to individually
herein as a "Party" and collectively as the "Parties".
WHEREAS, Seller desires to sell or license to Buyer, and
Buyer desires to purchase or license from Seller, certain of the
assets, properties, rights and business of Seller for the
consideration and upon the terms and conditions, set forth in
this Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending, to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the terms listed in Exhibit I
shall have the meanings specified or referred to therein.
ARTICLE II
THE ASSETS AND LIABILITIES
2.1 Purchase and Sale of Assets. At the Closing,
Seller shall (a) sell, transfer, convey, assign and deliver (and
in the case of certain Accounts Receivable and Inventories, will
cause Xxxxxx N.V. and Rogers Singapore to sell, transfer,
convey, assign and deliver) to Buyer, and Parent shall cause
Buyer to purchase from Seller or such Affiliates, all of
Seller's or such Affiliates' right, title and interest in and to
the Business as a going concern, including all of the Assets,
free and clear of all Encumbrances, except for Permitted
Encumbrances and (b) guarantee that WPI will grant Buyer (i) an
exclusive, worldwide, royalty-bearing license to use the
Licensed Intellectual Property pursuant to the Intellectual
Property Agreement and (ii) a worldwide and royalty-free license
to use the Shared Know-How pursuant to the Shared Know-How
Agreement. "Assets" shall mean all the assets, tangible and
intangible, of Seller and its Affiliates, wherever located, used
by Seller or its Affiliates in the Business, but shall not
include the Excluded Assets, the Licensed Intellectual Property
or the Shared Know-How. "Business" shall have the meaning set
forth in the Intellectual Property Agreement. Without limiting
the generality of the foregoing, the Assets shall include the
following:
(a) all real property owned by Seller and used primarily
in connection with the Business (collectively, the "Real
Estate"), as more particularly described in Schedule 2.1(a), and
all buildings, improvements, other constructions, construction-
in-progress and fixtures now or hereafter located on the Real
Estate (collectively, the "Improvements"), together with, as
they
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relate to the Real Estate, all right, title and interest of
Seller or its Affiliates in and to (i) all options, easements,
servitudes, rights-of-way, privileges, appurtenances and other
rights associated therewith, (ii) any land lying in the bed of
any street, open or proposed, public or private, in front of or
adjoining the Real Estate, (iii) any award made or to be made in
lieu thereof and in and to any unpaid award for damage to the
Real Estate by reason of any change of grade of any street, and
the buildings and improvements located thereon, and (iv) any
transferable Governmental Authorization, license or certificate
of occupancy used in or relating to the ownership, occupancy or
operation of the Real Estate;
(b) all Tangible Personal Property of every kind and
nature used primarily in connection with the Business,
including, without limitation, the Tangible Personal Property
listed on Schedule 2.1(b);
(c) all Inventories that are existing as of the Effective
Time (including, without limitation, Inventory purchased from
Affiliates of Seller), the current categories, locations and
amounts of which, as of July 28, 2002, are set forth on Schedule
2.1(c);
(d) all Accounts Receivable that are existing as of the
Effective Time (other than any Accounts Receivable from
Affiliates of Seller), including, without limitation, all those
Accounts Receivable listed on Schedule 2.1(d) as of July 28,
2002 which have not been collected in the Ordinary Course of
Business;
(e) all intangible property of every kind and nature used
in connection with the Business (collectively, the "Intangible
Property") other than the Licensed Intellectual Property and the
Shared Know-How, including, without limitation, the following:
(i) all Copyrights and all other proprietary rights
and all applications and registrations therefor and
licenses or other rights thereof that are used by Seller
primarily in connection with the Business;
(ii) all transferable Government Authorizations
relating to the operation of the Business as presently
conducted by Seller, which transferable Governmental
Authorizations are listed in Schedule 2.1(e)(ii);
(iii) all benefits, proceeds or any other amounts
payable under any policy of insurance maintained by Seller
with respect to destruction of or damage to any of the
Assets (but only to the extent that such destruction or
damage does not reduce the book value of the Asset or
Assets in question for purposes of determining Net Asset
Value); and
(iv) all deposits held by Seller in connection with
future services to be rendered by Seller in connection with
the Business, provided the service obligation in question
has been assumed by Buyer.
(f) all of the Business Contracts, including those listed
on Schedule 4.19(a) but excluding any such Business Contract
that also appears on Schedule 4.15(a)); and
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(g) all the books, Records, forms and files relating to
the operations of the Business or reflecting the operations
thereof which are presently located at the Real Estate,
including copies of all Records, books, forms and files relating
to human resource and other matters as to which Seller is
required to retain the originals under applicable Legal
Requirements, but excluding therefrom Records, books, forms and
files reflecting the operations of Seller as a whole, and
further excluding Records, books, forms and files which Seller
is required to maintain private under applicable Legal
Requirements.
2.2 Excluded Assets. Notwithstanding anything to the
contrary contained in Section 2.1 or elsewhere in this
Agreement, the following assets of Seller (collectively, the
"Excluded Assets") are not part of the sale and purchase
contemplated hereunder, are excluded from the Assets and shall
remain the property of Seller after the Closing:
(a) all cash and cash equivalents;
(b) all claims for refund of Taxes and other governmental
charges of whatever nature;
(c) the assets identified on Schedule 2.2(c) hereto, which
assets relate to the Excluded Products (as defined in the
Intellectual Property Agreement);
(d) the Excluded Technology (as defined in the
Intellectual Property Agreement);
(e) all benefits, proceeds or any other amounts payable
under any policy of insurance maintained by Seller, except as
may otherwise be provided in Section 2.1(e)(iii) above;
(f) all rights of Seller arising under this Agreement and
any other document relating to the Contemplated Transactions;
(g) rights under product warranty Contracts against
vendors to the extent needed to reimburse Seller for expenses
incurred by Seller in connection with product warranty and
product liability claims for goods manufactured or sold prior to
the Effective Time;
(h) all rights to and with respect to the assets
associated with Seller's Pension Plans;
(i) all books, Records, forms and files relating to human
resource and other matters as to which Seller is required to
retain originals or is required to maintain private under
applicable Legal Requirements;
(j) all Contracts with employees of the Business regarding
terms of employment and confidentiality obligations of such
employees and all rights to enforce such Contracts; provided,
however, that other than in connection with the Excluded
Products, Seller shall have no right to enforce such
confidentiality obligations against Hired Active Employees in
connection with the disclosure to Buyer or its Representatives
of confidential information relating to the Business or the use
of such confidential information in connection with the conduct
of the Business by Buyer after Closing;
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(k) the Shared Know-How (which is the subject of the
Shared Know-How Agreement);
(l) assets located at Seller's offices in Xxxxxx,
Connecticut which may be used in connection with the Business,
but are used primarily otherwise than in connection with the
Business, and which are generally described on Schedule 2.2(1);
(m) Accounts Receivable which have been written off for
accounting purposes and which are not reflected on the Closing
Balance Sheet; and
(n) the names "Xxxxxx" or "Xxxxxx Corporation," or any
logos or designs incorporating the names Xxxxxx or Xxxxxx
Corporation.
2.3 Assumed Liabilities. On the Closing Date, Buyer
shall assume and agree to discharge as and when due only the
following Liabilities of Seller (the "Assumed Liabilities"):
(a) any trade account payables arising out of or relating
to the Business (other than any payable to any Affiliate of
Seller) (the "Payables"), including, without limitation, all
those categories and classes of Payables listed on Schedule
2.3(a);
(b) subject to Section 2.4(b), any Liability arising after
the Effective Time under the Business Contracts and the
Governmental Authorizations set forth on Schedule 2.1(e)(ii);
(c) the accrual for employee benefit matters set forth and
described in reasonable detail on Schedule 2.3(c) and accruals
relating thereto arising after the date hereof in the Ordinary
Course of Business consistent with past practice (the "Benefits
Accrual"); and
(d) the accruals for matters set forth and described in
reasonable on Schedule 2.3(d) and accruals relating thereto
arising after the date hereof in the Ordinary Course of Business
consistent with past practice (the "Other Accruals").
2.4 Retained Liabilities. Buyer shall not assume or
in any way be liable for the payment, performance and discharge
of any Liabilities of Seller except as specifically provided in
Section 2.3. Without limiting the generality of the foregoing,
Buyer shall not assume and Seller shall retain and shall
punctually pay, perform and discharge when due, the following
Liabilities of Seller (collectively, the "Retained
Liabilities"):
(a) any and all Liabilities arising out of or relating to
products of the Business to the extent manufactured (i.e.,
carried in finished goods inventory) or sold prior to the
Effective Time, including without limitation any and all
Liabilities arising from the use by Seller of asbestos or other
Hazardous Materials in such products;
(b) any and all Liabilities under any Business Contract
assumed by Buyer pursuant to Section 2.3(b) that arises after
the Effective Time to the extent that such Liability arises out
of or relates to any Breach that occurred prior to the Effective
Time;
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(c) except to the extent taken into account in determining
Net Asset Value, any and all Liabilities for Taxes, including
(i) any Taxes arising as a result of Seller's operation of the
Business or ownership of the Assets prior to the Effective Time,
and (ii) any deferred Taxes of any nature;
(d) any and all Liabilities to the extent arising out of
or relating to any violation of Occupational Safety and Health
Laws by Seller in connection with the conduct of the Business
prior to the Effective Time;
(e) any and all Environmental Liabilities to the extent
arising out of or relating to the operation of the Business
prior to the Effective Time or the leasing, ownership or
operation of real property used in connection with the Business
prior to the Effective Time;
(f) any and all Liabilities under the Employee Plans or
relating to payroll, vacation, sick leave, workers'
compensation, unemployment benefits, pension benefits, employee
stock option or profit-sharing plans, health care plans or
benefits, severance or any other employee plans or benefits of
any kind for Seller's employees of the Business or former
employees of the Business or both, which is not taken into
account in determining Net Asset Value;
(g) any and all Liabilities of Seller to any Affiliate of
Seller;
(h) any and all Liabilities incurred by or on behalf of
Seller or its Affiliates arising from the transactions
contemplated by this Agreement, including, without limitation,
all legal fees, costs and disbursements payable in connection
therewith; and
(i) any and all Liabilities of Seller other than the
Assumed Liabilities.
ARTICLE III
CONSIDERATION; CLOSING
3.1 Consideration.
(a) The purchase price for the Assets (as adjusted, the
"Purchase Price") shall equal the Closing Net Asset Value,
subject to the adjustments provided in this Article III, and
shall be payable as provided in this Article III. In no event
shall the sum of the Purchase Price and the Royalty Payments
exceed the Consideration Cap. The "Consideration Cap" shall be
determined as follows: (a) if the Closing Net Asset Value equals
$21,000,000, the Consideration Cap shall equal $39,500,000; (b)
if the Closing Net Asset Value is less than $21,000,000, the
Consideration Cap shall be reduced, dollar for dollar, by the
amount that the Closing Net Asset Value is less than
$21,000,000; and (c) if the Closing Net Asset Value is greater
than $21,000,000, the Consideration Cap shall be increased,
dollar for dollar, by the amount that the Closing Net Asset
Value is greater than $21,000,000.
(b) The Purchase Price shall be payable as follows:
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(i) At the Closing, Buyer shall deliver to Seller, as
Seller may direct, by wire transfer of immediately
available funds to an account or accounts designated by
Seller, an amount equal to $10,500,000 (the "Closing
Payment");
(ii) At the Closing, Buyer shall deliver to Seller a
promissory note substantially in the form of Exhibit
3.1(b)(ii) (the "Note") with an aggregate principal amount
equal to $10,500,000; and
(iii) The Adjustment Amount shall be paid in
accordance with Section 3.6.
3.2 Royalty Payments. Buyer shall make royalty payments
to WPI, in the amounts and at such times as set forth in the
Intellectual Property Agreement (the aggregate amount of such
payments, the "Royalty Payments"), by wire transfer of
immediately available funds to an account or accounts designated
by WPI; provided, however, that in no event shall the Royalty
Payments exceed $18,500,000.
3.3 Closing. The purchase and sale provided for in
this Agreement (the "Closing") will take place at the offices of
Xxxxxx & Xxxx, One City Place, 000 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx, commencing at 9:00 a.m. (local time) on the first
Monday following both (i) the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the
Contemplated Transactions (other than conditions with respect to
actions the Parties will take at the Closing itself) and (ii)
the end of a bi-weekly payroll period of Seller, unless Buyer
and Seller otherwise agree (such date, the "Closing Date"). For
the purposes of passage of title and risk of loss, allocation of
expenses, adjustments and other economic or financial effects of
the transactions contemplated hereby, the Closing when completed
shall be deemed to have occurred at 10:00 p.m. local time (the
"Effective Time") on the Sunday prior to the Closing.
3.4 Closing Obligations. In addition to any other
documents to be delivered under other provisions of this
Agreement, at the Closing:
(a) Seller shall deliver to Buyer, or shall cause its
appropriate Affiliates to deliver to Buyer:
(i) bills of sale for all of the Assets in form and
substance reasonably acceptable to Buyer and its counsel
(the "Bills of Sale"), executed by Seller, and Xxxxxx N.V.
or Rogers Singapore, as appropriate;
(ii) an assignment of all of the Assets that are
intangible personal property in form and substance
reasonably acceptable to Buyer and its counsel, which
assignment shall also contain Buyer's undertaking and
assumption of the Assumed Liabilities (the "Assignment and
Assumption Agreement"), executed by Seller;
(iii) for each interest in Real Estate: (A) a
recordable, special warranty deed, an Assignment and
Assumption of Lease or such other appropriate document or
instrument of transfer, as the case may require, each in
form and substance reasonably satisfactory
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to Buyer and its counsel and executed by Seller; and
(B) any and all plans and specifications pertaining to,
and required permanent certificates of occupancy for, the
Improvements;
(iv) the Intellectual Property Agreement substantially
in the form of Exhibit 3.4(a)(iv) (the "Intellectual
Property Agreement"), executed by Seller and WPI, pursuant
to which WPI grants Buyer an exclusive, worldwide,
royalty-bearing license to use the Patent Rights and
Inventions, Know-How and Trademarks (all as defined in the
Intellectual Property Agreement, and together as the
"Licensed Intellectual Property");
(v) the Shared Know-How Agreement substantially in
the form of Exhibit 3.4(a)(v) (the "Shared Know-How
Agreement"), executed by WPI and Seller;
(vi) a security agreement substantially in the form of
Exhibit 3.4(a)(vi) (the "Security Agreement"), executed by
Seller;
(vii) the remediation side agreement substantially
in the form of Exhibit 3.4(a)(vii) (the "RSA"), and a side
agreement relating to VOC RACT consent order in form and
substance reasonably acceptable to the Parties (the "Side
Agreement")executed by Seller;
(viii) all forms required under the Connecticut
Transfer Act, executed by Seller;
(ix) such other deeds, bills of sale, assignments,
certificates of title, transfer tax documents and other
instruments of transfer and conveyance as may reasonably be
requested by Buyer, each in form and substance reasonably
satisfactory to Buyer and its counsel and executed by
Seller or its appropriate Affiliate;
(x) a supplement to the Disclosure Schedule, to
update the Disclosure Schedule through the Effective Time;
(xi) a certificate executed by Seller as to the
accuracy of its representations and warranties as of the
date of this Agreement and as of the Closing, in accordance
with Section 8.1, and as to its compliance with and
performance of their covenants and obligations to be
performed or complied with at or before the Closing, in
accordance with Section 8.2; and
(xii) a certificate of the corporate secretary of
Seller certifying and attaching all requisite resolutions
or actions of Seller's board of directors approving the
execution and delivery of this Agreement, any other
document relating to the Contemplated Transactions, and the
consummation of the Contemplated Transactions and
certifying the incumbency and signatures of the officers of
Seller executing this Agreement and any other document
relating to the Contemplated Transactions.
(b) Buyer shall deliver to Seller and/or WPI, as
applicable:
(i) the Closing Payment;
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(ii) the Note, executed by Buyer;
(iii) the Assignment and Assumption Agreement,
executed by Buyer;
(iv) the Intellectual Property Agreement, executed by
Buyer;
(v) the Shared Know-How Agreement, executed by Buyer;
(vi) the Security Agreement, executed by Buyer;
(vii) a mortgage on the Real Estate substantially
in the form of Exhibit 3.4(b)(vii)(the "Mortgage"),
executed by Buyer;
(viii) the RSA and Side Agreement, executed by
Buyer;
(ix) a certificate executed by Buyer as to the
accuracy of its representations and warranties as of the
date of this Agreement and as of the Closing, in accordance
with Section 9.1, and as to its compliance with and
performance of its covenants and obligation to be performed
or complied with at or before the Closing, in accordance
with Section 9.2; and
(x) a certificate of the corporate secretary of Buyer
certifying and attaching all requisite resolutions or
actions of such Party's board of directors approving the
execution and delivery of this Agreement, any other
document relating to the Contemplated Transactions and the
consummation of the Contemplated Transaction, and
certifying the incumbency and signatures of the officers of
such Party executing this Agreement and any other document
relating to the Contemplated Transactions.
(c) Parent shall deliver to Seller and/or WPI, as
applicable:
(i) a guarantee of Buyer's obligations to make the
Royalty Payments and the payments required under the Note
substantially in the form of Exhibit 3.4(c)(i) (the
"Guarantee");
(ii) a certificate executed by Parent as to the
accuracy of its representations and warranties as of the
date of this Agreement and as of the Closing, in accordance
with Section 9.1, and as to its compliance with and
performance of its covenants and obligation to be performed
or complied with at or before the Closing, in accordance
with Section 9.2; and
(iii) a certificate of the corporate officer of
Parent certifying and attaching all requisite resolutions
or actions of such Party's board of directors approving the
execution and delivery of this Agreement, any other
document relating to the Contemplated Transactions and the
consummation of the Contemplated Transaction, and
certifying the
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incumbency and signatures of the officers of
such Party executing this Agreement and any other document
relating to the Contemplated Transactions.
3.5 Adjustment Procedure.
(a) "Net Asset Value" as of a given date shall mean an
amount determined in accordance with this Section 3.5 and equal
to the difference between (x) the book value of the Assets
calculated in accordance with GAAP; provided, however, that
Inventory will be valued in accordance with the definition
thereof in Exhibit I to this Agreement, minus (y) the sum of (A)
the amount of Payables included in the Assumed Liabilities, (B)
the amount of the Benefit Accruals included in the Assumed
Liabilities and (C) the amount of Other Accruals included in the
Assumed Liabilities.
(b) Within thirty (30) days after Closing, Seller shall
prepare, with the assistance of Buyer, and deliver to Buyer a
balance sheet (the "Closing Balance Sheet") identifying the Net
Asset Value as of the Effective Time (the "Closing Net Asset
Value") and any work papers and other documents and information
used by Seller in preparing the Closing Balance Sheet. A
physical inventory shall be conducted by Seller, with the
assistance of Buyer, on or shortly before the Closing Date, and
such physical inventory, together with the Records of the
Business, shall form the basis for Seller's determination of
quantities of Inventory on the Closing Balance Sheet.
(c) Buyer shall have the right to conduct an audit of the
Closing Balance Sheet. If within forty-five (45) days following
delivery of the Closing Balance Sheet, Buyer has not given
Seller written notice of its objection as to the calculation of
Closing Net Asset Value (which notice shall state the basis of
its objection), then such Closing Net Asset Value shall be
binding and conclusive on the Parties and be used in computing
the Adjustment Amount.
(d) If Buyer duly gives Seller such notice of objection,
and if Seller and Buyer fail to resolve the issues outstanding
with respect to the Closing Balance Sheet within thirty (30)
days of Seller's receipt of Buyer's objection notice, Seller and
Buyer shall submit the issues remaining in dispute to the
Hartford, Connecticut office of Deloitte & Touche, or such other
firm of independent public accountants as the Parties mutually
agree (the "Independent Accountants"). If issues are submitted
to the Independent Accountants for resolution, (i) Seller and
Buyer shall furnish or cause to be furnished to the Independent
Accountants such work papers and other documents and information
relating to the disputed issues as the Independent Accountants
may request and are available to that party or its agents and
shall be afforded the opportunity to present to the Independent
Accountants any material relating to the disputed issues and to
discuss the issues with the Independent Accountants; (ii) the
determination by the Independent Accountants, as set forth in a
notice to be delivered to both Seller and Buyer within sixty
(60) days of the submission to the Independent Accountants of
the issues remaining in dispute, shall be final, binding and
conclusive on the Parties and shall be used in the calculation
of the Closing Net Asset Value; and (iii) Buyer will bear the
fees and costs of the Independent Accountants for such
determination, unless such determination differs by more than
ten percent (10%) of the Closing Net Asset Value calculated in
accordance with Section 3.5(b), in which case Seller shall bear
such fees and costs.
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3.6 Adjustment Amount and Payment. The "Adjustment
Amount" (which may be a positive or negative number) will be
equal to the amount determined by subtracting $21,000,000 from
the Closing Net Asset Value. Within fifteen (15) days of the
determination of the Closing Net Asset Value pursuant to Section
3.5(c) or 3.5(d), as the case may be: (a) if the Adjustment
Amount is positive, Parent shall cause Buyer to pay the
Adjustment Amount to Seller, by wire transfer of immediately
available funds to an account designated by Seller; or (b) if
the Adjustment Amount is negative, Seller shall pay the
Adjustment Amount to Buyer by wire transfer of immediately
available funds to an account designated by Buyer.
3.7 Accounts Receivable Adjustment.
(a) "Uncollected Accounts Receivable" shall mean
any Accounts Receivable included in the Assets that have not
been paid to Buyer within 150 days of the Closing Date.
Commencing ten (10) days after the first full calendar month
following the Closing Date, Buyer shall deliver monthly reports
to Seller showing the aging of Accounts Receivables included in
the Assets. Buyer shall also deliver a notice to Seller
identifying the Uncollected Accounts Receivable in reasonable
detail within 165 days of the Closing Date. Provided Buyer has
complied with the provisions of Section 3.7(b) below, Seller
shall pay an amount equal to the aggregate amount of the
Uncollected Accounts Receivable submitted by Buyer to Seller for
payment to Buyer within fifteen (15) days of receiving the
Buyer's notice relating thereto by wire transfer of immediately
available funds to an account designated by Buyer, and Buyer
shall thereupon assign all of its right, title and interest in
such Uncollected Accounts Receivables. For the avoidance of
doubt, if Buyer does not submit a particular Uncollected Account
Receivable for payment by Seller within such 165 day period,
Buyer shall not have any right to, and shall not be obligated
to, assign it to Seller in accordance with the foregoing
sentence and Seller shall have no obligation to make any payment
to Buyer relating thereto.
(b) Buyer shall use its Best Efforts to collect the
Accounts Receivable included in the Assets, prior to the
assignment of Uncollected Accounts Receivable to Seller
described above, although Buyer shall not be required to
institute litigation in connection therewith. If Buyer settles
any Account Receivable for less than its full face amounts
without Seller's prior written consent, Buyer may not submit
such Account Receivable for reimbursement pursuant to Section
3.7(a). Collections by Buyer of Accounts Receivable from any
customer after the Effective Time (including collections of
Accounts Receivable created after the Effective Time) shall be
credited to the oldest outstanding Accounts Receivable of such
customer unless otherwise specified by the customer (so long as
the customer is, to Buyer's Knowledge, acting in good faith and
on the basis of a bonafide dispute concerning the older Account
Receivable).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
4.1 Organization And Good Standing. Each of Seller, WPI,
Xxxxxx N.V. and Rogers Singapore is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, with full corporate power
and authority to conduct the Business as it is now being
conducted, to own or use the properties and assets that it
purports to own or use to conduct the Business, and to perform
all its obligations under the Business Contracts to which it is
a party. Seller is duly qualified to do business as a foreign
corporation and is in good standing under the laws of the State
of Connecticut.
4.2 Enforceability; Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and
binding obligation of Seller and is enforceable against it in
accordance with its terms. Upon the execution and delivery by
Seller of each other agreement to be executed or delivered by
Seller at the Closing (collectively, "Seller's Closing
Documents"), each of Seller's Closing Documents will constitute
the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms. Seller has the
power and authority to execute and deliver this Agreement and
Seller's Closing Documents and to perform its obligations under
this Agreement and Seller's Closing Documents, and such action
has been duly authorized by all necessary action by Seller's
shareholders, if necessary, and board of directors. Seller has
the power and authority to cause each of Xxxxxx N.V. and Rogers
Singapore to, and guarantees that WPI will, perform its
obligations under this Agreement and Seller's Closing Documents
and such action has been duly authorized by all necessary action
by Seller and its Affiliates.
(b) Except as set forth in Schedule 4.2(b), neither the
execution and delivery of this Agreement nor any of Seller's
Closing Documents, nor the consummation or performance of any of
the Contemplated Transactions will, directly or indirectly (with
or without notice or lapse of time):
(i) Breach any provision of any of the Governing
Documents of Seller, WPI, Xxxxxx N.V. or Xxxxxx Singapore;
(ii) Breach any Legal Requirement or any Order to
which Seller, WPI, Xxxxxx N.V. or Xxxxxx Singapore, or any
of the Assets, Licensed Intellectual Property or Shared
Know-How, may be subject;
(iii) contravene, conflict with or result in a
violation or breach of any of the terms or requirements of,
or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any
Governmental Authorization that is held by Seller, WPI,
Xxxxxx N.V. or Xxxxxx Singapore with respect to the
Business or that
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otherwise relates to the Assets, Licensed
Intellectual Property or Shared Know-How or to the
Business, and that is material to the operation of the
Business; or
(iv) Except as noted on Schedule 4.19(a), Breach any
provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or payment under, or to cancel,
terminate or modify, any Business Contract identified or
required to be identified on Schedule 4.19(a);
(v) result in the imposition or creation of any
Encumbrance upon or with respect to any of the Assets,
Licensed Intellectual Property or Shared Know-How, other
than any Encumbrance created by Buyer.
(c) Except as set forth in Schedule 4.2(c), and other than
as may be required under certain Business Contracts not required
to be identified on Schedule 4.19(a), none of Seller, WPI,
Xxxxxx N.V. or Xxxxxx Singapore is required to give any notice
to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
4.3 Financial Statements. Attached hereto as
Schedule 4.3 is a pro forma balance sheet in respect of the
Business as at July 28, 2002 (the "Balance Sheet"). The Balance
Sheet fairly presents the financial condition of the Business as
of July 28, 2002 and was prepared from and is in accordance with
GAAP and the accounting Records of Seller, except that the
accruals and reserves described on Schedule 4.3 are maintained
on Seller's consolidated financial statements and except as
otherwise noted on Schedule 4.3 have been treated as expenses of
the Business and reflected as such on the pro forma income
statements of the Business. Seller has also delivered to Buyer
the portions of all management letters from Seller's auditors
discussing the Business to Seller's board of directors or the
audit committee thereof during the thirty-six (36) months
preceding the execution of this Agreement, together with copies
of all responses thereto.
4.4 Books And Records. The books of account and
other financial Records of Seller used in the conduct of the
Business, all of which have been made available to Buyer, are
complete and correct in all material respects.
4.5 Title to and Sufficiency of Assets. Seller (or,
in the case of certain Intangible Property, the Licensed
Intellectual Property and the Shared Know-How, WPI, and in the
case of certain Accounts Receivable and Inventories, Xxxxxx N.V.
and Xxxxxx Singapore) owns good title to all of the Assets,
Licensed Intellectual Property and Shared Know-How, free and
clear of all Encumbrances, other than the Permitted
Encumbrances. The Assets, Licensed Intellectual Property and
Shared Know-How constitute all of the assets, tangible and
intangible, of any nature whatsoever, required to conduct the
Business. Except for certain de minimis share holdings required
by local statutes and disclosed in Schedule 4.5, each of WPI,
Xxxxxx N.V. and Xxxxxx Singapore is a wholly-owned subsidiary of
the Seller.
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4.6 Real Estate. With respect to the Real Estate:
(a) Seller owns good and marketable, legal and beneficial,
fee simple title to the Real Estate, free and clear of any
Encumbrances other than the Encumbrances described on Schedule
4.6(a)(i) (the "Permitted Encumbrances"). Seller has not
granted to any Person any option or other right to purchase the
Real Estate or Improvements and to the Knowledge of Seller, no
Person has any such option or right.
(b) Seller has not received any notice from any
Governmental Body of any taking of the Real Estate, or any
portion thereof, by eminent domain or similar proceeding, and,
to Seller's Knowledge, no such taking or other condemnation of
the Real Estate, or any portion thereof, is threatened or
contemplated by any Governmental Body.
(c) Seller has not retained any Person to file notices of
protest against, or to commence actions to review, real property
tax assessments against the Real Estate, and is not aware that
any such action has been taken by or on behalf of any lessees
under any Real Estate Lease. Schedule 4.6(c) contains a list
and brief description of all actions taken by Seller to file
notices of protest against, or to commence actions to review,
real property tax assessments against the Real Estate, and the
status of all such proceedings.
(d) All leases, easements, rights of way, licenses, and
other non-ownership interests granted to or by Seller in any of
the Real Estate (the "Realty Use Rights") are valid and
effective in accordance with their terms. Seller has furnished
or made available to Buyer copies of all written Realty Use
Rights of which it has Knowledge, all of which are identified on
Schedule 4.6. Seller and, to Seller's Knowledge, the other
party to each Realty Use Right have fully and completely
performed and satisfied their respective duties and obligations
under such Realty Use Right, and Seller has no claims,
Proceedings or causes of action against any such other party for
failure of such party fully and completely to perform and
satisfy its duties and obligations under such Realty Use Right.
(e) The Real Estate and all Improvements are in compliance
in all material respects with all applicable Legal Requirements
and Orders, including building, fire and other regulatory laws,
ordinances and regulations, other than Environmental Law (as to
which specific representations and warranties are made in
Section 4.21 of this Agreement) and Seller has not received any
notice of any violation or alleged violation thereof since June
1, 1999. The present use and condition of the Real Estate and
Improvements is in conformity in all material respects with all
applicable zoning laws, ordinances and regulations and with all
deed restrictions of record or other covenants, restrictions or
agreements, site plan approvals, zoning or subdivision
regulations or urban redevelopment plans, and Seller has no
Knowledge of any proposed changes therein that would affect the
Real Estate or its use; and all Improvements on any of the Real
Estate are located within the lot lines (and within the
mandatory set-backs from such lot lines established by zoning
ordinances or otherwise) and not over any areas subject to
easements or rights of way.
(f) All material requisite certificates of occupancy and
other material permits or approvals legally required with
respect to the Improvements, and the occupancy and use thereof,
have been obtained and are currently in effect.
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(g) There is lawfully available to the Real Estate water,
gas, sewerage and electricity, all of which are now being
utilized by Seller; and, ingress and egress to and from all of
the Real Estate and all abutting roads is not limited in any
material way. Except as set forth in Schedule 4.6, to Seller's
Knowledge, there is no change or proposed change in the route,
grade or width of, or otherwise affecting, any street or road
adjacent to or serving the Real Estate.
(h) To the Knowledge of Seller, and except for future
repairs or improvements which, if completed prior to Closing
would have been required to be capitalized under GAAP, all of
the Improvements are in good operating condition and repair, and
are adequate and suitable for the purpose for which they are
presently being used and are not in need of maintenance or
repairs except for ordinary, routine maintenance and repairs
that are not material in nature or cost. Seller has maintained
the Improvements consistent with its past practices.
(i) There are no Consents of any Third Party or
Governmental Authority that are required in connection with the
conveyance of the Real Estate.
4.7 Tangible Personal Property. Except as set forth
in Schedule 4.7, each item of Tangible Personal Property is in
good operating order and condition, ordinary wear and tear
excepted, is suitable for immediate use in the Ordinary Course
of Business, and to the Knowledge of Seller, is not in need of
maintenance or repairs except for ordinary, routine maintenance
and repairs that are not material in nature or cost. Seller has
maintained the Tangible Personal Property consistent with its
past practices.
4.8 Relationships with Affiliates. Except as set
forth in Schedule 4.8, neither Seller nor to the Knowledge of
Seller any of its Affiliates owns, or since January 1, 2000, has
owned, of record or as a beneficial owner, a material interest
or any other material financial or material profit interest in
any Person that has (a) had business dealings or a material
financial interest in any transaction involving the Business or
(b) engaged in competition with the Business in any market
presently served by the Business.
4.9 Brokers or Finders. Neither Seller nor any of
its Representatives have incurred any obligation or liability,
contingent or otherwise, for brokerage or finders' fees or
agents' commissions or other similar payments in connection with
the sale of the Business or the Assets or the Contemplated
Transactions.
4.10 Accounts Receivable. All Accounts Receivable
that are reflected on the Balance Sheet or on the accounting
Records of Seller in connection with the conduct of the Business
as of the Closing Date, represent or will represent valid
obligations arising from sales made or services performed by
Seller in the Ordinary Course of Business. There is no contest,
claim, defense or right of setoff, other than returns in the
Ordinary Course of Business of Seller, under any Business
Contract with any account debtor of an Account Receivable
relating to the amount or validity of such Account Receivable.
4.11 Inventories. Except as set forth in Schedule
4.11, in connection with the conduct of the Business, Seller is
not in possession of any inventory not owned by the Business,
including goods already sold. Inventories now on hand that were
purchased after the date of the
14
Balance Sheet were purchased in the Ordinary Course of Business
of Seller at a cost not exceeding market prices prevailing at
the time of purchase.
4.12 No Undisclosed Liabilities. In connection with
the conduct of the Business, Seller has no Liability required to
be accrued on the face of a balance sheet prepared in accordance
with GAAP except for (i) Liabilities accrued on Seller's
consolidated balance sheet and described on Schedule 4.3 (which
Liabilities are Retained Liabilities); (ii) Liabilities
reflected or reserved against in the Balance Sheet, and (iii)
current liabilities incurred in the Ordinary Course of Business
of Seller since the date of the Balance Sheet.
4.13 Taxes. Except as set forth in Schedule 4.13, (i)
Seller has properly completed, duly and timely filed in correct
form with the appropriate Governmental Body, all Tax Returns
required to be filed before the date of this Agreement; (ii) all
Tax Returns are accurate, complete and correct as filed, in all
material respects, and Seller has paid in full or made adequate
provision in its financial statements for all amounts shown to
be due thereon; and (iii) all Taxes due from or claimed to be
due by each Governmental Body in respect of Seller, the Assets,
the Licensed Intellectual Property or the Shared Know-How or the
Business, for all periods through the date of this Agreement,
have been, and for all periods through the Effective Time will
be, fully paid. Seller has timely made and will timely make all
withholdings of Taxes required to be made under all applicable
Legal Requirements, and such withholdings have either been paid
or will be paid to the respective Governmental Body or set aside
in accounts for such purpose or accrued, reserved against and
entered upon the books of Seller. There are no Tax liens (other
than liens for Taxes for current and subsequent years that are
not yet due and payable) upon any of the Assets, the Licensed
Intellectual Property or the Shared Know-How.
4.14 No Material Adverse Change. Since the date of
the Balance Sheet, there has not been any material adverse
change that is unique to the Business (as distinguished from
such adverse changes in the economy generally, or in the markets
served by the Business) in the business, operations, assets,
results of operations or condition (financial or other) of the
Business, and to Seller's knowledge, except as may arise as a
result of the announcement or consummation of the transactions
contemplated by this Agreement, no event has occurred or
circumstance exists that is reasonably likely to result in such
a material adverse change. In determining material adverse
change, a loss of orders from customers of the Business will not
be taken into account to the extent that such customers
subsequently made orders from Buyer or one of its Affiliates.
4.15 Employee Benefits.
(a) Set forth in Schedule 4.15(a) is a complete and
correct list of all "employee benefit plans" as defined by
Section 3(3) of ERISA, all specified fringe benefit plans as
defined in Section 6039D of the Code, and all other bonus,
incentive compensation, deferred compensation, profit-sharing,
stock option, stock appreciation right, stock bonus, stock
purchase, employee stock ownership, savings, severance, change-
in-control, supplemental unemployment, layoff, salary
continuation, retirement, pension, health, life insurance,
disability, accident, group insurance, vacation, holiday, sick
leave, fringe benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice,
commitment, contract or
15
understanding (whether qualified or nonqualified), that (i)
is currently effective or was terminated after January 1, 2002
and is in connection with the conduct of the Business, (ii)
is maintained or contributed to by Seller or any other
corporation or trade or business controlled by, controlling
or under common control with Seller (within the meaning of
Section 414 of the Code or Section 4001(a)(14) or 4001(b) of
ERISA) ("ERISA Affiliate") or has been maintained or contributed
to since January 1, 2002 by Seller or any ERISA Affiliate, or
with respect to which Seller or any ERISA Affiliate has or
may have any liability, and (iii) provides benefits, or
describes policies or procedures applicable, to any current
employee of Seller or any ERISA Affiliate or any such person
terminated since January 1, 2002, or the dependents of any
thereof, regardless of how (or whether) liabilities for the
provision of benefits are accrued or assets are acquired or
dedicated with respect to the funding thereof (collectively the
"Employee Plans").
(b) Seller has delivered or made available to Buyer true,
accurate and complete copies of (i) the documents comprising
each Employee Plan; and (ii) the most recent summary plan
descriptions, summaries of material modifications, employee
handbooks and other material written communications to employees
regarding the Employee Plans.
(c) Full payment has been made of all amounts which Seller
is required to pay under the terms of each of the Employee Plans
as of the last day of the most recent fiscal year of each of
the Employee Plans ending prior to the date of this Agreement,
and no "accumulated funding deficiencies" or liquidity
shortfalls (as those terms are defined in Section 302 of ERISA
and Section 412 of the Code) exist as of the date of this
Agreement, whether or not waived.
(d) Except as disclosed in Schedule 4.15(d), Seller's
Union Pension Plan has not been partially terminated, nor has
any event occurred nor does any circumstance exist that could
result in the termination or partial termination of such Plan.
The Pension Benefit Guaranty Corporation ("PBGC") has not
instituted or threatened a Proceeding to terminate or to appoint
a trustee to administer such Plan pursuant to Title IV of ERISA,
and no condition or set of circumstances exists that presents a
material risk of termination of such Plan by the PBGC. Such
Plan has not been the subject of, and no event has occurred or
condition exists that could be deemed with respect to such Plan,
a reportable event (as defined in Section 4043 of ERISA) as to
which a notice would be required (without regard to regulatory
monetary thresholds) to be filed with the PBGC. Seller has paid
in full all insurance premiums due to the PBGC with regard to
such Plan for all applicable periods ending on or before the
Closing Date.
(e) Except as disclosed in Schedule 4.15(e), a favorable
determination letter has been issued by the IRS with respect to
the tax-qualified status under Code Section 401(a) of each
Employee Plan which is an "employee pension plan" under ERISA
Section 3(2), and where relevant, with respect to the tax-exempt
status under Code Section 501(a) of any trust or trusts through
which such Employee Plan(s) are funded, and to the Knowledge of
Seller, there are no circumstances that will or could result in
revocation of any such favorable determination letter. Seller
and the "administrator" (as described in ERISA Section 3(16)(A))
of each of the Employee Plans described in ERISA Section 3(3)
have complied in all material respects with all reporting and
disclosure requirements of Title I of ERISA and the Code in a
timely manner, and neither are liable for any reporting and/or
disclosure penalties, or for any accrued or contingent
liabilities imposed under either ERISA or the Code. The
Employee Plans have been and are
16
currently operating in compliance in all material respects with
any and all applicable laws, including all applicable provisions
of ERISA and the Code including, but not limited to, the funding
and prohibited transaction provisions thereof, and with the written
Employee Plan documents. There is no pending or threatened
Proceeding relating to any Employee Plan, nor is there any basis
for any such Proceeding.
(f) With respect to the Employee Plans, Seller does not
currently have any direct or indirect liability to the PBGC in
respect to any such Employee Plan or other employee pension
benefit plan, nor any potential withdrawal liability or other
obligation to contribute to any "multiemployer plan" as defined
in ERISA Section 4001(a)(3).
(g) With respect to any Employee Plans which qualify as
"group health plans" under Code Section 4980B and ERISA Section
607(1) and related regulations, Seller has complied in all
material respects with all reporting, disclosure, notice,
election and other benefit continuation requirements imposed
thereunder, as and when applicable to such Plans, and Seller has
no direct or indirect liability, and is not subject to any loss,
assessment, excise tax penalty or other sanction arising on
account of or in respect of any direct or indirect failure by
Seller at any time to comply with any such benefit continuation
requirement.
(h) In connection with the conduct of the Business, Seller
has maintained workers' compensation coverage as required by
applicable state law.
(i) Except as required by Legal Requirements and as
provided in Section 11.1, the consummation of the Contemplated
Transactions will not accelerate the time of vesting or the time
of payment, or increase the amount, of compensation due to any
employee or officer of Seller. Except as provided in Section
11.1, none of the Contemplated Transactions will result in an
amendment, modification or termination of, or additional or
accelerated payments under, any of the Employee Plans. No
written or oral representations have been made by Seller to any
employee or former employee of Seller concerning the employee
benefits of Buyer.
4.16 Compliance With Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in Schedule 4.16(a), in connection
with the conduct of the Business, Seller is, and at all times
since June 1, 1999 has been in compliance with each Legal
Requirement, including Occupational Safety and Health Laws, 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 Assets, Licensed
Intellectual Property or Shared Know-How, except where the
failure to be in such compliance would not reasonably be likely
to have a material adverse effect upon the Business, and other
than Legal Requirements in connection with (i) Real Estate and
Improvements, as to which specific representations and
warranties are made in Section 4.6 of this Agreement, (ii)
Taxes, as to which specific representations and warranties are
made in Section 4.13 of this Agreement, (iii) Employee Plans, as
to which specific representations and warranties are made in
Section 4.15 of this Agreement, (iv) Environmental Law, as to
which specific representations and warranties are made in
Section 4.21 of this Agreement, (v) employment practices, as to
which specific representations and warranties are made in
Section 4.23 of this Agreement, and (vi) Intellectual Property,
as to which specific representations and warranties are made in
Section 4.24 of this
17
Agreement. To the Knowledge of Seller, no event has occurred
or circumstance exists that (with or without notice or lapse
of time) constitutes or would be reasonably likely to result
in a violation by Seller of, or a failure on the part of Seller
to comply with, any Legal Requirement in connection with the
conduct of the Business. Seller has not received, at any time
since June 1, 1999, any notice or other communication (whether
written or to the Knowledge of Seller, oral) from any
Governmental Body or any other Person regarding any actual,
alleged, possible or potential violation of, or failure to
comply with, any Legal Requirement in connection with the
conduct of the Business.
(b) Schedule 4.16(b) contains a complete and accurate list
of each Governmental Authorization that is held by Seller in
connection with the conduct of the Business or that otherwise
relates directly to the Business or the Assets, the Licensed
Intellectual Property or the Shared Know-How, whether or not
transferable. Each Governmental Authorization listed or
required to be listed in Schedule 4.16(b) is valid and in full
force and effect. Except as set forth in Schedule 4.16(b), in
connection with the conduct of the Business:
(i) Seller is, and at all times since June 1, 1999,
has been, in material compliance with all of the terms and
requirements of each Governmental Authorization identified
or required to be identified in Schedule 4.16(b);
(ii) to the Knowledge of Seller, no event has occurred
or circumstance exists that may (with or without notice or
lapse of time) (A) constitute or result in a material
violation of or a material failure to comply with any term
or requirement of any Governmental Authorization listed or
required to be listed in Schedule 4.16(b) or (B) result in
the revocation, withdrawal, suspension, cancellation or
termination of, or any modification to, any Governmental
Authorization listed or required to be listed in Schedule
4.16(b);
(iii) Seller has not received, at any time since
June 1, 1999, any notice or other communication (whether
written or to the Knowledge of Seller, oral) from any
Governmental Body or any other Person regarding (A) any
actual, alleged, possible or potential violation of or
failure to comply with any term or requirement of any
Governmental Authorization or (B) any actual, proposed,
possible or potential revocation, withdrawal, suspension,
cancellation, termination of or modification to any
Governmental Authorization; and
(iv) all applications required to have been filed for
the renewal of the Governmental Authorizations listed or
required to be listed in Schedule 4.16(b) have been duly
filed on a timely basis with the appropriate Governmental
Bodies, and all other filings required to have been made by
Seller with respect to such Governmental Authorizations
have been duly made on a timely basis with the appropriate
Governmental Bodies, except where the failure to have so
filed would not have a material adverse effect upon the
Business.
The Governmental Authorizations listed in Schedule 4.16(b)
collectively constitute all of the material Governmental
Authorizations necessary to permit Seller to lawfully conduct and
18
and operate the Business in the manner in which it currently
conducts and operates such business and to permit Seller to own
and use its Assets, Licensed Intellectual Property or Shared
Know-How in the manner in which it currently owns and uses such
assets.
4.17 Legal Proceedings; Orders.
(a) There is no pending or, to the Knowledge of Seller,
threatened Proceeding: (i) by or against Seller in connection
with the conduct of the Business or that otherwise relates to or
is reasonably likely to affect the Business, or any of the
Assets, Licensed Intellectual Property or Shared Know-How; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering
with, any of the Contemplated Transactions. To the Knowledge of
Seller, no event has occurred or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the
commencement of any such Proceeding. Seller has delivered or
made available to Buyer copies of all pleadings, correspondence
and other documents relating to each Proceeding listed in
Schedule 4.17(a). There are no Proceedings listed or required
to be listed in Schedule 4.17(a) that could have a material
adverse effect on the Business, its operations, assets,
condition or prospects or upon the Assets, Licensed Intellectual
Property or Shared Know-How.
(b) There is no Order specifically applicable to Seller in
connection with its conduct of the Business, or any of the
Assets, Licensed Intellectual Property or Shared Know-How. To
the Knowledge of Seller, no officer, agent or employee of Seller
is subject to any Order that prohibits such officer, agent or
employee from engaging in or continuing any conduct, activity or
practice relating to the Business.
4.18 Absence Of Certain Changes And Events. Except as
set forth in Schedule 4.18, since the date of the Balance Sheet,
Seller has conducted the Business only in the Ordinary Course of
Business and, in connection with the conduct of the Business,
there has not been any:
(a) payment (except in the Ordinary Course of Business) or
increase by Seller, of any bonuses, salaries or other
compensation to any officer or employee of the Business or entry
into any employment, severance or similar Contract with any
officer or employee of the Business;
(b) adoption of, amendment to or increase in the payments
to or benefits under, any Employee Plan applicable to employees
of the Business;
(c) event, in connection with which there was damage to or
destruction or loss of Assets, whether or not covered by
insurance, resulting in repair or replacement costs of at least
fifty thousand dollars ($50,000);
(d) entry into, termination of or receipt of notice of
termination of (i) any license, distributorship, dealer, sales
representative, joint venture, credit or similar Contract to
which Seller, with respect to the Business is a party, or (ii)
any Business Contract or transaction involving a total
commitment by Seller of at least $50,000;
(e) sale (other than sales of Inventories in the Ordinary
Course of Business), lease or other disposition of any Asset or
property of Seller used in connection with the conduct of the
19
Business (including the Intellectual Property) with a
replacement value in excess of $50,000, or the creation of any
Encumbrance (other than a Permitted Encumbrance) on any Asset,
Licensed Intellectual Property or Shared Know-How;
(f) cancellation or waiver of any claims or rights with a
value to Seller in excess of $50,000;
(g) written notice from (i) any significant customer of an
intention to cease or materially reduce its level of business
with Seller, or (ii) any supplier of an intention to discontinue
or significantly change the terms of its business relationship
with Seller;
(h) change in the accounting methods used by Seller with
respect to the Business; or
(i) entry into a Contract by Seller to do any of the
foregoing.
4.19 Contracts; No Defaults.
(a) Schedule 4.19(a) contains an accurate and complete
list, and Seller has delivered or made available to Buyer
accurate and complete copies, of, with respect to the Business:
(i) each Business Contract that involves performance
of services or delivery of goods or materials by or to
Seller of an amount or value in excess of $50,000;
(ii) each Business Contract affecting the ownership
of, leasing of, title to, use of or any leasehold or other
interest in any real or personal property, including any
licenses, sublicenses or other agreements involving
Intellectual Property of an amount or value in excess of
$50,000;
(iii) each Business Contract with any labor union
or other employee representative of a group of employees
relating to wages, hours and other conditions of
employment;
(iv) each Business Contract (however named) involving
a sharing of profits, losses, costs or liabilities by
Seller with any other Person;
(v) each Business Contract containing covenants that
in any way purport to restrict Seller's activity or limit
the freedom of Seller to engage in any line of business or
to compete with any Person;
(vi) each power of attorney of Seller granted in
connection with the conduct of the Business that is
currently effective and outstanding;
(vii) each written warranty, or performance
guaranty extended by Seller other than in the Ordinary
Course of Business; and
20
(viii) each amendment, supplement and modification
(whether oral or written) in respect of any of the
foregoing.
(b) Each Business Contract identified or required to be
identified in Schedule 4.19(a), which is to be assigned to or
assumed by Buyer under this Agreement: (i) is in full force and
effect and is valid and enforceable in accordance with its
terms; (ii) except as noted on Schedule 4.19(a), is assignable
by Seller to Buyer without the Consent of any other Person; and
(iii) except as noted on Schedule 4.19(a), will continue to be
legal, valid, binding, enforceable, and in full force and effect
on identical terms following the Closing;
(c) Seller is, and at all times since June 1, 1999, has
been, in compliance in all material respects with all applicable
terms and requirements of each Business Contract that is being
assumed by Buyer. To the Knowledge of Seller, each other Person
that has or had any obligation or liability under any Business
Contract that is being assigned to Buyer is and at all times
since June 1, 1999, has been in compliance in all material
respects with all applicable terms and requirements of such
Business Contract. To the Knowledge of Seller, and without
regard to the consummation of the Contemplated Transactions, no
event has occurred or circumstance exists that (with or without
notice or lapse of time) may contravene, conflict with or result
in a Breach of, or give Seller or another Person the right to
declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or payment under, or to cancel,
terminate or modify, any Business Contract that is being
assigned to or assumed by Buyer. To the Knowledge of Seller, no
event has occurred or circumstance exists under or by virtue of
any Business Contract that (with or without notice or lapse of
time) would cause the creation of any Encumbrance affecting any
of the Assets, Licensed Intellectual Property or Shared Know-
How. Seller has not given to or received from any other Person,
at any time since June 1, 1999, any notice or other
communication (whether written or to the Knowledge of Seller,
oral) regarding any actual, alleged, possible or potential
violation or Breach of, or default under, any Business Contract
identified or required to be identified in Schedule 4.19(a) and
which is being assigned to or assumed by Buyer.
(d) There are no renegotiations of, attempts to
renegotiate or outstanding rights to renegotiate any material
amounts paid or payable to Seller under current or completed
Business Contracts identified or required to be identified in
Schedule 4.19(a) and which are being assigned to or assumed by
Buyer with any Person having the contractual or statutory right
to demand or require such renegotiation and no such Person has
made written demand for such renegotiation at any time since
June 1, 1999.
(e) Each Business Contract which is being assigned to or
assumed by Buyer relating to the sale, design, manufacture or
provision of products or services by Seller has been entered
into in the Ordinary Course of Business of Seller.
4.20 Insurance. Schedule 4.20 describes by year, for
the current policy year and the five immediately preceding
policy years, with respect to the Assets or the Business: (i)
all property, casualty, liability and xxxxxxx'x compensation
insurance policies maintained by Seller; (ii) a summary of the
loss experience under each such policy; (iii) a statement
describing
21
each claim under each such insurance policy for an
amount in excess of $5,000, that sets forth: (A) the name of the
claimant; (B) a description of the policy by insurer, type of
insurance, and period of coverage; and (C) the amount and a
brief description of the claim; and (iv) a statement describing
the loss experience for all property, casualty, liability and
xxxxxxx'x compensation claims that were self-insured, including
the number and aggregate cost of such claims. Except as set
forth on Schedule 4.20, all such policies were provided on an
"occurrence" basis. Such policies are valid, binding and
enforceable in accordance with their terms, are in full force
and effect, and all premiums due thereon have been paid and will
be paid through the Effective Time. With respect to the Assets
or the Business, Seller has not been refused any insurance by
any insurance carrier during the past three years.
4.21 Environmental Matters. In connection with the
conduct of the Business and except as disclosed in Schedule
4.21:
(a) To the Knowledge of Seller, Seller is, and at all
times since January 1, 1997 has been, in full compliance with,
and has not been and is not in violation of or liable under, any
Environmental Law. Seller has not received, nor to the
Knowledge of Seller has any other Person for whose conduct it
may be held to be responsible in connection with the conduct of
the Business received, any actual or threatened citation,
directive, inquiry, notice, summons, warning, Order, or other
communication (whether written, or to the Knowledge of Seller,
oral) from (i) any Governmental Body or private citizen acting
in the public interest or (ii) 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 obligation to undertake or bear the cost of
any Environmental Liabilities with respect to any Facilities, or
with respect to Hazardous Activity, Hazardous Material or any
property or Facilities at or to which Hazardous Materials were
generated, manufactured, refined, used or processed by Seller or
any other Person for whose conduct it is or may be held
responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed,
recycled or received. Without limiting the generality of the
foregoing, and except with respect to the matters more
particularly discussed in Section 4.21(b) below, Seller has
obtained all material Governmental Authorizations that are
required pursuant to Environmental Laws for the occupation of
the Facilities and the operation of the Business.
(b) Seller is, and at all times has been, in full
compliance with R.C.S.A. Section 22a-174-32 ("VOC RACT") as based
upon the current manufacturing operations and procedures of the
Facilities, assuming 2001 production levels, mixture of product
grades, length of production runs per product grade and raw
material constituents utilized per product grade. Schedule
4.21(b) sets forth both Seller's calculation of VOC emissions
for 2001 based upon these assumptions and the related
recommended reasonably available control technology measures to
control VOC emissions from the Facilities, as presented in the
report to the Connecticut Department of Environmental Protection
("CTDEP") dated August 12, 2002 (the "VOC Report"), or as such
VOC Report is amended before closing. In connection with the
information set forth on Schedule 4.21(b), Seller represents and
warrants that: (i) to Seller's Knowledge, the information
regarding its operation of the Facilities is true and correct;
and (ii) the assumptions underlying the calculations in respect
of the operation of the Facilities at 2001 production levels
associated with current manufacturing operations and procedures,
are reasonable in light of Seller's
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operational experience. In connection with the information set
forth on Schedule 4.21(b), Seller represents and warrants that
the assumptions underlying the calculations in respect of the
operation of the Facilities at maximum production levels (e.g.,
twenty-one, eight hour shifts per week), are reasonable in light
of Seller's operational experience.
(c) There are no Claims nor, to the Knowledge of Seller,
threatened Claims arising under or pursuant to any Environmental
Law with respect to or affecting the Facilities or any other
property or asset (whether real, personal or mixed) which is
part of the Assets.
(d) Except as set forth on Schedule 4.20 or 4.21(d), there
are no pending or, to the Knowledge of Seller, threatened Claims
arising from the use by Seller of asbestos or other Hazardous
Materials in products manufactured or sold by Seller in the
conduct of the Business prior to the Effective Time (the
"Asbestos Claims"). All closed Asbestos Claims have been
settled in the amounts set forth on Schedule 4.21 (d).
(e) Seller has delivered or made available to Buyer true
and complete copies and results of any reports, studies,
analyses, tests, or monitoring prepared by or at the request of
Seller after January 1, 1997, in connection with the conduct of
the Business pertaining to Hazardous Materials or Hazardous
Activities in, on, or under the Facilities, or concerning
compliance by Seller or any other Person for whose conduct it is
or may be held responsible with Environmental Laws.
(f) To the Knowledge of Seller, except as disclosed in
Schedule 4.21, none of the following exists at any Facilities:
(1) underground storage tanks, (2) asbestos-containing material
in any form or condition, (3) materials or equipment containing
polychlorinated biphenyls, or (4) landfills, surface
impoundments, or disposal areas.
(g) Seller has not, either expressly or by operation of
law, assumed or undertaken any Liability of any Third Party
relating to the Facilities or Business, including without
limitation any obligation for corrective or remedial action, of
any other Person relating to Environmental Laws.
4.22 Employees.
(a) Schedule 4.22(a) contains a complete and accurate list
of the following information for each employee of the Business
as of July 31, 2002, including each employee on leave of absence
or layoff status: name; job title; date of commencement of
employment; current compensation paid or payable; sick and
vacation leave that is accrued but unused and service credited
for purposes of benefit accrual, vesting and eligibility to
participate under any Employee Plan.
(b) In connection with the conduct of the Business, prior
to the date hereof and through the Effective Time, Seller has
not (and will not have) violated, and has (and will have) fully
complied with, the Worker Adjustment and Retraining Notification
Act (the "WARN Act") or any similar state or local Legal
Requirement.
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(c) Except as disclosed in Schedule 4.22(a), to the
Knowledge of Seller, no officer or employee of the Business is
bound by any Contract that purports to limit the ability of such
officer or employee (i) to engage in or continue or perform any
conduct, activity, duties or practice relating to the Business
or (ii) to assign to Seller or to WPI any rights to any
invention, improvement, or discovery. No former or current
employee of the Business is a party to, or is otherwise bound
by, any Contract that in any way adversely affected, affects, or
will affect the ability of Seller or Buyer to conduct the
Business as heretofore carried on by Seller.
4.23 Labor Disputes; Compliance.
(a) In connection with the conduct of the Business, the
execution of this Agreement and the consummation of the
Contemplated Transactions, Seller has complied in all material
respects with all Legal Requirements relating to employment
practices, terms and conditions of employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours,
benefits, collective bargaining, the payment of social security
and similar Taxes. Seller is not liable for the payment of any
Taxes, fines, penalties, or other amounts, however designated,
for failure to comply with any of the foregoing Legal
Requirements.
(b) In connection with the conduct of the Business, except
as disclosed in Schedule 4.23(b), (i) the CBA is the only
collective bargaining agreement or other labor contract relating
to the Business to which the Seller is a party; (ii) since June
1, 1999 , there has not been any arbitration in connection with,
and there is not presently pending or existing, and to the
Knowledge of Seller, there is not threatened, any strike,
slowdown, picketing, work stoppage or employee grievances
involving Seller; (iii) to the Knowledge of Seller, no event has
occurred or circumstance exists that could provide the basis for
any work stoppage or other labor dispute; (iv) there is not
pending or, to the Knowledge of Seller, threatened against or
affecting Seller any Proceeding relating to the alleged
violation of any Legal Requirement pertaining to labor relations
or employment matters, including any charge or complaint filed
with the National Labor Relations Board or any comparable
Governmental Body, and there is no organizational activity or
other labor dispute against or affecting Seller or the
Facilities; (v) no application or petition for an election of or
for certification of a collective bargaining agent is pending;
(vi) no grievance or arbitration Proceeding exists that might
have a material adverse effect upon Seller or the conduct of the
Business; (vii) there is no lockout of any employees by Seller,
and no such action is contemplated by Seller; and (viii) to the
Knowledge of Seller, there has been no charge of discrimination
filed against or threatened against Seller with the Equal
Employment Opportunity Commission or similar Governmental Body
since June 1, 1999.
4.24 Intellectual Property.
(a) Seller (or, in the case of the Intellectual Property
identified on Schedule 4.24(a), WPI) owns and possesses or has
the right to use pursuant to a valid and enforceable, written
license, sublicense, agreement, or permission, all Intellectual
Property necessary for the operation of the Business as
presently conducted. Each item of Intellectual Property owned
or used by Seller or WPI in the Business immediately prior to
the Closing hereunder will be owned or available for use by
Buyer. Each of Seller and WPI has taken all reasonably
necessary action to maintain and protect each item of
Intellectual Property that each owns or uses.
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(b) To Sellers' Knowledge, with respect to the Business,
neither Seller nor WPI has infringed upon, or misappropriated
any intellectual property rights of Third Parties, nor has
either Seller or WPI received any claim alleging any such
infringement or misappropriation (including any claim that
Seller or WPI must license or refrain from using any
intellectual property rights of any Third Party). To the
Knowledge of Seller, no Third Party is infringing upon, or
misappropriating any Intellectual Property rights of Seller or
WPI.
(c) Schedule 4.24(c) identifies each Patent, Xxxx and
Copyright that has been issued to Seller or WPI that is used in
the Business, each pending application for registration that
Seller or WPI has made with respect to Intellectual Property,
and each license, sublicense, agreement, or other permission
that either of Seller or WPI has granted to any Third Party with
respect to any of their Intellectual Property. Seller has
delivered to or made available to Buyer correct and complete
copies of all such Patents, Marks, Copyrights and licenses,
sublicenses, agreements, and permissions (as amended to date).
With respect to each item of Intellectual Property required to
be identified in Schedule 4.24(c):
(i) each item is currently enforceable and in full
force and effect;
(ii) Seller or WPI owns and possesses all right,
title, and interest in and to the item, free and clear of
any Encumbrance, license, or other restriction or
limitation regarding use or disclosure, unless otherwise
set forth in Schedule 4.24(c);
(iii) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(iv) no claim is pending or, to the Knowledge of
Seller, is threatened which challenges the legality,
validity, enforceability, use, or ownership of the item;
(v) neither Seller nor WPI has agreed to indemnify
any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the
item; and
(vi) no loss or expiration of the item is
threatened, pending, or reasonably foreseeable, except
for patents expiring at the end of their statutory terms
(and not as a result of any act or omission by Seller or
WPI, including without limitation, a failure by Seller or
WPI to pay any required maintenance fees).
(d) Seller and WPI are presently in compliance with all
foreign, federal, state, local, governmental, administrative or
regulatory laws, regulations, guidelines and rules applicable to
any Intellectual Property and Seller and WPI shall use Best
Efforts to ensure such compliance until Closing.
4.25 Securities Law Matters. Seller is acquiring the
Note for its own account and not with a view to its distribution
within the meaning of the Securities Act. Seller confirms that
Buyer has made available to Seller and its Representatives the
opportunity to ask questions of the officers and management
employees of Buyer and to acquire such additional information
about the financial condition of Buyer as Seller has requested,
and all such information has been received.
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4.26 Disclosure. No representation or warranty made
by Seller in this Agreement, or the Disclosure Schedule contains
any untrue statement or omits to state a material fact necessary
to make any of them, in light of the circumstances in which it
was made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Each of Buyer and Parent represents and warrants to Seller,
jointly and severally, as follows:
5.1 Organization and Good Standing. Each of Buyer
and Parent is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to
conduct its business as it is now conducted.
5.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid and
binding obligation of each of Parent and Buyer, enforceable
against such Party in accordance with its terms. Upon the
execution and delivery by each of Buyer and Parent of each
agreement to be executed or delivered by such Party at Closing
(collectively, "Buyer's Closing Documents"), each of Buyer's and
Parent's Closing Documents will constitute the legal, valid and
binding obligation of such Party, enforceable against such Party
in accordance with its respective terms. Each of Buyer and
Parent has the right, power and authority to execute and deliver
this Agreement and each of Buyer's Closing Documents to which it
is a party and to perform its obligations under this Agreement
and Buyer's Closing Documents, and such action has been duly
authorized by all necessary corporate action.
(b) Neither the execution and delivery of this Agreement
or any of Buyer's Closing Documents by Parent or Buyer nor the
consummation or performance of any of the Contemplated
Transactions by Parent or Buyer will breach or give any Person
the right to prevent, delay or otherwise interfere with any of
the Contemplated Transactions pursuant to any provision of the
Governing Documents of Parent or Buyer, any resolution adopted
by the board of directors or the shareholders of Parent or
Buyer, any Legal Requirement or Order to which Parent or Buyer
may be subject, or any Contract to which Parent or Buyer is a
party or by which Parent or Buyer may be bound. Neither Parent
nor Buyer is required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or
the consummation or performance of any of the Contemplated
Transactions.
5.3 Certain Proceedings. There is no pending
Proceeding that has been commenced against Parent or Buyer and
that challenges, or may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the
Contemplated Transactions. To the Knowledge of Parent or Buyer,
no such Proceeding has been threatened.
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5.4 Brokers or Finders. Neither Parent nor Buyer nor
any of their Representatives have incurred any obligation or
liability, contingent or otherwise, for brokerage or finders'
fees or agents' commissions or other similar payment in
connection with the Contemplated Transactions.
5.5 Financial Statements.
(a) Attached hereto as Schedule 5.5(a) are (i) unaudited
pro forma balance sheets and income statements for each of Buyer
and Parent (as constituted as of the date hereof) as of and for
the six months ended June 30, 2002 and (ii) unaudited, pro forma
balance sheets and income statements for Parent (as constituted
as of the date hereof) as of and for the twelve months ended
December 31, 2001. The financial statements provided in
accordance with this Section 5.5(a) were prepared in accordance
with GAAP in the case of Buyer, and generally accepted
accounting principles for financial reporting in Sweden in the
case of Parent, except in each case that such financial
statements lack footnotes. The financial statements provided in
accordance with this Section 5.5(a) present fairly the financial
condition of Buyer or Parent (as constituted as of the date
hereof), as the case may be, as of such dates and the results of
operation of Buyer or Parent (as constituted as of the date
hereof), as the case may be, for such periods.
(b) Attached hereto as Schedule 5.5(b) are (i) unaudited
pro forma balance sheets and income statements for Parent (as
proposed to be constituted as of Closing) as of and for the six
months ended June 30, 2002 and (ii) unaudited, pro forma balance
sheets and income statements for Parent (as proposed to be
constituted as of Closing) as of and for the twelve months ended
December 31, 2001. The financial statements provided in
accordance with this Section 5.5(b) were prepared in accordance
with generally accepted accounting principles for financial
reporting in Sweden, except that such financial statements lack
footnotes. The financial statements provided in accordance with
this Section 5.5(b) present fairly the financial condition of
Parent (as proposed to be constituted as of Closing) as of such
dates and the results of operation of Parent (as proposed to be
constituted as of Closing for such periods.
5.6 Encumbrances. Upon consummation of the Contemplated
Transactions, and assuming for this purpose that Seller's
representations and warranties in Section 4.5 above are true in
all respects, Buyer will own good title to all of the Assets
free and clear of all Encumbrances, other than Permitted
Encumbrances.
ARTICLE VI
COVENANTS OF SELLER
6.1 Access and Investigation. Between the date of
this Agreement and the Closing Date, upon reasonable advance
notice received from Buyer, and subject to applicable Legal
Requirements, Seller shall (a) afford Buyer and its
Representatives (collectively, "Buyer Group") full and free
access, during regular business hours, to the Business's
personnel, properties, Business Contracts, Governmental
Authorizations, books and Records and other documents and data
in respect of the Business, such rights of access to be
exercised in a manner that does not unreasonably interfere with
the operations of the Business; (b) furnish Buyer Group with
copies of all such Business Contracts, Governmental
Authorizations, books and Records and other
27
existing documents and data in respect of the Business as
Buyer may reasonably request; (c) furnish Buyer Group with such
additional financial, operating and other relevant data and
information in respect of the Business as Buyer may reasonably
request; and (d) otherwise cooperate and assist, to the extent
reasonably requested by Buyer, with Buyer's investigation of
the properties, assets and financial condition in respect of
the Business. In addition, Buyer shall have the right to have
the Real Estate and Tangible Personal Property inspected by
Buyer Group, at Buyer's sole cost and expense, for purposes
of determining the physical condition and legal characteristics
of the Real Estate and Tangible Personal Property. No
subsurface or other destructive testing shall be permitted
without Seller's prior written consent, which may be withheld
or conditioned in Seller's sole discretion. Any information
Buyer receives in the course of its investigations pursuant to
this Section 6.1 shall be considered Confidential Information
for purposes of the Confidentiality Agreement dated
February 26, 2002 between Seller and Perstorp Composites Holding
AB and subject to the terms and conditions thereof.
6.2 Operation of the Business. Between the date of
this Agreement and the Closing, Seller shall, in connection with
the conduct of the Business:
(a) conduct the Business only in the Ordinary Course of
Business;
(b) except as otherwise directed by Buyer in writing, and
without making any commitment on Buyer's behalf, use its Best
Efforts to preserve intact its current business organization,
keep available the services of its officers, employees and
agents and maintain its relations and good will with suppliers,
customers, landlords, creditors, employees, agents and others
having business relationships with it;
(c) make no material changes in management personnel
without prior consultation with Buyer;
(d) maintain the Assets in substantially the same
condition as of the date of this Agreement, ordinary wear and
tear excepted, in a manner consistent with the requirements and
normal conduct of the Business;
(e) use its Best Efforts to keep in full force and effect,
without amendment, all material rights relating to the Business;
(f) use its Best Efforts to comply with all Legal
Requirements and contractual obligations applicable to the
operations of the Business;
(g) use its Best Efforts to continue in full force and
effect the insurance coverage under the policies set forth in
Schedule 4.20 or substantially equivalent policies;
(h) except as required to comply with ERISA or to maintain
qualification under Section 401(a) of the Code, not amend,
modify or terminate any Employee Plan insofar as it relates to
employees of the Business without the express written Consent of
Buyer;
28
(i) cooperate with Buyer and assist Buyer in identifying
the Governmental Authorizations required by Buyer to operate the
Business from and after the Closing Date and in transferring
existing Governmental Authorizations of Seller to Buyer, where
permissible;
(j) maintain all books and Records of Seller relating to
the Business in the Ordinary Course of Business; and
(k) remove all of the Excluded Assets from the Real
Estate.
6.3 Negative Covenant. Except as otherwise expressly
permitted herein, between the date of this Agreement and the
Closing Date, Seller shall not, without the prior written
Consent of Buyer, (a) take any affirmative action, or fail to
take any reasonable action within its control, as a result of
which any of the changes or events listed in Sections 4.14 or
4.18 would be likely to occur; (b) make any modification to any
material Business Contract or Governmental Authorization; (c)
allow the levels of raw materials, supplies or other materials
included in the Inventories to vary materially from the levels
customarily maintained; or (d) enter into any compromise or
settlement of any litigation, proceeding or governmental
investigation relating to the Business, Assets, Licensed
Intellectual Property or Shared Know-How or the Assumed
Liabilities.
6.4 Required Approvals. As promptly as practicable
after the date of this Agreement, Seller shall make all filings
required by Legal Requirements to be made by it in order to
consummate the Contemplated Transactions. Seller also shall
cooperate with Buyer and its Representatives with respect to all
filings that Buyer elects to make or, pursuant to Legal
Requirements, shall be required to make in connection with the
Contemplated Transactions. Seller also shall cooperate with
Buyer and its Representatives in obtaining all Material
Consents.
6.5 Notification. Between the date of this Agreement
and the Closing, Seller shall promptly notify Buyer in writing
if it becomes aware of (a) any fact or condition that causes or
constitutes a Breach of any of Seller's representations and
warranties made as of the date of this Agreement or (b) the
occurrence after the date of this Agreement of any fact or
condition that would or be reasonably likely to (except as
expressly contemplated by this Agreement) cause or constitute a
material Breach of any such representation or warranty had that
representation or warranty been made as of the time of the
occurrence of, or Seller's discovery of, such fact or condition.
During the same period, Seller shall promptly notify Buyer of
the occurrence of any Breach of any covenant of Seller in this
Article 6 or of the occurrence of any event that is reasonably
likely to prevent the satisfaction of the conditions of Article
8.
6.6 No Negotiation. Until such time as this
Agreement shall be terminated pursuant to Section 10.1, neither
Seller nor any of its Affiliates or Representatives shall
directly or indirectly solicit, initiate, encourage or entertain
any inquiries or proposals from, discuss or negotiate with,
provide any nonpublic information to or consider the merits of
any inquiries or proposals from any Person (other than Buyer)
relating to any business combination transaction involving the
Business, including the sale of any of the Assets (other than in
the Ordinary Course of Business) or Licensed Intellectual
Property. Seller shall notify Buyer of any such inquiry or
proposal within twenty-four (24) hours of receipt or awareness
of the same by Seller.
29
6.7 Landlord Estoppel Certificate. Seller shall use its
Best Efforts to obtain a current estoppel certificate from the
landlord under each Real Estate Lease stating (i) that such Real
Estate Lease is in full force and effect and has not been
amended, modified or supplemented since the date of execution
thereof; (ii) that all rent and other sums and charges payable
under such Real Estate Lease are current and setting forth the
date through which such payments have been made; (iii) the
amount of any tenant security or other similar deposit held by
or on behalf of such landlord under the Real Estate Lease; (iv)
that no notice of default on the part of Seller or termination
notice has been served under such Real Estate Lease which
remains outstanding; (v) that to the knowledge of such landlord,
no uncured default or termination event or condition exists
under such Real Estate Lease, and that no event has occurred or
condition exists which, with the giving of notice or the lapse
of time or both, would constitute such a default or termination
event or condition; and (vi) that the consummation of the
Contemplated Transactions will not constitute a default under
such Real Estate Lease or grounds for termination thereof or for
the exercise of any other right or remedy adverse to the
interests of the tenant thereunder.
6.8 Conversion of Seller's Accounting Systems. Seller
shall use its Best Efforts to provide to Buyer at Closing
computer hardware and software (collectively, "Systems")
sufficient to allow Buyer to operate the Business in the manner
in which Seller operated the Business prior to Closing in all
material respects, provided that the Systems will not have any
functionality relating to payroll matters. As of the Closing
Date, Seller will have trained certain Hired Active Employees
designated by Buyer to use the Systems. The Seller will use its
Best Efforts to ensure that the Systems will be substantially
free of program defects and for a period of 60 days after
Closing, Seller will make required corrections.
6.9 Best Efforts. Seller shall use its Best Efforts
to cause the conditions in Article 8 (other than Sections 8.7
and 8.9(a)) to be satisfied.
6.10 Transition Services Agreement. Each of the Parties
shall use its Best Efforts to negotiate a Transition Services
Agreement in a mutually acceptable form which shall include,
without limitation, provisions relating to the Seller's delivery
of services in Singapore.
ARTICLE VII
COVENANTS OF BUYER AND PARENT
7.1 Required Approvals. As promptly as practicable
after the date of this Agreement, each of Buyer and Parent
covenant, jointly and severally, to make, or cause to be made,
all filings required by Legal Requirements to be made by it to
consummate the Contemplated Transactions. Buyer and Parent also
shall cooperate, and cause its Affiliates to cooperate, with
Seller (a) with respect to all filings Seller shall be required
by Legal Requirements to make and (b) in obtaining all Consents
identified in Schedule 4.2(c); provided, however, that neither
Buyer nor Parent shall be required to dispose of or make any
change to its business or expend any material funds to comply
with this Section 7.1.
7.2 Notification. Between the date of this Agreement and
the Closing, Buyer or Parent shall promptly notify Seller in
writing if either such Party becomes aware of (a) any fact
30
or condition that causes or constitutes a Breach of any of the
representations and warranties made by Parent or Buyer as of the
date of this Agreement or (b) the occurrence after the date of
this Agreement of any fact or condition that would or be
reasonably likely to (except as expressly contemplated by this
Agreement) cause or constitute a material Breach of any such
representation or warranty had that representation or warranty
been made as of the time of the occurrence of, or such Party's
discovery of, such fact or condition. During the same period,
Buyer or Parent shall promptly notify Seller of the occurrence
of any Breach of any covenant of Buyer or Parent in this Article
7 or of the occurrence of any event that is reasonably likely to
prevent the satisfaction of the conditions in Article 9.
7.3 Best Efforts. Each of Parent and Buyer shall use
its Best Efforts to facilitate the conversions described in
Section 6.8 above, and to cause the conditions in Sections 8.6,
8.7, 8.8 and 8.9(a) and Article 9 to be satisfied.
7.4 Reorganization. Parent shall complete the proposed
reorganization of Parent as contemplated by Section 5.5(b) prior
to November 4, 2002.
ARTICLE VIII
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Assets and to take the
other actions required to be taken by Buyer at the Closing is
subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by
Buyer, in whole or in part):
8.1 Accuracy of Representations.
(a) All of Seller's representations and warranties in this
Agreement shall have been accurate in all material respects as
of the date of this Agreement, and shall be accurate in all
material respects as of the Effective Time as if then made,
without giving effect to any supplement to the Disclosure
Schedule, except where any such failure would not result in a
material adverse change in the business, operations, assets,
results of operations or condition (financial or otherwise) of
the Business.
(b) Each of the representations and warranties in Section
4.2(a) and each of the representations and warranties in this
Agreement that contains an express materiality qualification,
shall have been accurate in all respects as of the date of this
Agreement, and shall be accurate in all respects as of the
Effective Time as if then made, without giving effect to any
supplement to the Disclosure Schedule, except where any such
failure would not result in a material adverse change in the
business, operations, assets, results of operations or condition
(financial or otherwise) of the Business.
8.2 Seller's Performance. All of the covenants and
obligations that Seller is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing, shall
have been duly performed and complied with in all material
respects.
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8.3 Consents. Each of the Consents identified in
Schedule 8.3 (the "Material Consents") shall have been obtained
and shall be in full force and effect.
8.4 Additional Documents. Seller shall have caused
the documents and instruments required by Section 3.4(a) and the
following documents to be delivered (or tendered subject only to
Closing) to Buyer:
(a) an opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.,
dated the Closing Date, in the form of Exhibit 8.4(a);
(b) Releases of all Encumbrances on the Assets and
Licensed Intellectual Property, other than Permitted
Encumbrances, including releases of each mortgage of record and
reconveyances of each deed of trust with respect to each parcel
of real property included in the Assets;
(c) Certificates dated as of a date not earlier than the
third Business Day prior to the Closing as to the good standing
of Seller, executed by the appropriate officials of the
Commonwealth of Massachusetts and the State of Connecticut; and
(d) such other documents as Buyer may reasonably request.
8.5 No Proceedings. Since the date of this
Agreement, there shall not have been commenced or threatened
against Buyer, or against any Affiliate of Buyer, any Proceeding
(a) involving any challenge to, or seeking a material amount of
Damages or other relief in connection with, any of the
Contemplated Transactions or (b) that may have the effect of
preventing, delaying, making illegal, imposing limitations or
conditions on or otherwise interfering with any of the
Contemplated Transactions.
8.6 Governmental Authorizations. Buyer shall have
received the Governmental Authorizations required under the
competition laws of Germany, and any waiting periods applicable
to the Contemplated Transactions under any such laws, including
the waiting periods required following the required submission
with the German Federal Cartel Office, shall have expired or
been terminated.
8.7 Employees. Two or more of those key employees
of Seller identified on Schedule 8.7, or substitutes therefor
who shall be acceptable to Buyer, in its sole discretion, shall
have accepted employment with Buyer with such employment to
commence on and as of the Closing Date, provided however, that
the employment offered by Buyer to each such key employee
contains terms substantially equivalent in the aggregate to the
terms of each such key employee's current employment with Seller
relating to benefits, salaries and length of severance and
provided, however, further that Buyer shall assert or waive its
right under this Section 8.7 within fifteen (15) days of the
date hereof.
8.8 Collective Bargaining Agreement. The Bargaining
Representative shall have executed a letter agreement in respect
of Buyer's assumption of the CBA substantially in the form of
Exhibit 8.8 (the "CBA Assumption").
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8.9 Title Insurance and Survey.
(a) Buyer shall have obtained, at its expense, a binding
commitment to issue an ALTA Owner's Policy of Title Insurance Form
B-1992 issued by a title insurer reasonably satisfactory to Buyer,
in such amount as Buyer reasonably may determine to be the fair
market value of the Real Estate (including all Improvements
thereon), insuring title to such Real Estate to be in Seller as of
the Closing (subject only to the permitted encumbrances listed on
Schedule 4.6(a)(ii) and only to the extent that such permitted
encumbrances do not have a material adverse effect on the Business
or the Real Estate). The title insurance policy shall (i) insure
title to the Real Estate and all recorded easements benefiting the
Real Estate, (ii) contain an "extended coverage endorsement"
insuring over the general exceptions contained customarily in such
policies, (iii) contain an ALTA Zoning Endorsement 3.1 (or
equivalent), (iv) contain an endorsement insuring that the Real
Estate described in the title insurance policy is the same real
estate as shown on the Survey delivered with respect thereto, (v)
contain an endorsement insuring that each street adjacent to the
Real Estate is a public street and that there is direct and
unencumbered pedestrian and vehicular access to such street from
the Real Estate, (vi) contain a contiguity endorsement insuring
that all of the parcels compromising the Real Estate when taken
together form one contiguous parcel of real estate without any
gaps or gores (if applicable); (vii) contain one or more
encroachment endorsements, as applicable; and (viii) contain an
endorsement insuring over any bankruptcy and/or creditors'
rights exceptions.
(b) Seller shall have procured, at its expense, a current
survey of the Real Estate certified to Buyer and the title
insurance company, prepared by a licensed surveyor and conforming
to current ALTA Minimum Detail Requirements for Land Title
Surveys, disclosing the location of all improvements, easements,
party walls, sidewalks, roadways, utility lines, and other matters
shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Survey"). The
Survey shall not disclose any survey defect or encroachment from
or onto the Real Estate that has not been cured or insured over
prior to the Closing.
8.10 Environmental Study.
(a) Seller shall have obtained, at its own expense, a
Phase II Environmental Site Assessment (the "Phase II Report")
of the Facilities located in Manchester, Connecticut (the
"Manchester Facilities") by Fuss & X'Xxxxx Inc. ("Seller's
Consultant"). The scope of the work, the testing and analysis
to be undertaken and the nature of the report to be issued by
Seller's Consultant are detailed in Schedule 8.10; provided,
however, that Seller's Consultant must include a conclusion,
based on the results of the test outlined in Schedule 8.10, as
to the remediation activities that are reasonably likely to be
required by the CTDEP in response to Seller's filing under the
Connecticut Transfer Act (the "Required Remediation").
(b) Buyer may retain, at its own expense, an environmental
consultant to review the Phase II Report ("Buyer's Consultant").
Seller shall instruct Seller's Consultant to cooperate with
Buyer's Consultant in order to facilitate such review. If Buyer
determines that the Required Remediation will likely result in a
material interruption of the Business at the Manchester Facility
following the Closing for a period of time in excess of two
weeks in any three-month period (a "Material Remediation Event")
then Buyer shall not be obligated to consummate the Contemplated
Transactions and may terminate this Agreement pursuant to
Section 10.1(a).
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(c) If Buyer determines that the Required Remediation is
likely to result in a Material Remediation Event and Seller
disagrees with Buyer's determination, then Seller shall submit
its objections to Buyer and the Parties shall attempt in good
faith to resolve the disagreement.
(d) If the Parties are not able to resolve the
disagreement within fifteen (15) Business Days, then either
Buyer or Seller may submit the issue to binding arbitration as
described in this Section 8.10(d). Buyer and Seller shall
mutually agree upon a Connecticut licensed environmental
professional to arbitrate the dispute (the "Phase II
Arbitrator"), whose expenses shall be borne 50% by Buyer and 50%
by Seller. The Phase II Arbitrator shall review the Phase II
Report and each Party's determination with respect to the
probability of a Material Remediation Event and conduct such
hearings as he/she shall deem necessary. The Phase II Arbitrator
shall issue a written decision within twenty (20) days of the
date of his/her retention by the Parties, which decision shall
conclude whether there is likely to be a Material Remediation
Event and his/her reasons for such determination. If the Phase
II Arbitrator determines that there is likely to be a Material
Remediation Event, then Buyer shall not be obligated to
consummate the Contemplated Transactions and may terminate this
Agreement pursuant to Section 10.1(a).
8.11 Systems Conversions. The Systems work described in
Section 6.8 shall have been completed in a manner reasonably
satisfactory to Buyer.
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Assets and to take the
other actions required to be taken by Seller at the Closing is
subject to the satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by
Seller in whole or in part):
9.1 Accuracy of Representations. All of the
representations and warranties of Buyer or Parent in this
Agreement shall have been accurate in all material respects as
of the date of this Agreement and shall be accurate in all
material respects as of the Effective Time as if then made,
except where any such failure would not result in a material
adverse change in the business, operations, assets, results of
operations, condition (financial or otherwise) of the Buyer or
the Parent, as applicable.
9.2 Buyer's Performance. All of the covenants and
obligations that Buyer or Parent is required to perform or to
comply with pursuant to this Agreement at or prior to the
Closing shall have been performed and complied with in all
material respects.
9.3 Financial Information of Buyer and Parent. Prior to
the Closing, Buyer and Parent shall have provided Seller with
unaudited balance sheets and income statement for each of Buyer
and Parent as of and for the period ending on the last day of
the month immediately preceding the Closing Date, none of which
will show the existence of a material adverse change when
compared with the financial statements attached hereto as
Schedule 5.5(a) with respect to
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Buyer, and Schedule 5.5(b) with respect to Parent. Such updated
financial statements shall be accurate in all material respects
as of the Closing Date; provided, however, that if Seller waives
its right under this Section 9.3, the Note shall bear interest
at a rate equal to 6% above the one-year Libor rate until such
time as the proposed reorganization of Parent is complete as
contemplated by Section 5.5(b).
9.4 No Proceedings. Since the date of this
Agreement, there shall not have been commenced or threatened
against Seller, or against any Affiliate of Seller, any
Proceeding (a) involving any challenge to, or seeking a material
amount of Damages or other relief in connection with, any of the
Contemplated Transactions or (b) that may have the effect of
preventing, delaying, making illegal, imposing limitations or
conditions on or otherwise interfering with any of the
Contemplated Transactions.
9.5 Additional Documents. Buyer or Parent shall each
have caused the documents, instruments and payments required by
Section 3.4(b) or Section 3.4(c) and the following documents to
be delivered (or tendered subject only to Closing) to Seller.
(a) an opinion of Xxxxxx & Xxxx LLP, dated the Closing
Date, in the form of Exhibit 9.5(a);
(b) an opinion of NautaDutilh N.V., dated the Closing
Date, in form and substance reasonably acceptable to Seller;
(c) a certificate dated as of a date not earlier than the
third Business Day prior to the Closing as to the good standing
of Buyer, executed by the appropriate officials of the State of
Connecticut;
(d) a document of the jurisdiction of incorporation of
Parent in respect of the existence of Parent; and
(e) such other documents as Seller may reasonably request.
9.6 Collective Bargaining Agreement. The Bargaining
Representative shall have executed the CBA Assumption.
9.7 WARN Period. Any required notification period under
the WARN Act shall have expired.
9.8 Consent. Seller shall have received the consents
required under its credit facility as more fully described in
Schedule 4.2(c).
ARTICLE X
TERMINATION
10.1 Termination Events. By notice given prior to or
at the Closing, subject to Section 10.2, this Agreement may be
terminated as follows:
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(a) by Buyer if a material Breach of any provision of this
Agreement has been committed by Seller and such Breach has
neither been waived by Buyer nor cured by Seller within thirty
(30) days of Seller's receipt of notice from Buyer of such
Breach;
(b) by Seller if a material Breach of any provision of
this Agreement has been committed by Buyer or Parent and such
Breach has neither been waived by Seller nor cured by Buyer or
Parent within thirty (30) days of Buyer's receipt of notice from
Seller of such Breach;
(c) by mutual consent of Buyer and Seller;
(d) by any Party if the Closing has not occurred on or
before December 29, 2002, or such later date as the Parties may
agree upon; or
(e) by any Party if there shall have been commenced or
threatened against any Party, or against any Affiliate of any
Party, any Proceeding (a) involving any challenge to, or seeking
any material amount of Damages or other relief in connection
with, any of the Contemplated Transactions or (b) that may have
the effect of preventing, delaying, making illegal, imposing
limitations or conditions on or otherwise interfering with any
of the Contemplated Transactions.
10.2 Effect of Termination. Each Party's right of
termination under Section 10.1 is in addition to any other
rights it may have under this Agreement or otherwise, and the
exercise of such right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section
10.1, all obligations of the Parties will terminate, except that
the obligations of the Parties in this Section 10.2 and Articles
12, 13 and 14 (except for those in Section 14.4) will survive;
provided, however, that, if this Agreement is terminated because
of a Breach of this Agreement or because one or more of the
conditions to the terminating Party's obligations under this
Agreement is not satisfied as a result of the other Party's
failure to comply with its obligations under this Agreement, the
terminating Party's right to pursue all legal remedies will
survive such termination unimpaired.
ARTICLE XI
ADDITIONAL COVENANTS
11.1 Employees and Employee Benefits.
(a) For the purpose of this Agreement, the term "Active
Employees" shall mean all employees employed exclusively by
Seller on the Closing Date in the Business, including bargaining
unit employees currently covered by Seller's collective
bargaining agreement with the Paper, Allied-Industrial, Chemical
and Energy Workers International Union, AFL-CIO, CLC through its
PACE Local 1-1554 (the "Bargaining Representative"), and
including employees on temporary leave of absence (including
family and/or medical leave, military leave, temporary
disability or sick leave), but excluding employees on an
indefinite leave or an approved leave in excess of one month and
excluding employees on long term disability.
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(b) (i) Prior to the Closing Date, Buyer shall offer
employment to all Active Employees who are covered by the
CBA, subject to and in accordance with the provisions of
Section 11.1(f) below, to be effective on the Closing Date.
(ii) Prior to the Closing Date, Buyer may interview
all Active Employees who are not bargaining unit employees,
and shall have no obligation to hire any such Active
Employee. Subject to applicable Legal Requirements, Buyer
will have reasonable access to the Facilities and personnel
Records (including performance appraisals, disciplinary
actions, and grievance records) of Seller for the purpose
of preparing for and conducting employment interviews with
such Active Employees and will conduct the interviews as
expeditiously as possible prior to the Closing Date.
Access will be provided by Seller upon reasonable prior
notice during normal business hours. Seller will use Best
Efforts to obtain any consents required by applicable Legal
Requirements to grant Buyer access to personnel Records.
(iii) Buyer will provide Seller with a list of
Active Employees who are not bargaining unit employees to
whom Buyer has made an offer of employment that has been
accepted to be effective on the Closing Date (such Active
Employees, along with bargaining unit employees who accept
employment with the Buyer upon the Closing, being the
"Hired Active Employees"). Buyer will provide such list to
Seller in a manner which will permit Seller to comply with
any applicable notice requirements under the WARN Act.
Effective upon the Closing, Seller will terminate the
employment of all of the Hired Active Employees.
Notwithstanding the foregoing, an Active Employee who is
not actually at work on the Closing Date, such as an
employee who is then absent due to illness, shall only
become a Hired Active Employee, and be terminated from
employment by Seller, upon his commencing active work with
the Buyer.
(iv) Neither Seller nor its Affiliates shall (A) prior
to Closing, solicit the continued employment of or (B) for
the two (2)year period after Closing, employ any Active
Employee not hired by Buyer at Closing other than those
Active Employees listed on Schedule 11.1(b)(iv) (unless and
until Buyer has informed Seller in writing that the
particular Active Employee will not receive any employment
offer from Buyer). Prior to Closing and for the two (2)
year period after Closing, neither Buyer nor Parent shall
solicit the employment of or employ any Active Employee
listed on Schedule 11.1(b)(iv).
(v) It is understood and agreed that (A) Buyer's
expressed intention to extend offers of employment as set
forth in this section shall not constitute any Contract or
understanding or any obligation on the part of Buyer to a
post-Closing employment relationship of any fixed term or
duration or upon any terms or conditions other than those
that Buyer may establish pursuant to individual offers of
employment (or, with respect to bargaining unit employees,
pursuant to collective bargaining) and (B) employment
offered by Buyer is "at will" and may be terminated by
Buyer or by an employee at any time for any reason (subject
to any written commitments to the contrary made by Buyer or
an employee, any collective bargaining agreement entered
into by Buyer, and applicable Legal Requirements). Nothing
in this Agreement shall be deemed to prevent or restrict in
any way the right of Buyer to terminate, reassign, promote or
37
demote any of the Hired Active Employees after the
Closing or to change adversely or favorably the title,
powers, duties, responsibilities, functions, locations,
salaries, other compensation or terms or conditions of
employment of such employees.
(c) (i) Seller shall be responsible for (A) the payment
of all wages and other remuneration due to Active Employees
with respect to their services as employees of Seller
through the Effective Time (or such later time as such
employees become Hired Active Employees), except to the
extent such payment constitutes an Assumed Liability and
except as contemplated by Section 11.1(e)(ii), (B) the
payment of any termination or severance payments and the
provision of health plan continuation coverage in
accordance with the requirements of COBRA and Sections 601
through 608 of ERISA; and (C) any and all payments to
employees required under the WARN Act. Seller will pay
Hired Active Employees for all pro-rated unused vacation
time under Seller's vacation policies as of the Closing
Date and Buyer will pay Seller for all vacation time used
by Hired Active Employees (who are not bargaining unit
employees) prior to the Closing Date in excess of their
pro-rated vacation time.
(ii) Seller shall be liable for any claims made or
incurred by Hired Active Employees and their beneficiaries
through the Closing Date (or such later date as such
employees become Hired Active Employees) under the Employee
Plans. For purposes of the immediately preceding sentence,
a claim will be deemed incurred not later than, in the case
of hospital, medical or dental benefits, when the services
that are the subject of the charge are performed and, in
the case of other benefits (such as disability in the case
of disability insurance or death in the case of life
insurance), when an event has occurred that entitles the
employee to the benefit.
(d) (i) All Hired Active Employees who are participants
in Seller's Defined Benefit Pension Plan ("Seller's
Nonunion Pension Plan") or Seller's Employees' Pension Plan
("Seller's Union Pension Plan" and together with Seller's
Nonunion Pension Plan, "Seller's Pension Plans") shall
retain their accrued benefits under Seller's Pension Plans
as of the Closing Date, and Seller (or Seller's Pension
Plans) shall retain sole liability for the payment of such
benefits as and when such Hired Active Employees become
eligible therefor under such Plans. All Hired Active
Employees shall become fully vested in their accrued
benefits under Seller's Pension Plans as of the Closing
Date, and Seller will so amend such Plans if necessary to
achieve this result. Employment by Buyer shall not cause
Hired Active Employees to be ineligible to commence their
benefits under Seller's Pension Plans, such that (A) Hired
Active Employees who have attained age 55 as of the Closing
Date, and Hired Active Employees who attain age 55
subsequent to the Closing Date, shall be eligible to
commence distribution of their benefits under Seller's
Nonunion Pension Plan notwithstanding their continued
employment with Buyer and (B) Hired Active Employees,
regardless of their age or number of completed years of
service, will be able to commence distribution of their
benefits under Seller's Union Pension Plan notwithstanding
their continued employment with Buyer. Seller agrees that
accrued benefits under Seller's Union Pension Plan will be
calculated based on the $35.75 monthly benefit level
effective under such Plan as of October 1, 2002 for those
Hired Active Employees employed on or after October 1, 2002
by Buyer or an affiliated entity.
38
(ii) Seller will offer retiree medical benefits,
effective as of the Closing Date, to those Hired Active
Employees who, as of the Closing Date, are nonunion
employees who have completed 10 years of service after
attaining age 45, in accordance with its normal practices
for the provision of retiree medical benefits,
notwithstanding such employees' continued employment with
Buyer.
(e) (i) Neither Seller nor its Affiliates will make any
transfer of pension or other employee benefit plan assets
to Buyer or retirement plans maintained by Buyer. Buyer
agrees to provide, as of the Closing Date (1) defined
benefit pension plan coverage with respect to Hired Active
Employees who are not bargaining unit employees that
recognizes prior service for benefit accrual purposes with
Seller only to the extent credited under Seller's Nonunion
Pension Plan, and that offsets the benefit accrued under
Seller's Nonunion Pension Plan for service with Seller
prior to the Closing Date; (2) unless otherwise agreed to
with the Bargaining Representative, defined benefit pension
plan coverage with respect to Hired Active Employees who
are bargaining unit employees, that recognizes service with
both Seller and Buyer and that, together with the benefit
provided by Seller's Union Pension Plan, provides a benefit
of equal value to the benefit which would have been
provided with respect to the employee had the employee been
covered for all years of service under Seller's Union
Pension Plan; and (3) savings plan coverage, with respect
to Hired Active Employees, that recognizes service with
Seller for purposes of eligibility and vesting and that
affords Hired Active Employees the opportunity, at their
discretion, to elect to roll over to such plan
distributions they may receive from Seller's 401k Employees
Savings and Investment Plan ("Seller's Savings Plan").
Nothing contained herein shall prevent Buyer from amending
in any way or terminating any or all of such plans at any
time after the Closing Date.
(ii) By March 2003, Seller will calculate the amount
due under each bonus plan, pro-rated to the Closing Date,
for each Annual Incentive Compensation Plan participant and
each Xxxxxx Performance Sharing ("RPS") participant based
on the final Earnings Per Share results of the Seller for
2002, plus any payroll taxes due in connection with such
amount. Seller shall pay Buyer this amount and deliver a
calculation (which calculation shall specify the amount of
payroll taxes to be withheld in connection therewith) of
the amount due to Buyer, by March 1, 2003, and Buyer shall
pay each Hired Active Employee, within two weeks of receipt
of this payment, an amount at least equal to such amount as
a bonus for calendar year 2002.
(f) Collective Bargaining Matters. Buyer shall, subject
to the requirements of applicable federal labor laws, (i)
recognize the Bargaining Representative as the exclusive
representative of the Hired Active Employees who are bargaining
unit employees and (ii) assume the CBA in accordance with and
subject to such changes as are set forth in (or on an attachment
to) Exhibit 8.8. Buyer, rather than Seller, will provide
retiree medical benefits with respect to Hired Active Employees
who are bargaining unit employees and retire from service with
Buyer following the Closing Date. Seller shall retain all
Liability for any pension, medical, life insurance or other
benefits with respect to any retiree, former employee or other
employee who is not a Hired Active Employee. Seller will use
Best Efforts to resolve any outstanding
39
grievances and arbitrations with respect to bargaining unit
employees prior to Closing. Seller will retain responsibility for
unresolved grievances and arbitrations as of the Closing Date,
including the costs of resolving those grievances and arbitrations,
provided that Seller shall not resolve a grievance or
arbitration which might negatively impact Buyer without Buyer's
consent, which consent shall not be unreasonably withheld.
(g) General Employee Provisions.
(i) Seller and Buyer shall give any notices required
by Legal Requirements and take whatever other actions with
respect to the plans, programs and policies described in
this Section 11.1 as may be necessary to carry out the
arrangements described in this Section 11.1, and agree to
cooperate with each other as appropriate with respect to
communications to affected employees.
(ii) Seller and Buyer shall, both before and after
Closing, provide each other with such plan documents and
summary plan descriptions, employee data or other
information as may be reasonably required to carry out the
arrangements described in this Section 11.1 or otherwise
facilitate the administration of their respective employee
plans and arrangements.
(iii) If any of the arrangements described in this
Section 11.1 are determined by the IRS or other
Governmental Body to be prohibited by law, Seller and Buyer
shall modify such arrangements to as closely as possible
reflect their expressed intent and retain the allocation of
economic benefits and burdens to the parties contemplated
herein in a manner that is not prohibited by law.
(iv) Seller agrees to use Best Efforts to obtain
signed, written authorizations from all Hired Active
Employees stating that Seller is authorized to release
their personnel files to Buyer. Seller further agrees that
any noncompete or confidentiality provisions of Seller's
Contracts with employees who become Hired Active Employees
of Buyer shall not apply to such employees' work for Buyer,
other than in connection with Excluded Products. At
Buyer's request and expense, Seller shall take all such
actions as may be appropriate to cause, to the extent
possible, Buyer to benefit from the provisions of Seller's
Contracts with Active Employees who are not retained by
Seller or hired by Buyer, which provide that such employees
shall keep information regarding the Business confidential
and not compete with the Business.
(v) Buyer shall not have any responsibility,
liability or obligation, whether to Active Employees,
former employees, their beneficiaries or to any other
Person, with respect to any Employee Plans (including the
establishment, operation or termination thereof and the
notification and provision of COBRA coverage extension)
maintained by Seller, including any responsibility,
liability or obligation with respect to any retiree medical
or life insurance benefits with respect to individuals who
retired from employment with Seller or were otherwise
terminated either on or prior to the Closing Date.
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11.2 Transfer Taxes. All stamp, transfer, documentary
sales, use, registration and other such Taxes incurred in
connection with this Agreement or the Contemplated Transactions
shall be paid by the Party primarily liable therefore under
applicable law and such Party shall, at its own expense, prepare
and properly file accurate Tax Returns and other documentation
with respect to such Taxes on a timely basis.
11.3 Payment of Other Retained Liabilities. Seller
shall pay or discharge in full all of the Retained Liabilities.
If any such Retained Liabilities are not so paid or discharged,
and if Buyer reasonably determines that failure to make any
payments will impair Buyer's use or enjoyment of the Assets,
Licensed Intellectual Property or Shared Know-How or conduct of
the Business, Buyer may, at any time after the Closing Date,
elect to make all such payments directly (but shall have no
obligation to do so) and set off and deduct the full amount of
all such payments from any amounts due under the Note, provided
however that such failure to pay continues for ten (10) days
after Buyer shall have notified Seller of such failure to make
payments. If, after exercising its right to set off and deduct
any payment against the Note as provided in the preceding
sentence, any amount remains, Buyer may set off and deduct such
remaining amount from any Royalty Payments due under the
Intellectual Property Agreement. Unless the Buyer and Seller
agree otherwise or a court of competent jurisdiction determines
otherwise, Buyer shall receive full credit under the Note, this
Agreement and the Intellectual Property Agreement for all
payments so made.
11.4 Retention of and Access to Records.
(a) After the Closing Date, Buyer shall retain for a
period consistent with Buyer's record-retention policies and
practices those Records of Seller delivered to Buyer. Buyer
also shall provide Seller and their Representatives reasonable
access thereto, during normal business hours and upon reasonable
prior notice, to enable them to prepare financial statements or
Tax Returns, deal with Tax audits, administer product liability,
product warranty, and workmen's compensation claims, perform the
RSA, and to perform similar tasks and responsibilities. Prior
to removal or destruction of any such Records, Buyer shall
notify Seller and shall afford Seller the opportunity to take
possession of such Records as are proposed to be so removed or
destroyed.
(b) After the Closing Date, Seller shall retain for a
period consistent with Seller's record-retention policies and
practices those Records of Seller relating to the Business which
are not part of the Assets. Seller shall provide Buyer and their
Representatives reasonable access thereto, during normal
business hours and upon reasonable prior notice, to enable them
to conduct the Business. Prior to removal or destruction of any
such Records, Seller shall notify Buyer and shall afford Buyer
the opportunity to take possession of such Records as are
proposed to be so removed or destroyed. Buyer's obligations
pursuant to Section 13.3 hereof shall apply to any Records of
Seller to which Buyer gains access pursuant to this Section
11.4(b).
11.5 Reports and Returns. Seller shall promptly after
the Closing prepare and file all reports and returns required by
Legal Requirements relating to the Business as conducted using
the Assets, to and including the Effective Time.
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11.6 Assistance in Proceedings. In the event and for
so long as any Party actively is contesting or defending against
any action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand in connection with (a) any
Contemplated Transaction or (b) any fact, situation,
circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or
transaction on or prior to the Effective Time involving the
Business, each of the other Parties will cooperate with the
contesting or defending Party and his or its counsel in the
contest or defense, make available his or its personnel, and
provide such testimony and access to his or its books and
records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is
entitled to indemnification therefore under Article 12 below).
11.7 Noncompetition, Nonsolicitation, and
Nondisparagement.
(a) For a period of five (5) years after the Closing Date,
Seller shall not, anywhere in North America, directly or
indirectly invest in, own, manage, operate, finance, control,
advise, render services to or guarantee the obligations of any
Person engaged in or planning to become engaged in the Business,
provided, however, that Seller may purchase or otherwise acquire
up to (but not more than) five percent (5%) of any class of the
securities of any Person engaged in the Business (but may not
otherwise participate in the activities of such Person) if such
securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the
Exchange Act.
(b) For a period of five (5) years after the Closing Date,
(i) Seller shall not, directly or indirectly solicit any
employee of Buyer employed at the Business, and (ii) Buyer shall
not, directly or indirectly solicit any employee of Seller
(other than the Active Employees).
(c) If a final judgment of a court or tribunal of
competent jurisdiction determines that any term or provision
contained in Section 11.7 is invalid or unenforceable, then the
Parties agree that the court or tribunal will have the power to
reduce the scope, duration or geographic area of the term or
provision, to delete specific words or phrases or to replace any
invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term
or provision. This Section 11.7 will be enforceable as so
modified after the expiration of the time within which the
judgment may be appealed. This Section 11.7 is reasonable and
necessary to protect and preserve Buyer's legitimate business
interests and the value of the Business and the Assets, Licensed
Intellectual Property and Shared Know-How and to prevent any
unfair advantage conferred on Seller.
(d) This Section 11.7 shall not apply to the Business of
the Seller as it relates to Excluded Products or Excluded
Technology, as defined in the Intellectual Property Agreement.
11.8 Further Assurances. Subject to the proviso in
Section 7.1, the Parties shall cooperate reasonably with each
other and with their respective Representatives in connection
with any steps required to be taken as part of their respective
obligations under this Agreement, and shall (a) furnish upon
request to each other such further information; (b) execute and
deliver to each other such other documents; and (c) do such
other acts and things, all as the other Parties
42
may reasonably request for the purpose of carrying out the
intent of this Agreement and the Contemplated Transactions.
11.9 Investigation; Remediation. Buyer and Seller will
cooperate in the efforts outlined in the RSA.
11.10 WARN Act. If Buyer terminates any employees of
the Business after the Closing Date, and such termination
creates an obligation under the WARN Act or any similar state or
local Legal Requirement on the part of a Party to provide
notices or take any other action, then Buyer shall be deemed the
employer under the WARN Act and such other Legal Requirements
for all purposes and shall provide such notices, assume such
Liabilities and take such other action as may be required
thereby.
11.11 Collection of Accounts Receivable. After the
Closing Date, Seller will collect any payments remitted to
Seller in respect of any Accounts Receivable, whether arising in
connection with products shipped before or after the Effective
Time, and remit such payments to Buyer by ACH Credit no later
than the Tuesday of the week next following the week in which
Seller receives such payments.
ARTICLE XII
INDEMNIFICATION; REMEDIES
12.1 Survival. All representations, warranties,
covenants and obligations in this Agreement and any certificate
or document delivered pursuant to this Agreement shall survive
the Closing and the consummation of the Contemplated
Transactions, subject to Section 12.6. The right to
indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations shall not
be affected by any investigation (including any environmental
investigation or assessment) conducted with respect to, or any
Knowledge acquired (or capable of being acquired) at any time,
whether before or after the execution and delivery of this
Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any such representation,
warranty, covenant or obligation. The waiver of any condition
based upon the accuracy of any representation or warranty, or on
the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations,
warranties, covenants and obligations.
12.2 Indemnification and Reimbursement by Seller.
Seller will indemnify, hold harmless and defend Buyer, and its
Representatives, shareholders, subsidiaries and Affiliates
(collectively, the "Buyer Indemnified Persons) for any loss,
liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees and
expenses) or diminution of value, whether or not involving a
Third-Party Claim (collectively, "Damages"), arising from or in
connection with:
(a) any Breach of any representation or warranty made by
Seller in this Agreement;
43
(b) any Breach of any covenant or obligation of Seller in
this Agreement or in any certificate, document, writing or
instrument delivered by Seller pursuant to this Agreement;
(c) any Retained Liabilities; or
(d) any brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding made,
or alleged to have been made, by any Person with Seller (or any
Person acting on its behalf) in connection with any of the
Contemplated Transactions.
12.3 Indemnification and Reimbursement by Seller -
Environmental Matters.
(a) In addition to the other indemnification provisions in
Article 12, Seller will indemnify and hold harmless Buyer and
the other Buyer Indemnified Persons for any Damages (including
costs of cleanup, containment or other remediation and net of
any proceeds in connection therewith from Buyer's business
interruption insurance carrier) arising from or in connection
with:
(i) any Environmental Liabilities arising out of or
relating to: (A) the ownership or operation by any Person
at any time on or prior to the Closing Date of any of the
Facilities, Assets or the Business, or (B) any Hazardous
Materials or other contaminants that were present on the
Facilities or Assets at any time on or prior to the Closing
Date; or
(ii) any bodily injury (including illness, disability
and death, 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 or any Assets
in any way arising from any Hazardous Activity conducted by
any Person with respect to the Business or the Assets prior
to the Closing Date or from any Hazardous Material that was
(A) present on or before the Closing Date on or at the
Facilities (or present or suspected to be present on any
other property, if such Hazardous Material emanated or
allegedly emanated from any Facility and was present on any
Facility, on or prior to the Closing Date) or (B) Released
by any Person on or at any Facilities or Assets at any time
on or prior to the Closing Date.
(b) Notwithstanding any Legal Requirement to the contrary,
the Parties agree that the burden of proof with respect to the
extent of Seller's indemnity obligations under this Section 12.3
will be determined as follows:
(i) in respect of any claim commenced prior to the
third anniversary of the Closing Date, Seller will have the
burden of proving that an Environmental Liability arose out
of or relates to (in whole or in part) an event or omission
occurring after the Closing Date; and
(ii) in respect of any Claim commenced after the third
anniversary of the Closing Date, Buyer will have the burden
of proving that an Environmental Liability arose out of or
relates to (in whole or in part) an event or omission
occurring before the Closing Date.
44
(c) Notwithstanding any provision of this Agreement
to the contrary, the Parties agree that in respect of any Claim
commenced after the date which is five (5) years after the date
upon which all Approvals (as defined in the RSA) are obtained,
to the extent that it is determined that the Environmental
Liability arose out of or relates to (in whole or in part) an
event or omission occurring before Closing, Seller shall bear
the legal fees incurred by or on behalf of Buyer with regard to
such Claim, and to the extent that it is determined that the
Environmental Liabilities arose out of or relates to (in whole
or in part) an event or omission occurring after Closing, Buyer
shall bear the legal fees incurred by or on behalf of Seller
with regard to such Claim.
(d) In addition, notwithstanding any Legal Requirement or
provision in this Agreement to the contrary, in the event of a
Material Remediation Event, Seller shall, at Seller's option,
either: (1) indemnify Buyer for Buyer's Damages, including
Buyer's lost profits, incurred as a result of the Material
Remediation Event; or (2) reimburse Buyer for its costs to
relocate the Business, as conducted at such time at the
Facilities. If Seller elects option (2), Seller shall also
purchase certain of the Assets from Buyer on the following
basis: (a) with respect to the Improvements, Seller will pay the
book value calculated in accordance with GAAP at the time of
Closing, as set forth in the Closing Balance Sheet and (b) with
respect to the Real Estate, Seller will pay the current market
value as of the date hereof. Buyer agrees to use Best Efforts
to cooperate with Seller and to mitigate the possible effect of
any Required Remediation so as to avoid a Material Remediation
Event.
12.4 Indemnification and Reimbursement by Parent and
Buyer.
(a) Parent and Buyer will jointly and severally indemnify,
hold harmless and defend Seller and its Representatives,
shareholders, subsidiaries and Affiliates (the "Seller
Indemnified Persons") for Damages arising from or in connection
with:
(i) any Breach of any representation or warranty made
by Buyer or Parent in this Agreement;
(ii) any Breach of any covenant or obligation of Buyer
or Parent in this Agreement or in any other certificate,
document, writing or instrument delivered by Buyer or
Parent pursuant to this Agreement; or
(iii) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by
such Person with Buyer or Parent (or any Person acting on
Buyer's or Parent's behalf) in connection with any of the
Contemplated Transactions.
(b) Buyer will indemnify, hold harmless and defend the
Seller Indemnified Parties for Damages arising from or in
connection with:
(i) any Assumed Liabilities; or
45
(ii) any and all Liabilities arising out of or related
to products of the Business to the extent manufactured and
sold after the Effective Time.
12.5 Limitations on Amount. Seller shall have no
liability (for indemnification or otherwise) with respect to
claims under Section 12.2(a) until the total of all Damages with
respect to such matters exceeds three hundred and eighty
thousand dollars ($380,000) (the "Basket Amount"); provided,
however, that after the total of all such damages exceeds the
Basket Amount, Seller shall be liable for all such Damages,
including the Basket Amount. Seller shall have no liability
(for indemnification or otherwise) with respect to claims under
Section 12.2(a) for Damages with respect to such matters, in the
aggregate in excess of the Purchase Price. This Section 12.5
will not apply to claims under Section 12.2(b) through (d) or to
matters arising in respect of Sections 4.1, 4.2(a) or 4.2(b)(iv)
or to any Breach of any of Seller's representations and
warranties of which Seller had Knowledge at any time prior to
the date on which such representation and warranty is made or
any intentional Breach by Seller of any covenant or obligation,
and Seller will be liable for all Damages with respect to such
Breaches.
12.6 Time Limitations. Seller will have liability
(for indemnification or otherwise) with respect to any Breach of
a representation or warranty (other than those in Sections 4.1,
4.2(a), 4.5, 4.13, 4.15, or 4.21) only if on or before the date
which is two years following the Closing Date, Buyer notifies
Seller of a claim specifying the factual basis of the claim in
reasonable detail to the extent then known by Buyer. Any claims
arising under the Sections identified in the preceding sentence
or the remaining provisions of this Article 12 shall be governed
by the applicable statute of limitations.
12.7 Right of Setoff. Buyer may set off against (i)
Royalty Payments otherwise payable under the Intellectual
Property Agreement and (ii) amounts otherwise payable under the
Note, any amount to which it is entitled under this Agreement as
determined by mutual agreement of the Parties (including for
this purpose, WPI) or pursuant to an Order.
12.8 Third-Party Claims.
(a) Promptly after receipt by a Person entitled to
indemnity under this Article 12 (an "Indemnified Person") of
notice of the assertion of a Third-Party Claim against it, such
Indemnified Person shall give notice to the Person obligated to
indemnify under such Section (an "Indemnifying Person") of the
assertion of such Third-Party Claim, provided that the failure
to notify the Indemnifying Person will not relieve the
Indemnifying Person of any liability that it may have to any
Indemnified Person, except to the extent that the Indemnifying
Person demonstrates that the defense of such Third-Party Claim
is prejudiced by the Indemnified Person's failure to give such
notice.
(b) If an Indemnified Person gives notice to the
Indemnifying Person pursuant to Section 12.8(a) of the assertion
of a Third-Party Claim, the Indemnifying Person shall assume the
defense of such Third-Party Claim with counsel reasonably
satisfactory to the Indemnified Person (unless the Indemnifying
Person is also a Person against whom the Third-Party Claim is
made and the Indemnified Person determines in good faith that
joint representation would be inappropriate). If the
Indemnifying Person assumes the defense of a Third-Party Claim,
(i) no
46
compromise or settlement of such Third-Party Claims may
be effected by the Indemnified Person without the Indemnifying
Person's Consent, and (ii) no compromise or settlement of such
Third-Party Claims may be effected by the Indemnifying Person
without the Indemnified Person's Consent unless (A) there is no
finding or admission of any violation of Legal Requirement or
any violation of the rights of any Person; (B) the sole relief
provided is monetary damages that are paid in full by the
Indemnifying Person; and (C) the Indemnified Person shall have
no liability with respect to any compromise or settlement of
such Third-Party Claims effected without its Consent.
Notwithstanding the foregoing, if notice is given to an
Indemnifying Person of the assertion of any Third-Party Claim
and the Indemnifying Person does not, within twenty (20) days
after the Indemnified Person's notice is given, give notice to
the Indemnified Person of its assumption of the defense of such
Third-Party Claim as provided for herein, the Indemnifying
Person will be bound by any determination made in such Third-
Party Claim or any compromise or settlement effected by the
Indemnified Person.
(c) Notwithstanding the foregoing, if an Indemnified
Person determines in good faith that there is a reasonable
probability that a Third-Party Claim may materially and
adversely 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 Indemnified Person
may, by notice to the Indemnifying Person, assume the exclusive
right to defend, compromise or settle such Third-Party Claim,
but the Indemnifying Person will not be bound by any
determination of any Third-Party Claim so defended for the
purposes of this Agreement or any compromise or settlement
effected without its Consent (which may not be unreasonably
withheld or delayed).
(d) With respect to any Third-Party Claim subject to
indemnification under this Article 12: (i) both the Indemnified
Person and the Indemnifying Person, as the case may be, shall
keep the other Person fully informed of the status of such
Third-Party Claim and any related Proceedings at all stages
thereof where such Person is not represented by its own counsel,
and (ii) the Parties agree (each at its own expense) to render
to each other such assistance as they may reasonably require of
each other and to cooperate in good faith with each other in
order to ensure the proper and adequate defense of any Third-
Party Claim.
(e) With respect to any Third-Party Claim subject to
indemnification under this Article 12, the Parties agree to
cooperate in such a manner as to preserve in full (to the extent
possible) the confidentiality of all Confidential Information
and the attorney-client and work-product privileges. In
connection therewith, each Party agrees that: (i) it will use
its Best Efforts, in respect of any Third-Party Claim in which
it has assumed or participated in the defense, to avoid
production of Confidential Information (consistent with
applicable law and rules of procedure), and (ii) all
communications between any Party hereto and counsel responsible
for or participating in the defense of any Third-Party Claim
shall, to the extent possible, be made so as to preserve any
applicable attorney-client or work-product privilege.
12.9 Exclusive Remedy. The indemnification provided
in this Article 12 shall be sole and exclusive remedy for any
Breach of representation or warranty made by any Party in this
Agreement; provided, however, that the foregoing shall not apply
to any Breach of which a Party had Knowledge at any time prior
to the date on which such representation or warranty is made.
47
12.10 Service of Customer Returns and Product
Warranties. Notwithstanding the provisions of Section 12.8,
and in no way to derogate from the indemnification obligations
of Seller in this Article XII, the Parties agree that, solely as
an accommodation to Seller, Buyer shall service customer
warranty work for products of the Business manufactured or sold
by Seller prior to the Effective Time, and Seller shall
reimburse Buyer for such service, in accordance the procedures
set forth in Schedule 12.10.
ARTICLE XIII
CONFIDENTIALITY
13.1 Confidential Information. "Confidential Information"
shall mean any information or technology that is not generally
available to the public and that is treated as confidential or
proprietary by a Party or any of its Affiliates. Confidential
Information shall not include, and the provisions set forth in
this Article 13 regarding Confidential Information shall not
apply (or will cease to apply), with respect to Confidential
Information that (i) is or hereafter becomes generally available
to the public other than through an unauthorized act or omission
or breach by a Party of this Agreement, the Intellectual
Property Agreement or the Shared Know-How Agreement, or (ii)
becomes available to Seller or Buyer, provided that the source
is not known (after due inquiry) by Seller or Buyer, as
applicable, to be bound by a confidentiality agreement with or
other obligation as to confidentiality, non-disclosure or non-
use to, Seller or Buyer (or its Affiliates), as applicable, or
(iii) is independently developed or acquired by a Party.
Notwithstanding the foregoing, a combination of features shall
not be deemed to be in the public domain or in the possession of
the Party subject to confidentiality obligations hereunder
merely because the individual features are separately found to
be in the public domain or in such possession; the combination
itself must be in the public domain or in such possession.
13.2 Seller's Confidentiality Obligations. Seller
covenants and agrees on behalf of itself, its Affiliates, and
all employees of the foregoing, that neither it nor they will
disclose to any Person not employed by Buyer or not engaged to
render services to Buyer, and that neither it nor they will use
for the benefit of Seller or others, any Confidential
Information of Buyer or Parent obtained by Seller prior to the
Closing or any Confidential Information of the Business
transferred (or exclusively licensed) to Buyer at Closing;
provided, however, that this provision shall not preclude
Seller, its Affiliates, and their employees from use or
disclosure of information if (i) use or disclosure of such
information shall be required by applicable Legal Requirement or
Order of any Governmental Body (but only after notice to Buyer
and affording Buyer a reasonable opportunity to obtain
confidentiality or protective arrangements to the extent
reasonably available), (ii) use or disclosure of such
information is reasonably required in connection with any
Proceeding against or involving Seller or its Affiliates or
(iii) such information is included within the Shared Know-How
Agreement.
13.3 Buyer's Confidentiality Obligations. Buyer
acknowledges that (as a result of the transactions contemplated
by this Agreement and the performance of its obligations under
this Agreement and its access to, and the cooperation of,
employees of Seller prior to the Closing, as well as its
employment of employees of the Business after the Effective
Time) Buyer may acquire or have access to Confidential
Information belonging to Seller. Buyer
48
acknowledges that any such Confidential Information that does
not relate to the Business is and will remain proprietary to
Seller and its Affiliates. Buyer, on behalf of each of itself,
its Affiliates, and all employees of the foregoing, covenants
and agrees that it will not disclose to any Person, and that it
will not use for the benefit of itself or others any Confidential
Information of Seller that does not relate to the Business.
This provision shall not preclude Buyer or its Affiliates and
employees from disclosure of such Confidential Information if
disclosure of such information shall be required by applicable
Legal Requirement or Order of any Governmental Body (but only
after notice to Seller and affording Seller a reasonable
opportunity to obtain confidentiality or protective arrangements
to the extent reasonably available). Buyer's obligations under
this Section 13.3 are in addition to its confidentiality obligations
under the Shared Know-How Agreement.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Expenses. Except as otherwise provided in this
Agreement, each Party to this Agreement will bear its respective
fees and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and the
Contemplated Transactions, including all fees and expense of its
Representatives; provided, however, that if Seller terminates
this Agreement pursuant to Section 10.1(b) or Buyer terminates
this Agreement pursuant to Section 10.1(d), Buyer shall
reimburse Seller for the actual amounts incurred by Seller in
connection with the matters set forth on Schedule 14.1, such
amounts not to exceed the maximum amount for each such item set
forth on Schedule 14.1 (and upon such payment, Seller shall
transfer, convey, assign and deliver to Buyer any tangible asset
or intangible rights in respect of the systems work described in
Schedule 14.1). If this Agreement is terminated, the obligation
of each party to pay its own fees and expenses will be subject
to any rights of such Party arising from a Breach of this
Agreement by another Party.
14.2 Public Announcements. Prior to Closing, neither
Seller nor Buyer shall make any public statements, including,
without limitation, any press releases, with regard to this
Agreement and the Contemplated Transactions without the prior
written consent of the other Party (which consent may not be
unreasonably withheld or delayed), except as may be required by
Legal Requirement. The Parties will jointly discuss and agree
upon a statement to the public regarding this Agreement and
Contemplated Transactions, and promptly following the Closing,
Seller and Buyer may issue such mutually acceptable public
statements.
14.3 Notices. All notices, Consents, waivers and
other communications required or permitted by this Agreement
shall be in writing and shall be given as follows: (a) by
delivery to the appropriate address by hand or by nationally
recognized overnight courier service (costs prepaid); (b) by
facsimile or e-mail with confirmation of transmission by the
transmitting equipment; or (c) sent by certified mail, return
receipt requested, in each case to the following addresses,
facsimile numbers or e-mail addresses and marked to the
attention of the person (by name or title) designated below (or
to such other address, facsimile number, e-mail address or
person as a Party may designate by notice to the other Parties):
49
if to Seller, to:
Xxxxxx Corporation
Xxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Office of the Corporate Secretary
Fax no.: 000-000-0000
E-mail address: xxx.xxxxxx@xxxxxx-xxxx.xxx
with a mandatory copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxxx Xxxxxxx, Esq.
Fax no.: 000-000-0000
E-mail address: xxxxxxxx@xxxx.xxx
If to Buyer, to:
Vyncolit North America Inc.
c/o Perstorp Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax no.: 000-000-0000
E-mail address: xxxxx.xxxxx@xxxxxxxx.xxx
with mandatory copies to:
Xxxxxxxxxx Swartling Advokatbyra
Xxxxx Xxxxxxxxx 0
Xxx 0000
000 00 Xxxxxxxxxxx
XXXXXX
Attention: Xxxxxx Xxxxxxxxx
Fax: 00 00 000 00 00
E-mail address: xxx@xxx.xx
Wiggin & Xxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
E-mail address: xxxxxxx@xxxxxx.xxx
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If to Parent, to:
Xxxxxxxx Xxxxxxxxxx Xxxxxxx XX
00000 Xxxxxxxx
Xxxxxx
Attention: Xxxxxx Xxxxxx
Fax no.: x00 000 00000
E-mail address: xxxxxx.xxxxxx@xxxxxxxx.xxx
with mandatory copies to:
Xxxxxxxxxx Swartling Advokatbyra
Xxxxx Xxxxxxxxx 0
Xxx 0000
000 00 Xxxxxxxxxxx
XXXXXX
Attention: Xxxxxx Xxxxxxxxx
Fax: 00 00 000 00 00
E-mail address: xxx@xxx.xx
Wiggin & Xxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Fax: 000-000-0000
E-mail address: xxxxxxx@xxxxxx.xxx
14.4 Enforcement of Agreement. Each Party
acknowledges and agrees that the other Parties may be
irreparably damaged if any of the provisions of this Agreement
are not performed in accordance with their specific terms and
that any Breach of this Agreement might not be adequately
compensated in all cases by monetary damages alone. Accordingly,
in addition to any other right or remedy to which a Party may be
entitled, at law or in equity, it shall be entitled to seek to
enforce any provision of this Agreement by a decree of specific
performance and to temporary, preliminary and permanent
injunctive relief to prevent Breaches or threatened Breaches of
any of the provisions of this Agreement, without posting any
bond or other undertaking.
14.5 Waiver; Remedies Cumulative. Except as set forth
in Section 12.8 above, the rights and remedies of the Parties
are cumulative and not alternative. Neither any failure nor any
delay by any Party in exercising any right, power or privilege
under this Agreement or any of the documents referred to in this
Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement
can be
51
discharged by one Party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed
by the other Parties; (b) no waiver that may be given by a Party
will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one Party will be
deemed to be a waiver of any obligation of that Party or of the
right of the Party giving such notice or demand to take further
action without notice or demand as provided in this Agreement or
the documents referred to in this Agreement.
14.6 Entire Agreement and Modification. This
Agreement supersedes all prior understandings, agreements,
representations, or warranties, whether written or oral, express
or implied, between the Parties with respect to its subject
matter (including any letter of intent and any confidentiality
agreement between Buyer and Seller) and constitutes (along with
the Disclosure Schedule, Exhibits and other documents delivered
pursuant to this Agreement) a complete and exclusive statement
of the terms of the agreement between the Parties with respect
to its subject matter. Notwithstanding the forgoing, the
Existing Confidentiality Agreement shall remain in full force
and effect in accordance with its terms until the Closing, at
which time the foregoing shall apply thereto. For the avoidance
of doubt, the Existing Confidentiality Agreement shall remain in
full force and effect in accordance with its terms in the event
that this Agreement is terminated in accordance with Article X
hereof. This Agreement may not be amended, supplemented, or
otherwise modified except by a written agreement executed by the
party to be charged with the amendment.
14.7 Disclosure Schedule. The information in the
Disclosure Schedule constitutes (i) exceptions to particular
representations, warranties, covenants and obligations of Seller
as set forth in this Agreement or (ii) descriptions or lists of
assets and liabilities and other items referred to in this
Agreement. If there is any inconsistency between the statements
in this Agreement and those in the Disclosure Schedule (other
than an exception expressly set forth as such in the Disclosure
Schedule with respect to a specifically identified
representation or warranty), the statements in this Agreement
will control. The statements in the Disclosure Schedule, and
those in any supplement thereto, relate only to the provisions
in the Section of this Agreement to which they expressly relate
and not to any other provision in this Agreement.
14.8 Assignments, Successors, and No Third-Party
Rights. No Party may assign any of its rights or delegate any
of its obligations under this Agreement without the prior
written consent of the other Parties, except that Buyer may
assign any of its rights under this Agreement to any Affiliate
of Buyer at any time, provided that such Affiliate agrees in
writing to be bound by the provisions of this Section 14.8, and
may collaterally assign its rights hereunder to any financial
institution providing financing to Buyer at any time after Buyer
has satisfied all of its payment obligations under the Note and
Intellectual Property Agreement. Subject to the preceding
sentence, this Agreement will apply to, be binding in all
respects upon and inure to the benefit of the successors and
permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other
than the Parties to this Agreement any legal or equitable right,
remedy or claim under or with respect to this Agreement or any
provision of this Agreement, except such rights as shall inure
to a successor or permitted assignee pursuant to this Section
14.8.
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14.9 Severability. If any provision of this
Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement
will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held
invalid or unenforceable.
14.10 Construction. The headings of Articles and Sections
in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to
"Articles," "Sections" and "Schedules" refer to the
corresponding Articles, Sections and Schedules of this Agreement
and the Disclosure Schedule.
14.11 Governing Law. This Agreement will be governed by
and construed under the laws of the State of Connecticut without
regard to conflicts-of-laws principles that would require the
application of any other law.
14.12 Execution of Agreement. This Agreement may be
executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and
the same agreement. The exchange of copies of this Agreement and
of signature pages by facsimile transmission shall constitute
effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for
all purposes. Signatures of the parties transmitted by facsimile
shall be deemed to be their original signatures for all
purposes.
[Signature Page Follows]
53
IN WITNESS WHEREOF, the parties have caused this Agreement
executed in multiple original counterparts as of the date first
set forth above.
VYNCOLIT NORTH AMERICA INC.
By: /s/ Henny Van Dijk
----------------------
Name: Henny Van Dijk
Title: President
PERSTORP COMPOSITES HOLDING B.V.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-fact
XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
54
EXHIBIT I
DEFINITIONS
For purposes of this Agreement, the following terms and
variations thereof have the meanings specified or referred to in
this Exhibit I:
"Accounts Receivable" shall mean (a) all trade accounts
receivable and other rights to payment from customers of the
Business and the full benefit of all security for such accounts
or rights to payment, including all trade accounts receivable
representing amounts receivable in respect of goods shipped or
products sold or services rendered to customers of the Business,
(b) all other accounts or notes receivable of Seller arising out
of or relating to the Business and the full benefit of all
security for such accounts or notes and (c) any claim, remedy or
other right related to any of the foregoing. For purposes of
determining Net Asset Value, there will be no bad debt reserve
established for the Accounts Receivable, notwithstanding the
requirements of GAAP.
"Active Employees" shall have the meaning as set forth in
Section 11.1(a).
"Adjustment Amount" shall have the meaning set forth in Section
3.6.
"Affiliate" shall mean any Person that directly or indirectly
controls, is directly or indirectly controlled by or is directly
or indirectly under common control with such specified Person
and each Person that serves as a director, officer, partner,
executor or trustee of such specified Person (or in a similar
capacity). For purposes of this definition "control" (including
"controlling," "controlled by," and "under common control with")
means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise, and shall be construed as such term is
used in the rules promulgated under the Securities Act.
"Agreement" shall have the meaning set forth in the first
paragraph of this Agreement.
"Assets" shall have the meaning set forth in Section 2.1.
"Assignment and Assumption Agreement" shall have the meaning set
forth in Section 3.4(a)(ii).
"Assumed Liabilities" shall have the meaning set forth in
Section 2.3.
"Balance Sheet" shall have the meaning set forth in Section 4.3.
"Bargaining Representative" shall have the meaning set forth in
Section 11.1(a).
"Basket Amount" shall have the meaning set forth in Section
12.5.
"Benefits Accrual" shall have the meaning set forth in Section
2.3(c).
"Best Efforts" shall mean the commercially reasonable efforts
that a prudent Person desirous of achieving a result would use
in similar circumstances to achieve that result as expeditiously
as possible, provided, however, that a Person required to use
Best Efforts under this Agreement will not be thereby required
to take actions that would result in a material adverse change
in the benefits to such Person of this Agreement and the
Contemplated Transactions or to dispose of or make any change to
its business, expend any material funds or incur any other
material burden.
"Bills of Sale" shall have the meaning set forth in Section
3.4(a)(i).
"Breach" shall mean any breach of, or any inaccuracy in, any
representation or warranty or any breach of, or failure to
perform or comply with, any covenant or obligation, in or of
this Agreement or any other Contract, or any event which with
the passing of time or the giving of notice, or both, would
constitute such a breach, inaccuracy or failure.
"Business" shall have the meaning set forth in Section 2.1.
"Business Contract" shall mean any Contract entered into in the
Ordinary Course of Business under which Seller in connection
with its conduct of the Business has or may acquire any rights
or benefits, or has or may become subject to any obligation or
liability, or by which any of the Assets or Licensed
Intellectual Property owned or used by Seller is or may become
bound.
"Business Day" shall mean any day other than (a) Saturday or
Sunday or (b) any other day on which banks in New York, NY are
permitted or required to be closed.
"Buyer" shall have the meaning set forth in the first paragraph
of this Agreement.
"Buyer Group" shall have the meaning set forth in Section 6.1.
"Buyer Indemnified Persons" shall have the meaning set forth in
Section 12.2.
"Buyer's Closing Documents" shall have the meaning set forth in
Section 5.2(a).
"Buyer's Consultant" shall have the meaning set forth in Section
8.10(b).
"CBA" shall mean the Labor Agreement by and between the Seller,
PACE Local 1-1554, and the Bargaining Representative (1999-
2004).
"CBA Assumption" shall have the meaning set forth in Section
8.8.
"Claim" shall mean any action, suit, litigation, proceeding,
hearing, investigation, charge, complaint, claim, demand or
notice.
"Closing" shall have the meaning set forth in Section 3.3.
"Closing Balance Sheet" shall have the meaning set forth in
Section 3.5(b).
"Closing Date" shall have the meaning set forth in Section 3.3.
"Closing Net Asset Value" shall have the meaning set forth in
Section 3.5(b).
"Closing Payment" shall have the meaning set forth in Section
3.1(b)(i).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidential Information" shall have the meaning set forth in
Section 13.1.
"Connecticut Transfer Act" shall mean the Connecticut Transfer
Act, Conn. Gen. Stat. 22a-134 et seq.
"Consent" shall mean any written approval, consent,
ratification, waiver or other authorization.
"Consideration Cap" shall have the meaning set forth in Section
3.1(a).
"Contemplated Transactions" shall mean all of the transactions
contemplated by this Agreement.
"Contract" shall mean any agreement, contract, Lease, consensual
obligation, promise or undertaking (whether written or oral and
whether express or implied).
"Copyright" shall mean any registered and unregistered
copyrights in both published works and unpublished works.
"CTDEP" shall have the meaning set forth in Section 4.21(b)(i).
"Damages" shall have the meaning set forth in Section 12.2.
"Disclosure Schedule" shall mean the schedules delivered by
Seller to Buyer concurrently with the execution and delivery of
this Agreement and to which reference is made in this Agreement,
together with any supplements thereto provided as of the Closing
Date.
"Dollars" or "$" shall mean United States currency.
"Effective Time" shall have the meaning set forth in Section 3.3
"Employee Plans" shall have the meaning set forth in Section
4.15(a).
"Encumbrance" shall mean any charge, claim, community or other
marital property interest, lien, option, pledge, security
interest, mortgage, right of way, easement, encroachment,
servitude, right of first option, right of first refusal or
similar restriction.
"Environment" shall mean soil, land surface or subsurface
strata, surface waters (including navigable waters and ocean
waters), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life and
any other environmental medium or natural resource.
"Environmental Liabilities" shall mean any cost, damages,
expense, liability, obligation or other responsibility arising
from or under any Environmental Law, including, without
limitation, those consisting of or relating to:
(a) any other compliance, corrective or remedial measure
required under any Environmental Law (including on-site or off-
site contamination and regulation of any chemical substance or
product);
(b) any fine, penalty, judgment, award, settlement, legal
or administrative proceeding, damages, loss, claim, demand or
response, remedial or inspection cost or expense arising under
any Environmental Law; or
(c) financial responsibility under any Environmental Law
for cleanup costs or corrective action, including any cleanup,
removal, containment or other remediation or response actions
("Cleanup") required by any Environmental Law and for any
natural resource damages.
Notwithstanding anything in this Agreement to the contrary,
Environmental Liabilities shall not include any cost, damages,
expense, liability, obligation or other responsibility arising
from or related to Buyer's post-Closing operations to the extent
that they deviate from Seller's pre-Closing manufacturing
operation and procedures at the Facilities, as described more
particularly in Schedule 4.21(b) attached hereto, including
production levels, mixture of product grades, length of
production runs per product grade, and raw material constituents
per product grade.
The terms "removal," "remedial" and "response action" include
the types of activities covered by the United States
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (CERCLA), as amended.
Notwithstanding the foregoing, responsibility for any
Environmental Liabilities that are within the coverage of the
RSA shall be governed exclusively by the RSA and not by this
Agreement.
"Environmental Law" shall mean any Legal Requirement in effect
on or before the date hereof that is not an Occupational Safety
and Health Law that requires or relates to:
(a) advising appropriate authorities, employees or the
public of intended or actual Releases of pollutants or hazardous
substances or materials, violations of discharge limits or other
prohibitions and the commencement of activities, such as
resource extraction or construction, that could have a
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the
Release of pollutants or hazardous substances or materials into
the Environment;
(c) reducing the quantities, preventing the Release or
minimizing the hazardous characteristics of wastes that are
generated;
(d) assuring that products are 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
clean up or prevention; or
(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.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall have the meaning set forth in Section
4.15(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Excluded Assets" shall have the meaning set forth in Section
2.2.
"Existing Confidentiality Agreement" shall mean the
Confidentiality Agreement by and between Seller and Perstorp
Composites Holding AB dated as of February 26, 2002.
"Facilities" shall mean any real property, leasehold or other
interest in real property currently owned or operated by Seller
in connection with the Business. Notwithstanding the foregoing,
for purposes of the definitions of "Hazardous Activity" and
"Remedial Action" and Sections 4.21 and 12.3, "Facilities" shall
mean any real property, leasehold or other interest in real
property currently or formerly owned or operated by Seller in
connection with the Business.
"GAAP" shall mean generally accepted accounting principles for
financial reporting in the United States, applied on a
consistent basis.
"Governing Documents" shall mean with respect to any particular
entity, (a) any charter or similar document adopted or filed in
connection with the creation, formation or organization of the
Person; (b) all equityholders' agreements, voting agreements,
voting trust agreements, joint venture agreements, registration
rights agreements or other agreements or documents relating to
the organization, management or operation of any Person or
relating to the rights, duties and obligations of the
equityholders of any Person; and (c) any amendment or supplement
to any of the foregoing.
"Governmental Authorization" shall mean any Consent, license,
registration or permit issued, granted, given or otherwise made
available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" shall mean any: (a) nation, state, county,
city, town, borough, village, district or other jurisdiction;
(b) federal, state, local, municipal, foreign or other
government; (c) governmental or quasi-governmental authority of
any nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising
governmental or quasi-governmental powers); (d) multinational
organization or body; (e) body entitled to exercise, any
administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power; or (f) official of any
of the foregoing.
"Guarantee" shall have the meaning set forth in Section
3.4(c)(i).
"Hazardous Activity" shall mean the distribution, generation,
handling, importing, management, manufacturing, processing,
production, refinement, storage, transfer, transportation,
treatment or use (including any withdrawal or other use of
groundwater) of Hazardous Material in, on, under, about or from
any of the Facilities or any part thereof into the Environment.
"Hazardous Material" shall mean any substance, material or waste
which is regulated by any Governmental Body, including any
material, substance or waste which is defined as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "contaminant,"
"toxic waste" or "toxic substance" under any provision of
Environmental Law, and including petroleum, petroleum products,
asbestos, presumed asbestos-containing material or asbestos-
containing material, urea formaldehyde and polychlorinated
biphenyls.
"Hired Active Employees" shall have the meaning set forth in
Section 11.1(b)(iii).
"Improvements" shall have the meaning set forth in Section
2.1(a).
"Indemnified Person" shall have the meaning set forth in Section
12.8(a).
"Indemnifying Person" shall have the meaning set forth in
Section 12.8(a).
"Independent Accountants" shall have the meaning set forth in
Section 3.5(d).
"Intangible Property" shall have the meaning set forth in
Section 2.1(e).
"Intellectual Property" shall mean collectively, the Intangible
Property described in Section 2.1(e)(i), together with the
Licensed Intellectual Property and the Shared Know-How.
"Intellectual Property Agreement" shall have the meaning set
forth in Section 3.4(a)(iv).
"Inventories" shall mean all inventories of the Business,
wherever located, including all finished goods, work in process,
raw materials, spare parts and all other materials and supplies
to be used
or consumed by Seller in the production of finished
goods of the Business. For purposes of determining Net Asset
Value. Inventories will be valued at the lower of cost and fair
market value on a first-in, first-out basis in accordance with
the following obsolescence guidelines:
(i) in connection with raw materials, value will be
determined with respect to age as follows:
Less than 6 months usage 100%
More than 6 months usage(but less than
9 months anticipated usage) 75%
More than 9 months usage(but less than
12 months anticipated usage) 50%
More than 12 months usage 0%
To determine usage of various categories of raw
materials inventories for purposes of the foregoing table,
the Parties will calculate the actual usage (or its
equivalent) of the raw materials in question over the six
months immediately preceding the Effective Time and divide
that amount by six to determine the average monthly usage
of such inventory. The total dollar amount of raw material
inventory in question will then be divided by the average
monthly usage to determine the usage of the raw material
inventory in question for purposes of the foregoing table.
Furthermore, raw material inventory for which there is no
current formulation will be deemed to have a usage of more
than twelve months for purposes of the foregoing table,
regardless of the average monthly usage of such inventory,
exclusive of materials used for experimental purposes
(which materials will be deemed to have a usage of less
than 6 months for purposes of the foregoing table).
(ii) in connection with work-in-process and
finished goods, value will be determined with respect to
age as follows:
Manufactured within previous 9 months 100%
Manufactured more than 9 months ago 0%
"IRS" shall mean the United States Internal Revenue Service and,
to the extent relevant, the United States Department of the
Treasury.
"Knowledge" with respect to a Party shall mean the actual
knowledge of its senior officers and employees who report
directly to a senior officer and have responsibility for the
relevant matter, without any express or implied obligation of
due inquiry.
"Lease" shall mean any lease or rental agreement, license, right
to use or installment and conditional sale agreement to which
Seller is a party and any other Business Contract pertaining to
the leasing or use of any Tangible Personal Property.
"Legal Requirement" shall mean any federal, state, local,
municipal, foreign, international, multinational or other
constitution, law, ordinance, principle of common law, code,
regulation, statute or treaty.
"Liability" shall mean with respect to any Person, any liability
or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to
become due, vested or unvested, executory, determined,
determinable or otherwise, and whether or not the same is
required to be accrued on the financial statements of such
Person.
"Licensed Intellectual Property" shall have the meaning set
forth in Section 3.4(a)(iv).
"Manchester Facility" shall have the meaning set forth in
Section 8.10(a).
"Marks" shall mean all trademarks, service marks, trade dress,
logos, slogans, trade names, corporate names, Internet domain
names, and rights in telephone numbers, together with all
translations, adaptations, derivations, and combinations thereof
and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection
therewith
"Material Consents" shall have the meaning set forth in Section
8.3.
"Material Remediation Event" shall have the meaning set forth in
Section 8.10(b).
"Mortgage" shall have the meaning set forth in Section
3.4(b)(vii).
"Net Asset Value" shall have the meaning set forth in Section
3.5(a).
"Note" shall have the meaning set forth in Section 3.1(b)(ii).
"Occupational Safety and Health Law" shall mean any Legal
Requirement designed to provide safe and healthful working
conditions and to reduce occupational safety and health hazards,
including the Occupational Safety and Health Act, and any
program, whether governmental or private (such as those
promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working
conditions.
"Order" shall mean any order, injunction, judgment, decree,
ruling or arbitration award of any Governmental Body or
arbitrator.
"Ordinary Course of Business" shall mean an action taken by a
Person will be deemed to have been taken in the Ordinary Course
of Business only if that action is consistent in nature, scope
and magnitude with the past practices of such Person and is
taken in the ordinary course of the normal, day-to-day
operations of such Person.
"Other Accruals" shall have the meaning set forth in Section
2.3(d).
"Parent" shall have the meaning set forth in the first paragraph
of this Agreement.
"Party" or "Parties" shall have the meaning set forth in the
first paragraph of this Agreement.
"Patents" shall mean all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations in part revision, extensions, and reexamination.
"Payables" shall have the meaning set forth in Section 2.3(a).
"PBGC" shall have the meaning set forth in Section 4.15(d).
"Permitted Encumbrances" shall have the meaning set forth in
Section 4.6(a).
"Person" shall mean an individual, partnership, corporation,
business trust, limited liability company, limited liability
partnership, joint stock company, trust, unincorporated
association, joint venture or other entity or a Governmental
Body.
"Phase II Report" shall have the meaning set forth in Section
8.10(a).
"Phase II Arbitrator" shall have the meaning set forth in
Section 8.10(d).
"Proceeding" shall mean any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether formal or
informal, whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any
Governmental Body or arbitrator, or a demand or claim for any of
the foregoing.
"Purchase Price" shall have the meaning set forth in Section
3.1(a).
"Real Estate" shall have the meaning set forth in Section
2.1(a).
"Real Estate Lease" shall mean any lease in respect of any
Facility used in the conduct of the Business.
"Realty Use Rights" shall have the meaning set forth in Section
4.6(d).
"Record" shall mean information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
"Release" shall mean any release, spill, emission, leaking,
pumping, pouring, dumping, emptying, injection, deposit,
disposal, discharge, dispersal, leaching or migration on or into
the Environment or into or out of any property.
"Remedial Action" shall mean all actions, including any capital
expenditures, required or voluntarily undertaken (a) to clean
up, remove, treat or in any other way address any Hazardous
Material or other substance; (b) to prevent the Release or
Threat of Release or to minimize the further Release of any
Hazardous Material or other substance so it does not migrate or
endanger
or threaten to endanger public health or welfare or the
Environment; (c) to perform pre-remedial studies and
investigations or post-remedial monitoring and care; or (d) to
bring all Facilities and the operations conducted thereon into
compliance with Environmental Laws and environmental
Governmental Authorizations.
"Representative" shall mean with respect to a particular Person,
any director, officer, manager, employee, agent, consultant,
advisor, accountant, financial advisor, legal counsel or other
representative of that Person.
"Required Remediation" shall have the meaning set forth in
Section 8.10(a).
"Retained Liabilities" shall have the meaning set forth in
Section 2.4.
"Xxxxxx N.V." shall mean Xxxxxx N.V., a corporation organized
under the laws of Belgium.
"Xxxxxx Singapore" shall mean Xxxxxx Technologies Singapore,
Inc., a corporation organized under the laws of Delaware.
"Royalty Payments" shall have the meaning set forth in Section
3.2.
"RPS" shall have the meaning set forth in Section 11.1(e)(ii).
"RSA" shall have the meaning set forth in Section 3.4(a)(vii).
"Schedule" shall mean a part or section of the Disclosure
Schedule.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities and Exchange Act of
1933, as amended.
"Security Agreement" shall have the meaning set forth in Section
3.4(a)(vi).
"Seller" shall have the meaning set forth in the first paragraph
of this Agreement.
"Seller's Closing Documents" shall have the meaning set forth in
Section 4.2(a).
"Seller's Consultant" shall have the meaning set forth in
Section 8.10(a).
"Seller Indemnified Persons" shall have the meaning set forth in
Section 12.4(a).
"Seller's Nonunion Pension Plan" shall have the meaning set
forth in Section 11.1(d)(i).
"Seller's Savings Plan" shall have the meaning set forth in
Section 11.1(e)(i).
"Sellers Pension Plans" shall have the meaning set forth in
Section 11.1(d)(i).
"Sellers Union Pension Plan" shall have the meaning set forth in
Section 11.1(d)(i).
"Shared Know-How" shall have the meaning set forth in the
Intellectual Property Agreement.
"Shared Know-How Agreement" shall have the meaning set forth in
Section 3.4(a)(v).
"Side Agreement" shall have the meaning set forth in Section
3.4(a)(vii).
"Survey" shall have the meaning set forth in Section 8.9(b).
"Systems" shall have the meaning set forth in Section 6.8.
"Tangible Personal Property" shall mean all machinery,
equipment, tools, furniture, office equipment, computer
hardware, supplies, materials, vehicles and other items of
tangible personal property (other than Inventories) of every
kind owned by Seller (wherever located and whether or not
carried on Seller's books), together with any express or implied
warranty by the manufacturers or sellers or lessors of any item
or component part thereof and all maintenance records and other
documents relating thereto.
"Tax" shall mean any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium,
property, environmental, windfall profit, customs, vehicle,
airplane, boat, vessel or other title or registration, capital
stock, franchise, employees' income withholding, foreign or
domestic withholding, social security, unemployment, disability,
real property, personal property, sales, use, transfer, value
added, alternative, add-on minimum and other tax, fee,
assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon
imposed, assessed or collected by or under the authority of any
Governmental Body or payable under any tax-sharing agreement or
any other Contract.
"Tax Return" shall mean any return (including any information
return), report, statement, schedule, notice, form, declaration,
claim for refund 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.
"Third Party" shall mean a Person that is not a party to this
Agreement.
"Third-Party Claim" shall mean any claim against any Indemnified
Person by a Third Party, whether or not involving a Proceeding.
"Threat of Release" shall mean a reasonable likelihood of a
Release that may require action in order to prevent or mitigate
damage to the Environment that may result from such Release.
"Uncollected Accounts Receivable" shall have the meaning set
forth in Section 3.7.
"Union" shall mean Paper Allied-Industrial, Chemical and Energy
Workers International Union AFL-CIO, CLC, PACE, Local 1-1554 of
Manchester.
"VOC RACT" shall have the meaning set forth in Section 4.21(b).
"VOC Report" shall have the meaning set forth in Section
4.21(b).
"WARN Act" shall have the meaning set forth in Section 4.22(b).
"WPI" shall mean World Properties, Inc., an Illinois
corporation.