EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") made as of the 28th day
of September, 1995, by and among Arcar Graphics, Inc., an Illinois corporation
("Arcar" or "Seller"), BCA Holdings, Inc., a Delaware corporation ("BCAH"),
Bagcraft Corporation of America, a Delaware corporation ("BCA" and, collectively
with BCAH, "Bagcraft"), ARTRA GROUP Incorporated, a Pennsylvania corporation
("ARTRA"), and Arcar Acquisition Corp., a Delaware corporation ("Buyer").
WHEREAS, Arcar wishes to sell, and Buyer wishes to purchase, the
Purchased Assets (as hereinafter defined), subject to the assumption by Buyer of
certain liabilities of Arcar comprising the Assumed Liabilities (as hereinafter
defined) upon the terms and conditions hereinafter set forth;
WHEREAS, capitalized terms used herein which are otherwise not defined
shall have the meaning set forth in Section 10.7 hereof;
In consideration of the mutual promises and covenants herein contained,
the parties hereto, intending to be legally bound, agree as follows:
1. Purchase and Sale of Assets.
1.1 Sale of Assets to Buyer. On the terms and subject to the
conditions set forth in this Agreement, at the closing referred to in Section
3.1, Arcar shall sell, transfer, convey, assign and deliver to Buyer, and Buyer
shall purchase and acquire from Arcar, all of Arcar's right, title and interest
in and to all of the Purchased Assets (as defined below) and the business of
Arcar, free and clear of all Liens, as such Purchased Assets exist on the
Closing Date (as defined hereinafter). As used herein, the term "Purchased
Assets" means all of the assets, properties and rights owned by Arcar, or used
or usable by Arcar, of every type and description, real, personal and mixed,
tangible and intangible, wherever located and whether or not reflected on the
Books and Records of Arcar, other than those assets, properties and rights which
are specifically excluded pursuant to Section 1.2. Except as specifically
excluded pursuant to Section 1.2, the Purchased Assets include, without
limitation, all of the right, title and interest of Arcar in or to the
following:
(a) Real Property Leases. (i) The leases and subleases of real
property set forth on Schedule 4.12 hereto as to which Arcar is the lessor or
sublessor and (ii) all leases and subleases of real property set forth on
Schedule 4.12 hereto as to which Arcar is the lessee or sublessee, together with
any options to purchase the underlying property and leasehold improvements
thereon set forth on Schedule 4.12 hereto, and in each case all other rights,
subleases, licenses, permits, deposits and profits appurtenant to or related to
such leases and subleases (the leases and subleases described in subclauses (i)
and (ii), the "Real Property Leases");
(b) Inventory. All inventories or raw materials,
work-in-process, finished goods, merchandise, products under research and
development, demonstration equipment, office and other supplies, parts,
packaging materials and other accessories related thereto which are held at, or
are in transit from or to, the locations at which the Arcar Business is
conducted, or located at suppliers' premises or customers' premises on
consignment, including any of the foregoing purchased subject to any conditional
sales or title retention agreement in favor of any other Person, together with
all rights of Arcar against suppliers of such inventories (the "Inventory");
(c) Accounts Receivable. All trade accounts receivable and all
notes, bonds and other evidences of indebtedness of and rights to receive
payments arising out of sales occurring in the conduct of the Arcar Business and
the security agreements related thereto, including any rights of Arcar with
respect to any third party collection proceedings or any other Actions or
Proceedings which have been commenced in connection therewith (the "Accounts
Receivable");
(d) Tangible Personal Property. In addition to the Inventory
separately described above, all furniture, fixtures, equipment, machinery and
other tangible personal property at the locations at which the Arcar Business is
conducted or at suppliers' premises or customers' premises on consignment, or
otherwise used or held for use by Arcar in the conduct of the Arcar Business,
including any of the foregoing purchased subject to any conditional sales or
title retention agreement in favor of any other Person;
(e) Personal Property Leases. (i) The leases or subleases of
tangible personal property set forth on Schedule 4.24 hereto as to which Arcar
is the lessor or sublessor and (ii) all leases of tangible personal property set
forth on Schedule 4.24 hereto as to which Arcar is the lessee or sublessee,
together with any options to purchase or sell the underlying property set forth
on Schedule 4.24 hereto (the leases and subleases described in subclauses (i)
and (ii), the "Personal Property Leases");
(f) Business Contracts. In addition to the Real Property
Leases, the Personal Property Leases and the Accounts Receivable separately
described above, all Material Agreements (as such term is defined in Section
4.8) set forth on Schedule 1.1(f), all purchase orders from customers of Arcar
which Arcar has accepted in the ordinary course of business, that certain $3
million life insurance policy issued by Prudential Insurance Company on the life
of Xxxxx Xxxxxxxx (the "Xxxxxxxx Insurance Policy"), the medical insurance
policies set forth on Schedule 1.1(f) (the "Medical Insurance Policies") and the
automobile insurance policies set forth on Schedule 1.1(f) (the "Automobile
Insurance Policies") (the "Business Contracts");
(g) Prepaid Expenses. All prepaid expenses;
(h) Intangible Property. All intellectual property rights
(including Arcar's goodwill therein) and all rights, privileges, claims, causes
of action and options relating or pertaining to its Business or its assets or
properties, including but not limited to patents and applications therefor,
knowhow, trade secrets, secret formulas, business and marketing plans, computer
software (including source codes) and related documentation, copyrights and
applications therefor, trademarks and applications therefor, trade names,
service marks and all names and slogans used by Arcar, including the name "Arcar
Graphics, Inc." (the "Intangible Property");
(i) Licenses. All transferable licenses, permits, franchises,
approvals and authorizations (including applications therefor) (the "Business
Licenses");
(j) Vehicles. All motor vehicles owned or leased by Arcar;
(k) Security Deposits. All security deposits deposited by or
on behalf of Arcar as lessee or sublessee under the Real Property Leases or the
Personal Property Leases;
(l) Balance Sheet Assets. Those assets, properties and rights
of Arcar reflected on the unaudited June 30, 1995 balance sheet of Arcar
included in the Financial Statements (as hereinafter defined) or otherwise
referred to in this Agreement or any Schedule hereto, subject to changes in the
ordinary course of business through the Closing Date;
(m) Books and Records. All Books and Records used or held for
use in the conduct of the Arcar Business or otherwise relating to Arcar or its
assets or properties;
(n) Property Plans. All site plans, surveys, soil and
substratus studies, architectural drawings, plans and specifications,
engineering, electrical and mechanical plans and studies, floor plans, landscape
plans, appraisals, feasibility studies, environmental studies and other plans
and studies of any kind if existing and in the possession or subject to the
control of Arcar relating to any property leased or subleased by Arcar pursuant
to the Real Property Leases;
(o) Warranties. All rights of Arcar under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers and
contractors in connection with products sold to or services provided to Arcar or
affecting the property, machinery or equipment owned or used by Arcar or
relating to any property leased pursuant to the Real Property Leases or the
Personal Property Leases; and (p) Telephone Numbers. All transferable telephone
exchange numbers.
(q) Lockbox Number. Arcar's lockbox number at American
National Bank & Trust Company of Chicago set forth on Schedule 1.1(q).
1.2 Excluded Assets. Any provision of this Agreement to the
contrary notwithstanding, Buyer shall not acquire and there shall be excluded
from the Purchased Assets the following (the "Excluded Assets"):
(a) Cash. All cash and cash equivalents held by Arcar;
(b) Bank Accounts. Any rights of Arcar with respect to bank
accounts of Arcar, except as set forth in Section 1.1(q);
(c) Marketable Securities. All marketable securities owned by
Arcar.
(d) Intercompany Accounts. Any rights of Arcar with respect to
any obligations or liabilities of Bagcraft or ARTRA, any Affiliate of Bagcraft
or ARTRA, or any director or officer of any of the foregoing or of Arcar, except
for any rights of Arcar with respect to those Business Contracts and Accounts
Receivable listed on Schedule 1.2(d) hereto;
(e) Insurance Policies. Any rights of Arcar with respect to
insurance policies owned by Arcar or for which Arcar is the named insured, other
than the Automobile Insurance Policies, Xxxxxxxx Insurance Policy, and the
Medical Insurance Policies;
(f) Minute Books. The minute books, stock transfer books and
corporate seal of Arcar;
(g) Other Matters. All rights of Arcar under this Agreement
and the documents and other papers delivered to Buyer by Arcar pursuant to this
Agreement.
2. Purchase Price.
2.1 Amount of Consideration. Subject to adjustment as provided
in Section 2.2, the purchase price (the "Purchase Price") for the Purchased
Assets to be purchased by Buyer, shall be:
a) a payment of $21,000,000, all of which shall be paid to
Arcar by Buyer by wire transfer of immediately available funds to Arcar's
account at American National Bank (the "Cash Payment") at the Closing, except
for that portion which the parties agree pursuant to Section 7.1(xv) shall be
reduced from the Cash Payment and deferred and paid in accordance with Section
7.1(xv); and
b) the assumption by Buyer of the Assumed Liabilities (as
defined hereinafter) at the Closing.
2.2 Adjustment to Purchase Price.
(a) Not later than three (3) Business Days before the Closing
Date, Arcar shall prepare and deliver to Buyer an estimated calculation and
statement of the Net Assets (the "Estimated Statement") based upon the Books and
Records of Arcar as of the time such Books and Records are closed on the day
preceding the day of delivery of the Estimated Statement, assuming the
satisfaction of Section 6.1(ii)(f) hereof. The Estimated Statement shall be
prepared in good faith and shall be subject to the review and written approval
of Buyer and be in the form of the pro forma Statement of Net Assets attached
hereto as Exhibit A. In the event that the amount of the estimated Net Assets
set forth on the Estimated Statement (the "Estimated Net Assets") exceeds
$1,998,876, being the Net Assets on June 30, 1995 and as detailed on the pro
forma Statement of Net Assets attached hereto as Exhibit A, then the Purchase
Price and the Cash Payment shall be increased by the amount of such excess. In
the event that the amount of the Estimated Net Assets is less than $1,998,876,
then the Purchase Price and the Cash Payment shall be reduced by the amount of
such deficiency.
(b) As promptly as practicable, but in any event not later
than forty-five (45) days after the Closing Date, Arcar shall cause to be
prepared and delivered to Buyer a balance sheet for Arcar as of the Closing Date
(the "Balance Sheet"), which shall be audited by Coopers & Xxxxxxx ("C&L"),
certified public accountants, and certified by such firm to have been prepared
in accordance with GAAP consistently applied and in substantially the manner
used to prepare the Audited Financial Statements. The Balance Sheet shall be
accompanied by a statement (the "Statement of Net Assets") prepared by such
accountants and setting forth the Net Assets, which shall be calculated by
reference to the Balance Sheet and be in the form of the pro forma Statement of
Net Assets attached hereto as Exhibit A.
(c) Subject to subsection (d) below, within thirty (30) days
after delivery of the Balance Sheet and the Statement of Net Assets pursuant to
subsection (b) above, (i) Arcar shall pay to Buyer the amount, if any, by which
the amount of the Estimated Net Assets exceeds the Net Assets, or (ii) Buyer
shall pay to Arcar the amount, if any, by which the amount of the Net Assets
exceeds the Estimated Net Assets. Payments, if any, by Arcar or Buyer pursuant
to this subsection (c) shall be made by wire transfer of immediately available
funds. The parties shall treat any payment made pursuant to this Section 2.2(c)
as an adjustment to the Purchase Price for the Purchased Assets for all
purposes.
(d) Dispute Resolution. Buyer's certified public accountant,
Deloitte & Touche, LLP ("D&T") shall be permitted to review the Balance Sheet
and Statement of Net Assets and C&L's workpapers thereto during the thirty (30)
day period following the delivery of the Balance Sheet and Statement of Net
Assets to Buyer. If Buyer in good faith disagrees with the Balance Sheet or the
Statement of Net Assets, then Buyer shall notify Arcar in writing (the "Notice
of Disagreement") of such disagreement within thirty (30) days after delivery of
the Balance Sheet and the Statement of Net Assets. The Notice of Disagreement
shall set forth in reasonable detail the basis for the disagreement. Thereafter,
Arcar and Buyer shall attempt in good faith to resolve and finally determine the
Balance Sheet and the Statement of Net Assets. If Arcar and Buyer are unable to
resolve the disagreement within thirty (30) days after delivery of the Notice of
Disagreement, then Arcar and Buyer shall select a mutually acceptable,
nationally recognized independent accounting firm which does not then have a
relationship with any of the parties hereto or any of their affiliates (such
accounting firm being hereinafter referred to as the "Independent Accountant")
to resolve the disputed items and make a determination with respect thereto.
Such determination will be made, and written notice thereof given to Arcar and
Buyer within thirty (30) days after such selection. The determination by the
Independent Accountant shall be final, binding and conclusive upon the parties
hereto. The scope of such firm's engagement (which shall not be an audit) shall
be limited to the resolution of the items contained in the Notice of
Disagreement, and the recalculation, if any, of the Balance Sheet and the
Statement of Net Assets in light of such resolution. The fees, costs and
expenses of C&L in connection with the preparation of the Balance Sheet and the
Statement of Net Assets, and the fees, costs and expenses of D&T in connection
with the review thereof, shall be borne by Arcar but, in the case of the
fees, costs and expenses of D&T, they shall not exceed $10,000 pursuant to the
engagement letter from D&T attached hereto as Exhibit B. The fees, costs and
expenses of the Independent Accountant, if any, selected in accordance with this
Section 2.2(d) will be borne equally by both parties. Within ten (10) days of
delivery of a notice of determination by the Independent Accountants as
described above, any adjustment shall be paid as provided in Section 2.2(c). Any
portion of the Purchase Price adjustment not in dispute shall be paid when due.
2.3 Xxxxxx Agreement. Notwithstanding any agreements or
arrangements Bagcraft or any of its Affiliates may have with respect to Xxxxx
Xxxxxx ("Xxxxxx") to the contrary, at any time prior to and for a period of 90
days following the Closing (the "Xxxxxx Negotiating Period"), Buyer shall be
permitted to negotiate with and to enter into an agreement with Xxxxxx relating
to the establishment of the Dispersions Business. If Buyer enters into an
agreement with Xxxxxx relating to the establishment of the Dispersions Business
during the Xxxxxx Negotiating Period, then simultaneously (i) Bagcraft and
Xxxxxx shall terminate that certain Consulting Agreement dated June 1, 1995 by
and between Bagcraft and Xxxxxx (the "Consulting Agreement"), and (ii) Buyer
shall reimburse Bagcraft for its reasonable and ordinary out-of-pocket expenses
relating to the Consulting Agreement, including any and all amounts paid in
connection therewith to Xxxxxxxx Xxxxxx since July 1, 1995, provided, however,
that the amount of such reimbursement shall not in the aggregate exceed the sum
of (i) $100,000, plus (ii) if Buyer enters into such agreement with Xxxxxx after
the Closing, Bagcraft's post Closing expenses incurred during the post-Closing
period (such amount not to exceed $20,000 per month).
2.4 Assumption of Liabilities. Except as may be specifically excluded
pursuant to the provisions of Section 2.5, subject to the terms and conditions
set forth herein, Buyer agrees that, on the Closing Date, Buyer shall assume and
thereafter pay, perform or discharge when due or required to be performed, as
the case may be, the following obligations and liabilities of Arcar to the
extent existing on the Closing Date (the "Assumed Liabilities"):
(a) Balance Sheet Liabilities. All undischarged liabilities
and obligations of Arcar which relate to conduct of the Arcar Business prior to
the Closing Date and are reflected on the Balance Sheet and the Statement of Net
Assets to the extent such liabilities (i) are properly recorded thereon, and
(ii) have been incurred in the ordinary course of business consistent with past
practice without violation of this Agreement and (iii) are of the same type and
nature as those liability line items for Arcar set forth on the pro forma
Statement of Net Assets attached hereto as Exhibit A (but expressly excluding
those items which are to be adjusted in calculating Net Assets and excluded from
the Assumed Liabilities pursuant to the proviso set forth in the definition of
Net Assets (the "Earnout Amounts").
(b) Real Property Lease Obligations. All obligations of Arcar
under the Real Property Leases arising and to be performed on or after the
Closing Date;
(c) Personal Property Lease Obligations. All obligations of
Arcar under the Personal Property Leases arising and to be performed on or after
the Closing Date; and
(d) Obligations Under Contracts and Licenses. All obligations
of Arcar under the Business Contracts and Business Licenses arising and to be
performed on or after the Closing Date.
(e) Health Plans. To the extent expressly provided in Section
6.16 hereof, all obligations of Arcar under the Arcar Graphics, Inc. Employee
Benefits Plan to the extent and only to the extent that such plan is a group
health plan that provides medical benefits (the "Medical Plan"), incurred on or
after the Closing Date.
In the event of any claim against Buyer with respect to any of the Assumed
Liabilities hereunder, Buyer shall have, and Arcar hereby assigns to Buyer, any
defense, counterclaim, or right of setoff which would have been available to
Arcar if such claim had been asserted against Arcar.
2.5 Excluded Liabilities Not Assumed. Any provision of this
Agreement to the contrary notwithstanding, Buyer shall not assume, or in any way
become liable for, any of the following liabilities or obligations of Arcar of
any kind or nature, whether accrued, absolute, contingent or otherwise, or
whether due or to become due, or otherwise on the Closing Date (the "Excluded
Liabilities") unless such liabilities are accrued as liabilities in the
calculation of Net Assets (excluding the Earnout Amounts) and therefore assumed
by Buyer pursuant to Section 2.4(a):
a) Undisclosed Liabilities. Debts, obligations or liabilities
of any kind or nature, whether absolute, accrued, contingent or otherwise,
required by this Agreement to be disclosed to Buyer and not so disclosed in
writing in a Schedule hereto or contained in the Financial Statements (as
hereinafter defined).
b) Violation of Representations, etc. Debts, obligations or
liabilities which arise or exist in violation of any of the representations,
warranties, covenants or agreements of Seller, Artra or Bagcraft contained in
this Agreement, or in any documents or other papers delivered to Buyer by or on
behalf of Seller, Artra or Bagcraft on or before the Closing Date pursuant to
this Agreement or in connection with the transactions contemplated hereby.
c) Taxes. Debts, obligations or liabilities for Taxes of any
kind whatsoever for periods through and including the Closing Date, including,
without limitation, Taxes which are (i) due and payable as of the Closing Date,
(ii) all income taxes arising from the operations of Arcar, the liquidation of
Arcar or the transactions contemplated by this Agreement, and (iii) all real
estate taxes or personal use taxes with respect to the Leased Property (as
hereinafter defined) or the Purchased Assets accrued through the Closing Date
(whether or not then due and payable).
d) Taxes Due on Sale. Debts, obligations or liabilities for
Taxes of any kind whatsoever arising from, based upon, or related to, the sale,
transfer or delivery of the Purchased Assets or assignment and assumption of the
Assumed Liabilities pursuant to this Agreement.
e) Infringements. Any liability or obligation arising out of
any infringement or misappropriation by or conflict with, any proprietary rights
of any Person.
f) Indebtedness for Borrowed Money. Debts, liabilities or
obligations of any kind or nature representing indebtedness for borrowed money
(whether short-term or long-term), including accrued interest and/or from
penalties owing thereon.
g) Environmental Liabilities. Any liability or obligation (a)
relating to or arising out of any Environmental Claim, (b) relating to or
arising out of the presence, Release, emission, use, generation, discharge,
treatment, storage, or disposal of any Hazardous Substances on, under, in, from
or about, or any transportation of any such Hazardous Substances to or from, any
premises or waste treatment or disposal facilities owned, leased or used by
Arcar on or prior to the Closing Date, (c) relating to or arising out of the
violation or alleged violation of, or imposed by, any Environmental Laws or
Release, transportation, treatment, storage or disposal of Hazardous Substances
on or prior to the Closing Date, including without limitation the discharge or
Release disclosed in Schedule 4.15 hereto or (d) relating to or arising out of
any violation or alleged violation of any other Law or Order.
h) Litigation. Any liability or obligation relating to Actions
or Proceedings involving Arcar as a defendant (including a defendant in any
cross-claim or counterclaim) or a respondent (other than as a respondent in an
appeal in an Action or a Proceeding in which Arcar initially was a plaintiff)
which is pending on or threatened on or prior to, the Closing Date or is
initiated after the Closing Date and relates to any occurrences or circumstances
existing prior to the Closing Date.
(i) Affiliates. Any liabilities of Arcar to Bagcraft, ARTRA,
any Affiliate of Bagcraft, ARTRA or Arcar or any director of officer of any of
the foregoing or of Arcar;
(j) Employee Plans. Except for the Medical Insurance Policies
and the Medical Plan (to the extent set forth in Section 6.16), any liabilities
arising out of or in connection with any Employee Plan;
(k) Breach. Any liabilities (whether asserted before or after
Closing Date) for any breach of a representation, warranty, or covenant, or for
any claim for indemnification, contained in any Real Property Lease, Personal
Property Lease, Business Contract or Business License agreed to be performed
pursuant hereto by Buyer, to the extent that such breach or claim arises out of
or by virtue of Arcar's performance or non-performance thereunder prior to the
Closing Date, it being understood that, as between the parties hereto, this
subsection shall not apply if any provision which may be contained in any form
of consent to the assignment of any such Real Property Lease, Personal Property
Lease, Business Contract or Business License which by its terms, imposes such
liabilities upon Buyer and which assignment is accepted by Buyer notwithstanding
the presence of such a provision, and that Arcar's failure to discharge any such
liability shall entitle Buyer to indemnification in accordance with the
provisions of Section 9;
(l) Product Warranty. Any product warranty liabilities of
Arcar with respect to any products or merchandise sold by it on or prior to the
Closing Date; it being understood and agreed that any such claim or liability
asserted after the Closing Date arising out of the sale of any product sold by
Arcar on or prior to the Closing Date shall be considered to be a claim against
or a liability of Arcar and therefore not assumed hereunder by Buyer;
(m) Worker's Compensation. Any liabilities of Arcar for injury
to or death of persons or damage to or destruction of property (including,
without limitation, any worker's compensation claim) occurring prior to the
Closing Date regardless of when said claim or liability is asserted, including,
without limitation, any claim for consequential damages in connection with the
foregoing; it being understood and agreed that any such claim or liability
asserted after the Closing Date, but arising from acts or omissions by Arcar
which occur before the Closing Date shall be considered to be a claim against or
a liability of Arcar for injury to or death of persons or damages to or
destruction of property and therefore not assumed hereunder by Buyer;
(n) Benefits. Except for the Medical Insurance Policies and
the Medical Plan (to the extent set forth in Section 6.16), any liabilities to,
for or in connection with any present or former employee of Seller or any of its
Affiliates, including without limitation, for (i) medical, dental, disability
income, life insurance or accidental death benefits, whether insured or self
insured, for claims incurred or for disabilities commencing prior to the Closing
Date, (ii) workers' compensation (both long term and short term) benefits,
whether insured or self-insured, to the extent accruing or based upon exposure
to conditions prior to the Closing Date or for claims incurred or for
disabilities commencing prior to the Closing Date, or (iii) severance benefits
for employees of Arcar whose employment is terminated on or prior to the Closing
Date, or (iv) accrued vacation or other benefits;
(o) Excluded Assets. Any liabilities relating to the Excluded
Assets;
(p) Stockholders. Any liabilities relating to the capital
stock of Arcar or any shareholders' agreements to which Arcar is party
(including but not limited to the agreements set forth on Schedule 2.5(p)) or
under any other agreement set forth on Schedule 2.5(p);
(q) Agreements. Any Liabilities of Arcar under this Agreement
and any document or other papers delivered to Buyer by Arcar pursuant to this
Agreement;
(r) Xxxxxx. Any liabilities of Arcar relating to Arcar's or
any of its Affiliates business relationships with Xxxxxx or Xxxxxxxxxxx
XxXxxxxx, including but not limited to the Consulting Agreement;
(s) Material Agreements. Any liabilities under any contract,
agreement, lease, commitment, instrument, permit or license which is not a Real
Property Lease, Personal Property Lease, Business Contract or Business License;
and
(t) Other Matters. Without limitation by the specific
enumeration of the foregoing, any liabilities not expressly assumed by Buyer
pursuant to the provisions of Section 2.4.
The assumption by Buyer of the Assumed Liabilities, and the transfer thereof by
Arcar shall in no way expand the rights or remedies of any third party against
Buyer or Arcar or their respective officers, directors, employees, shareholders
and advisors as compared to the rights and remedies which such third party would
have had against such parties had Buyer not assumed such liabilities. Without
limiting the generality of the preceding sentence, the assumption by Buyer of
said liabilities shall not create any third party beneficiary rights. Arcar
shall pay and discharge when due, or contest in good faith, all of those
liabilities of Arcar which Buyer has not specifically agreed to assume pursuant
to the provisions of Section 2.4.
2.6 Allocation of Purchase Price. After the Closing, Buyer
shall allocate the purchase price among the various Purchased Assets (including
the covenant not-to-compete contained in Section 6.14 hereof made by Seller,
Bagcraft and ARTRA in favor of Buyer), which allocation shall be reasonably
acceptable to Seller. The parties further agree to file any reports required
(including, without limitation, Form 8594) under Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations thereunder,
consistent with such allocation.
2.7. Proration of Lease Payments, Utility Charges and Other
Payments. If the Closing Date shall fall on a date other than the date on which
payments are due with respect to (i) any Real Property Lease or Personal
Property Lease, (ii) insurance or (iii) utility or similar regular periodic
charges with respect to the Purchased Assets for which a final billing has not
been received by Arcar, any installment of rental payments, insurance premiums
and any such utility or similar charge payable with respect to the current
period in which the Closing Date occurs which is not included as a liability in
the calculation of Net Assets shall be paid by Arcar on the basis of the actual
number of days elapsed from the first day of such period to the Closing Date and
the balance shall be paid by Buyer.
2.8. Proration of Taxes. All property taxes, ad valorem taxes
and special assessments payable with respect to a taxable period beginning and
ending before the Closing Date, but not yet due as of the Closing Date which is
not included as a liability in the calculation of Net Assets, with respect to
any Purchased Assets shall be paid by Arcar. In the case of any such taxes or
assessments payable with respect to a taxable period beginning before the
Closing Date and ending after the Closing Date, but not yet due as of the
Closing Date, Arcar shall pay that portion of such taxes times a fraction, the
numerator of which is the number of days from the beginning of such taxable
period through and including the Closing Date, and the denominator of which is
365, and the balance shall be paid by Buyer.
3. Closing and Due Diligence.
3.1 Time and Place. The closing of the purchase and sale of
the Purchased Assets (the "Closing") shall take place at 10:00 a.m. on October
12, 1995, at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such
other place or time as the parties may agree upon in writing. The date on which
the Closing is held is referred to as the "Closing Date".
3.2 Conveyance. On the Closing Date, subject to the terms and
conditions set forth in this Agreement, Arcar shall sell, assign and deliver (or
cause the sale, assignment and delivery of) the Purchased Assets to Buyer, and
Buyer shall purchase and take delivery of the Purchased Assets. Arcar shall
execute and deliver (or cause to be executed and delivered) such documents of
conveyance and take such other action as may be necessary or reasonably
desirable to transfer all interests therein to Buyer and put Buyer in actual
possession and operating control of the Purchased Assets. Seller agrees that
such sale, assignment and delivery shall be effected by such warranty deeds,
bills of sale, endorsements, assignments and such other instruments of transfer
and conveyance as Buyer shall reasonably request and as shall be sufficient to
convey all the right, title and interest of Arcar in and to the Purchased Assets
free and clear of all Liens.
4. Representations and Warranties of Seller, Bagcraft and ARTRA.
Seller, Bagcraft and ARTRA, jointly and severally, represent and warrant to
Buyer as follows:
4.1 Organization. Each of Bagcraft, ARTRA and Arcar is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and has all requisite corporate power and
authority to own, lease and operate the properties and assets utilized in, and
to carry on its business as it is presently being conducted. Arcar is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the nature of the Arcar Business or the property owned, leased or
operated in the Arcar Business makes such qualification necessary and where a
failure to be so qualified or licensed might have a Material Adverse Effect and
each such jurisdiction is listed on Schedule 4.1.
4.2 Power and Authority. Each of Bagcraft, ARTRA and Arcar has
full corporate power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it pursuant
hereto and to consummate the transactions contemplated hereunder, and the
execution, delivery and performance of this Agreement by each of Bagcraft, ARTRA
and Arcar and all other documents and instruments to be executed, delivered or
performed by it pursuant hereto, have been duly and validly authorized by all
necessary corporate action of it.
4.3 Legality and Validity. Assuming due authorization,
execution and delivery by Buyer, this Agreement and all other documents and
instruments to be executed and delivered by each of Bagcraft, ARTRA and Arcar
pursuant hereto, constitute the legal, valid and binding obligations of it,
enforceable against it, in accordance with their respective terms.
4.4 No Conflicts, Consents. The execution, delivery and
performance of this Agreement by each of Bagcraft, ARTRA and Arcar will not (a)
conflict with its certificate of incorporation or by-laws and will not conflict
with or result in the breach or termination of or constitute a default under any
permit, lease, agreement, commitment or other instrument, or any order, judgment
or decree, to which it is a party, by which it is bound or to which any of the
Purchased Assets is subject; (b) constitute a violation by it of any law or
regulation applicable to it, the Purchased Assets or the Assumed Liabilities; or
(c) result in the creation of any Lien upon any of the Purchased Assets. Except
as set forth on Schedule 4.4, no consent, approval or authorization of, or
declaration or filing with, any person, including any governmental authority, is
required on the part of Arcar in connection with the execution, delivery and
performance of this Agreement, or the transfer of the Purchased Assets to Buyer.
4.5 Litigation, Compliance with Laws. Except as set forth on
Schedule 4.5 hereto, there is no Action or Proceeding pending or threatened, or
any Order outstanding, against Arcar or the Purchased Assets. Arcar is not in
violation of any Law or Order, except for violations that in the aggregate would
not have a Material Adverse Effect, and no notice has been received by any of
Bagcraft, ARTRA or Seller alleging any such violation. Arcar has advised Buyer
in writing of any proposed environmental, safety, health or other Law, which, to
its knowledge without due inquiry, except for its review of its internal
operations, and personnel, could reasonably be expected to have a Material
Adverse Effect or which, to its knowledge without due inquiry, except for its
review of its internal operations, and personnel, could reasonably be expected
to require new capital investments by Buyer in the Arcar Business in excess of
$100,000.
4.6 Title to Assets. Arcar has good and marketable title to
(or valid, binding and enforceable leasehold, license or similar interests in
and right of quiet enjoyment of), and the right to transfer to Buyer, all of the
Purchased Assets, subject to no Liens and no licenses or rights of other parties
exist with respect thereto. The Purchased Assets constitute all of the assets
and property owned and used in the Arcar Business and are of merchantable
quality, fit for their intended purpose, and ready for normal operation and use.
None of the Purchased Assets are shared with any other Person except for
personal computers located at certain customer sites. The documents of transfer
to be executed by Arcar and delivered to Buyer at the Closing will be sufficient
to convey good and marketable title to (or valid and enforceable leasehold,
license or similar interests in) the Purchased Assets, free and clear of all
Liens.
4.7 Financial Statements.
(a) The unaudited balance sheets of Arcar as of December 31,
1992, and December 31, 1993 and April 8, 1994 and the related unaudited
statements of income and retained earnings for the years or periods then ended
compiled by Xxxxxxx & Xxxxx, Ltd. certified public accountants, the audited
balance sheet of Arcar as of December 31, 1993 and the audited balance sheet of
Arcar as of December 31, 1994 and the related audited statements of income,
retained earnings and cash flows from April 8, 1994 to December 31, 1994,
including the footnotes thereto, and except for the December 31, 1994
financials, certified by Coopers & Xxxxxxx, certified public accountants, in
each case true, correct and complete copies of which are attached hereto as
Schedule 4.7-a, present fairly the financial position of Arcar as at such dates
and the results of operations and cash flows of Arcar for the periods then
ended, in each case, in accordance with GAAP consistently applied for the
periods covered thereby (the "Historical Financial Statements").
(b) The unaudited balance sheets of Arcar as of August 31,
1995 and June 30, 1995, and the related statements of income, retained earnings
and cash flows for the periods then ended, true, correct and complete copies of
which are attached hereto as Schedule 4.7-b, present fairly the financial
position of Arcar as of such dates and the results of operations and cash flows
of Arcar for the periods then ended, in each case in accordance with GAAP
consistently applied for the periods covered thereby (the "Unaudited Financial
Statements" and, collectively with the Historical Financial Statements, the
"Financial Statements").
All material liabilities of Arcar as of the dates of the
balance sheets included in the Financial Statements, whether accrued, absolute,
contingent or otherwise, are fully reflected, reserved and accounted for in such
statements. Arcar has not incurred or reserved for any liabilities or
obligations other than liabilities and obligations incurred in the ordinary
course of the conduct of the Arcar Business and of the same general nature and
amounts as those reflected on the December 31, 1994 and August 31, 1995 balance
sheets included in the Financial Statements.
Since August 31, 1995 there has been no material adverse
change in the assets, properties, business, operations, income or condition
(financial or otherwise) of Arcar, nor is any such change threatened, nor has
there been any damage, destruction or loss which could have a Material Adverse
Effect, whether or not covered by insurance.
4.8 Contracts. Schedule 4.8 describes all of the following
contracts, agreements, leases, commitments, instruments, plans, permits or
licenses (written or oral) to which Arcar is a party or is otherwise bound or
which relate to the Purchased Assets, the Assumed Liabilities or the Arcar
Business (the "Material Agreements"):
(a) contracts and other agreements with any current or former
officer, director, employee, consultant, agent, other representative of Arcar or
with any Affiliate of Arcar;
(b) contracts and other agreements with any labor union or
association representing any employee;
(c) contracts and other agreements for the sale of any of its
assets or properties or for the grant to any Person of any preferential rights
to purchase any of its assets or properties, in each case in an amount exceeding
$10,000 (other than purchase orders entered into with customers in the ordinary
course of business);
(d) joint venture and partnership agreements;
(e) contracts under which Arcar agrees to indemnify any
Person;
(f) any take or pay or requirements contracts or agreements or
any other contracts or agreements requiring Arcar to pay regardless of whether
products or services are received;
(g) contracts and other agreements not cancelable without
penalty by Arcar on sixty (60) or fewer days' notice calling for an aggregate
purchase price or payments to or from Arcar in any one year of more than $10,000
in any one case (or in the aggregate, in the case of any related series of
contracts and other agreements);
(h) contracts and other agreements with clients, customers or
any other Person for the sharing of fees, the rebating of charges or purchase
price or other similar arrangements;
(i) contracts and other agreements containing obligations or
liabilities of any kind to holders of any securities issued by Arcar to register
any of such securities under any federal or state securities laws;
(j) contracts and other agreements containing covenants of
Arcar or any officer or employee of Arcar pertaining to the right to compete or
not compete in any line of business or similarly restricting its ability to
conduct business with any Person or in any geographical area or covenants of any
other Person not to compete with Arcar in any line of business or restricting
its ability to conduct business or in any geographical area;
(k) contracts and other agreements relating to the acquisition
by Arcar of any operating business or the capital stock of any other Person;
(l) contracts and other agreements not cancelable without
penalty by Arcar on sixty (60) or fewer days' notice requiring the payment by or
to Arcar of a royalty, override or similar commission or fee of more than
$10,000 per annum;
(m) contracts and other agreements not cancelable without
penalty by Arcar on sixty (60) or fewer days' notice relating to the sale or
marketing of any products sold, distributed or marketed by Arcar and involving
an amount in excess of $10,000;
(n) contracts and other agreements relating to the borrowing
of money, creation of Liens, or the guarantee of the payment of liabilities or
performance of obligations of any other person by Arcar;
(o) any stockholder agreement, registration rights agreement
or any arrangement relating to or affecting the ownership of the common stock or
other equity interests of Arcar;
(p) contracts and other agreements relating to data processing
or the provision of other services which are not cancelable without penalty in
sixty (60) or fewer days' notice; and
(q) any other contract and other agreement made outside the
ordinary course of business or which is material to Arcar or the Arcar Business
and involving an amount in excess of $10,000.
True and complete copies of all of the Material Agreements
have been delivered to Buyer. All of the Material Agreements are valid,
subsisting, in full force and effect and binding upon Arcar and, to the best
knowledge of Arcar, the other parties thereto in accordance with their terms,
subject to the qualifications that enforcement of the rights and remedies
created thereby is subject to: (A) bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and (B) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
except as listed on Schedule 4.8 (Good Faith Disputed Issues). Arcar has
satisfied in full or provided for all of its liabilities and obligations under
the Material Agreements requiring performance prior to the date hereof in all
material respects, is not in material default under any of them, nor does any
condition exist that with notice or lapse of time or both would constitute such
a material default. To the best knowledge of Arcar, no other party to any such
Material Agreement is in default thereunder, nor does any condition exist that
with notice or lapse of time or both would constitute such a default. Except as
separately identified on Schedule 4.8, no approval or consent of any Person is
needed for all of the Business Contracts to continue to be in full force and
effect, and all of Arcar's rights under the Business Contracts will be conveyed
to Buyer, upon consummation of the transactions contemplated by this Agreement.
4.9 Inventory. The Inventory shown on the Financial Statements
has been determined in accordance with GAAP consistently applied. Subject to
appropriate reserves as reflected on the Financial Statements, such Inventory
and all Inventory acquired subsequent to June 30, 1995 is now and will be on the
Closing Date of a quality and quantity which can be sold, used or consumed in
the normal course of the Arcar Business and conforms to all requirements of Laws
and Orders.
4.10 Accounts Receivable. The Accounts Receivable reflected on
the Financial Statements are, and all Accounts Receivable reflected on the Books
and Records of Arcar as of the Closing Date will be, good and valid receivables
arising from the sale of goods and services in the ordinary course of business
and have been collected or are current and will be collected in the ordinary
course (but in any event, within one hundred eighty (180) days of the invoice
date therefor) at the aggregate amount recorded therefor on the books and
records of Arcar as of the Closing Date (subject to no counterclaims or offset).
4.11 Intangible Property. Arcar is the owner of all right,
title and interest in and to the Intangible Property. Schedule 4.11 sets forth a
list of all Intangible Property of Arcar (other than trade secrets, knowhow and
goodwill attendant to the Intangible Property and other intellectual property
rights not reducible to schedule form), true and complete copies of which have
been delivered or made available to Buyer, and the Intangible Property
constitutes all of the Intangible Property owned or used by Arcar in connection
with the Arcar Business. Arcar has not received any notice of, nor has it become
aware of any facts which indicate a likelihood of, any challenge to such rights,
misappropriation or infringement by or any conflict with, any third party with
respect to the Intangible Property. Arcar has not infringed, misappropriated or
otherwise conflicted with any rights of any third party, nor is Arcar aware of
any infringement, misappropriation or conflict which will occur as a result of
the continued operation of the Arcar Business as now conducted or as presently
proposed to be conducted. Arcar has taken all actions which are reasonably
necessary to protect the Intangible Property and will continue to maintain the
Intangible Property through the Closing Date so as not affect adversely the
validity or enforceability of the Intangible Property. Except as separately
identified on Schedule 4.11, no approval or consent of any Person is needed so
that the interest of Arcar in the Intangible Property shall continue to be in
full force and effect and enforceable by Buyer following the transactions
contemplated by this Agreement.
4.12 Real Estate. Arcar leases the premises (the "Leased
Property") (including land, improvements, fixtures and personal property)
located and described as set forth in Schedule 4.12 hereto. All of the Real
Property Leases are valid, subsisting, in full force and effect and binding upon
the parties thereto in accordance with their terms, subject to the
qualifications that enforcement of the rights and remedies created thereto is
subject to: (A) bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and
remedies of creditors and (B) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
Arcar has satisfied in full or provided for all of its liabilities and
obligations thereunder requiring performance prior to the date hereof in all
material respects, is not in default in any material respect under any of the
Real Property Leases, nor does any condition exist that with notice or lapse of
time or both would constitute such a default. To the knowledge of Arcar, no
other party to a Real Property Lease is in default thereunder, nor does any
condition exist that with notice or lapse of time or both would constitute such
a default. Except as identified on Schedule 4.12 hereto, no approval or consent
of any person or entity is needed for all of the Real Property Leases to be in
full force and effect after the Closing, and all of Arcar's rights under the
Real Property Leases will be conveyed to Buyer upon consummation of the
transactions contemplated by this Agreement. To Arcar's knowledge, there is no
pending or threatened condemnation proceeding against any of the Leased
Property. Arcar's leasehold interest in the Leased Property is free and clear of
all leasehold mortgages, assignments, pledges, liens, charges, encumbrances,
easements, equities, options, claims and rights of others of every nature
whatsoever. Seller has no knowledge, and has received no notices, that any of
the activities of Arcar at the Leased Property or the uses which it has made of
the Leased Property, violate any zoning or building codes, ordinance, rules,
regulations or laws affecting the Leased Property. Arcar does not own, occupy,
use, lease to or from others, or have any interest in or option with respect to
any real estate, except as described on Schedule 4.12 hereto. Seller has
delivered to Buyer complete copies of all leases relating to the Leased Property
and all written licenses, permits, certificates, authorizations and agreements
relating thereto.
Arcar in its maintenance and operation of the Leased Property, and in
the conduct of the Arcar Business, is in compliance with all Federal, state and
local laws, ordinances, court and administrative orders, rules and regulations,
including without limitation, all zoning, planning and land use laws and
ordinances, all laws, ordinances and all executive orders, rules and regulations
thereunder, and laws, ordinances, rules, regulations and court and
administrative orders relating to the safe conduct of business, health or
environmental protection, energy or conservation administered by those agencies.
4.13 Employee Benefits Matters.
a) For purposes of this Agreement, the term "Employee Plan"
includes any pension, retirement, savings, disability, medical, dental, health,
life (including without limitation any individual life insurance policy under
which any Arcar employee is the named insured and as to which Arcar or any of
its Affiliates make premium payments, whether or not Arcar or any of its
Affiliates are the owner, beneficiary or both of such policy), death benefit,
group insurance, profit-sharing, deferred compensation, stock option, bonus,
incentive, vacation pay, severance pay, or other employee benefit plan, trust,
arrangement, contract, agreement, policy or commitment (including, without
limitation, any pension plan as defined in Section 3(2) of ERISA ("Pension
Plan"), and any welfare plan as defined in Section 3(1) of ERISA ("Welfare
Plan")), whether or not any of the foregoing is funded or insured and whether
written or oral, which is intended to provide or does in fact provide benefits
to any or all Arcar employees or their dependents or beneficiaries, and (i) to
which Arcar or any of its Affiliates are parties or by which Arcar or any of its
Affiliates (or any of the rights, properties or assets of Arcar or any of its
Affiliates) are bound, or (ii) with respect to which Arcar or any of its
Affiliates have made any payments, contributions or commitments, or may
otherwise have any liability (whether or not Arcar or any of its Affiliates
still maintain such plan, trust, arrangement, contract, agreement, policy or
commitment).
b) With respect to the Employee Plans:
(i) There are no Employee Plans other than those
disclosed in Schedule 4.13.
(ii) No Employee Plan is a Pension Plan (including,
without limitation, a "multiemployer pension plan" within the meaning of Section
3(37) of ERISA).
(iii) Each Employee Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter of the Internal Revenue Service stating that the plan meets
the requirements of the Code and that the trust associated with the plan is
tax-exempt under Section 501(a) of the Code.
(iv) No condition exists and no event has occurred
that could reasonably be expected to adversely affect the tax-qualified status
of any Employee Plan that has received a favorable determination letter of the
Internal Revenue Service.
(v) No lawsuits, claims (other than routine claims
for benefits) or complaints to, or by, any person or governmental entity have
been filed, are pending or, to Seller's knowledge, have been threatened, and
Seller has no knowledge of any facts or contemplated event that reasonably could
be expected to give rise to any such lawsuit, claim (other than a routine claim
for benefits) or complaint, with respect to any Employee Plan.
(vi) Each Employee Plan, the administrator and
fiduciaries of each Employee Plan, and Seller have at all times complied in all
material respects with the applicable requirements of ERISA (including, but not
limited to, the fiduciary responsibilities imposed by Part 4 of Title I,
Subtitle B of ERISA), the Code and any other applicable law (including
regulations and rulings thereunder) governing each Employee Plan, and each
Employee Plan has at all times been properly administered in all material
respects in accordance with all such requirements of law, and in accordance with
its terms and the terms of any applicable collective bargaining agreement to the
extent consistent with all such requirements of law.
(vii) Seller has not made, or committed to make, any
payment, contribution or award into, or under, any Employee Plan except as
required by the terms of such Employee Plan.
(viii) Seller is not delinquent as to contributions
or payments to or in respect of any Employee Plan as to which Seller is in any
way obligated to make contributions or payments, nor has Seller failed to pay
any assessments made with respect to any such Employee Plan. All contributions
and payments with respect to Employee Plans that are required to be made by
Seller with respect to periods ending before the Closing Date (including periods
from the first day of the then-current plan or policy year to the Closing Date)
have been made or will be accrued before the Closing Date by Seller in
accordance with the appropriate actuarial valuation report, collective
bargaining agreements or insurance contracts or arrangements.
(ix) With respect to each Employee Plan, there has
not occurred, nor is any Person contractually bound to enter into, any nonexempt
"prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA.
(x) No "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA) subject to Title IV of ERISA, maintained by
Arcar or any of its Affiliates has been completely or partially terminated since
September 2, 1974 or has been the subject of a "reportable event" (within the
meaning of Section 4043 of ERISA) as to which notices would be required to be
filed with the Pension Benefit Guaranty Corporation.
(xi) No proceeding by the Pension Benefit Guaranty
Corporation to terminate any Pension Plan in accordance with Subtitle 1 of Title
IV of ERISA has been instituted or is currently threatened.
(xii) Except as disclosed in Schedule 4.13(b)(xii)
hereto, since December 31, 1994, Arcar has not made any increase in, or
commitment to increase, benefits under any Employee Plan or adopted, or made any
commitment to adopt, any additional employee benefit plan or arrangement
relating to Arcar Employees or any increase in compensation or bonuses paid or
similar payments made or commitments to be made to any Arcar Employees.
(xiii) No event has occurred and no condition
exists, with respect to any Employee Plan that has subjected or could subject
Buyer or any of its Affiliates or any Employee Plan maintained by Buyer or any
of its Affiliates, to any tax, fine, penalty or other liability, that would not
have been incurred by Buyer or any of its Affiliates, or any such plan, but for
the transactions contemplated hereby. To the knowledge of Seller, no Employee
Plan is or will be directly or indirectly binding on Buyer by virtue of the
transactions contemplated hereby. To the knowledge of Seller, no Employee Plan
provides severance benefits to current or former employees or other service
providers of Seller. To the knowledge of Seller, no condition exists with
respect to any Employee Plan that could result in liability under Sections 4069
or 4212(c) of ERISA to Seller or any of its Affiliates or, by virtue of the
transactions contemplated hereby, to Buyer. To the knowledge of Seller, Buyer
will have no liability under the Workers Adjustment Retraining and Notification
Act with respect to any events occurring or conditions existing on or prior to
Closing.
(xiv) To the knowledge of Seller, no Employee Plan
exists which could result in the payment of money or any other property or
rights, or accelerate or provide any other rights or benefits, to any current or
former employee of Seller or any of its Affiliates (or other current or former
service provider thereto) that would not have been required but for the
execution and delivery of this Agreement or the transactions provided for
herein, and none of Seller nor any of its Affiliates is a party to any plan,
program, arrangement or understanding that would result, separately or in the
aggregate, in the payment (whether in connection with any termination of
employment or otherwise) of any "excess parachute payment" within the meaning of
Section 280G of the Code with respect to a current or former employee of, or
current or former independent contractor to, Seller or any of its Affiliates.
(xv) Neither Seller nor any of its Affiliates is or
has been a party to any collective bargaining (or other similar) agreement with
respect to any employee of the Arcar Business, nor is any such agreement
presently being negotiated.
(xvi) Notwithstanding any other provision of this
Agreement, except as agreed pursuant to Section 2.4(e) hereof, neither Buyer nor
any of its Affiliates shall have any responsibilities for, without limitation,
any legally mandated continuation of health care coverage, or for compliance
with any related requirements, for Arcar employees or their dependents or
beneficiaries who incur a loss of health care coverage due to a qualifying event
occurring before or through the Closing, and Seller shall be solely so
responsible with respect to qualifying events occurring before or through the
Closing.
(xvii) With respect to the Medical Plan, annual
claims with respect to any particular participant or covered dependent could not
result in an uninsured liability in excess of $12,500 per participant or covered
dependent, and all such claims could not result in an uninsured liability of
more than $138,000 in the aggregate for all participants and covered dependents
combined.
Notwithstanding any provision of this Section 4.13 to the
contrary, any materiality qualification in a representation or warranty of
Seller, Bagcraft or ARTRA under this Section 4.13, and any qualification in a
representation or warranty of Seller, Bagcraft or ARTRA under this Section 4.13,
and any qualification which limits a representation or warranty of Seller,
Bagcraft or ARTRA to the knowledge of Seller, Bagcraft or ARTRA shall not apply
with respect to the Medical Plan.
4.14 Taxes. All Tax Returns of Bagcraft, ARTRA and Arcar
required to be filed within the United States of America, all state and local
government authorities and all foreign jurisdictions have been timely filed, and
extensions of time within which to file any return which has not yet been filed,
have been timely requested or granted. Such Tax Returns are true, correct and
complete in all material respects. Bagcraft, ARTRA and Arcar have paid to the
appropriate taxing authority all Taxes due and payable to such taxing authority
any and all penalties, assessments or deficiencies of every nature and
description incurred or accrued prior to the date hereof. Seller has no
knowledge of any proposed additional tax assessment, examination or proceeding
against Arcar, or the Arcar Business for which adequate provision has not been
made on Arcar's books. None of the Purchased Assets is property which is
required to be treated as being owned by any other person pursuant to the
so-called "safe harbor lease" provisions of former Section 168(f)(8) of the Code
or is "tax exempt use property" within the meaning of Section 168 of the Code.
None of the Purchased Assets directly or indirectly secures any debt, interest
on which is tax exempt under Section 103(a) of the Code. None of Bagcraft, ARTRA
or Arcar has executed or filed any consent or agreement to extend the period of
assessment or collection of any Taxes. Arcar has no liability to any Person
pursuant to any Tax sharing or similar agreement relating to the payment of any
Taxes. Arcar is not and has not been at any time a "foreign person" as defined
in Sections 1445(f)(3) and 1446(e) of the Code. There are no Liens on the
Purchased Assets for unpaid Taxes which are due and payable.
4.15 Environmental.
a) Except as disclosed in Schedule 4.15(a), the lease,
ownership, use and operation by Arcar and any of its predecessors or other
Persons of all buildings, facilities and other improvements which are a part of
the Leased Property, whether or not presently in operation, and all facilities
previously leased, owned, used or otherwise operated by Arcar or any predecessor
of Arcar (collectively with the Leased Property, the "Arcar Facilities"), are
presently and have at all times been in compliance with all applicable
Environmental Laws, and to the knowledge of Arcar, without due inquiry except
for its review of its internal operations and personnel, there is no liability
which may be imposed upon Arcar pursuant to any Environmental Laws in respect of
any acts or omissions, occurring on or prior to the Closing Date. No Order has
been issued, no Environmental Claim has been filed, no penalty has been assessed
and no investigation or review is pending or, to the knowledge of Arcar,
threatened by any Governmental or Regulatory Body with respect to any alleged
failure by Arcar to have or comply with any license or permit required under
applicable Environmental Laws in connection with the conduct of its business or
with respect to any generation, treatment, storage, recycling, transportation,
discharge, disposal or Release of any Hazardous Substance in connection with its
business and, to the knowledge of Arcar, there are no facts or circumstances in
existence which could reasonably be expected to form the basis for any of the
foregoing.
b) Schedule 4.15(b) sets forth: (i) all environmental audits or
assessments or occupation health studies undertaken by governmental agencies
(and known to Seller) or by or at the direction of Seller or any other persons
with respect to Arcar or the Arcar Business, (ii) the results of waste, ground
water, wastewater, soil and air monitoring or testing with respect to the Arcar
Business, (iii) written communications of a material nature with environmental
or similar governmental agencies relating to issues of noncompliance with
respect to Arcar or the Arcar Business or notices of noncompliance with respect
to Arcar or the Arcar Business, (iv) OSHA claims made within the past three
years with respect to Arcar or the Arcar Business, (v) all environmental permits
for any Release, waste treatment or disposal with respect to Arcar or the Arcar
Business and (vi) all notifications that Arcar is a potentially responsible
party (PRP) with respect to any Environmental Claim..
c) Except as disclosed on Schedule 4.15(c), there has not
been, is not, and is not occurring, at any Arcar Facility, including facilities
previously owned, used or otherwise operated by Seller or their predecessors, a
Release of any Hazardous Substance.
d) Except as disclosed on Schedule 4.15(d), neither Seller nor
any predecessor in interest has ever transported or arranged for the
transportation or disposal of Hazardous Substances or other wastes at any site,
location or facility including a site owned, used or operated by Seller or a
predecessor in interest, which pursuant to CERCLA, RCRA or any similar state
law, as applicable:
(i) has been placed or is proposed (by the
Environmental Protection Agency or relevant state authority or other person) to
be placed, on the "National Priorities List" of hazardous waste sites or its
state equivalent; or
(ii) is on notice of or subject to a claim, an
administrative order or other request by any person either to undertake removal
or remedial action, or any investigation or studies relating to the presence of
a Hazardous Substance, or to otherwise comply with environmental cleanup
requirements;
(iii) has filed (or has had filed with respect to
it) notification of hazardous waste activities; or
(iv) is on any Comprehensive Environmental Response
Compensation Liability Information System List or similar site inventory.
e) Schedule 4.15(e) sets forth the age, contents or former
contents of any storage tanks located on any Arcar Facility, including any
facility previously owned, used or otherwise operated by Seller or any
predecessor of Seller. Except as set forth in Schedule 4.15(e), Seller has not
owned or operated, and presently does not own or operate, any underground
storage tanks as defined in RCRA at any Arcar Facility. Except as set forth in
Schedule 4.15(e), all storage tanks, including underground storage tanks, and
pipes pertinent thereto at any Arcar Facilities, are presently and have been in
the past in good condition and have not been the source of any spills,
overfills, or Releases.
f) Except as disclosed in Schedule 4.15(f):
(i) there are no wastes, drums or containers
disposed of or buried on, in or under the ground or any surface waters located
on the Arcar Facilities, including any facilities previously owned, used or
otherwise operated by Seller or any predecessor of Seller;
(ii) neither Seller nor any party acting on behalf
of Seller has disposed of or buried, or arranged to dispose of or bury, any
Hazardous Substances, waste, drums or containers generated or used in the Arcar
Business in or on the premises owned or operated by a third Person.
g) Except as set forth in Schedule 4.15(g), there have not
been, and are not presently, polychlorinated biphenyl, asbestos, asbestos
containing materials, or urea formaldehyde in or on the Arcar Facilities,
including any facilities previously owned, used, leased or otherwise operated by
Seller or any predecessor of Seller.
h) To the knowledge of Arcar, without due inquiry, except for
its review of its internal operations and personnel, the aggregate costs
relating to Arcar's future compliance with Environmental Laws and satisfaction
of Environmental Claims for acts or omissions occurring on or prior to the
Closing Date, will not exceed $100,000.
4.16 Personnel and Labor. All employees engaged in the Arcar
Business are employed by Arcar. There are no outstanding administrative or court
orders, or consent or conciliation decrees, whether federal, state or local, and
no actions, suits, claims investigations, inquiries or consent or conciliation
decrees pending or threatened, concerning charges relating to equal employment
opportunity, unfair labor practices or occupational safety and health applicable
to Arcar. Arcar has no collective bargaining agreement covering any employees
and Arcar has not agreed to recognize any union or other collective bargaining
unit, nor has any union or collective bargaining unit been certified to
represent any such employees. There are no complaints, grievances or
arbitrations, employment-related litigation, administrative proceedings or
controversies either pending or, to the best knowledge of Arcar, threatened,
involving any employee, applicant for employment, or former employee of Arcar
against Arcar. During the past three (3) years, Arcar has not suffered or
sustained any labor dispute resulting in any work stoppage and no such work
stoppage is, to the best knowledge of Arcar, threatened. To the best knowledge
of Arcar, there are no attempts presently being made to organize any employees
employed by Arcar.
4.17 Insurance. Schedule 4.17 sets forth a list and brief
description (specifying the insurer, the policy number or covering note number
with respect to binders and the amount of any deductible, describing the pending
claims if such claims exceed applicable policy limits, setting forth the
aggregate amount paid out under each such policy through the date hereof and the
aggregate limit, if any, of the insurer's liability thereunder) of all policies
or binders of fire, liability, errors and omissions, workers' compensation,
vehicular, unemployment and other insurance held by or on behalf of Arcar. The
Medical Insurance Policies and the Xxxxxxxx Insurance Policy and the Automobile
Insurance Policies are, and to the knowledge of Arcar, the other policies and
binders set forth on Schedule 4.17 are, valid and enforceable in accordance with
their terms in all material respects, are in full force and effect, and insure
against risks and liabilities to the extent and in respect of amounts, types and
risks insured, as are customary in the industries in which Arcar operates. Arcar
is not in default with respect to any material provision contained in any such
policy or binder and has not failed to give any notice or present any claim
under any such policy or binder in due and timely fashion. Except for claims
disclosed on Schedule 4.17, there are no outstanding unpaid claims under any
such policy or binder which have gone unpaid for more than forty-five (45) days
or as to which the carrier has disclaimed liability. Arcar has not received any
notice of cancellation or non-renewal of any such policy or binder. Arcar has
not received any notice from any of its insurance carriers that any insurance
premiums will be materially increased in the future or that any insurance
coverage listed on Schedule 4.17 will not be available in the future on
substantially the same terms as now in effect. None of the policies disclosed on
Schedule 4.17 provides that premiums paid in respect of periods may be adjusted
or recomputed based on claims-paying experience of such policies or otherwise.
Except as separately disclosed on Schedule 4.17, the Xxxxxxxx Policy and the
Medical Insurance Policies and the Automobile Insurance Policies shall be in
full force and effect and enforceable by Buyer following the consummation of the
transactions contemplated by this Agreement.
4.18. Subsidiaries and Affiliates. Arcar does not own,
directly or indirectly, any capital stock of, or any other interest in, any
other Person.
4.19. Books and Records. Each of the Books and Records of
Arcar as supplied to Buyer is true, correct, complete and current in all
material respects and, as applicable, accurately reflects all actions taken by
its shareholders and board of directors and committees thereof, and all
signatures contained therein are the true signatures of the Persons whose
signatures they purport to be.
4.20. Certificate of Incorporation and By-Laws. Arcar has
heretofore delivered to Buyer true, correct and complete copies of the
Certificate or Articles of Incorporation (certified by the Secretary of State of
Illinois) and By-Laws (certified by the secretary of Arcar) or similar governing
documents of Arcar as in full force and effect on the date hereof.
4.21. Transactions with Affiliates. Except as set forth on
Schedule 4.21, none of Bagcraft, ARTRA, any Affiliate or Associate of them or
Arcar or any officer or director of the foregoing has: (a) borrowed money from
or loaned money to Arcar which remains outstanding; (b) any contractual or other
claim, express or implied, of any kind whatsoever against Arcar; (c) any
interest in any property or assets used by Arcar in its business; (d) engaged in
any other transaction with Arcar during the last twelve months; (e) owns,
directly or indirectly, any interest in (except not more than five percent (5%)
stockholdings for investment purposes in securities of publicly held and traded
companies), or served as an officer, director, employee or consultant of or
otherwise receives remuneration from, any Person which is, or has engaged in
business as, a competitor, lessor, lessee, customer or supplier of Arcar; or (f)
provides any assets or services to Arcar in the conduct of its business.
4.22. Compensation Arrangements: Officers, Directors and
Employees. Schedule 4.22 sets forth: (a) the name and current annual salary,
including any bonus or commitment to pay any other amount or benefit in
connection with a termination of employment, if applicable, of all present
officers, directors and employees of Arcar whose current annual salary,
including any promised, expected or customary bonus or such other amount or
benefit, equals or exceeds $50,000 together with a statement of the full amount
of all remuneration paid by Arcar to each such Person during the past twelve
months and (b) the names and titles of all directors and officers of Arcar and
of each trustee, fiduciary or plan administrator of each Employee Plan of Arcar.
Arcar has not made a commitment or agreement (verbally or in writing) to
increase the compensation or to modify the conditions or terms of employment of
any Person listed on Schedule 4.22 or of any other Person if the increase would
cause such Person to be required to be listed on Schedule 4.22. To the best
knowledge of Arcar, none of such Persons has made a threat or otherwise
indicated any intent to Arcar to cancel or otherwise terminate such Person's
relationship with Arcar.
4.23. Operations.
(i) Except as disclosed on Schedule 4.23 or expressly authorized by
this Agreement, from December 31, 1994 through the date hereof, Arcar has not,
and from the date hereof through the Closing Date, Arcar shall not have, without
the prior written consent of Buyer:
(a) amended its Certificate or Articles of Incorporation or
By-Laws or comparable instruments or merged with or into or consolidated with
any other Person, or changed or agreed to rearrange in any manner the character
of its business;
(b) issued, sold or purchased options or rights to subscribe
to, or entered into any contracts or commitments to issue, sell or purchase, any
shares of its capital stock or other equity interests;
(c) entered into, amended or terminated any (i) employment
agreement or collective bargaining agreement, (ii) adopted, entered into or
amended any arrangement which is, or would be, an Employee Plan or (iii) made
any change in any actuarial methods or assumptions used in funding any Employee
Plan or in the assumptions or factors used in determining benefit equivalences
thereunder;
(d) issued any note, bond or other debt security, created,
incurred or assumed any indebtedness for borrowed money, or guaranteed any
indebtedness for borrowed money or any capitalized lease obligation;
(e) declared, set aside or paid any dividends or declared or
made any other distributions of any kind to its shareholders or holders of its
equity interests, or made any direct or indirect redemption, retirement,
purchase or other acquisition of any shares of its capital stock or other equity
interests;
(f) knowingly waived any right of material value to its
business;
(g) made any change in its accounting methods or practices or
made any changes in depreciation or amortization policies or rates adopted by it
or made any material write-down of Inventory or material write-off as
uncollectible of Accounts Receivable;
(h) made any wage or salary increase or other compensation
payable or to become payable or bonus, or increase in any other direct or
indirect compensation, for or to any of its officers, directors, employees,
consultants, agents or other representatives, or any accrual for or commitment
or agreement to make or pay the same;
(i) entered into any transactions with any of its Affiliates,
Associates, officers, directors, employees, consultants, agents or other
representatives, or any officer, director, consultant, employee, agent or other
representative of any of its Affiliates or Associates;
(j) made any payment or commitment to pay any severance or
termination pay to any Person or any of its officers, directors, employees,
consultants, agents or other representatives, other than payments or commitments
to pay such Persons or its officers, directors, employees in the ordinary course
of business;
(k) (i) entered into any lease (as lessor or lessee), (ii)
sold, abandoned or made any other disposition of any of its assets or properties
other than sale of Inventory in the ordinary course of business consistent with
past practice; (iii) granted or suffered any Lien on any of its assets or
properties other than sales of Inventory in the ordinary course of business; or
(iv) entered into or amended any contract or other agreement to which it is a
party, or by or to which it or its assets or properties are bound or subject, or
pursuant to which it agrees to indemnify any Person or to refrain from competing
with any Person, in each case or type required to be disclosed pursuant to
Section 4.8 hereof;
(l) except in the ordinary course of business, incurred or
assumed any debt, obligation or liability (whether absolute or contingent and
whether or not currently due and payable);
(m) except for Inventory or equipment acquired in the ordinary
course of business, made any acquisition of all or any part of the assets,
properties, capital stock or business of any other Person;
(n) paid, directly or indirectly, any of its liabilities
before the same became due in accordance with its terms or otherwise than in the
ordinary course of business, except to obtain the benefit of discounts available
for early payment;
(o) created, incurred or assumed any indebtedness for borrowed
money, or guaranteed any indebtedness for borrowed money or any capitalized
lease obligation, in each case in excess of $10,000 individually or in the
aggregate;
(p) made any capital expenditures or commitments for capital
expenditures in aggregate amount exceeding $10,000; or
(q) except in the ordinary course of business, terminated,
failed to renew, amended or entered into any contract or other agreement of a
type required to be disclosed pursuant to Section 4.8.
(ii) From the period from January 1, 1995 through the date hereof,
Arcar has carried on the Arcar Business diligently and substantially in the same
manner conducted prior thereto, including its business operations, physical
facilities, working conditions and employees, and its relationships with
suppliers and customers and others having business relations with it. Without
limiting the foregoing, during this period Arcar has not accelerated the
collection of Accounts Receivable or deferred the payment of payables.
4.24. Tangible Property. Schedule 4.24 sets forth a true,
complete and correct list of all categories of tangible personal property (other
than Inventory), including, without limitation, equipment, furniture, leasehold
improvements, fixtures, vehicles, structures, any related capitalized items and
other similar tangible property, in each case owned or leased by Arcar
(collectively, the "Tangible Property") together with a description of all
leases or subleases of Tangible Property to which Arcar is the lessor,
sublessor, lessee or sublessee and all options to purchase or sell the
underlying property. The Tangible Property is in good operating condition,
subject to continued repair and replacement in accordance with past practice,
and Arcar has not received notice that any of the Tangible Property is in
violation of any existing Law or Order. During the past one (1) year there has
not been any interruption of the operations of Arcar due to inadequate
maintenance of the Tangible Property. Except as separately identified on
Schedule 4.24, no approval or consent of any Person is needed so that the
interest of Arcar in the Tangible Property shall continue to be in full force
and effect and enforceable by Buyer following the transactions contemplated by
this Agreement.
4.25. Licenses and Permits. Schedule 4.25 sets forth a list of
the government permits, licenses, registrations and other governmental consents
and authorizations (federal, state, local and foreign) (collectively, "Permits")
which Arcar has obtained in connection with its assets, properties and business.
Except as set forth on Schedule 4.25, no Permits (including Permits under
Environmental Laws) are required to be obtained by Arcar in connection with its
properties or business. All such Permits are in full force and effect and in
good standing, and except as separately identified on Schedule 4.25, shall
continue to be in full force and effect and in good standing following the
consummation of the transactions contemplated by this Agreement. Arcar has not
received any notice of any claim of revocation of any such Permits or has
knowledge of any event which might give rise to such a claim.
4.26. Substantial Customers and Suppliers. Schedule 4.26 lists
the twenty (20) largest customers of Arcar, on the basis of revenues for goods
sold or services provided for the most recently-completed fiscal year. Schedule
4.26 lists the ten (10) largest suppliers of Arcar, on the basis of cost of
goods or services purchased for the most recently-completed fiscal year. Except
as disclosed in Schedule 4.26, no such customer or supplier has ceased or
materially reduced (i.e., by greater than 5% of such customer's or supplier's
business) its purchases from, use of the services of, sales to or provision of
services to Arcar since December 31, 1994, or to the knowledge of Arcar, has
threatened to cease or materially reduce such purchases, use, sales or provision
of services after the date hereof.
4.27. Disclosure. Neither this Agreement, nor any Schedule or
Exhibit to this Agreement, contains an untrue statement of a material fact or
omits a material fact necessary to make the statements contained herein or
therein not misleading.
4.28 Closing Date. The foregoing representations and
warranties will also be true and correct in all material respects in accordance
with their respective terms on and as of the Closing Date and with the same
force and effect as though such representations and warranties had been made on
and as of such time.
5. Representations and Warranties of Buyer. Each of Buyer and Xxxxx
Holdings USA, Inc. ("Xxxxx") represents and warrants to Seller as follows:
5.1 Organization. Buyer and Xxxxx are duly organized, validly
existing and in good standing under the laws of the state of their incorporation
and are duly authorized to carry on their business where and as now conducted
and to own, lease and operate properties as they now do.
5.2 Corporate Authority. Buyer and Xxxxx have full power and
authority to enter into and perform this Agreement in accordance with its terms;
the execution, delivery and performance of this Agreement by Buyer and Xxxxx
have been duly authorized by all necessary corporate action of Buyer and Xxxxx;
and this Agreement is a valid and binding obligation of Buyer and Xxxxx
enforceable in accordance with its terms.
5.3 No Conflicts, Consents. Except as set forth on Schedule
5.3, the execution, delivery and performance of this Agreement by Buyer and
Xxxxx will not (a) conflict with its certificate of incorporation or by-laws and
will not conflict with or result in the breach or termination of or constitute a
default under, any lease, agreement, commitment or other instrument, or any
order, judgment or decree, to which it is a party or by which either is bound;
or (b) to Buyer's or Xxxxx'x knowledge, constitute a violation by it of any law
or regulation applicable to it. Except as set forth on Schedule 5.3, no consent,
approval or authorization of, or declaration or filing with, any governmental
authority is required on the part of Buyer or Xxxxx in connection with the
execution, delivery and performance of this Agreement.
5.4 Litigation. There are no actions, suits, proceedings,
claims or investigations pending or to the best of Buyer's or Xxxxx'x knowledge,
threatened, concerning Buyer or Xxxxx with respect to the transactions
contemplated hereby or which would prevent Buyer or Xxxxx from consummating the
transactions contemplated hereby.
6. Particular Covenants. In addition to the various other covenants set
forth in this Agreement, Arcar covenants and agrees with Buyer and Buyer
covenants and agrees with Arcar as follows:
6.1 Conduct of Business. During the period from the date
hereof to the Closing Date, except as otherwise contemplated by this Agreement:
(i) Operation of Business. Except with the written consent of
Buyer, Arcar shall not take any action or omit to take any action which would
result in a material breach, violation or inaccuracy of any representation,
warranty or covenant of Arcar made in this Agreement; provided, however, that
Arcar shall not be required to secure the consent of Buyer with respect to acts
undertaken in the ordinary course of business, which do not, individually or in
the aggregate, have an adverse effect on the Arcar Business.
(ii) Preservation of Business. Arcar shall use its reasonable
best efforts to carry on the Arcar Business diligently and substantially in the
same manner as heretofore conducted and shall keep the business organization of
the Arcar Business intact, including its present business operations, physical
facilities, working conditions and employees and its present relationships with
suppliers and customers and others having business relations with it, except as
otherwise consented to by Buyer. Without limiting the generality of the
foregoing,
a) Arcar shall conduct and carry on the Arcar Business and
affairs only in the ordinary and regular course, and, without limiting the
foregoing, shall not accelerate the collection of receivables or defer the
payment of payables.
b) Arcar shall use its best efforts to keep available to Buyer
and the Arcar Business the services of the present employees and agents of the
Arcar Business and to maintain and cause the Arcar Business to maintain and
preserve the relations and goodwill with suppliers, customers, distributors and
any others having business relations with the Arcar Business.
c) Arcar shall not increase or otherwise change the rate or
nature of the compensation (including, without limitation, wages, salaries,
bonuses and other benefits) which is paid or payable to any director, officer or
employee of Arcar.
d) Arcar shall maintain in full force and effect policies of
insurance of the same type, character and coverage as the policies of insurance
listed in Schedule 4.17; and Arcar shall give Buyer prompt written notice of any
and all changes which may occur between the date hereof and the Closing Date
with respect to the insurance coverages of Arcar.
e) Except as required by law or the terms of its agreements,
Arcar shall not cause the Arcar Business to make any loans, advances or capital
contributions to, or investments in, or declare any dividends or make any
payments to, any person or entity.
f) On or before the Closing, Bagcraft shall cause to be paid
to Arcar any Accounts Receivable owed by Bagcraft which is more than 45 days
old.
g) Immediately notify Buyer of any deviation or exception from
the commitments set forth in (a) through (f) above.
(iii) Full Access. Arcar shall grant Buyer and representatives
of Buyer and its lenders reasonable access during normal business hours to all
employees, premises, properties, books, records, contracts, accounting records
and other documents of or pertaining to Arcar and the Arcar Business, shall
provide copies to Buyer and its lenders of all Arcar documentation reasonably
requested by Buyer, and Arcar will furnish to Buyer and its lenders any
information in respect of Arcar and the Arcar Business as Buyer and its lenders
may from time to time reasonably request. Without limiting the generality of the
foregoing, Arcar shall afford Buyer and its lenders and their designated
representatives reasonable access during normal business hours to all employees,
premises, properties, books, records, contracts, accounting records and other
documents of or pertaining to the Arcar Business for purposes of compiling and
preparing appraisals of Arcar's Tangible Property and any other Purchased Assets
hereunder.
(iv) Notice. Arcar shall promptly (no later than four (4)
business days) give Buyer written notice of Arcar's becoming aware of the
existence or occurrence of any event or condition which would make any
representation or warranty of Arcar contained herein untrue or incomplete in any
material respect or which constitutes a breach or violation of this Agreement or
might prevent the consummation of the transactions herein contemplated.
6.2 Expenses.
(i) Except as otherwise provided herein, whether or not the
transactions contemplated hereby are consummated, all costs and expenses and
disbursements incurred in connection with this Agreement and the transactions
contemplated hereby, shall be paid by the party incurring such costs and
expenses.
(ii) The parties hereto hereby represent to each other and
hold each other harmless that no broker, finder, investment banker, or financial
adviser is entitled to any fees due to the transaction contemplated hereby.
6.3 Action. From the date hereof until the Closing, the
parties shall use their reasonable best efforts to take, or cause to be taken,
all action, and use their reasonable best efforts to do or cause to be done all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby.
6.4 Consents. Prior to the Closing, Arcar will obtain all
consents listed on Schedules 4.4, 4.8, 4.11, 4.12, 4.17, 4.24 and 4.25 and all
other necessary consents in order to transfer the Purchased Assets to Buyer to
conclude the transactions contemplated by this Agreement. Where it is found to
be impossible to transfer the benefits under any Business Contract, Business
License, Real Property Lease or Personal Property Lease to Buyer, Arcar will act
as Buyer's agent to the extent it can lawfully and effectively do so in order to
help assure to Buyer the full benefits thereof; and Arcar will work with Buyer
to obtain for it the benefits thereunder, and will cooperate, to the extent
permitted by applicable law, with Buyer in any other reasonable arrangement
requested by Buyer designed to provide such benefits for Buyer, including, if
permitted by applicable law and the Business Contract, Business License Real
Property Lease or Personal Property Lease, subcontracting to Buyer the work to
be performed or the services to be provided under any Business Contract,
Business License, Real Property Lease or Personal Property Lease on the same
basis that Arcar would be required to perform under such Business Contract,
Business License, Real Property Lease or Personal Property Lease. In the event
after a good faith effort, Arcar is unable to cause a consent to be delivered to
Buyer, and Buyer deems such a consent to be material to the conduct of the Arcar
Business, Buyer may terminate this Agreement without any liability arising
pursuant hereto.
6.5. Transfer Taxes. Arcar agrees to pay all sales, use,
transfer, real property transfer, recording, gains, stock transfer and other
similar taxes and fees ("Transfer Taxes") arising out of or in connection with
the transactions effected pursuant to this Agreement, and shall indemnify,
defend and hold harmless Buyer with respect to such Transfer Taxes. Arcar shall
file all necessary documentation and Tax Returns with respect to such Transfer
Taxes.
6.6. Xxxx-Xxxxx-Xxxxxx Act Filings. Arcar and Buyer have filed
with the United States Federal Trade Commission and the Antitrust Division of
the United States Department of Justice pursuant to the Xxxx-Xxxxx-Xxxxxx
Anti-Trust Improvements Act of 1976, as amended (the "HSR Act"), all requisite
documents and notifications in connection with the transactions contemplated by
this Agreement. Arcar and Buyer shall coordinate and cooperate with each other
and the respective governmental offices in exchanging such information and
providing such assistance as the other and the respective governmental offices
may require to comply with the HSR Act. Arcar and Buyer shall use their
respective best efforts in order to overcome any objection made by either the
Federal Trade Commission or Department of Justice but neither party shall be
required to divest of any other business or agree to limitations on the conduct
of its business in connection therewith.
6.7. Public Announcements. On and after the date hereof, Arcar
and Buyer shall consult with each other before issuing any press release or
making any public statements with respect to this Agreement and the transactions
contemplated hereby and neither of them shall issue any such press release or
make any such public statement prior to obtaining the other party's approval,
which approval shall not be unreasonably withheld, except that no such approval
shall be necessary to the extent disclosure may be required by law or any stock
exchange listing agreement of a party or an affiliate. Any party intending to
make disclosure of this Agreement required by law shall notify and consult with
the other party in advance.
6.8. Further Assurances. From time to time prior to and after
the Closing, without further consideration, each party at its own expense shall
execute and deliver such documents to the other party as such other party may
reasonably request in order more effectively to consummate the transactions
contemplated hereby. At any time and from time to time after the Closing Date at
the request of Buyer, and without further consideration, Arcar will execute and
deliver such other instruments of sale, transfer, conveyance, assignment and
confirmation and take such other action as Buyer may reasonably deem necessary
or desirable in order to transfer, convey and assign more effectively to Buyer,
the Purchased Assets and to put Buyer in actual possession and operating control
of the Arcar Business and to assist Buyer in exercising all rights with respect
thereto.
6.9. Tax Elections. No new elections with respect to Taxes, or
any changes in current elections with respect to Taxes, affecting the Purchased
Assets shall be made after the date of this Agreement without the prior written
consent of Buyer.
6.10. Clearance Certificate. As a condition precedent to the
consummation of the transactions contemplated by this Agreement, Seller shall
have timely filed all Tax Returns, notifications, certificates or other similar
filings required by law or regulation in connection with the transactions
contemplated by this Agreement and Seller shall provide Buyer with clearance
certificate(s) or similar document(s) which may be required by any state or city
taxing authority in order to relieve Buyer of any obligation to withhold any
portion of the Purchase Price. Seller agrees to file notice of or application
for such certificate(s) or document(s) within five days after the date of
execution of this Agreement. To the extent required by applicable law, Buyer
agrees to withhold any portion of the cash Purchase Price directed to be
withheld by the taxing authority, provided that if any cash payment is required
to be made by Buyer to the taxing authority, then Buyer shall reduce the
Purchase Price by such amount and make the cash payment.
6.11. Nonforeign Affidavit. Prior to the Closing Arcar shall
furnish Buyer an affidavit, stating, under penalty of perjury, the transferor's
United States taxpayer identification number and that the transferor is not a
foreign person, pursuant to section 1445(b)(2) of the Code.
6.12. Covenant Not to Compete.
(a) Covenants Against Competition. Bagcraft, ARTRA and Arcar
acknowledge that (i) Arcar is one of a limited number of persons who have
developed the Arcar Business; (ii) the Arcar Business is conducted in the United
States of America; (iii) Bagcraft's and ARTRA's direct and indirect ownership of
Arcar has brought them and their Affiliates in close contact with certain
confidential affairs of Arcar not readily available to the public; and (iv)
Buyer would not purchase the Purchased Assets but for the agreements and
covenants of each of Bagcraft, ARTRA and Arcar contained in this Section 6.12.
Accordingly, each of Bagcraft, ARTRA and Arcar covenants and agrees that:
(i) Each of Bagcraft, ARTRA and Arcar and any
entities under the direct or indirect control of any of the foregoing
(collectively, the "Designated Entities") shall not in Canada, the United States
of America or Mexico, directly or indirectly, for a period commencing on the
Closing Date and terminating on the date five (5) years following the Closing
Date (the "Restricted Period"), (1) engage, or
prepare to engage, in the Arcar Business or the Dispersions Business
(collectively, the "Business") for their own account; (2) render any services to
any Person (other than Buyer) engaged in such activities; or (3) become
interested in any such Person as a partner, shareholder, principal, agent,
trustee, consultant or in any other similar relationship or capacity; provided,
however, that notwithstanding the above the Designated Entities collectively may
own, directly or indirectly, solely as an investment, securities of any Person
which are traded on any national securities exchange or NASDAQ if (i) none of
them is a controlling Person, or a member of a group which controls such Person
or (ii) they do not, directly or indirectly, own 5% or more of any class of
securities of such Person.
(ii) During the Restricted Period, each of the
Designated Entities shall keep secret and retain in strictest confidence, and
shall not use for the benefit of itself or others except in connection with the
business and affairs of Buyer and its Affiliates, all confidential information
with respect to the Arcar Business and the Purchased Assets, or learned
heretofore or hereafter directly or indirectly from the Arcar Business,
including, without limitation, information with respect to (a) prospective
facilities, (b) sales figures, (c) profit or loss figures, (d) customers,
clients, suppliers, sources of supply and customer lists (the "Confidential
Company Information"), and shall not disclose such Confidential Company
Information to anyone outside of Buyer and its Affiliates except with Buyer's
express written consent and except for Confidential Company Information which
(i) is at the time of receipt or thereafter becomes publicly known through no
wrongful act of any of the Designated Entities or (ii) is received from a third
party not under an obligation to keep such information confidential and without
breach of this Agreement.
(iii) During the Restricted Period, each of the
Designated Entities shall not, directly or indirectly, knowingly solicit or
encourage to leave the employment of Buyer or any of its Affiliates, any
employee of Buyer or any of its Affiliates or hire any employee who has left the
employment of Buyer or any of its Affiliates after the date of this Agreement
within one (1) year of the termination of such employee's employment with Buyer.
(b) Rights and Remedies Upon Breach. If any of the Designated
Entities breaches, or threatens to commit a breach of, any of the provisions of
Section 6.12(a) (the "Restrictive Covenants"), Buyer shall have the following
rights and remedies (upon compliance with any necessary prerequisites imposed by
law upon the availability of such remedies), each of which rights and remedies
shall be independent of the other and severally enforceable and shall not be
affected by the provisions of Section 9, and all of which rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to Buyer under law or in equity:
(i) The right and remedy to have the Restrictive
Covenants specifically enforced (without posting any bond) by any court having
equity jurisdiction, including, without limitation, the right to an entry
against the offending party of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or actual,
and whether or not then continuing, of such covenants, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to Buyer and that money damages will not provide adequate remedy to Buyer.
(ii) The right and remedy to require the offending
party to account for and pay over to Buyer all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits") derived or
received by any of such Persons as a result of any transactions constituting a
breach of any of the Restrictive Covenants, and such Person shall account for
and pay over such Benefits to Buyer.
(c) Severability of Covenants. If any court determines that
any of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
(d) Blue-Pencilling. If any court determines that any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provisions and, in its reduced
form, such provision shall then be enforceable and shall be enforced.
(e) Enforceability in Jurisdictions. Bagcraft, ARTRA, Arcar
and Buyer intend to and hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
the Restrictive Covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the parties that
such determination not bar or in any way affect Buyer's right to the relief
provided above in the courts of any other jurisdiction within the geographical
scope of such Restrictive Covenants, as to breaches of such Restrictive
Covenants in such other respective jurisdictions, such Restrictive Covenants as
they relate to each jurisdiction being, for this purpose, severable into diverse
and independent covenants, subject, where appropriate, to the doctrine of res
judicata.
6.13. Insurance. As of the Closing Date, except for the
Medical Insurance Policies, the Xxxxxxxx Insurance Policy and the Automobile
Insurance Policies, the coverage under all insurance policies related to the
Arcar Business shall continue in force only for the benefit of Arcar and Arcar's
Affiliates and not for the benefit of Buyer. Buyer agrees to arrange for its own
insurance policies with respect to the Arcar Business covering all periods
subsequent to the Closing Date, except for the Medical Insurance Policies, the
Xxxxxxxx Insurance Policy and the Automobile Insurance Policies.
6.14. Environmental Matters. With respect to and to the extent
existing on or prior to the Closing Date, each of Bagcraft, ARTRA and Arcar
hereby, jointly and severally, covenants and agrees to indemnify, defend and
hold Buyer and each of its Affiliates and their respective directors, officers,
employees, successors and assigns harmless from and against any claim, action,
suit, proceeding, loss, cost, damage, liability, deficiency, fine, punitive
damage or expense (including, without limitation, attorneys' and consultants'
fees), resulting from, arising out of, or based upon (i) any Environmental
Claim, (ii) the presence, Release, use, generation, discharge, storage, or
disposal of any Hazardous Substances on, under, in or about, or the
transportation of any such materials to or from, any Arcar Facility, including
any facilities previously owned, used or otherwise operated by Arcar or any
predecessor of Arcar; (iii) any Environmental Law or permit, judgment or license
(including but not limited to any violation or alleged violation thereof)
relating to the use, generation, Release, discharge, handling, treatment,
storage, or disposal of Hazardous Substances on, about, to or from any Arcar
Facility (defined as those offices, manufacturing, warehouse and other
facilities used by Arcar in the Arcar Business), including any facilities
previously owned, used or otherwise operated by Arcar or any predecessor of
Arcar; and (iv) any actions, suits, proceedings, investigations, assessments,
and judgments incident to any of the foregoing. This indemnity shall include,
without limitation, any damage, liability, fine, penalty, punitive damage, cost
or expense arising from or out of any claim, action, suit or proceeding for
personal injury (including sickness, disease or death), tangible or intangible
property damage, compensation for lost wages, business income, profits or other
economic loss, damage to natural resources or the environment, nuisance,
pollution, contamination, leak, spill, release or other potential adverse effect
on the environment.
6.15 Certain Additional Environmental Matters.
(a) Prior to the Closing, Seller shall take appropriate
measures to ensure that either (i) the discharge of wastewater from its facility
located at 000 Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx is in compliance with the
local discharge limits set forth in the West Chicago Pretreatment Ordinance and
applicable state and Federal laws or (ii) a letter or notice is received from
the City of West Chicago stating that Buyer can operate the Arcar Business
without interruption during the time it takes to comply with the West Chicago
Pretreatment Ordinance.
(b) Prior to the Closing, Seller shall assist Buyer in
obtaining all air operating permits required from the Illinois Environmental
Protection Agency for the emissions associated with the Arcar facility at 000
Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx.
6.16 Medical Plan. Effective as of the Closing, Buyer shall assume,
without interruption, sponsoring of the Medical Plan, to the extent disclosed to
Buyer prior to the date of this Agreement; provided, however, that in no event
shall Buyer have any obligation or liability under the Medical Plan other than
with respect to individuals (or their dependents) who (i) were Arcar employees
immediately prior to the Closing, (ii) are offered employment by Buyer as of the
Closing, and (iii) accept such offer of employment by Buyer. Seller shall
reimburse Buyer for any and all amounts paid by Buyer for or in connection with
claims incurred under the Medical Plan prior to the Closing by individuals (or
their dependents) who (i) were Arcar employees immediately prior to the Closing,
(ii) are offered employment by Buyer as of the Closing, and (iii) accept such
offer of employment by Buyer; except to the extent such amounts are fully
reflected in the Balance Sheet and the Statement of Net Assets. Seller
represents, warrants and covenants that there are no impediments to the
assumption of the Medical Plan and any related insurance or administrative
contracts by Buyer. Seller shall cooperate in the execution of any documents,
adoption of any corporate resolutions and the taking of any and all other
actions as may be necessary or appropriate to effectuate the sponsorship and
assumption provided for by this Section 6.16. Buyer's present intentions is to
offer employment to all of Arcar's present employees.
7. Conditions Precedent to Closing.
7.1. Conditions to Obligations of Buyer. The obligations of
Buyer under this Agreement to enter into and complete the Closing are subject to
the satisfaction at or prior to the Closing of the following conditions,
provided that compliance with any such conditions or parts thereof may be waived
by Buyer:
(i) The representations and warranties of Bagcraft, ARTRA and
Arcar contained in this Agreement shall be true and correct, in all respects, on
and as of the Closing Date as if made on such date, except for representations
and warranties relating to specified dates and except as otherwise provided
herein; each and all of the covenants and agreements of Bagcraft, ARTRA and
Arcar to be performed on or before the Closing pursuant to the terms hereof
shall have been duly performed; since the date hereof there shall not have been
any material adverse change in, and there shall have occurred no event which has
resulted or could result in a material adverse change in, the business and
financial condition of the Arcar Business or in its properties or assets; and
Bagcraft, ARTRA and Arcar shall have delivered to Buyer a certificate, in such
form as Buyer shall reasonably require, dated the Closing Date and signed by an
officer of Bagcraft, ARTRA and Arcar, to each such effect.
(ii) Arcar shall have delivered all documents reasonably
necessary in order to complete any and all transfers and assignments provided
for in this Agreement and to convey to Buyer such title to the Purchased Assets
as Arcar is required hereunder to convey in form and substance satisfactory to
Buyer in its sole discretion.
(iii) Arcar shall have obtained all permits, authorizations,
consents and approvals listed on Schedules 4.4, 4.8, 4.11, 4.12, 4.17, 4.24 and
4.25 and shall have made all filings and declarations required to be made by it,
including, without limitation, the filings required by Section 6.10, for the
consummation of the transactions contemplated hereby and the applicable waiting
period under the HSR Act shall have expired.
(iv) Seller shall have delivered to Buyer an opinion of legal
counsel of Arcar, dated the Closing Date, covering the matters set forth in
Exhibit D hereto.
(v) No action, claim or proceeding shall be pending or
threatened before or by any Federal, state or municipal or other domestic or
foreign governmental department, commission, court, board, bureau, agency or
instrumentality seeking to restrain, prohibit or invalidate this Agreement or
any of the transactions contemplated hereby and no preliminary or permanent
injunction or other order, decree or ruling shall be issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission and no statute, rule, regulation or executive order shall be
issued or proposed which, if effective, would prevent the consummation of the
transactions contemplated under this Agreement.
(vi) All existing employment agreements of Arcar shall have
been terminated and all related obligations thereunder shall have been satisfied
and Xxxxx Xxxxxxxx, Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxx shall have entered
into employment agreements with Buyer in form and substance satisfactory to
Buyer in its sole discretion.
(vii) Buyer shall have obtained and formalized senior debt
financing in an immediately available amount of $8,000,000 sufficient, to
Buyer's sole satisfaction, for the transactions contemplated herein.
(viii) Buyer and Xxxxx Xxxxxxxx ("Xxxxxxxx") shall have agreed
upon an arrangement pursuant to which Buyer will assume not less than $2 million
of the indebtedness and other amounts owed by Arcar to Xxxxxxxx and his
affiliates ( the "Designated Liabilities") and Buyer, ARTRA, Bagcraft and Seller
shall have entered into an amendment to this Agreement pursuant to which the
Designated Liabilities would be included in the Assumed Liabilities and the
Purchase Price and the Cash Payment would be reduced by the amount of the
Designated Liabilities so assumed by Buyer; provided, however, that such
amendment shall not have the effect of increasing the liabilities which Seller,
ARTRA and Bagcraft would otherwise have to Xxxxxxxx or his affiliates but for
the entering of such amendment.
(ix) There shall exist no defaults by Bagcraft with respect to
and in connection with that certain documentation with General Electric Capital
Corporation, the City of Xxxxxx Springs, Kansas and any other senior or secured
financing documents which have not been cured.
(x) Arcar shall have delivered to Buyer a current estoppel
certificate from the landlord under each Real Property Lease stating (i) that
such Real Property Lease is in full force and effect and has not been amended,
modified or supplemented, (ii) that all rent and other sums and charges payable
under such Real Property 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 such Real
Property Lease, (iv) that no notice of default on the part of Arcar or
termination notice has been served under such Real Property Lease which remains
outstanding, (v) that no default exists under such Real Property 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 and (vi) that the
consummation of the transactions provided for herein will not constitute a
default under such Real Property Lease or grounds for the termination thereof or
for the exercise of any other right or remedy adverse to the interests of the
tenant thereunder.
(xi) Bagcraft shall have executed and delivered to Buyer the
form of Ink Purchase Agreement attached hereto as Exhibit E and Buyer shall have
received the Letter of Credit referred to therein, which shall be satisfactory
in form and substance to Buyer in its sole discretion.
(xii) Buyer shall have received an extension of that certain
Industrial Building Lease dated April 8, 1994 by and between AGI Acq., Inc. and
Trust No. 1531 with respect to Arcar's property located at 000 Xxxxxx Xxxxx in
substantially the form of Exhibit F hereto.
(xiii) Buyer shall have received an executed amendment to that
certain Standard/Industrial Commercial Single-Tenant Lease dated May 15, 1995 by
and between Arcar and Xxxx Xxxxx, as principal, with respect to Arcar's property
located at 000 Xxxxxx Xxxxx in substantially the form of Exhibit G hereto.
(xiv) (intentionally deleted)
(xv) Buyer shall have applied for, and taken all steps
necessary to obtain, all air operating permits required from the Illinois
Environmental Protection Agency for emissions associated with the Arcar facility
at 000 Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx (the "Air Permits"). In addition, as
of the Closing Date, the discharge of waste water from such facility shall be in
compliance with the local discharge limits set forth in the current West Chicago
Pretreatment Ordinance (the "Ordinance") and all applicable state and Federal
laws such that, when the facility is operated by Buyer after the Closing, Buyer
will not be exposed to future liability or damages in respect thereof nor will
Buyer be required to incur capital expenditures in the future to assure
permanent compliance with the Ordinance and all applicable state and Federal
laws. Buyer and Seller agree that $200,000 of the Purchase Price will be held by
the Buyer (the "Holdback Amount") pending resolution of the Ordinance and the
permit relating thereto, and the Air Permits and any failures to comply with any
other current state or Federal laws relating to waste water discharge or the Air
Permits. Following the Closing, the parties will use their best efforts to
attempt to obtain a permanent variance from the City of West Chicago and any
other applicable state and Federal authorities in order that Arcar will be in
compliance with all aspects of the Ordinance and state and Federal law relating
to the discharge of waste water from the facility. In the event a permanent
variance is unobtainable within ninety (90) days from the Closing Date Buyer
shall implement a system to eliminate the waste water discharge problem and
assure compliance with the Ordinance and state and Federal law. Buyer will have
the right to determine the procedures and systems required to manage the
discharge of waste water, subject to Bagcraft's written consent regarding the
expenses associated therewith, which consent shall not be unreasonable withheld.
Any out-of-pocket amounts expended for such system (including but not limited to
any out-of-pocket expenses incurred in connection with the design and
installation thereof) and any fines, penalties or other specific damages
incurred by Buyer due to Arcar's or Buyer's operation of the Arcar Business
without compliance with the Ordinance or state or Federal laws relating to the
discharge of waste water or without the Air Permits shall be deducted from the
Holdback Amount and the remainder, if any, will be paid to Seller the earlier of
(x) compliance with the Ordinance and any state or federal laws on a permanent
basis and Buyer shall be reasonably assured it will not be responsible for any
such fines or penalties or (y)180 days after the Closing. In addition, Arcar,
ARTRA and Bagcraft, jointly and severally, agree to pay to Buyer on demand all
such out-of-pocket amounts, fines, penalties and other specific damages to the
extent they exceed the Holdback Amount.
(xvi) Except as otherwise waived by Buyer, all consents,
permits and approvals from third parties to contracts or other agreements with
Arcar, and any other material consent, permit or approval that may be required
in connection with the performance by Arcar of its obligations under this
Agreement or the consummation of the transactions contemplated by this Agreement
or the continuance of Arcar's contracts or other agreements with Buyer after the
Closing shall have been obtained.
(xvii) Arcar shall have done or caused to be done all things
necessary to transfer, or have reissued in the name of Buyer, each permit listed
on Schedule 4.25, other than the Air Permits, and all other permits required to
be obtained in connection with the operation of the Arcar Business.
(xviii) Buyer shall have received the certified report of
Coopers & Xxxxxxx for the December 31, 1994 financial statements referred to in
Section 4.7.
(xix) Buyer shall have received such other documents,
certificates or instruments as it may reasonably request.
7.2. Conditions to Obligations of Arcar. The obligations of Arcar under
this Agreement are subject to the satisfaction at or prior to the Closing Date
of the following conditions, provided that compliance with any such conditions
or parts thereof may be waived by Arcar:
(i) The representations and warranties of Buyer contained in
this Agreement shall be true and correct, in all material respects, on and as of
the Closing Date as if made on such date, except for representations and
warranties relating to specified dates and except as otherwise provided herein;
each and all of the covenants and agreements of Buyer to be performed on or
before the Closing pursuant to the terms hereof shall have been duly performed;
and Buyer shall have delivered to Arcar a certificate, in such form as Arcar
shall reasonably require, dated the Closing Date and signed by an officer of
Buyer to both such effects.
(ii) Buyer shall have obtained all material permits,
authorizations, consents and approvals and shall have made all material filings
and declarations required by it for the consummation of the transactions
contemplated hereby and the applicable waiting period under the HSR Act shall
have expired.
(iii) Buyer shall have delivered to Arcar an opinion of Xxxxxx
& Xxxxx, counsel to Buyer, dated the Closing Date, covering the matters set
forth in Exhibit H hereto.
(iv) No action, claim or proceeding shall be pending or
threatened before or by any Federal, state or municipal or other domestic or
foreign governmental department, commission, court, board, bureau, agency or
instrumentality seeking to restrain, prohibit or invalidate this Agreement or
any of the transactions contemplated hereby and no preliminary or permanent
injunction or other order, decree or ruling shall be issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission and no statute, rule, regulation or executive order shall be in
effect which has a substantial likelihood of preventing the consummation of the
transactions contemplated under this Agreement.
(v) Buyer shall have executed and delivered to Bagcraft the
form of Ink Purchase Agreement attached hereto as Exhibit E.
(vi) Arcar shall have received such other documents,
certificates or instruments as it may reasonably request.
8. Termination.
8.1. Events and Methods of Termination. This Agreement may be
terminated prior to the Closing, and the purchase and sale and the other
transactions contemplated hereby may be abandoned:
(i) By Bagcraft, ARTRA and Seller on the one hand or Buyer on
the other hand (by written notice to each other) if the Closing has not been
consummated or occurred by October 17,, 1995 (unless such failure of the Closing
to be consummated or to occur has been caused by a breach of this Agreement by
the party seeking termination, in which case such party may not so terminate
this Agreement); or
(ii) by mutual consent of each of the parties hereto.
8.2. Disposition of Documents. If this Agreement is terminated
as provided herein, each party shall promptly redeliver to the other Party all
documents, workpapers and other material of the other party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof. In the event this Agreement is terminated as provided herein (i) this
Agreement shall become null and void and of no further force and effect, except
for the provisions (the "Surviving Provisions") of Section 10.11 relating to
Buyer's obligation to keep confidential certain information, Section 6.2 and
Section 10.5 and (ii) except for the Surviving Provisions, there shall be no
liability on the part of any party hereto, their Affiliates or their respective
partners, officers, directors, employees or agents, provided, however, that if
such termination shall result from the breach by a party of the provisions
contained in this Agreement, such party shall be fully liable for any and all
damages, costs and expenses sustained or incurred as a result of such breach by
the other parties hereto.
9. Survival; Indemnification
9.1. Survival of Representations, Warranties, Covenants and
Agreements. The representations and warranties of Xxxxx shall not survive the
Closing; all other representations, warranties, covenants and agreements of the
parties contained in this Agreement will survive the Closing (a) until sixty
(60) days after the expiration of all applicable statutes of limitation
(including all periods of extension, whether automatic or permissive) with
respect to the matters covered by the representations and warranties contained
in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.13, 4.14 and 4.15 and Sections 5.1,
5.2, 5.3 and 5.4, (b) until the date which is twenty-four (24) months after the
Closing Date in the case of all other representations and warranties and any
covenant or agreement to be performed on or prior to the Closing, or (c) with
respect to each other covenant or agreement contained in this Agreement, except
as provided in Xxxxx'x guarantee contained on the signature pages hereof, until
ninety (90) days following the last date on which such covenant or agreement is
to be performed or, if no such date is specified, indefinitely; provided,
however that any representation, warranty, covenant or agreement that would
otherwise terminate in accordance with clause (a), (b) or (c) above (x) will
continue to survive if the party making such representation, warranty, covenant
or agreement knowingly engages in fraud with respect thereto until one year from
the discovery thereof by the party in whose favor such representation, warranty,
covenant or agreement is made and (y) will continue to survive, if a Claim
Notice (as hereinafter defined) shall have been given under this Section 9 on or
prior to such termination date, until the related claim for indemnification has
been satisfied or otherwise resolved as provided in this Section 9.
9.2. Indemnification of Buyer. Subject to the limitations
contained in this Section 9, Bagcraft, ARTRA and Arcar, jointly and severally,
agree to indemnify, defend and hold harmless Buyer and each of its Affiliates
and their respective directors, officers, employees, successors and assigns from
and against any and all losses, liabilities (including punitive or exemplary
damages and fines or penalties and any interest thereon), expenses (including
fees and disbursements of counsel and expenses of investigation and defense),
claims, liens or other obligations of any nature whatsoever (hereinafter
individually, a "Loss" and collectively, "Losses") which, directly or
indirectly, arise out of, result from or relate to (a) any inaccuracy in or any
breach of any representation and warranty, or any breach of any covenant or
agreement, of Bagcraft, ARTRA or Arcar contained in this Agreement or in any
document or other papers delivered by any of them pursuant to this Agreement,
(b) any Excluded Liability, or (c) the failure of Arcar to comply with any bulk
sales or similar Laws and Buyer's waiver of compliance with such Laws. The
parties hereto agree that if Buyer seeks indemnification for any Losses pursuant
to this Section 9.2, an offset shall be allowed for an amount equal to the
excess, if any, of (i) the amount set forth on the Statement of Net Assets as a
reserve for claims under the Medical Plan over (ii) the actual amount paid by
Buyer for such claims.
Buyer hereby agrees that Buyer shall not be entitled to
recover from any of Bagcraft, ARTRA and/or Arcar any indemnification under
clause (a) of Section 9.2 as it relates to any inaccuracy or breach of any
representation or warranty (other than as the same relates to any inaccuracy in
or breach of the representations and warranties set forth
in Section 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.13, 4.14, and 4.15, which shall not
be subject to limitations of this Section 9.2) unless and until the total of all
Losses with respect to the matters covered thereby exceed $25,000.00 (the
"Threshold Amount"). Once such Losses exceed the Threshold Amount the
indemnification under clause (a) of Section 9.2 shall also include those Losses
which were less than the Threshold Amount.
9.3. Indemnification of Arcar. Subject to the limitations
contained in this Section 9, Buyer agrees to indemnify, defend and hold harmless
Bagcraft, ARTRA, Arcar, their Affiliates and their respective directors,
officers, employees, successors and assigns from and against any and all Losses
which, directly or indirectly, arise out of, result from or relate to (a) any
inaccuracy in or any breach of any representation and warranty, or any breach of
any covenant or agreement, of Buyer contained in this Agreement or in any
document or other papers delivered by Buyer pursuant to this Agreement or (b)
any Assumed Liability assumed by Buyer pursuant to Section 2.4.
9.4. Method of Asserting Claims. The party making a claim
under this Section 9 is referred to as the "Indemnified Party" and the party
against whom such claims are asserted under this Section 9 is referred to as the
"Indemnifying Party". All claims by any Indemnified Party under this Section 9
shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an
Indemnifying Party would be liable to an Indemnified Party hereunder is asserted
against or sought to be collected from such Indemnified Party by a third party,
said Indemnified Party shall with reasonable promptness notify in writing the
Indemnifying Party of such claim or demand, specifying the basis for such claim
or demand, and the amount or the estimated amount thereof to the extent then
determinable (which estimate shall not be conclusive of the final amount of such
claim and demand; the "Claim Notice"); provided, however, that any failure to
give such Claim Notice will not be deemed a waiver of any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
actually prejudiced by such failure. The Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel (who shall be reasonably acceptable to
the Indemnified Party) to represent the Indemnified Party and shall pay the
reasonable fees and disbursements of such counsel with regard thereto; provided,
however, that any Indemnified Party is hereby authorized prior to the date on
which it receives written notice from the Indemnifying Party designating such
counsel, to retain counsel, whose fees and expenses shall be at the expense of
the Indemnifying Party, to file any motion, answer or other pleading and take
such other action which it reasonably shall deem necessary to protect its
interests or those of the Indemnifying Party until the date on which the
Indemnified Party receives such notice from the Indemnifying Party. After the
Indemnifying Party shall retain such counsel, the Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (x) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the retention of
such counsel or (y) the named parties of any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnified Party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The Indemnifying
Party shall not, in connection with any proceedings or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one such
firm for the Indemnified Party (except to the extent the Indemnified Party
retained counsel to protect its (or the Indemnifying Party's) rights prior to
the selection of counsel by the Indemnifying Party). If requested by the
Indemnifying Party, the Indemnified Party agrees to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand which the
Indemnifying Party defends. A claim or demand may not be settled by the
Indemnifying Party without the prior written consent of the Indemnified Party
(which consent will not be unreasonably withheld) unless, as part of such
settlement, the Indemnified Party shall receive a full and unconditional release
reasonably satisfactory to the Indemnified Party.
(b) In the event any Indemnified Party shall have a claim
against any Indemnifying Party hereunder which does not involve a claim or
demand being asserted against or sought to be collected from it by a third
party, the Indemnified Party shall send a Claim Notice with respect to such
claim to the Indemnifying Party.
(c) After delivery of a Claim Notice, so long as any right to
indemnification exists pursuant to this Section 9 the affected parties each
agree to retain all Books and Records related to such Claim Notice. In each
instance, the Indemnified Party shall have the right to be kept fully informed
by the Indemnifying Party and its legal counsel with respect to any legal
proceedings. Any information or documents made available to any party hereunder
and designated as confidential by the party providing such information or
documents and which is not otherwise generally available to the public and not
already within the knowledge of the party to whom the information is provided
(unless otherwise covered by the confidentiality provisions of any other
agreement among the parties hereto, or any of them), and except as may be
required by applicable law, shall not be disclosed to any third Person (except
for the representatives of the party being provided with the information, in
which event the party being provided with the information shall request its
representatives not to disclose any such information which it otherwise required
hereunder to be kept confidential).
10. General Provisions.
10.1. Representations and Warranties. Buyer acknowledges that
Arcar has not made any representations or warranties of any kind, either express
or implied, except as expressly set forth or referred to in this Agreement and
the other documents, instruments, certificates, Exhibits and Schedules delivered
or to be delivered by Arcar to Buyer pursuant to this Agreement. All statements
of fact made by Arcar in the foregoing shall be deemed representations and
warranties of Arcar regardless of any investigation made by or on behalf of
Buyer.
10.2. Records. Following the Closing, each party will afford
to the other party, its counsel and its accountants, during normal business
hours, reasonable access to the Books and Records of Arcar or relating to the
Arcar Business, the Purchased Assets, the Excluded Assets, the Assumed
Liabilities or Arcar in its possession with respect to periods prior to the
Closing and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party (a) to facilitate
the investigation, litigation and final disposition of any claims which may have
been or may be made against any party or its Affiliates and (b) for any other
reasonable business purpose. Each party agrees that for a period of not less
than seven (7) years following the Closing Date, it shall not destroy or
otherwise dispose of any of the Books and Records relating to the Arcar
Business, the Purchased Assets, the Assumed Liabilities, the Excluded Assets or
Arcar in its possession with respect to periods prior to the Closing. Each party
shall have the right to destroy all or part of such Books and Records after the
seventh anniversary of the Closing Date or, at an earlier time by giving each
other party hereto thirty (30) days prior written notice of such intended
disposition and by offering to deliver to the other parties, at the other
parties' expense, custody of such Books and Records as such party may intend to
destroy. Arcar shall advise Buyer of the results of any tax audits (whether
federal, state or foreign), which pertain to Arcar's conduct of the Arcar
Business up to the Closing.
10.3. Assignability and Amendments. This Agreement shall not
be assignable by any of the parties hereto, except that Buyer may, without the
prior written consent of Arcar, assign this Agreement and any or all of its
rights and/or its obligations hereunder (i) to any one or more of its Affiliates
prior to Closing or (ii) to one or more of its lenders as collateral for a loan
at any time. No assignment will relieve the assigning party of any of its
obligations hereunder. This Agreement cannot be altered or otherwise amended
except pursuant to an instrument in writing signed by all parties.
10.4. Exclusivity. Until the earlier of the Closing or the
termination of this Agreement (the "Negotiating Period"), Seller, Bagcraft and
ARTRA shall not, directly or indirectly through any officer, director, employee,
agent, partner, Affiliate or otherwise, enter into any agreement, agreement in
principle or other commitment (whether or not legally binding) relating to any
business combination with, recapitalization of, or acquisition or purchase of
all or a significant portion of the assets of, or any material equity interest
in, Arcar (a "Competing Transaction"), or solicit, initiate or encourage the
submission of any proposal or offer from any person or entity
(including any of their officers, directors, employees and agents) relating to
any Competing Transaction, nor participate in any negotiations with any other
person or entity with respect to a Competing Transaction. Seller, Bagcraft and
ARTRA shall notify Buyer promptly if any proposal regarding a Competing
Transaction (or any inquiry or contact with any person or entity with respect
thereto) is made, and shall advise Buyer of the contents thereof (and, if in
written form, provide Buyer with copies thereof).
10.5. Competing Transaction Fee. In the event that the Seller,
Bagcraft or ARTRA engages in a Competing Transaction within one year after the
date of this Agreement and (i) this Agreement has not been terminated pursuant
to Section 8.1(i) or 8.1(ii) above, or (ii) Buyer has not breached this
Agreement, the Seller shall reimburse Buyer for all out-of-pocket expenses
incurred by Buyer or on its behalf related to this Agreement and the
transactions contemplated hereby and pay Buyer a fee of $750,000 upon the
consummation of such Competing Transaction. ARTRA and Bagcraft hereby guarantee
the payment of such fee.
10.6. Notices. All notices, demands or other communications
required or desired to be given hereunder shall be in writing and shall be
deemed given when delivered personally by courier, overnight delivery service or
by telecopy transmission (with transmission confirmed) or five (5) business days
after it is deposited in the U.S. Mail, registered or certified mail, return
receipt requested, postage pre-paid, and addressed as set forth below:
If to Seller, addressed to:
Arcar Graphics, Inc.
000 Xxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telecopy Number: (000) 000-0000
With copies addressed to:
Bagcraft Corporation of America
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
Xxxxxx, Xxxxxxxxx & Xxxxx, Ltd.
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Telecopy Number: (000) 000-0000
and ARTRA GROUP Incorporated
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
If to Buyer, addressed to:
c/x Xxxxx Holdings USA, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx
Telecopy Number: (212)
With a copy addressed to:
Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Telecopy Number: (000) 000-0000
Any party may change such party's address or telecopy number for the
giving of notice specified above by giving notice as herein provided.
Any notice given by personal delivery, by Federal Express (other
similar overnight courier service) or telecopy transmission shall be deemed
given, delivered, received and effective on the date of receipt (or confirmation
or answer back for facsimile) of such delivery (or such other transmission at
the address or fax number designed pursuant hereto) and any notice given by
registered or certified mail shall be deemed given, delivered, received and
effective on the third Business Day after the date on which it was deposited in
the United States postal system. Notice in writing may be given by a method
other than as described above and such notice shall be deemed given, delivered,
received and effective on a date actually received.
10.7. Certain Definitions. As used in this Agreement, the
following terms have the following meanings unless the context otherwise
requires:
"Action or Proceeding" means any action, suit, proceeding or
arbitration by any Person or any investigation or audit by any Governmental or
Regulatory Body.
"Affiliate" with respect to any Person, means any other Person
controlling, controlled by or under common control with such Person.
"Xxxxx" means Xxxxx Holdings USA, Inc., a Delaware
corporation.
"Arcar Business" means the development, manufacture and sale
of inks, adhesives, coatings, presside ink additives, varnishes, extenders,
cleaners for water-based inks and related products.
"Associate" means, with respect to any Person, any corporation
or other business organization of which such Person is an officer or partner or
is the beneficial owner, directly or indirectly, of ten percent (10%) or more of
any class of equity securities, any trust or estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a trustee
or in a similar capacity and any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person or any child or
sibling of such Person or such Person's spouse.
"Books and Records" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations,
conditions of (financial or other), results of operations and assets and
properties of such Person, including without limitation financial statements,
Tax Returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, contracts and other
agreements, licenses, customer lists, computer files and programs, retrieval
programs, operating data and plans and environmental studies and plans.
"Business Day" means any day on which commercial banks are not
authorized or required by law to close in Chicago, Illinois, and New York, New
York.
"Code" means the Internal Revenue Code of 1986, as amended.
"document or other papers" means any document, agreement,
instrument, certificate, notice, consent, affidavit, letter, telegram, telex,
statement, schedule (including any Schedule to this Agreement) or exhibit
(including any Exhibit to this Agreement).
"Dispersions Business" means the development, production and
sale of press cake, pigments and dispersions and other similar raw materials
used or usable in the manufacture of inks, coatings, varnishes, extenders,
presside ink additives and related products, provided, however, that the
foregoing definition will not be given effect for purposes of Section 6.12
unless and only if Buyer enters into a definitive agreement with Xxxxxx relating
to the establishment of the Dispersions Business as contemplated by Section 2.3.
"Environmental Claim" means, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, Governmental or Regulatory Body response
costs, damages to natural resources or other property, personal injuries, fines
or penalties arising out of, based on or resulting from (a) the presence, or
Release into the environment, of any Hazardous Substance at any location,
whether or not owned by such Person, or (b) circumstances forming the basis of
any violation, of alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
Governmental or Regulatory Body for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable Environmental
Law, and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence of Hazardous Substance or arising from alleged injury or threat of
injury to heath, safety or the environment.
"Environmental Law" means any Law or Order or guideline as
enacted, authorized, amended or proposed relating to the regulation or
protection of human health, safety or the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes including but not limited to:
(i) the Clean Air Act, 42 U.S.C. xx.xx. 7401 et seq., as
amended, its implementing regulations and any state or local analogs to that Act
and its regulations;
(ii) the Federal Water Pollution Control Act, as amended, 33
U.S.C. xx.xx. 1251 et seq., its implementing regulations and any state or local
analogs to that Act and its regulations;
(iii) the Rivers and Harbors Act of 1899, 33 X.X.X.xx.xx. 401
et seq., as amended, and its implementing regulations;
(iv) the Resource Conservation and Recovery Act, 42 U.S.C.
xx.xx. 6901 et seq., as amended ("RCRA"), its implementing regulations and any
state or local analogs to that Act and its regulations;
(v) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA" or "Superfund"), 42 U.S.C. xx.xx. 9601 et seq.,
as reauthorized and amended by the Superfund Amendments and Reauthorization Act
of 1986, its implementing regulations and any state statute similar to that act
and its regulations;
(vi) The Toxic Substances Control Act, 15 U.S.A. xx.xx. 2601
et seq., as amended, and the regulations promulgated thereunder,
(vii) the Hazard Communication Standard, 29 CFR ss. 1910.1200,
as amended ("HCS") promulgated by the Occupational Safety and Health
Administration, and any similar state or local law; and
(viii) the Safe Drinking Water Act, 42 U.S.C. ss. 300f et
seq., as amended; and
(ix) The Illinois Environmental Protection Act, 415 I.L.C.
55/1 et seq. and its implementing regulations.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"GAAP" means generally accepted accounting principles.
"Governmental or Regulatory Body" means court, tribunal,
arbitrator or any government or political subdivision thereof, whether federal,
state, county, local or foreign, or any agency, authority, official or
instrumentality of any such government or political subdivision.
"Hazardous Substance" means (A) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls (PCBs); (B) any chemicals or other materials or
substances which are now or hereafter defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants" or words of similar import under, or regulated by, any Environmental
Law; and (C) any other chemical or other material or substance, exposure to
which is now or hereafter prohibited, limited or regulated by any Governmental
or Regulatory Body under any Environmental Law.
"Law" means any law, statute, rule, regulation, ordinance and
other pronouncement having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Body.
"Lien" means any lien, pledge, hypothecation, mortgage,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any stockholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Effect" means any change or changes or
effect or effects that individually or in the aggregate are materially adverse
to (i) the assets, properties, business, operations, income, prospects or
condition (financial or otherwise) of Arcar or the transactions contemplated by
this Agreement or (ii) the ability of Bagcraft, ARTRA or Arcar to perform its
obligations under this Agreement.
"Net Assets" means (i) the sum of the Accounts Receivable (net
of reserves for bad debts), Inventory and Prepaid Expenses, reflected as current
assets in accordance with GAAP on the Balance Sheet and Statement of Net Assets
(taking into account only those assets constituting Purchased Assets), less (ii)
the sum of the Accounts Payable, Accrued Real Estate Taxes, Accrued Bonus,
Accrued Wages, Accrued Commissions, Accrued Medical Claims, Accrued Customer
Rebates and Discounts and Accrued Payroll Taxes reflected as current liabilities
in accordance with GAAP on the Balance Sheet and Statement of Net Assets (taking
into account only those liabilities constituting Assumed Liabilities), provided,
however, that such current liabilities and the Assumed Liabilities shall not
include and the Net Assets calculation shall be adjusted to exclude any amounts
owed for accrued bonuses and any amounts owed for accrued wages with respect to
management's earnout arrangements resulting from the acquisition of the Arcar
Business by Arcar from Xxxxx Xxxxxxxx and related parties pursuant to that
certain Asset Purchase Agreement dated as of March 1, 1994 by and among AGI Acq.
Inc., Arcar Graphics, Inc. and Xxxxx Xxxxxxxx. The calculations pursuant to the
preceding clauses (i) and (ii) shall be made in accordance with GAAP in the
manner set forth on the pro forma Statement of Net Assets attached hereto as
Exhibit A.
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Body, in each case whether
preliminary or final.
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental or Regulatory Body or other entity.
"Release" means any release, spill, emission, leaking,
pulping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Substances through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"Tax Return" means any return, report, information return, or
other document (including any related or supporting information) filed or
required to be filed with any federal, state, local, or foreign governmental
entity or other authority in connection with the determination, assessment or
collection of any Tax (whether or not such Tax is imposed on Arcar) or the
administration of any laws, regulations or administrative requirements relating
to any Tax.
"Tax" and "Taxes" means all taxes, charges, fees, levies or
other assessments imposed by any federal, state, local or foreign taxing
authority, whether disputed or not, including, without limitation, income,
capital, estimated, excise, property, sales, transfer, withholding, employment,
payroll, and franchise taxes and such terms shall include any interest,
penalties or additions attributable to or imposed on or with respect to such
assessments.
10.8. Trademarks and Trade Names. At or prior to the Closing,
Arcar shall either dissolve or change its name to a name not including the name
"Arcar". Except as otherwise contemplated hereby, neither Arcar nor any of its
Affiliates shall use the name "Arcar" after the Closing Date.
10.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Illinois, other than those
laws governing conflict of laws.
10.10. Entire Agreement. This Agreement and the Schedules and
Exhibits and the other documents and instruments referred to herein contain the
entire agreement between the Parties with respect to the transactions
contemplated hereby and supersede all previous oral or written negotiations,
commitments, understandings and agreements.
10.11. Confidentiality. Buyer hereby agrees, and shall cause
its Affiliates to agree, that Buyer and its Affiliates shall hold in confidence
and not disclose to any third Person, nor use any confidential or proprietary
information relating solely to Bagcraft, ARTRA and Arcar or their Affiliates
that is disclosed to or discovered by Buyer or its Affiliates in connection with
the transactions contemplated hereby, other than any such information relating
to the Arcar Business, the Purchased Assets, Bagcraft, ARTRA and or the Assumed
Liabilities. Bagcraft, ARTRA and Arcar hereby agree, and shall cause their
Affiliates to agree, that Bagcraft, ARTRA and Arcar and their Affiliates shall
hold in confidence and not disclose to any third Person any confidential or
proprietary information, nor use any confidential or proprietary information
relating solely to Buyer or its Affiliates that is disclosed to or discovered by
Bagcraft, ARTRA and Arcar or their Affiliates in connection with the
transactions contemplated hereby.
10.12. Cooperation in Litigation. In the event and for so long
as any party is contesting, pursuing or defending against any charge, complaint,
action, suit, proceeding, hearing, investigation, claim or demand or pursuing
any claim in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Arcar Business (the
"Litigating Party"), the other party (the "Cooperating Party") shall use its
commercially reasonable efforts to cooperate fully with the Litigating Party and
its counsel in the contest, pursuit or defense, make available its personnel,
and provide such testimony, information and access to its books and records as
shall be necessary or reasonably desirable in connection with the contest,
pursuit or defense. The Litigating Party shall pay or reimburse the Cooperating
Party for reasonable travel and meal charges of the employees and other
reasonable out-of-pocket expenses of the Cooperating Party incurred in
connection therewith (unless the Litigating Party is entitled to indemnification
therefor, or is required to bear additional expenses, under Section 9).
10.13. Knowledge. Whenever in this Agreement any
representation or warranty of Bagcraft, ARTRA and Arcar is expressed in terms of
knowledge, such knowledge shall be deemed to include (i) matters actually known
to an officer or director of Bagcraft, ARTRA and Arcar, including Xxxxxxxx or
(ii) information which an officer or director of Bagcraft, ARTRA and Arcar would
reasonably be expected to be aware in the prudent discharge of his duties.
Whenever in this Agreement any representation or warranty of
Buyer is expressed in terms of knowledge, such knowledge shall be deemed to
include:
(i) matters actually known to an officer or director
of Buyer (including but not limited to Xxxxxx X. Van Liedekerke); or
(ii) information which an officer or director of
Buyer (including but not limited to Xxxxxx X. Van Liedekerke) reasonably
expected to be aware in the prudent discharge of his duties.
10.14. Waivers. Any waiver must be explicitly in writing. A
waiver of any breach or failure to enforce any of the terms or conditions of
this Agreement shall not in any way affect, limit or waive a party's rights at
any time to enforce strict compliance thereafter with every term or condition of
this Agreement.
10.15. Third Party Rights. The provisions of this Agreement
are intended for the sole benefit of the parties and shall not inure to the
benefit of any other person (other than permitted assigns of the parties) either
as a third party beneficiary or otherwise.
10.16. Counterparts and Headings. This Agreement may be signed
in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument. All headings, in
this Agreement are inserted for convenience of reference only and shall not
affect its meaning or interpretation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
signed by their respective duly authorized representatives, all as of the date
first above written.
ARCAR ACQUISITION CORP.
By: ______________________________
Title: ______________________________
ARCAR GRAPHICS, INC.
By: ______________________________
Title: ______________________________
BAGCRAFT CORPORATION OF AMERICA
By: ______________________________
Title: ______________________________
ARTRA GROUP INCORPORATED
By: ______________________________
Title: ______________________________
BCA HOLDINGS, INC.
By: _______________________________
Title _______________________________
Xxxxx Holdings USA, Inc. ("Xxxxx") hereby agrees to its representations and
warranties set forth in Section 5 of the Agreement and guarantees the
performance by Buyer of its obligations under this Agreement, provided, however,
that, if the Closing shall occur, this guarantee and such representations and
warranties shall terminate and Xxxxx shall have no further liability hereunder
from and after the Closing.
XXXXX HOLDINGS USA, INC.
By: ______________________________
Title: ______________________________
