STOCK PURCHASE AGREEMENT by and among SAFRAN USA, INC., SAFRAN UK LIMITED and BEL FUSE INC. Dated as of DECEMBER 28, 2009
EXHIBIT
10.8
EXECUTION
VERSION
by and
among
SAFRAN
USA, INC.,
SAFRAN UK
LIMITED
and
BEL FUSE
INC.
Dated as
of
DECEMBER
28, 2009
TABLE
OF CONTENTS
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Page
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ARTICLE
1
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DEFINITIONS
AND CONSTRUCTION
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1
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Section
1.1
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Definitions
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1
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Section
1.2
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Additional
Defined Terms
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11
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Section
1.3
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Construction
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14
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ARTICLE
2
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THE
TRANSACTION
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14
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Section
2.1
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Sale
and Purchase of Shares
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14
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Section
2.2
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Purchase
Price
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14
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Section
2.3
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Purchase
Price Adjustment.
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15
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Section
2.4
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Closing.
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20
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Section
2.5
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Closing
Deliveries.
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20
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Section
2.6
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Allocation
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22
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Section
2.7
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Change
of Control Costs
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22
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ARTICLE
3
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REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
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23
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Section
3.1
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Organization
and Good Standing
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23
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Section
3.2
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Authority
and Enforceability
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24
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Section
3.3
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No
Conflict.
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24
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Section
3.4
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Capitalization
and Ownership, Subsidiaries.
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25
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Section
3.5
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Financial
Statements
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25
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Section
3.6
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No
Undisclosed Liabilities.
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26
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Section
3.7
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Absence
of Certain Changes and Events
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26
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Section
3.8
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Properties
and Assets; Encumbrances.
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28
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Section
3.9
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Intellectual
Property
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29
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Section
3.10
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Contracts.
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31
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Section
3.11
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Tax
Matters.
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33
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Section
3.12
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Employee
Benefit Matters.
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36
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Section
3.13
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Employment
and Labor Matters
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39
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Section
3.14
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Environmental,
Health and Safety Matters.
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39
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Section
3.15
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Governmental
Authorizations
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41
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Section
3.16
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Compliance
with Laws
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41
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Section
3.17
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Legal
Proceedings
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42
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Section
3.18
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Insurance
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42
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Section
3.19
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Inventories
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43
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Section
3.20
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Accounts
and Notes Receivable and Payable.
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43
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Section
3.21
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Related
Party Transactions.
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43
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Section
3.22
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Customers
and Suppliers.
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44
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Section
3.23
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Product
Warranty; Product Liability.
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44
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Section
3.24
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Banks;
Power of Attorney
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45
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TABLE
OF CONTENTS
(continued)
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Page
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Section
3.25
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Certain
Payments
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45
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Section
3.26
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Sufficiency
of the Assets
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45
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Section
3.27
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Military
Specification Testing
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45
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Section
3.28
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Brokers
Fees
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46
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Section
3.29
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Disclaimer
of Other Representations and Warranties
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46
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ARTICLE
4
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REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
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46
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Section
4.1
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Organization
and Good Standing
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46
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Section
4.2
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Authority
and Enforceability
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47
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Section
4.3
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No
Conflict.
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47
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Section
4.4
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Legal
Proceedings
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47
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Section
4.5
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Brokers
Fees
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47
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Section
4.6
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Financial
Capacity
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47
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Section
4.7
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No
Knowledge of Breach or Inaccuracy
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48
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Section
4.8
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Independent
Investigation
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48
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Section
4.9
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Disclaimer
of Other Representations and Warranties
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48
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ARTICLE
5
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COVENANTS
|
49
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Section
5.1
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Access
and Investigation
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49
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Section
5.2
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Operation
of the Businesses of the Acquired Companies.
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49
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Section
5.3
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Consents
and Filings; Commercially Reasonable Efforts.
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52
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Section
5.4
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Supplements
to Disclosure Schedules
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54
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Section
5.5
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Financing
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54
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Section
5.6
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Non-Competition;
Non-Solicitation; Confidentiality.
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55
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Section
5.7
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Public
Announcements
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56
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Section
5.8
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Use
of Seller Brand
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57
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Section
5.9
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Affiliate
Transactions.
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57
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Section
5.10
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Termination
of Seller Insurance Coverage
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58
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Section
5.11
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Credit
and Performance Support Obligations
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58
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Section
5.12
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Amended
and Restated Labinal Supply Agreement
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58
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Section
5.13
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Contact
with Customers and Suppliers
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58
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Section
5.14
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No
Shop.
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59
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Section
5.15
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Preservation
of Records
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59
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Section
5.16
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Use
of Name of Acquired Companies
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60
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Section
5.17
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Monthly
Financial Statements.
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60
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Section
5.18
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Fees
and Expenses
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61
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Section
5.19
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Notification
of Certain Matters
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61
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Section
5.20
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Debt;
Payables
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61
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Section
5.21
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Resignation
of Directors and Officers; Removal and Replacement of Authorized
Persons
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61
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Section
5.22
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Relationship
Managers.
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61
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TABLE
OF CONTENTS
(continued)
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Page
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Section
5.23
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Transition
Services
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62
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Section
5.24
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Further
Actions
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62
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ARTICLE
6
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CONDITIONS
PRECEDENT TO OBLIGATION TO CLOSE
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62
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Section
6.1
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Conditions
to the Obligation of the Purchaser
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62
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Section
6.2
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Conditions
to the Obligation of the Sellers
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64
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Section
6.3
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Transfer
of Main Scheme.
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64
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ARTICLE
7
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TERMINATION |
65
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Section
7.1
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Termination
Events
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65
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Section
7.2
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Effect
of Termination
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67
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Section
7.3
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Procedure
Upon Termination
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67
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Section
7.4
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Certain
Effects of Termination
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67
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ARTICLE
8
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INDEMNIFICATION
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68
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Section
8.1
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Indemnification
by the Sellers
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68
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Section
8.2
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Indemnification
by the Purchaser
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68
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Section
8.3
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Claim
Procedure.
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69
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Section
8.4
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Survival
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70
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Section
8.5
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Limitations
on Liability
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71
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Section
8.6
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Materiality
Thresholds Disregarded
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72
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Section
8.7
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Knowledge
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72
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Section
8.8
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Tax
Refunds and Other Payments
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72
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Section
8.9
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Mitigation
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72
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Section
8.10
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Subrogation
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72
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Section
8.11
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No
Right to Recover Against Acquired Companies
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72
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Section
8.12
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Exclusive
Remedy
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73
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ARTICLE
9
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TAX
MATTERS
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73
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Section
9.1
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Liability
and Indemnification for Taxes.
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73
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Section
9.2
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Tax
Return Filing; Audit Responsibilities.
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74
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Section
9.3
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Section
338 Elections.
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76
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Section
9.4
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Transfer
Taxes
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77
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Section
9.5
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Cooperation
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77
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Section
9.6
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Tax-Sharing
Agreements
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78
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ARTICLE
10
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EMPLOYEE BENEFITS MATTERS |
78
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Section
10.1
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Seller
Plans
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78
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Section
10.2
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Defined
Contribution Plan — U.K
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78
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TABLE
OF CONTENTS
(continued)
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Page
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Section
10.3
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Welfare
Arrangements
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78
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Section
10.4
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Indemnity
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79
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Section
10.5
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COBRA
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79
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Section
10.6
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Defined
Benefit Plan — U.K.
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79
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Section
10.7
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Indemnity
— Sellers.
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80
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ARTICLE
11
|
GENERAL
PROVISIONS
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81
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Section
11.1
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Notices
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81
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Section
11.2
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Amendment
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82
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Section
11.3
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Waiver
and Remedies
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82
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Section
11.4
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Entire
Agreement
|
82
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Section
11.5
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Assignment,
Successors and No Third Party Rights
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83
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Section
i 1.6
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Severability
|
83
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Section
11.7
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Exhibits
and Schedules
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83
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Section
11.8
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Interpretation
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83
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Section
11.9
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Expenses
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83
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Section
11.10
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Governing
Law
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83
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Section
11.11
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Limitation
on Liability
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84
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Section
11.12
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Specific
Performance
|
84
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Section
11.13
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Dispute
Resolution
|
84
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Section
11.14
|
No
Joint Venture
|
85
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Section
11.15
|
Counterparts
|
85
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Exhibits
A — Form
UK Power of Attorney
B —
Amended and Restated Labinal Supply Agreement
This
Stock Purchase Agreement (this "Agreement") is made
as of December 28, 2009, by and among Bel Fuse Inc., a New Jersey corporation
(the "Purchaser"),
SAFRAN USA, Inc., a Delaware corporation ("Seller U.S.") and
SAFRAN UK LIMITED (no 2178689), a private limited company incorporated in
England and Wales ("Seller U.K.", and
together with Seller U.S., the "Sellers" and each a
"Seller").
WITNESSETH:
WHEREAS,
Seller U.S. owns all of the outstanding shares of capital stock (the "U.S. Shares") of Cinch
Connectors, Inc., a Delaware corporation ("Cinch U.S."), and
Seller U.K. owns all of the outstanding shares (the "U.K. Shares" and, together
with the U.S. Shares, the "Shares") of Cinch
Connectors Limited, a private limited company incorporated in England and Wales
under number 2178707 ("Cinch U.K.", and
together with Cinch U.S., the "Companies" and each
a "Company");
WHEREAS,
Cinch U.S. owns 39,998 shares (the "MX Majority Shares")
of the capital stock of Cinch Connectors de Mexico, S.A. de C.V. ("Cinch MX") a Sociedad
Anonima de Capital
Variable, incorporated under the laws of the United Mexican states
("Mexico"), which such shares represent 99.9% of the issued and outstanding
capital stock of Cinch MX; and
WHEREAS,
upon the terms and conditions and for the purchase price set forth herein, the
Sellers desire to (a) sell to the Purchaser, and the Purchaser desires to
purchase from the Sellers, the Shares, and (b) cause Labinal Investments, Inc.
("Labinal") to
sell, assign or transfer to the Designee (as defined below) two (2) of the
shares (the "MX
Minority Shares", and together with the MX Majority Shares, the "MX Shares") of the
capital stock of Cinch MX, which such shares represent 0.1% of the issued and
outstanding capital stock of Cinch MX.
NOW,
THEREFORE, intending to be legally bound and in consideration of the mutual
provisions set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE
1
DEFINITIONS
AND CONSTRUCTION
Section
1.1 Definitions. For the
purposes of this Agreement and the Ancillary Agreements:
"Accounting Methodologies"
means the accounting methodologies set forth on Section 1.1(a) of the
Seller Disclosure Schedule, to be used solely for purposes of calculating the
Net Working Capital, Net Cash and Aggregate Revenues of the Acquired
Companies.
"Acquired Companies" means,
collectively, the Companies and their Subsidiaries including,
in the case of Cinch U.S., Cinch MX.
"Affiliate" means,
with respect to a specified Person, a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with, the specified Person. For purposes of this definition, (i)
the term "control" (including the terms "controlling," "controlled by" and
"under common control with") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise and (ii) the Acquired Companies shall each be deemed an "Affiliate" of
the Purchaser beginning as of the Closing.
"Affiliated Group"
means a group of corporations with which any Acquired Company has filed
consolidated, combined, unitary or similar Tax Returns.
"Aggregate Revenues"
means, for a relevant period, the aggregate revenues of the Acquired
Companies, calculated in the same manner, and in accordance with the same
policy, as revenues are calculated in preparing the Financial Statements and in
the manner set forth on the Accounting Methodologies.
"Ancillary Agreements"
means the Amended and Restated Labinal Supply Agreement and the Affiliate
Releases.
"Business Day" means
any day other than Saturday, Sunday or any day on which banking institutions in
Paris, France or New York, New York are closed either under applicable Law or
action of any Governmental Authority.
"Cash" means, with
respect to a Person, the amount of cash, cash equivalents and liquid investments
on hand or credited to any account open in the name of such Person with a
financial institution (plus all uncollected bank deposits and less all
outstanding checks), as of the close of business on the Closing
Date.
"Change of Control Payments"
means all sale, "stay-around," retention, or similar bonuses or payments
to those current or former directors, officers, employees and consultants of the
Acquired Companies set forth on Section 2.7 of the
Seller Disclosure Schedule as a result of or in connection with the transactions
contemplated by this Agreement and the actual or constructive termination of
such employees after the Closing in accordance with the terms of their
respective change of control agreements.
"Closing Condition Material
Adverse Effect" means the failure of the Aggregate Revenues to exceed
US$11,000,000 during any Pre-Closing Three Calendar Month Period. For purposes
of this calculation, the Aggregate Revenues will be determined in accordance
with the Accounting Methodologies.
"Code" means the
Internal Revenue Code of 1986, as amended.
-2-
"Company Plan" means
any "employee benefit plan" (as defined in Section 3(3) of ERISA) (excluding any
"multiemployer plan" (as defined in Section 3(37) of ERISA)) and any other
material plan, Contract or arrangement involving direct or indirect
compensation, including insurance coverage, sick leave, disability, health
benefits, vacation policies, severance benefits, change in control benefits,
deferred compensation, bonuses, stock options, stock purchase, stock
awards,
phantom stock, stock appreciation or other forms of incentive compensation or
post- retirement compensation that (i) is sponsored or maintained by any
Acquired Company or the Sellers for the benefit of any Employees, (ii) has been
approved by any Acquired Company or the Sellers for the benefit of any Employees
but is not yet effective or (iii) was previously maintained by any Acquired
Company or the Sellers for the benefit of any Employees and with respect to
which any Acquired Company has any liability. For purposes of Section 3.12(a) and
Section 10.1
only, "Company Plan" will exclude the "Main Scheme" and the "Stakeholder
Scheme" (both as defined in Section
3.12(b)(i).
"Company Transaction
Expenses" means, except as otherwise expressly set forth in this
Agreement, any fees and expenses of counsel, advisors, consultants, investment
bankers, accountants, and auditors and experts of the Acquired
Companies.
"Contract" means any
contract, agreement, lease, license, commitment, understanding, franchise,
warranty, guaranty, mortgage, note, bond or other instrument or consensual
obligation that is legally binding.
"Copyrights" means
all copyrights and registrations and applications therefor, works of authorship
and mask work rights.
"Dataroom" means the
collection of documents, materials and information relating to the Sellers and
Acquired Companies contained in the online data room which is operated by
Xxxxxxx Datasite and made available to Purchaser and its advisors prior to the
date hereof, a digital copy of which was provided to Purchaser on December 14,
2009 and the index to which is attached hereto as Section 1.1(b) of the
Seller Disclosure Schedule.
"Employees" means any
current or former director, officer or employee of any Acquired
Company.
"Encumbrance" means
any lien, pledge, mortgage, deed of trust, security interest, claim, lease,
charge, option, right of first refusal, easement, servitude, proxy, voting trust
or agreement, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever other than (a)
carrier's, warehousemen's, mechanic's, materialmen's and other similar liens
with respect to amounts that are not yet due and payable or that are being
contested in good faith, in each case, that are not material to the business,
operations and financial condition of the Companies or the assets of the
Companies so encumbered and that are not resulting from a breach, default or
violation by a Company or any of its Subsidiaries of any Contract or Law, (b)
statutory liens for Taxes that are not yet due and payable or that are being
contested in good faith, (c) restrictions on the transferability of securities
arising under applicable securities Laws and (d) restrictions arising under
applicable zoning and other land use Laws that do not, individually or in the
aggregate, have a material adverse effect on the present use or occupancy of the
property subject thereto and provided that such
Laws have not been violated.
"Environment" means
any land surface or subsurface strata, air, surface water, ground water,
drinking water supply, stream and river sediments, and natural resources,
including wildlife, fish and biota and other environmental resources belonging
to, managed by, or held in trust by
any governmental sovereign, including the U.S., any state or local Governmental
Entity, any foreign government or any other Person so designated under
Environmental Laws.
-3-
"Environmental Law"
means any Law, statute, rule, regulation, order, ordinance,
administrative ruling, decree, judgment, permit, or any other requirement of any
Governmental Authority concerning (a) the handling, storage, transport,
treatment, disposal, emission, discharge, Release or threatened Release or other
regulation of Hazardous Material or (b) the protection of human health and
safety and the Environment (including natural resources, wetlands, sediments,
ambient air and surface or subsurface land or waters) including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App. § 1801 et seq.), the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Clean Air
Act (42 U.S.C. § 7401 et seq.) the Toxic
Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. § 651 et seq.), the General
Law of Ecological Equilibrium and Environmental Protection ("Ley General del Equilibrio
Ecologico y la Proteccion at Ambiente"), the
National Waters Law ("Ley de
Aguas Nacionales"), the General Law for the Prevention and Integral
Management of Wastes ("Ley
General para la Prevencion y Gestion Integral de los Residuos"),
the Regulations of the General Law for the Prevention and Integrated
Management of Waste ("Reglamento de xx Xxx General para
la Prevencion y Gestion Integral de los Residuos"),
the General Health Law ("Ley General de Salud"), and
their respective regulations, as well as the Federal Regulation for Safety and
Health in the Work Environment ("Reglamento Federal de Seguridad,
Higiene y Medio Ambiente en el Trabajo"), the applicable Mexican Official
Standards (Normas Oficiales
Mexicanas), as such environmental laws may be amended, amended and
restated, supplemented, substituted or otherwise modified from time to time, as
well as any applicable analogous provisions of state, local, federal or
nonU.S. Laws.
"Environmental Liabilities"
means, with respect to any Person, all claims, judgments, Liabilities,
encumbrances, liens, violations, obligations, responsibilities, remedial
actions, losses, damages, punitive damages, treble damages, costs and expenses
(including any amounts paid in settlement, all reasonable fees, disbursements
and expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other Person, whether known or unknown,
accrued or contingent, whether based in contract, tort, implied or express
warranty, strict Liability, criminal or civil statute, to the extent based upon,
or arising under or pursuant to any Environmental Law or Environmental
Permit.
"Environmental Permit"
means any permit, license, approval, consent, franchise, privilege,
variance, immunity, registration and other authorization issued by a
Governmental Authority pursuant to any Environmental Law.
"ERISA" means the
Employee Retirement Income Security Act of 1974, as amended.
"ERISA Affiliate"
means Cinch U.S. and its Subsidiaries or any of their Affiliates and any
trade or business (whether or not incorporated) that is or has ever been under
common control,
or that is or has ever been treated as a single employer, with any of them under
Section 414(b), (c), (m) or (o) of the Code.
-4-
"FG" means all
inventory of finished goods owned, used or held for use by any of the Acquired
Companies.
"Governing Documents"
means any charter, articles, bylaws, certificate, statement, statutes or
similar document adopted, filed or registered in connection with the creation,
formation or organization of an entity.
"Governmental Authority"
means any (a) nation, region, state, county, city, town, village,
district or other jurisdiction, (b) federal, state, local, municipal, foreign or
other government, (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department or other entity and any
court or other tribunal), (d) multinational organization exercising judicial,
legislative or regulatory power or (e) body exercising, or entitled to exercise,
any administrative, executive, judicial, legislative, police, regulatory or
taxing authority or power of any nature of any federal, state, local, municipal,
foreign or other government, in each case anywhere throughout the
world.
"Governmental Authorization"
means any approval, consent, ratification, waiver, license, permit,
registration or other authorization issued or granted by any Governmental
Authority.
"Hazardous Material"
means any waste or other substance that is listed, defined, designated or
classified as hazardous, radioactive or toxic or a pollutant or a contaminant
under any Environmental Law, including any admixture or solution thereof, and
including petroleum and all derivatives thereof or synthetic substitutes
therefor, asbestos or asbestos-containing materials in any form or condition,
polychlorinated biphenyls, radon, or chlorofluorocarbons or other
ozone-depleting substances.
"HSR Act" means the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
"Indebtedness" of any
Person means, without duplication, (a) the principal, accreted value, accrued
and unpaid interest, prepayment and redemption premiums or penalties (if any),
unpaid fees or expenses and other monetary obligations owed or accrued as of the
Closing Date to a third party financial institution in respect of (i)
indebtedness of such Person for money borrowed and (ii) indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable; (b) all obligations of such Person
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such Person and all obligations of such Person under any
title retention agreement (but excluding trade accounts payable and other
accrued current liabilities arising in the ordinary course of business (other
than the current liability portion of any indebtedness for borrowed money)); (c)
all obligations of such Person under leases required to be capitalized in
accordance with U.S. GAAP or U.K. GAAP; (d) all obligations of such Person for
the reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction; (e) all obligations of such Person under interest
rate or currency swap transactions (valued at the termination value thereof);
(f) the liquidation value, accrued and unpaid dividends; prepayment or
redemption premiums and penalties (if any), unpaid fees or expenses and other
monetary obligations in respect of any redeemable preferred stock of such
Person; (g) all obligations of the type referred to in clauses (a) through (f)
of any Persons for the payment of which such Person is responsible or liable,
directly or indirectly, as obligor, guarantor, surety or otherwise, including
guarantees of such obligations; and (h) all obligations of the type referred to
in clauses (a) through (g) of other Persons secured by (or for which the holder
of such obligations has an existing right, contingent or otherwise, to be
secured by) any Encumbrance on any property or asset of such Person (whether or
not such obligation is assumed by such Person).
-5-
"Indemnification Articles"
means Article
8, Article 9 and/or Article
10.
"Intellectual Property"
means any and all intellectual property rights owned or used by the
Acquired Companies arising from or in respect of the following, whether
protected, created or arising under the laws of the U.S., Mexico, the U.K. or
any other jurisdiction: (i) all Patents, (ii) Marks, (iii) Copyrights, (iv)
URLs; (v) Trade Secrets, and (vi) all Software and Technology of the Acquired
Companies.
"Intellectual Property
Licenses" means (i) any grant by an Acquired Company to another Person of
any right to use any of the Intellectual Property, and (ii) any grant by another
Person to an Acquired Company of a right to use such Person's intellectual
property rights included in the Intellectual Property.
"Inventory" means all
inventory owned, used or held for use by any of the Acquired Companies,
including all Raw Materials, WIP and FG.
"IRS" means the
United States Internal Revenue Service and, to the extent relevant, the United
States Department of Treasury.
"Judgment" means any
order, injunction, judgment, decree, ruling, assessment or arbitration award of
any Governmental Authority or arbitrator.
"Knowledge" means (i)
with respect to the Sellers, the actual knowledge, without any obligation of
independent investigation, of any of the individuals listed in Section 1.1(c) of the
Seller Disclosure Schedule and (ii) with respect to the Purchaser, the actual
knowledge, without any obligation of independent investigation, of any of any of
Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxx and
Avi Eden.
"Law" means, with
respect to the U.S., the U.K. and Mexico, any federal, state, local, municipal,
foreign, international, multinational, or other constitution, law, statute,
treaty, rule, regulation, ordinance or code, including, without limitation, to
the extent applicable, all Environmental Laws, all Tax laws, all zoning laws,
the Code, ERISA, COBRA, the Small Business Act (15 U.S.C. Sec. 631, et. seq.),
the Federal Property and Administrative Services Act, the Federal Acquisition
Streamlining Act of 1994, 10 U.S.C. Sec 2323, Executive Order 12138, the Federal
Acquisition Regulations, the UK Taxation of Chargeable Gains Xxx 0000, the UK
Finance Xxx 0000, the UK Finance Xxx 0000, UK Finance Xxx 0000, UK Finance Xxx
0000, the UK Corporation Tax Xxx 0000, the UK Value Added Tax Xxx 0000, the UK
Income &
Corporation Taxes Act 1988 Occupational, the Pension Schemes (Employer
Debt) Regulations 2005, the Pensions Xxx 0000, the Xxxxxxx Xxxxxxx Xxx 0000, the
Finance Xxx 0000, the Welfare Reform
and Pensions Xxx 0000, the Occupational Pension Schemes (Cross-border
Activities) Regulations 2005, the Pensions Xxx 0000, the Transfer of
Undertakings (Protection of Employment) Regulations 1981 or 2006, the Working
Time Regulations 1998, the Employment Rights Xxx 0000, Sex Discrimination Xxx
0000, the Race Relations Xxx 0000, the Disability Discrimination Xxx 0000, the
Employment Equality (Sexual Orientation) Regulations 2003, the Employment
Equality (Religion or Belief) Regulations 2003, the National Minimum Wage Xxx
0000, the Mexican Federal Labor Law (Ley Federal del Trabajo), National Fund for
Worker's Housing Institute Law (Ley del Instituto del Fondo Nacional de la
Vivienda para los Trabajadores), Social Security Law (Ley del Seguro Social),
Retirement Savings Fund System Law, (Ley de los Sistemas de Ahorro para el
Retiro), Federal Regulation for Safety and Health in the Work Environment
("Reglamento Federal de Seguridad, Higiene y Medio Ambiente en el Trabajo"), the
applicable Mexican Official Standards (Normas Oficiales Mexicanas), as such may
be amended, amended and restated, supplemented, substituted or otherwise
modified from time to time, as well as any applicable analogous provisions of
state, local, federal or non-U.S. Laws.
-6-
"Liability" means any
debt, loss, damage, adverse claim, fines, penalties, liability or obligation
(whether direct or indirect, known or unknown, asserted or unasserted, absolute
or contingent, accrued or unaccrued, matured or unmatured, determined or
determinable, liquidated or unliquidated, or due or to become due, and whether
in contract, tort, strict liability or otherwise), and including all costs and
expenses relating thereto including all fees, disbursements and expenses of
legal counsel, experts, engineers and consultants and costs of
investigation).
"Loss" or "Losses" means any
and all direct and actual Liabilities, losses, damages, Judgments, fines,
penalties, costs or expenses (including reasonable attorney's or other
professional fees and expenses) but excluding any special, incidental, indirect,
exemplary, punitive or consequential damages (including lost profits, loss of
revenue or lost sales, or amounts calculated as a multiple of earnings, profits,
revenue, sales or other measure).
"Marks" means all
trademarks, service marks, trade names, service names, brand names, trade dress
rights, logos, slogans, corporate names and general intangibles of a like
nature, together with the goodwill associated with any of the foregoing, and all
applications, registrations and renewals thereof.
"Material Adverse Effect"
means any event, change, circumstance, effect or other matter that,
individually or in the aggregate with any other event, change, circumstance,
effect or other matter, has a material adverse effect on (a) the business,
financial condition or results of operations of the Acquired Companies, taken as
a whole, or (b) the ability of the Sellers to consummate timely the transactions
contemplated by this Agreement; provided, however,
that none of the following, either alone or in combination, will
constitute a Material Adverse Effect: any event, change, circumstance, effect or
other matter resulting from or related to (i) any outbreak or escalation of war
or major hostilities or any act of terrorism, (ii) changes in Laws, U.S. GAAP,
U.K. GAAP or enforcement or interpretation thereof except to the extent that
such event, change, circumstance, effect or other matter has a disproportionate
effect on the Acquired Companies as compared with other entities in the
industries in which they operate, (iii) changes that generally affect the
industries and markets in which any Acquired Company operates except to the
extent that such event, change, circumstance, effect or other matter has a
disproportionate effect on
the Acquired Companies as compared with other entities in the industries in
which they operate, (iv) changes in financial markets, general economic
conditions (including prevailing interest rates, exchange rates, commodity
prices and fuel costs) or political conditions, (v) any failure, in and of
itself, of any Acquired Company to meet any published or internally prepared
projections, budgets, plans or forecasts of revenues, earnings or other
financial performance measures or operating statistics (it being understood that
the facts and circumstances underlying any such failure that are not otherwise
excluded from the definition of a "Material Adverse Effect" may be considered in
determining whether there has been a Material Adverse Effect), (vi) any action
taken or failed to be taken pursuant to or in accordance with this Agreement or
at the request of, or consented to by, the Purchaser, or (vii) the execution or
delivery of this Agreement, the consummation of the transactions contemplated by
this Agreement or the public announcement or other publicity with respect to any
of the foregoing.
-7-
"Net Cash" means the
difference between (a) the Cash of the Acquired Companies minus
(b) the Indebtedness of the Acquired Companies, in all cases as of the
close of business on the Closing Date and determined in accordance with the
Accounting Methodologies. For purposes of this definition, if the Indebtedness
of the Acquired Companies exceeds the Cash of the Acquired Companies, then the
Net Cash amount will be a negative number.
"Net Working Capital"
means all current assets (not including Cash) minus all current
Liabilities (not including Indebtedness or Company Transaction Expenses) as
determined in accordance with the Accounting Methodologies.
"Patents" means all
patents and applications therefor, including continuations, divisionals,
continuations-in-part, or reissues of patent applications and patents issuing
thereon, and all similar rights arising under the Laws of any jurisdiction in
inventions and discoveries including, without limitation, invention
disclosures.
"Person" means an
individual or an entity, including a corporation, limited liability company,
general or limited partnership, trust, association or other business or
investment entity, or any Governmental Authority.
"Post-Closing Period"
means any taxable period or portion of a period that begins after the
Closing Date.
"Pre-Closing Period"
means any taxable period or portion of a period that begins on or before
the Closing Date and ends on or before the Closing Date.
"Pre-Closing Three Calendar
Month Period" means any three consecutive full calendar month period
beginning November 1, 2009 through the last day of the full calendar month
immediately prior to the date on which the last of the conditions set forth in
Article 6 have
been satisfied or waived (other than those conditions that by their nature can
only be satisfied at the Closing); provided, however
that if such date occurs after the 15th day of
a calendar month, then the Pre-Closing Three Calendar Month Period will include
the full calendar month in which the last of the conditions set forth in Article 6 have been
satisfied or waived (other than those conditions that by their nature can only
be satisfied at the Closing), unless the Purchaser waives (in its sole and
absolute discretion) its right to include such final full calendar month in the
Pre-Closing
Three Calendar Month Period (it being agreed and understood that if all of the
conditions set forth in Article 6 have been
satisfied or waived on or prior to January 31, 2010 (other than those conditions
that by their nature can only be satisfied at the Closing), then the condition
to Closing set forth in Section 6.1(c) shall
not be applicable in connection with the consummation of the transactions
contemplated by this Agreement).
-8-
"Previously-owned Land and
Buildings" means any land and buildings that has or have, during the nine
(9) years before the date of this Agreement, been owned (under whatever tenure)
and/or occupied and/or used by any of the Acquired Companies, but which are no
longer owned, occupied or used by the Acquired Companies.
"Proceeding" means
any action, arbitration, audit, examination, investigation, hearing, litigation
or suit (whether civil, criminal, administrative, judicial or investigative,
whether formal or informal, and whether public or private) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental
Authority or arbitrator.
"Products" means any
and all products designed, manufactured, assembled, repaired, maintained,
delivered, sold or installed, or services rendered, by or on behalf of the
Acquired Companies.
"Raw Materials" means
all inventory of raw materials owned, used or held for use by any of the
Acquired Companies.
"Release" means the
release, spill, emission, leaking, pumping, pouring, emptying, escaping,
dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migrating of any Hazardous Material into the environment.
"Schedule" means the
Seller Disclosure Schedule or the Purchaser Disclosure Schedule, as the context
requires.
"Software" means any
and all (i) computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code,
(ii) databases and compilations, including any and all data and collections of
data, whether machine readable or otherwise, (iii) descriptions, flow-charts and
other work product used to design, plan, organize and develop any of the
foregoing, screens, user interfaces, report formats, firmware, development
tools, templates, menus, buttons and icons, and (iv) all documentation including
user manuals and other training documentation related to any of the
foregoing.
"Straddle Period"
means any taxable period that begins on or before the Closing Date and
ends after the Closing Date.
"Subsidiary" means,
with respect to a specified Person, any corporation or other Person of which
securities or other interests having the power to elect a majority of that
corporation's or other Person's board of directors or similar governing body, or
otherwise having the power to direct the business and policies of that
corporation or other Person (other than securities or other interests having
such power only upon the happening of a contingency that has not occurred) are
held by the specified Person or one or more of its Subsidiaries. When used in
this Agreement without reference to a particular Person, "Subsidiary" means a
Subsidiary of a Company.
-9-
"Tax" means, (a) any
federal, state, local, foreign, or other tax, charge, fee, duty (including
customs duty), levy or assessment, including any income, gross receipts, net
proceeds, alternative or add-on minimum, corporation, ad valorem, turnover, real
property, personal property (tangible or intangible), sales, use, franchise,
excise, value added, stamp, leasing, lease, user, transfer, fuel, excess
profits, profits, occupational, premium, interest equalization, windfall
profits, severance, license, registration, payroll, environmental (including
taxes under Section 59A of the Code), capital stock, capital duty, disability,
estimated, gains, wealth, welfare, employee's income withholding, other
withholding, unemployment or social security or other tax of whatever kind
(including any fee, assessment or other charges in the nature of or in lieu of
any tax) that is imposed by any Governmental Authority, and (b) any interest,
fines, penalties or additions resulting from, attributable to, or incurred in
connection with any items described in this paragraph. For the avoidance of
doubt, the term "Tax" also includes any penalties relating to foreign bank
account reports.
"Tax Attributes"
means, any federal, state, local, foreign or other net operating loss,
net capital loss, research credit, foreign tax credit, charitable deduction or
any other credit, deduction, relief, allowance, exemption, or tax attribute that
could be carried forward or back or otherwise utilized to reduce Taxes,
including deductions and credits relating to alternative minimum Taxes, and any
additional items described in Section 381 of the Code without reference to the
conditions and limitations described therein.
"Tax Contest" means
an audit, claim, dispute or controversy relating to Taxes.
"Tax Return" means
any report, return, declaration, claim for refund, notice, account or
information return or statement related to Taxes, including any schedule or
attachment thereto, and including any amendment thereof
"Technology" means,
collectively, all designs, formulae, algorithms, procedures, methods,
techniques, ideas, know-how, research and development, technical data, programs,
subroutines, tools, materials, specifications, processes, inventions (whether
patentable or unpatentable and whether or not reduced to practice), apparatus,
creations, improvements, works of authorship and other similar materials, and
all recordings, graphs, drawings, reports, analyses, and other writings, and
other tangible embodiments of the foregoing, in any form whether or not
specifically listed herein, and all related technology, that are used in,
incorporated in, embodied in, displayed by or relate to, or are used by an
Acquired Company.
"Trade Secrets" means
all discoveries, concepts, ideas, research and development, know- how, formulae,
inventions, compositions, manufacturing and production processes and techniques,
technical data, procedures, designs, drawings, specifications, databases, and
other proprietary or confidential information, including customer lists,
supplier lists, pricing and cost information, and business and marketing plans
and proposals of the Acquired Companies, in each case excluding any rights in
respect of any of the foregoing that comprise or are protected by Copyrights or
Patents.
"Transferred Employee"
means those Persons employed by any Acquired Company immediately prior to
the Closing, including those employees on vacation, leave of absence,
disability
(including long-term disability), military, parental or sick leave or layoff
(whether or not such employees return to active employment with the Acquired
Company).
-10-
"U.K." means the
United Kingdom of Great Britain and Northern Ireland.
"U.K. GAAP" means U.K.
generally accepted accounting principles in the U.K. as of the date
hereof.
"URLs" means all
uniform resource locators, e-mail and other internet addresses and domain names
and applications and registrations therefore.
"U.S." means the
United States of America.
"U.S. GAAP" means U.S.
generally accepted accounting principles in the U.S. as of the date
hereof.
"WARN Act" means the
Worker Adjustment and Retraining Notification Act of 1988, as
amended.
"WIP" means the
work-in-process inventory owned, used or held for use by any of the Acquired
Companies.
Section
1.2 Additional Defined Terms.
For purposes of this Agreement, the following terms have the meanings
specified in the section of, or other location in, this Agreement:
|
Defined Term
|
Location
|
|
|
10.7
Indemnified Parties
|
Section
10.7(c)(i)
|
|
|
Acquired
Business
|
Section
5.6(c)(ii)
|
|
|
Acquired
Competing Business
|
Section
5.6(c)(ii)
|
|
|
Acquisition
Transaction
|
Section
5.14(a)
|
|
|
Aggregate
Inventory Value
|
Section
2.3(b)(xi)(A)
|
|
|
Agreement
|
Preamble
|
|
|
Affiliate
Contract
|
Section
3.21(b)
|
|
|
Affiliate
Releases
|
Section
5.9(a)
|
|
|
Amended
and Restated Labinal Supply Agreement
|
Section
5.12(b)
|
|
|
Antitrust
Laws
|
Section
5.3(d)
|
|
|
Authority
Granted
|
Section
3.24
|
|
|
Balance
Sheet Date
|
Section
3.5
|
|
|
Basket
|
Section
8.5(b)
|
|
|
Cap
|
Section
8.5(c)
|
|
|
Cinch
MX
|
Preamble
|
|
|
Cinch
Name
|
Section
5.16
|
|
|
Cinch
U.K.
|
Preamble
|
|
|
Cinch
U.K. Books
|
Section
3.1
|
|
|
Cinch
U.K. Estimated Closing Balance Sheet
|
Section
2.3(a)(i)
|
|
|
Cinch
U.K. Estimated Net Working Capital
|
Section
2.3(a)(i)
|
|
|
Cinch
U.S.
|
Preamble
|
-11-
|
Cinch
U.S. Estimated Closing Balance Sheet
|
Section
2.3(a)(i)
|
|
|
Cinch
U.S. Estimated Net Working Capital
|
Section
2.3(a)(i)
|
|
|
Claim
Notice
|
Section
8.3(a)
|
|
|
Closing
|
Section
2.4(a)
|
|
|
Closing
Certificate
|
Section
6.1(i)
|
|
|
Closing
Date
|
Section
2.4(a)
|
|
|
CoC
Payment Trigger
|
Section
2.7(a)
|
|
|
COBRA
|
Section
3.12(a)(vii)
|
|
|
Companies
|
Preamble
|
|
|
Company
|
Preamble
|
|
|
Company
Information
|
Section
5.6(b)
|
|
|
Company
Marks
|
Section
5.16
|
|
|
Company
Properties
|
Section
3.8(a)
|
|
|
Company
Property
|
Section
3.8(a)
|
|
|
Competing
Business
|
Section
5.6(c)
|
|
|
Compliant
Party
|
Section
7.2
|
|
|
Confidentiality
Agreement
|
Section
5.6(a)
|
|
|
Connected
Person
|
Section
10.7(c)(ii)
|
|
|
Contribution
Notice
|
Section
10.7(c)(iii)
|
|
|
Designee
|
Section
2.5(a)(ix)
|
|
|
Determination
Date
|
Section
2.4(b)
|
|
|
Dispute
Notice
|
Section
2.3(b)(iv)(B)
|
|
|
DoD
List
|
Section
3.27
|
|
|
Environmental
Assessments
|
Section
3.14(a)
|
|
|
Estimated
Closing Calculations
|
Section
2.3(b)(iv)
|
|
|
Estimated
Net Cash
|
Section
2.3(a)(ii)
|
|
|
Estimated
Seller Closing Balance Sheets
|
Section
2.3(a)(i)
|
|
|
Final
Aggregate Closing Net Working Capital Amount
|
Section
2.3(b)(viii)
|
|
|
Final
Closing Net Cash
|
Section
2.3(b)(viii)
|
|
|
Final
U.K. Closing Net Working Capital
|
Section
2.3(b)(viii)
|
|
|
Final
U.S. Closing Net Working Capital
|
Section
2.3(b)(viii)
|
|
|
Financial
Statements
|
Section
3.5
|
|
|
Financial
Support Direction
|
Section
10.7(c)(iv)
|
|
|
FIRPTA
Affidavit
|
Section
2.5(a)(viii)
|
|
|
General
Survival Period
|
Section
8.4
|
|
|
Governmental
Antitrust Authority
|
Section
5.3(b)
|
|
|
Indemnified
Party
|
Section
8.3(a)
|
|
|
Indemnifying
Party
|
Section
8.3(a)
|
|
|
Independent
Accounting Firm
|
Section
2.3(b)(vi)
|
|
|
Initial
Purchase Price
|
Section
2.2
|
|
|
Intragroup
Services
|
Section
3.21(b)
|
|
|
Labinal
|
Preamble
|
|
|
Leased
Real Property
|
Section
3.8(a)
|
|
|
Leased
Real Properties
|
Section
3.8(a)
|
|
|
Less
Than 20% Acquired Competing Business
|
Section
5.6(c)(ii)
|
|
|
Main
Scheme
|
Section
3.12(b)(i)
|
-12-
|
Material
Contracts
|
Section
3.10(a)
|
|
|
Mexico
|
Preamble
|
|
|
Mil
Spec Cap
|
Section
8.5(d)
|
|
|
Mil
Spec Products
|
Section
3.27
|
|
|
Mil
Spec Survival Period
|
Section
8.4
|
|
|
MX
Majority Shares
|
Preamble
|
|
|
MX
Minority Shares
|
Preamble
|
|
|
MX
Shares
|
Preamble
|
|
|
Non-Compete
Period
|
Section
5.6(c)
|
|
|
Non-Performing
Party
|
Section
11.12
|
|
|
Owned
Properties
|
Section
3.8(a)
|
|
|
Owned
Property
|
Section
3.8(a)
|
|
|
Pension
Schemes
|
Section
3.12(b)(i)
|
|
|
Performing
Party
|
Section
11.12
|
|
|
Purchase
Price
|
Section
2.2
|
|
|
Purchaser
|
Preamble
|
|
|
Purchaser
Estimated Closing Balance Sheets
|
Section
2.3(b)(i)
|
|
|
Purchaser
Estimated Closing Net Cash
|
Section
2.3(b)(i)
|
|
|
Purchaser
Estimated Closing Net Working Capital
|
Section
2.3(b)(i)
|
|
|
Purchaser
Disclosure Schedule
|
Article
4
|
|
|
Purchaser
Indemnified Parties
|
Section
8.1
|
|
|
Purchaser
Representation Cap
|
Section
8.5(d)
|
|
|
Real
Property Lease
|
Section
3.8(a)
|
|
|
Real
Property Leases
|
Section
3.8(a)
|
|
|
Related
Persons
|
Section
3.21(a)
|
|
|
Representation
Cap
|
Section
8.5(c)
|
|
|
Representatives
|
Section
5.14(a)
|
|
|
Safran
Group
|
Section
5.22(a)
|
|
|
Section
338(g) Election
|
Section
9.3(b)
|
|
|
Section
338(h)(10) Election
|
Section
9.3(a)
|
|
|
Sellers
|
Preamble
|
|
|
Seller
Disclosure Schedule
|
Article
3
|
|
|
Seller
Estimated Closing Net Working Capital
|
Section
2.3(a)(i)
|
|
|
Seller
Indemnified Parties
|
Section
8.2
|
|
|
Seller
Name
|
Section
5.8(a)
|
|
|
Seller
Plans
|
Section
10.1
|
|
|
Seller
Representation Cap
|
Section
8.5(c)
|
|
|
Seller
U.K.
|
Preamble
|
|
|
Seller
U.S.
|
Preamble
|
|
|
Sellers
|
Preamble
|
|
|
Services
Agreement
|
Section
5.23
|
|
|
Shares
|
Preamble
|
|
|
Stakeholder
Scheme
|
Section
3.12(b)(i)
|
|
|
Support
Obligation Liabilities
|
Section
5.11
|
|
|
Support
Obligation Release
|
Section
5.11
|
|
|
Survival
Period
|
Section
8.4
|
-13-
|
Target
Net Working Capital
|
Section
2.3(a)(iii)
|
|
|
Tax
Adjustment
|
Section
9.3(b)
|
|
|
Termination
Date
|
Section
7.1(e)
|
|
|
Third
Party Claim
|
Section
8.3(b)
|
|
|
Transfer
of the Main Scheme
|
Section
6.3
|
|
|
Transfer
Taxes
|
Section
9.4
|
|
|
U.K.
Financial Statements
|
Section
3.5
|
|
|
U.K.
Purchaser Estimated Closing Balance Sheet
|
Section
2.3(b)(i)
|
|
|
U.K.
Purchaser Estimated Net Working Capital
|
Section
2.3(b)(i)
|
|
|
U.K.
Relationship Manager
|
Section
5.22(a)
|
|
|
U.K.
Shares
|
Preamble
|
|
|
U.S.
Financial Statements
|
Section
3.5
|
|
|
U.S.
Purchaser Estimated Closing Balance Sheet
|
Section
2.3(b)(i)
|
|
|
U.S.
Purchaser Estimated Net Working Capital
|
Section
2.3(b)(i)
|
|
|
U.S.
Relationship Manager
|
Section
5.22(b)
|
|
|
U.S.
Savings Plan
|
Section
10.1
|
|
|
U.S.
Shares
|
Preamble
|
|
|
Welfare
Plans
|
Section
10.3
|
Section
1.3 Construction.
Any reference in this Agreement to an "Article," "Section," "Exhibit" or
"Schedule" refers to the corresponding Article, Section, Exhibit or Schedule of
or to this Agreement, unless the context indicates otherwise. The table of
contents and the headings of Articles and Sections are provided for convenience
only and are not intended to affect the construction or interpretation of this
Agreement. All words used in this Agreement are to be construed to be of such
gender or number as the circumstances require. The words "including,"
"includes," or "include" are to be read as listing non-exclusive examples of the
matters referred to, whether or not words such as "without limitation" or "but
not limited to" are used in each instance. Where this Agreement states that a
party "shall", "will" or "must" perform in some manner or otherwise act or omit
to act, it means that the party is legally obligated to do so in accordance with
this Agreement. Any reference to a statute is deemed also to refer to any
amendments or successor legislation as in effect at the relevant time. Any
reference to a Contract or other document as of a given date means the Contract
or other document as amended, supplemented and modified from time to time
through such date. Any reference in this Agreement to $ will mean U.S.
dollars.
ARTICLE 2
THE
TRANSACTION
Section
2.1 Sale and Purchase
of Shares. In accordance with the provisions of this Agreement, at the
Closing, the Sellers will (i) sell and transfer to the Purchaser, and the
Purchaser will purchase and acquire from the Sellers, all of the Shares, free
and clear of any Encumbrances and (ii) cause Labinal to transfer the MX Minority
Shares to the Designee.
Section
2.2 Purchase Price.
On the Closing Date, subject to the adjustments set forth in Section 2.3(a),
Purchaser will pay to Sellers $37,500,000.00 (the "Initial Purchase Price")
less Company Transaction Expenses unpaid as of the close of business on
the day immediately preceding
the Closing Date. The Initial Purchase Price as adjusted pursuant to the terms
of this Agreement will be the "Purchase
Price".
-14-
Section
2.3 Purchase Price
Adjustment.
(a)
Closing Date Purchase Price
Adjustment.
(i) Estimated Net Working
Capital. Not later than three (3) Business Days prior to the Closing
Date, the Sellers will provide the Purchaser with (A) an estimated, consolidated
balance sheet of Cinch U.S. as of the close of business on the Closing Date (the
"Cinch U.S. Estimated
Closing Balance Sheet"), (B) an estimated balance sheet of Cinch U.K. as
of the close of business on the Closing Date (the "Cinch U.K. Estimated Closing
Balance Sheet" and, together with the Cinch U.S. Estimated Closing
Balance Sheet, the "Estimated Seller Closing
Balance Sheets"), (C) the Sellers' calculations of the Net Working
Capital of Cinch U.S. based on the Cinch U.S. Estimated Closing Balance Sheet
(the "Cinch U.S.
Estimated Net Working Capital"), and (D) the Sellers' calculations of the
Net Working Capital of Cinch U.K. based on the Cinch U.K. Estimated Closing
Balance Sheet (the "Cinch U.K. Estimated Net
Working Capital" and, consolidated with the Cinch U.S. Estimated Net
Working Capital, the "Seller Estimated
Closing Net
Working Capital").
(ii) Estimated Net Cash.
Not later than three (3) Business Days prior to the Closing Date, Sellers
will provide to Purchaser a good faith estimate of the Net Cash as of the
Closing Date, which will be calculated in accordance with the definition of Net
Cash (such estimate, the "Estimated Net Cash").
To the extent Estimated Net Cash is positive (i.e., Cash of the Acquired
Companies exceeds the Indebtedness of the Acquired Companies) such amount will
be added to the Purchase Price paid at the Closing. To the extent Estimated Net
Cash is negative (i.e., Indebtedness of the Acquired Companies exceeds Cash of
the Acquired Companies) such amount will be deducted from the Purchase Price
paid at the Closing.
(iii) Target Working Capital.
If the Seller Estimated Closing Net Working Capital is less than Target
Net Working Capital, then the Purchase Price payable at Closing will be
decreased by the difference between Seller Estimated Closing Net Working Capital
and Target Net Working Capital. If the Seller Estimated Closing Net Working
Capital is greater than Target Net Working Capital, then the Purchase Price
payable at Closing will be increased by the difference between Seller Estimated
Closing Net Working Capital and Target Net Working Capital. The Target Net
Working Capital will be $7,143,000 (the "Target Net Working
Capital").
(iv) The
Cinch U.S. Estimated Closing Balance Sheet, Cinch U.K. Estimated Closing Balance
Sheet and calculations of Cinch U.S. Estimated Net Working Capital, Cinch U.K.
Estimated Net Working Capital and Estimated Net Cash, will each be prepared in
accordance with the Accounting Methodologies.
-15-
(v) All
adjustments to the Purchase Price payable at Closing pursuant to Section 2.3(a)(ii)
will be netted against all adjustments to the Purchase Price payable at
Closing pursuant to Section
2.3(a)(iii).
(b)
Post-Closing Date Purchase
Price Adjustment.
(i)
Within ninety (90) days following the Closing Date, the Purchaser will deliver
to the Sellers (A) a consolidated balance sheet of Cinch U.S., audited by the
Purchaser's accountants, as of the close of business on the Closing Date (the
"U.S. Purchaser Estimated Closing
Balance Sheet"), (B) a balance sheet of Cinch U.K., audited by the
Purchaser's accountants, as of the close of business on the Closing Date (the
"U.K. Purchaser Estimated Closing
Balance Sheet" and, together with the U.S. Purchaser Estimated Closing
Balance Sheet, the "Purchaser Estimated Closing
Balance Sheets"), (C) the Purchaser's calculations of the Net Working
Capital of Cinch U.S. based on the U.S. Purchaser Estimated Closing Balance
Sheet (the "U.S. Purchaser Estimated Net
Working
Capital"), (D) the Purchaser's calculations of the Net Working Capital of
Cinch U.K. based on the U.K. Purchaser Estimated Closing Balance Sheet (the
"U.K. Purchaser Estimated Net
Working Capital and, consolidated with the U.S. Purchaser Estimated Net
Working Capital, the "Purchaser Estimated Closing
Net Working Capital"), and (E) the Purchaser's calculation of Net Cash
(the "Purchaser
Estimated Closing Net Cash").
(ii) The
U.S. Purchaser Estimated Closing Balance Sheet, the U.K. Purchaser Estimated
Closing Balance Sheet and the calculations of U.S. Purchaser Estimated Net
Working Capital, U.K. Purchaser Estimated Net Working Capital and Purchaser
Estimated Closing Net Cash will each be prepared in accordance with Accounting
Methodologies.
(iii) The
Sellers will have thirty (30) days from the date of their receipt to review the
Purchaser Estimated Closing Balance Sheets and to respond to the Purchaser
pursuant to Section
2.3(b)(iv) below. During the Sellers' review of the Purchaser Estimated
Closing Balance Sheets, the Purchaser will, and will cause each of the Acquired
Companies to, (A) provide the Sellers and the Sellers' representatives with
reasonable access to the books and records of the Acquired Companies, and (B)
reasonably cooperate with the Sellers and the Sellers' representatives,
including by providing on a timely basis all information reasonably necessary in
reviewing the Purchaser Estimated Closing Balance Sheets.
(iv)
Within thirty (30) days from the date of its receipt of the Purchaser Estimated
Closing Net Working Capital and/or Purchaser Estimated Closing Net Cash
(collectively, the "Estimated Closing
Calculations") the Sellers will either:
(A) agree
in writing with the Estimated Closing Calculations, in which case the Estimated
Closing Calculations, will be final and binding on the parties for purposes of
Section 2.3(b)(viii);
or
(B) dispute
any or all of the Estimated Closing Calculations, by delivering to the Purchaser
a written notice (a "Dispute Notice")
setting forth in reasonable
detail the basis for, and an itemized alternative calculation of, each such
disputed item.
-16-
(v) If
the Sellers fail to take either of the actions set forth in Section 2.3(b)(iv)(A) or
Section 2.3(b)(iv)(B)
within thirty (30) days from the date of its receipt of the Purchaser
Estimated Closing Balance Sheets, then the Sellers will be deemed to have
irrevocably accepted the Estimated Closing Calculations, in which case, the
Estimated Closing Calculations, will be final and binding on the parties for
purposes of Section
2.3(b)(viii).
(vi) If
the Sellers timely deliver a Dispute Notice to the Purchaser, then the Purchaser
and the Sellers will attempt in good faith, for a period of thirty (30) days, to
agree on any changes to the Estimated Closing Calculations for purposes of Section 2.3(b)(viii). Any
resolution by the Purchaser and the Sellers during such thirty (30)-day period
as to any disputed items will be final and binding on the parties for purposes
of Section
2.3(b)(viii). If the Purchaser and the Sellers do not resolve all
disputed items by the end of thirty (30) days after the date of delivery of the
Dispute Notice, then the Purchaser and the Sellers will submit the remaining
items in dispute to KPMG, LLP, for resolution, or if that firm is unwilling or
unable to serve, the Purchaser and the Sellers will engage another mutually
agreeable independent accounting firm of recognized international standing,
which firm is not the regular auditing firm of the Purchaser or the Acquired
Companies. If the Purchaser and the Sellers are unable to jointly select such
independent accounting firm within ten (10) days after such thirty (30)-day
period, the Purchaser, on the one hand, and the Sellers, on the other hand, will
each select an independent accounting firm of recognized international standing
and such selected accounting firms will select a third independent accounting
firm of recognized international standing, which firm is not the regular
auditing firm of the Purchaser or the Acquired Companies; provided, however,
that if either the Purchaser, on the one hand, or the Sellers, on the
other hand, fail to select such independent accounting firm during this ten
(10)-day period, then the parties agree that the independent accounting firm
selected by the other party will be the independent accounting firm selected by
the parties for purposes of this Section 2.3(b)(vi)
(such selected independent accounting firm, whether pursuant to this
sentence or the preceding sentence, the "Independent Accounting
Firm"). The Independent Accounting Firm will act as an expert in
accounting and not as an arbitrator and will render its determination on a basis
in accordance with the Accounting Methodologies. The Independent Accounting Firm
will only render its determination with respect to the specific remaining
accounting differences submitted to it and in no event will its determination as
to an item in dispute be less than the lowest amount for such item proposed by
the Purchaser or the Sellers nor greater than the highest amount for such item
proposed by the Purchaser or the Sellers. The Purchaser and the Sellers will
instruct the Independent Accounting Firm to render its determination with
respect to the items in dispute in a written report that specifies the
conclusions of the Independent Accounting Firm as to each item in dispute
relating to the Estimated Closing Calculations. The Purchaser and the Sellers
will each use their commercially reasonable efforts to cause the Independent
Accounting Firm to render its determination within thirty (30) days after
referral of the items to such firm or as soon thereafter as reasonably
practicable. The Independent Accounting Firm's determination of any adjustments
to the Estimated
Closing Calculations as set forth in its report will be final and binding on the
parties for purposes of Section 2.3(b). The
fees and expenses of the Independent Accounting Firm will be shared by the
Purchaser and the Sellers in inverse proportion to the relative amounts of the
items in dispute determined to be for the account of Purchaser and the Sellers,
respectively. For example, should the items in dispute total an amount equal to
$1,000 and the Independent Accounting Firm awards $600 in favor of the Sellers'
position, sixty percent (60%) of the costs of its review would be borne by the
Purchaser and forty percent (40%) of the costs would be borne by the Sellers.
For purposes of this Section 2.3(b), the
"items in dispute" will be measured by the difference between the amount claimed
by the Sellers to equal the Net Working Capital and/or Net Cash, as applicable,
as of the Closing Date and the amount claimed by the Purchaser to equal the Net
Working Capital and/or Net Cash, as applicable, as of the Closing Date, in each
case as determined as of the date that such matter is first submitted by the
parties to the Independent Accounting Firm.
-17-
(vii) For
purposes of complying with this Section 2.3(b), the
Purchaser and the Sellers will furnish to each other and to the Independent
Accounting Firm such work papers and other documents and information relating to
the disputed items as the Independent Accounting may request and are
available to that party (or its independent public accountants) and will be
afforded the opportunity to present to the Independent Accounting Firm any
material related to the disputed items and to discuss the items with the
Independent Accounting Firm, any such discussion to be in the presence of all
parties to the dispute.
(viii) The
final amounts of (A) the Net Working Capital of Cinch U.S. (the "Final U.S. Closing Net
Working Capital") and the Net Working Capital of Cinch U.K. (the "Final U.K. Closing Net
Working Capital"), and (B) the Net Cash (the "Final Closing Net Cash"),
will be as set forth in the Estimated Closing Calculations, as finally
determined by this Section 2.3(b). The
sum of the finally determined amounts of the Final U.S. Closing Net Working
Capital and the Final U.K. Closing Net Working Capital will constitute the "Final Aggregate Closing Net
Working Capital Amount".
(ix) Upon
the final determination of the Final Aggregate Closing Net Working Capital
Amount: (i) if the Final Aggregate Closing Net Working Capital Amount is less
than Seller Estimated Closing Net Working Capital, the Purchase Price will be
decreased by the excess of Seller Estimated Closing Net Working Capital over the
Final Aggregate Closing Net Working Capital Amount and the Sellers will promptly
pay to the Purchaser the amount of such difference; or (ii) if the Final
Aggregate Closing Net Working Capital Amount is greater than Seller Estimated
Closing Net Working Capital, the Purchase Price will be increased by the excess
of Final Aggregate Closing Net Working Capital Amount over the Seller Estimated
Closing Net Working Capital and the Purchaser will promptly pay to the Sellers
the amount of such difference.
(x) Upon
the final determination of the Final Closing Net Cash: (i) if the Final Closing
Net Cash is less than the Estimated Net Cash, the Sellers will promptly pay to
the Purchaser the amount of such difference; or (ii) if the Final Closing Net
Cash is
greater than the Estimated Net Cash, the Purchaser will promptly pay to the
Sellers the amount of such difference.
-18-
(xi) For
purposes of this Section 2.3, it is
agreed that the aggregate value of the Inventory used for purposes of each
respective Net Working Capital calculation to be made under this Section 2.3 will be
deemed as follows:
(A) if
the value attributable to Inventory (as determined for purposes of each
respective Net Working Capital calculation to be made under this Section 2.3, before
giving effect to this Section 2.3(xi), the
"Aggregate
Inventory
Value") is greater than or equal to $6,554,000 but less than or equal to
$6,854,000, then the value of the Inventory used to calculate the Net Working
Capital will be deemed to be $6,704,000.
(B) if
the Aggregate Inventory Value is greater than $6,854,000 but less than
$7,354,000, then the value of the Inventory used to calculate the Net Working
Capital will be equal to the difference that results from subtracting $150,000
from the Aggregate Inventory Value.
(C) if
the Aggregate Inventory Value is greater than $7,354,000, then the value of the
Inventory used to calculate the Net Working Capital will be deemed to be
$7,204,000.
(D) if
the Aggregate Inventory Value is less than $6,554,000, then the value of the
Inventory used to calculate the Net Working Capital will be equal to the sum
that results from adding $150,000 to the Aggregate Inventory Value.
(E) for
purposes of determining the Aggregate Inventory Value, no value will be
attributed to any Inventory held for sale to IBM pursuant to Contracts in place
as of the date of this Agreement.
(xii) All
adjustments to the Purchase Price payable pursuant to Section 2.3(b)(ix) will be
netted against all adjustments to the Purchase Price payable pursuant to Section
2.3(b)(x).
(xiii)
Any payment to the Purchaser pursuant to Section 2.3(b) will
be effected by wire transfer of immediately available funds from the Sellers to
an account designated in writing by the Purchaser. Any payment to the Sellers
pursuant to Section
2.3(b)
will be effected by wire transfer of immediately available funds from the
Purchaser to an account designated in writing by the Sellers. Such payments will
be made within ten (10) Business Days following the final determination of the
Final Aggregate Closing Net Working Capital Amount and/or Final Closing Net Cash
in accordance with this Section
2.3.
-19-
(c) The
purpose of this Section 2.3 is to
determine the final Purchase Price to be paid by the Purchaser under this
Agreement. Accordingly, any adjustment pursuant hereto will neither be deemed to
be an indemnification pursuant to the Indemnification Articles, nor preclude
the Purchaser from exercising any indemnification rights pursuant to the
Indemnification Articles; provided, however,
that in no event will the Sellers be obligated to indemnify any Purchaser
Indemnified Party for any Loss as a result of, or based upon or arising from,
any Liability, to the extent, and only to the extent that, such Liability is
reflected in the calculation of the Final U.S. Closing Net Working Capital,
Final U.K. Closing Net Working Capital, Final U.S. Closing Net Cash and/or Final
U.K. Closing Net Cash as finally determined pursuant to this Section 2.3. Any
payment made pursuant to this Section 2.3 will be
treated by the parties for all purposes as an adjustment to the Purchase Price
and will not be subject to offset for any reason.
Section
2.4 Closing.
(a) The
closing of the transactions contemplated by this Agreement (the "Closing") will take
place, as soon as practicable, but in any event not later than the fifth (5th)
Business Day immediately following the Determination Date, at the offices of
Xxxxxxxxxx Xxxxxxx PC, 1251 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 a.m., local time or at such other date, time and place as the Sellers and
the Purchaser may agree in writing. The date on which the Closing actually
occurs is referred to in this Agreement as the "Closing Date."
(b) The
"Determination Date"
will mean the date on which the last of the conditions set forth in Article 6 have been
satisfied or waived (other than those conditions that by their nature can only
be satisfied at the Closing); provided, however, if
such date occurs after the 15th day of
any calendar month on or after February 1, 2010, then the Determination Date
will mean the later of the date on which: (i) the last of the conditions set
forth in Article 6
have been satisfied or waived (other than those conditions that by their
nature can only be satisfied at the Closing) and (ii) the Sellers deliver to the
Purchaser the written calculation of the Aggregate Revenues for the full
calendar month in which such closing conditions have been satisfied or waived
(it being agreed and understood that if all of the conditions set forth in Article 6 have been
satisfied or waived on or prior to January 31, 2010 (other than those conditions
that by their nature can only be satisfied at the Closing), then the condition
to Closing set forth in Section 6.1(c) shall not be
applicable in connection with the consummation of the transactions contemplated
by this Agreement, and subsection (ii) of this Section 2.4(b) shall
not be applicable).
Section
2.5 Closing
Deliveries.
(a) At
or prior to the Closing, the Sellers will deliver or cause to be delivered to
the Purchaser:
(i) a
certificate of the secretary of each Acquired Company in his or her
representative capacity, dated as of the Closing Date, certifying as to the
Acquired Company which he or she represents (A) that true and complete copies of
the Governing Documents of such Acquired Company, as in effect on the Closing
Date (including any amendments thereof), are attached thereto, (B) as to the
incumbency and genuineness of the signatures of each officer executing any of
the Ancillary Agreements or other agreements entered into in connection herewith
to which such Acquired Company is a party,
and (C) as to the genuineness of the resolutions (attached thereto) of each
Acquired Company's board of directors authorizing the execution, delivery and
performance of any Ancillary Agreement and any other agreements in connection
herewith to which such Acquired Company is a party and any special resolution to
amend or adopt new Governing Documents for such Acquired Company (attached
thereto) in the form Purchaser requires;
-20-
(ii) a
certificate of the secretary of each Seller in his or her representative
capacity, dated as of the Closing Date, certifying as to the Seller which he or
she represents (A) that true and complete copies of the Governing Documents of
such Seller, as in effect on the Closing Date (including any amendments thereof)
are attached thereto, (B) as to the incumbency and genuineness of the signatures
of each officer executing this Agreement, any of the Ancillary Agreements, and
any other document executed by such Seller in connection herewith, and (C) as to
the genuineness of the resolutions (attached thereto) of each Seller's hoard of
directors authorizing the execution, delivery and performance of this Agreement,
the Ancillary Agreements and any other agreements in connection herewith to
which such Seller is a party;
(iii) certificates
representing the Shares, including the share certificate for the U.K. Shares,
duly endorsed in blank or accompanied by stock powers or a stock transfer form
duly executed in blank in form reasonably satisfactory to the Purchaser for
transfer with all necessary stock transfer tax stamps and otherwise sufficient
to transfer the Shares to Purchaser free and clear of all
Encumbrances;
(iv) the
Closing Certificates;
(v) the
Ancillary Agreements to which any Seller, Acquired Company or other Affiliate of
a Seller is a party executed by each such Seller, Acquired Company and/or other
Affiliate of the Seller;
(vi) a
certificate setting forth an estimate of Indebtedness, pursuant to Section
5.20.
(vii) to
the extent such concepts are recognized under applicable Law, certificates of
good standing, or equivalents thereof, dated not more than five (5) Business
Days prior to the Closing Date with respect to each Seller and each Acquired
Company issued by the presiding Government Authority of the jurisdiction in
which each such Seller and Acquired Company was formed;
(viii) an
affidavit of non-foreign status from Seller U.S. that complies with Section 1445
of the Code (a "FIRPTA
Affidavit");
(ix) such
instruments of transfer as required for the transfer of the MX Minority Shares
owned by Labinal to the Purchaser or any other entity designated by the
Purchaser (as the case may be, the "Designee"),
including endorsement of the MX Minority Shares to the Purchaser or any
other entity designated by the Purchaser; and
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(x) a
power of attorney duly executed by Seller U.K. in respect of the rights
attaching to the U.K. Shares, in a form substantially similar to Exhibit
A.
(b) At
the Closing, the Purchaser will deliver or cause to be delivered to the
Sellers:
(i)
the Purchase Price by wire transfer of immediately
available funds in U.S. dollars to the account specified by the Sellers no later
than two (2) Business Days prior to the Closing Date; and
(ii)
a certificate, dated as of the
Closing Date, executed by the Purchaser confirming the satisfaction of the
conditions specified in Section 6.2(a) and
Section
6.2(b).
Section
2.6 Allocation.
The Purchase Price will be allocated among the Shares as set forth on
Schedule 2.6.
In the event an adjustment to the Purchase Price is made pursuant to
Section 2.3 or
otherwise under this Agreement, the allocation of the Purchase Price will be
revised to allocate such adjustment based upon the item to which such adjustment
is attributable. The Purchaser and the Sellers will execute and file all Tax
Returns in accordance with Schedule 2.6 (as adjusted) and
will not take any position before any Governmental Authority or in any judicial
Proceeding that is inconsistent with such allocation, except as otherwise
required pursuant to a Judgment. The Purchaser and the Sellers will each timely
file all required tax forms and Tax Returns to be filed in connection with the
transactions contemplated by this Agreement.
Section
2.7 Change of Control
Costs.
(a)
In the event any Change of Control Payment is triggered (a "CoC Payment Trigger") and the
relevant triggering event occurs on or prior to the six (6) month anniversary of
the Closing, Purchaser will provide Sellers with written notice of such CoC
Payment Trigger within ten (10) Business Days after the date on which any
corresponding payment was made, and will include in such notice reasonable proof
that such payment had been made and an invoice (each a "Seller Payment Invoice")
for Sellers' fifty percent (50%) share of the applicable Change of
Control Payment made by Purchaser (or the relevant Acquired Company, as the case
may be); provided,
however, that if the parties mutually determine that one or more of the
employees set forth on Section 2.7 of the Seller Disclosure Schedule will remain
employed by Seller US at the Closing, Seller US will provide Purchaser with
written notice of any CoC Payment Trigger within ten (10) Business Days after
the date on which any corresponding payment was made, and will include in such
notice reasonable proof that such payment had been made and an invoice (each a
"Purchaser Payment
Invoice") for the Purchaser's (or the relevant Acquired Company's, as the
case may be) fifty percent (50%) share of the applicable Change of Control
Payment made by Seller US. In the case of any CoC Payment made by the Purchaser
(or the relevant Acquired Company, as the case may be), Sellers will have ten
(10) Business Days after receipt of the relevant notice to pay the amount to
Purchaser (or the relevant Acquired Company, as the case may be) as shown on the
relevant Seller Payment Invoice. In the case of any CoC Payment made by Seller
US, the Purchaser (or the relevant Acquired Company, as the case may be) will
have ten (10) Business Days after receipt of the relevant notice to pay the
amount to Seller US as shown on
the relevant Purchaser Payment Invoice. Purchaser and Seller will work together
in good faith to resolve any discrepancies in the amounts due to Purchaser under
this Section
2.7.
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(b)
Any payments made to the Purchaser (or by Seller U.S., and not reimbursed by the
Purchaser, as the case may be) pursuant to the terms of this Section 2.7 will be
deemed reductions of the Purchase Price. Accordingly, any adjustment pursuant
hereto will neither be deemed to be an indemnification pursuant to the
Indemnification Articles, nor preclude the Purchaser from exercising any
indemnification rights pursuant to the Indemnification Articles. Any payment
made pursuant to this Section 2.7 will be
treated by the parties for all purposes as an adjustment to the Purchase Price
and will not be subject to offset for any reason.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF THE SELLERS
The
Sellers, jointly and severally, represent and warrant to the Purchaser as
follows, except as set forth on the disclosure schedule delivered by the Sellers
to the Purchaser concurrently with the execution and delivery of this Agreement
and dated as of the date of this Agreement (the "Seller Disclosure
Schedule") or in the Dataroom (it being agreed and understood that (i)
any matter set forth for purposes of this Article 3 in (x) any
section of the Seller Disclosure Schedule with respect to a specific
representation and warranty will also be deemed disclosed with respect to any
other representation and warranty to the extent it is reasonably apparent on its
face that it relates to another representation or warranty hereunder, or (y) any
document contained in the Dataroom will be deemed disclosed with respect to the
representations and warranties hereunder only to the extent a relevant matter is
disclosed in a sufficiently clear manner so that a reasonably prudent
professional can understand the nature, the scope and the extent of the matter
and that such matter relates to the representations and warranties hereunder (it
being agreed and understood by the parties that the Persons preparing the Seller
Disclosure Schedules are reasonably prudent professionals); and (ii) no
reference to or disclosure of any item on the Seller Disclosure Schedule or in
the Dataroom will be construed as an admission or indication that such item or
other matter is material or that such item or other matter is required to be
referred to or disclosed on the Seller Disclosure Schedule):
Section
3.1 Organization and
Good Standing. Seller U.S. is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Seller
U.K. is a private limited company duly organized, validly existing under the
Laws of England and Wales. Each Acquired Company is duly organized, validly
existing and in good standing (to the extent such concepts are recognized under
applicable Law) under the Laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to conduct its business as presently
conducted. Each Acquired Company is duly qualified to do business and is in good
standing (to the extent such concepts are recognized under applicable Law) as a
foreign corporation in each jurisdiction in which the nature of its activities
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect. The Governing Documents and statutory books of
Cinch U.K. (the "Cinch
U.K. Books") are, and will remain to the Closing Date, in the possession
of Seller U.K. or its attorneys. Section 3.1 of the
Seller Disclosure Schedule contains true, complete and correct copies of the
Governing Documents of the Acquired Companies in effect on the date of this
Agreement.
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Section
3.2 Authority and
Enforceability. Each Seller and each Acquired Company, as applicable, has
all requisite corporate power and authority to execute and deliver this
Agreement and/or each Ancillary Agreement to which it is a party and to perform
its obligations under this Agreement and/or each such Ancillary Agreement. The
execution, delivery and performance of this Agreement and each Ancillary
Agreement to which any Seller and/or any Acquired Company is a party and the
consummation of the transactions contemplated hereby and thereby by such Seller
and/or Acquired Company has been duly authorized by all necessary action on the
part of the Sellers and/or the Acquired Companies, as the case may be. Each
Seller has duly and validly executed and delivered this Agreement and, on or
prior to the Closing, each Seller and each Acquired Company will have duly and
validly executed and delivered each Ancillary Agreement to which it is a party.
Assuming the due authorization, execution and delivery of this Agreement and the
Ancillary Agreements by the Purchaser and the other parties thereto, this
Agreement constitutes, and at the Closing each Ancillary Agreement to which each
Seller and/or Acquired Company is a party will constitute, the valid and binding
obligation of the Sellers and/or the Acquired Companies, as the case may be,
enforceable against each such party in accordance with its terms, subject to (a)
Laws of general application relating to bankruptcy, insolvency and the relief of
debtors and (b) Laws governing specific performance, injunctive relief and other
equitable remedies.
Section
3.3 No
Conflict.
(a) Except
in any case that would not have a Material Adverse Effect, neither the
execution, delivery and performance of this Agreement by the Sellers and any
Ancillary Agreement to which a Seller or an Acquired Company is a party, nor the
consummation by the Sellers of the transactions contemplated by this Agreement
and/or any Ancillary Agreement, will (i) conflict with or violate any Sellers'
or Acquired Companies' Governing Documents, (ii) except as disclosed in Section 3.3 of the
Seller Disclosure Schedule, result in a breach or default under, or create in
any Person the right to terminate, cancel, accelerate or modify, or require any
notice, consent or waiver under, any Contract to which a Seller or an Acquired
Company is a party or to which any of the assets or properties of a Seller or an
Acquired Company are subject, or (iii) violate any Law or Judgment applicable to
any Seller or Acquired Company.
(b) Except
in any case that would not have a Material Adverse Effect and except as set
forth in Section 3.3
of the Seller Disclosure Schedule, no consent, waiver, approval, order,
permit, Governmental Authorization or other authorization of, or declaration or
filing with, or notification to, any Person or Governmental Authority is
required on the part of a Seller or any Acquired Company in connection with (i)
the execution and delivery of this Agreement and the Ancillary Agreements,
respectively, the compliance by the Sellers and the Acquired Companies with any
of the provisions hereof and thereof, or the consummation of the transactions
contemplated hereby or thereby, or (ii) the continuing validity and
effectiveness immediately following the Closing of any Governmental
Authorization or Contract of any Acquired Company.
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Section
3.4Capitalization and
Ownership, Subsidiaries.
(a) The
authorized capital stock of Cinch U.S. and Cinch MX and the number of shares of
such capital stock that are issued and outstanding, and the authorized share
capital of Cinch
U.K. and the number of such shares that are issued and outstanding, and the
beneficial and record ownership thereof, are set forth on Section
3.4 of the Seller Disclosure Schedule. The Sellers are the
sole record holders and beneficial owners of all of the Shares and Cinch U.S.
and Labinal are the sole record holders and beneficial owners of all MX Shares,
free and clear of all Encumbrances. Upon payment in full of the Purchase Price,
good and valid title to the Shares will pass to the Purchaser and good and valid
title to the MX Minority Shares will pass to the Designee, free and clear of any
Encumbrances, and with no restrictions on the voting rights or other incidents
of record and beneficial ownership of such Shares. All of the Shares are duly
authorized, validly issued, fully paid and nonassessable. There are no Contracts
to which either the Sellers or any other Person is a party or bound with respect
to the voting (including voting trusts or proxies) of the Shares or the shares
of the capital stock of any of the Acquired Companies. There are no outstanding
or authorized options, warrants, rights, agreements or commitments to which a
Seller or an Acquired Company is a party or which are binding upon a Seller or
any Acquired Company providing for the issuance or redemption of any shares of
Cinch U.S.'s or Cinch MX's capital stock or Cinch U.K.'s share
capital.
(b)
Section 3.4 of
the Seller Disclosure Schedule sets forth for each Subsidiary of the Companies
(a) its name and jurisdiction of incorporation, (b) its authorized capital stock
and (c) the number of issued and outstanding shares of capital stock and the
record holders and beneficial owners thereof. No Acquired Company owns or has
any rights to acquire, directly or indirectly, any capital stock or other equity
interests of any Person, except for the Subsidiaries set forth in Section
3.4 of the Seller Disclosure Schedule. All of the issued and
outstanding equity securities of each Subsidiary are duly authorized, validly
issued, fully paid and nonassessable, and are owned of record and beneficially
by one or more of the Acquired Companies in the respective amounts set forth in
Section
3.4 of the Seller Disclosure Schedule, free and clear of all
Encumbrances. Since January 1, 2006, none of the Acquired Companies have had any
subsidiaries (other than the Subsidiaries).
Section
3.5 Financial
Statements. Attached as Section 3.5 of the
Seller Disclosure Schedule is (a) (i) the unaudited, consolidated balance sheet
of Cinch U.S. as of December 31, 2008, and the related unaudited consolidated
statement of income for the year ended December 31, 2008, and (ii) the
unaudited, consolidated balance sheet of Cinch U.S. as at September 30, 2009
(the "Balance Sheet
Date") and the related consolidated statement of income of Cinch U.S. for
the nine (9) month period then ended (the "U.S. Financial Statements");
and (b) (i) the audited balance sheet of Cinch U.K. as of December 31,
2008, and the related audited statement of income for the year ended December
31, 2008, and (ii) the unaudited balance sheet of Cinch U.K. as at the Balance
Sheet Date and the related statement of income of Cinch U.K. for the nine (9)
month period then ended (the "U.K. Financial Statements",
and together with the U.S. Financial Statements, the "Financial Statements").
The Financial Statements (x) present fairly in all material respects the
financial positions of the Acquired Companies as of the dates of such Financial
Statements and the results of operations for such companies as of such date, in
conformity with: (i) U.S. GAAP for the U.S. Financial Statements; and (ii) U.K.
GAAP for the U.K. Financial Statements, except, in each case, for the absence of
footnotes and other disclosures required by U.S. GAAP or U.K. GAAP as
applicable, and (y) are prepared in accordance with the books and records of the
Acquired Companies. The Financial Statements are further qualified by the fact
that the Acquired Companies have not operated as separate "stand-alone"
entities for accounting purposes and thus may not present the results of
operation that would have occurred if the Acquired Companies had been operated
as stand-alone entities.
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Section
3.6 No Undisclosed
Liabilities.
(a) Cinch
U.K. has no Liabilities as of the date of this Agreement that would be required
to be reflected on a balance sheet prepared in accordance with U.K. GAAP except
for Liabilities (i) reflected, reserved against or otherwise disclosed in the
U.K. Financial Statements, (ii) incurred in the ordinary course of business
since the Balance Sheet Date, (iii) disclosed herein or in the Seller Disclosure
Schedule, including Section 3.6(a)
thereof or (iv) which would not have a Material Adverse
Effect.
(b) Neither
Cinch U.S. nor Cinch MX has any Liabilities as of the date of this Agreement
that would be required to be reflected on the U.S. Financial Statements in
accordance with U.S. GAAP except for Liabilities (i) reflected, reserved against
or otherwise disclosed in the U.S. Financial Statements, (ii) incurred in the
ordinary course of business since the Balance Sheet Date, (iii) disclosed herein
or in the Seller Disclosure Schedule, including Section 3.6(b)
thereof or (iv) which would not have a Material Adverse
Effect.
Section
3.7 Absence of Certain
Changes and Events. From December 31, 2008 to the date of this Agreement,
there has not been any Material Adverse Effect. From December 31, 2008 to the
date of this Agreement, the Acquired Companies have operated their business in
the ordinary course of business, and except as set forth on Section 3.7 of the
Seller Disclosure Schedule, there has not been any:
(a) change
in any Acquired Company's authorized or issued shares or other equity interests;
grant of any option or right to purchase shares of any Acquired Company;
issuance of any security convertible into such shares; grant of any registration
rights; purchase, redemption, retirement or other acquisition by any Acquired
Company of any shares; or declaration or payment of any dividend or other
distribution or payment with respect to any Shares;
(b) amendment
to the Governing Documents of any Acquired Company;
(c) damage
to or destruction of any asset or property of an Acquired Company, whether or
not covered by insurance, having a replacement cost of more than $50,000 for any
single loss or $200,000 for all such losses;
(d) sale
(other than in the ordinary course of business), lease or other disposition of
any asset or property of any Acquired Company, including Intellectual Property,
material to the Acquired Companies as a whole;
(e) material
change in the accounting methods used by any Acquired Company;
(f) declaration,
setting aside or payment of any dividend or other distribution in respect of any
shares of capital stock of any Acquired Company or any repurchase, redemption
or other acquisition by an Acquired Company of any outstanding shares of capital
stock or other securities of, or other ownership interest in, such Acquired
Company;
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(g)
award or payment of any bonuses to employees of any Acquired Company with
respect to the fiscal year ending December 31, 2009, except to the extent
accrued on the Financial Statements, or entered into any employment, deferred
compensation, severance or similar agreement (nor amended any such agreement) or
agreed to increase the compensation payable or to become payable by it to any of
any Acquired Company's directors, officers, or management employees or agreed to
increase the coverage or benefits available under any severance pay, termination
pay, vacation pay, company awards, salary continuation for disability, sick
leave, deferred compensation, bonus or other incentive compensation, insurance,
pension or other employee benefit plan, payment or arrangement made to, for or
with such directors, officers or management employees;
(h) making
or rescinding of any election relating to Taxes or settled or compromised any
claim relating to Taxes, except as would not have a Material Adverse
Effect;
(i) entry
into any Contract, or modification or extension of any Contract, which involves
a total remaining commitment as of October 31, 2009 by or to any Acquired
Company of at least $500,000, other than in the ordinary course of business, it
being understood that a modification, extension or amendment of any Real
Property Lease is outside of the ordinary course of business;
(j) making
of any loans, advances or capital contributions to, or investments in, any
Person or paid any fees or expenses to any Seller or any director, officer,
partner, stockholder or Affiliate of any Seller, other than in accordance with
normal cash management practices;
(k) mortgage,
pledge or Encumbrance, other than in the ordinary course of business, incurred
upon any properties or assets of the Acquired Companies;
(1) making
of, or commitment to make, any capital expenditures or capital additions or
betterments in excess of $50,000 individually or $100,000 in the
aggregate;
(m) issuance,
creation, assumption, guarantee, endorsement or incurrence of any other
liability or responsibility with respect to (whether directly, contingently, or
otherwise) any Indebtedness in excess of $100,000 except in the ordinary course
of business or except as would not have a Material Adverse Effect;
(n) grant
of any license or sublicense of any rights under or with respect to any material
Intellectual Property except in the ordinary course of business;
(o) institution
or settlement of any Proceeding involving amounts in excess of $100,000;
or
(p) Contract,
committed, arranged or understanding agreed upon or entered into by any Acquired
Company to do any of the foregoing.
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Section
3.8 Properties and Assets;
Encumbrances.
(a) Section 3.8(a) of the
Seller Disclosure Schedule sets forth a complete list of (i) all real property
and interests in real property, owned in fee by the Acquired Companies
(individually, an "Owned Property" and
collectively, the "Owned Properties")
and (ii) all real property and interests in real property leased by the
Acquired Companies (individually a "Leased Real Property" and
collectively the "Leased Real Properties"
and the leases pursuant to which such Leased Real Properties are leased,
each individually, a "Real Property Lease"
and collectively, the "Real Property Leases"
and, the Leased Real Properties together with the Owned Properties, being
referred to herein individually as a "Company Property"
and collectively as the "Company Properties")
as lessee or lessor, including a description of each such Real Property
Lease (including the name of the third party lessor or lessee and the date of
the lease or sublease and all amendments thereto). The Acquired Companies have
good and marketable fee title to all Owned Property, free and clear of all
Encumbrances, except for those Encumbrances set forth on Section 3.8(a) of the
Seller Disclosure Schedule. The Company Properties constitute all material
interests in real property currently used, occupied or currently held for use in
connection with the business of the Acquired Companies. Except as would not have
a Material Adverse Effect, all of the Company Properties and buildings, fixtures
and improvements thereon are in good operating condition without structural
defects (ordinary wear and tear excepted), and all mechanical and other systems
located thereon are in good operating condition (ordinary wear and tear
excepted). The Sellers have delivered to the Purchaser true, correct and
complete copies of (i) all deeds, title reports and surveys for the Owned
Properties and (ii) the Real Property Leases, together with all amendments,
modifications or supplements, if any, thereto. The Company Properties are not
subject to any leases or rights of occupancy, other than the Real Property
Leases.
(b)
Except as set forth in Section 3.8(b) of the
Seller Disclosure Schedule, and except as would not have a Material Adverse
Affect, there does not exist any actual or, to the Knowledge of the Sellers
threatened or contemplated, condemnation or eminent domain proceedings that
affect any Company Property or any part thereof, and none of the Acquired
Companies or any Seller has received any written notice of the intention of any
Governmental Authority or other Person to take or use all or any part thereof.
To the Sellers' Knowledge, no event has occurred that with the lapse of time or
the giving of notice or both would constitute a material breach or default on
the part of an Acquired Company or any other party under any Real Property
Lease.
(c) Except
as set forth in Section 3.8(c) of the
Seller Disclosure Schedule, to the Knowledge of the Sellers, none of the Sellers
or the Acquired Companies has received any written notice during the three (3)
years prior to the date of this Agreement from any insurance company that has
issued a policy with respect to any Company Property or from any landlord of a
Leased Real Property requiring performance of any structural or other repairs or
alterations to such Company Property.
(d) None
of the Acquired Companies owns, holds, is obligated under or is a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any real estate or any portion thereof or interest
therein.
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(e) Except
as set forth in Section 3.8(e) of the
Seller Disclosure Schedule, other than the Intragroup Services, the Acquired
Companies have good and marketable title to, or a valid leasehold interest in,
all of the items of material tangible personal property used in the business of
the Acquired Companies (except as sold or disposed of subsequent to the date
thereof in the ordinary course of business and not in violation of this
Agreement), free and clear of any and all Encumbrances. All such items of
tangible personal property which, individually or in the aggregate, are material
to the operation of the business of the Acquired Companies are in good condition
and in a state of good maintenance and repair (ordinary wear and tear
excepted).
(f) Section 3.8(f) of the
Seller Disclosure Schedule sets forth a list of leases of personal property held
by the Acquired Companies as of the date of this Agreement that are material to
the operation of the business.
(g) Except
as set forth on Section 3.8(g) of the
Seller Disclosure Schedule, the Acquired Companies have not entered into any
Contract pursuant to which an Acquired Company guarantees any obligations of
third parties.
Section
3.9 Intellectual
Property.
(a) Section 3.9(a) of the
Seller Disclosure Schedule sets forth an accurate and complete list of all
Patents, Marks, URLs and Copyrights owned or licensed by the Acquired Companies
that are material to the business of the Acquired Companies. Section 3.9(a) of the
Seller Disclosure Schedule lists the record owner and jurisdictions in which
each such item of Intellectual Property has been issued or registered or in
which any such application for such issuance and registration has been filed. To
the Sellers' Knowledge, all material registration, maintenance and renewal fees
currently due in connection with the Patents, Marks and Copyrights listed on
Section 3.9(a)
of the Seller Disclosure Schedule have been paid and all necessary
documents and certificates in connection with such Intellectual Property have
been filed with the relevant patent, copyright, trademark or other authorities
in the U.S. or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Intellectual Property, except where failure to do so would not
have a Material Adverse Effect.
(b) Except
as disclosed in Section 3.9(b) of the
Seller Disclosure Schedule, one or more of the Acquired Companies is the sole
and exclusive owner of all right, title and interest in and to or has valid and
continuing rights to use, sell and license, as the case may be, to all
Intellectual Property that is material to the business of the Acquired Companies
as presently conducted. All such Intellectual Property owned by the Acquired
Companies and, to the Sellers' Knowledge, all such Intellectual Property
licensed by the Acquired Companies, is free and clear of all Encumbrances
(except for those specified licenses included in Section 3.9(b) of the
Seller Disclosure Schedule). All material Intellectual Property rights currently
used by the Acquired Companies that have been assigned to any one or more of the
Acquired Companies have been assigned to such Acquired Company irrevocably,
other than revocation rights triggered as a result of a breach by such Acquired
Company.
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(c) To
the Sellers' Knowledge, the Intellectual Property owned, used, practiced or
otherwise commercially exploited by the Acquired Companies, the development,
manufacturing, licensing, marketing, importation, offer for sale, sale or use of
the Products, Software,
or Technology in connection with the business of the Acquired Companies as
presently conducted, and the Acquired Companies' present business practices and
methods, do not infringe, violate or constitute an unauthorized use or
misappropriation of any Patent, Copyright, Xxxx, URL, Trade Secret or other
similar right, of any Person (including pursuant to any non-disclosure
agreements or obligations to which an Acquired Company or any of their Employees
is a party, and including any intellectual property that might exist with
respect to open software or other intellectual property publicly available for
certain types of use), except as would not have a Material Adverse
Effect.
(d) Except
with respect to licenses of commercial off-the-shelf Software, and except
pursuant to the Intellectual Property Licenses listed in Section 3.9(d) of the
Seller Disclosure Schedule, none of the Acquired Companies is required,
obligated, or under any liability whatsoever, to make any payments by way of
royalties, fees or otherwise or provide any other consideration of any kind, to
any owner or licensor of, or other claimant to, any Intellectual Property, or
any other Person, with respect to the use thereof or in connection with the
conduct of the business of the Acquired Companies as currently
conducted.
(e) During
the three (3) years prior to the Closing Date, the Acquired Companies have taken
reasonable steps in accordance with normal industry practice to maintain the
confidentiality of Trade Secrets of the Acquired Companies.
(f) As
of the date hereof, none of the Acquired Companies is the subject of any pending
or, to the Knowledge of the Sellers, threatened Proceedings which involve a
claim of infringement, misappropriation, unauthorized use, or violation of any
intellectual property rights by any Person against any Acquired Company or
challenging the ownership, use, validity or enforceability of any material
Intellectual Property. As of the date of this Agreement, no Seller or Acquired
Company has received notice of any such threatened claim and, to the Knowledge
of the Sellers, there are no facts or circumstances that would form the basis
for any claim of infringement, unauthorized use, misappropriation or violation
of any intellectual property rights by any Person against an Acquired Company,
or challenging the ownership, use, validity or enforceability of any material
Intellectual Property. Except as would not have a Material Adverse Effect, all
of the Acquired Companies' rights in and to material Intellectual Property are
valid and enforceable.
(g) To
the Knowledge of the Sellers, as of the date of this Agreement, no Person is
infringing, violating, misusing or misappropriating any material Intellectual
Property of an Acquired Company, and no such claims have been made against any
Person by an Acquired Company.
(h) To
the Knowledge of the Sellers, none of the Acquired Companies have
misrepresented, or failed to disclose, any facts or circumstances in any
application for any Intellectual Property that would constitute fraud with
respect to such application.
(i) There
are no Judgments to which an Acquired Company is a party or by which an Acquired
Company is bound which restrict, in any material respect, the right to use any
of the Intellectual Property.
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(j) To
the Knowledge of the Sellers, the consummation of the transactions contemplated
hereby will not result in the loss or impairment of the Purchaser's right to own
or use any of the Intellectual Property.
(k) No
Employee has any right, title, or interest, directly or indirectly, in whole or
in part, in any material Intellectual Property owned or used by an Acquired
Company. To the Knowledge of the Sellers, as of the date of this Agreement, no
employee, consultant or independent contractor of an Acquired Company is, as a
result of or in the course of such employee's, consultant's or independent
contractor's engagement by an Acquired Company, in default or breach of any
material term of any employment agreement, non-disclosure agreement, assignment
of invention agreement or similar agreement.
(1) Section 3.9(1) of the
Seller Disclosure Schedule sets forth a list of Software used by the Acquired
Companies as of the date of this Agreement that is material to the operation of
the business.
Section
3.10 Contracts.
(a) Section 3.10(a) of
the Seller Disclosure Schedule sets forth an accurate and complete list as of
the date hereof of each Contract to which any Acquired Company is a party,
which:
(i) includes
a term extending more than one (1) year beyond the date of this
Agreement;
(ii) involves
future annual expenditures or receipts by an Acquired Company in excess of
$100,000 in the aggregate during the term thereof;
(iii) relates
to the borrowing of money or guarantying any obligation for borrowed money or
otherwise, including any Contract that is a (A) mortgage, indenture, note,
installment obligation or other instrument relating to the borrowing of money,
(B) letter of credit, bond or other indemnity (including letters of credit,
bonds or other indemnities as to which an Acquired Company is the beneficiary,
but excluding endorsements of instruments for collection) or (C) currency or
interest rate swap, collar or hedge agreements;
(iv) affects
the ownership of, leasing of title to, use of, or any other possessory interest
in any Company Properties;
(v) constitutes
an Intellectual Property License or pursuant to which an Acquired Company uses
Intellectual Property owned by a third party, except for any license implied by
the sale of a product and perpetual, paid-up licenses for commonly available
software programs with a value of less than $25,000 under which an Acquired
Company is the licensee;
(vi) involves
any labor union or other employee representative of a group of
employees;
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(vii) creates
a partnership or joint venture with any other Person;
(viii) contains
covenants that in any way purport to restrict the business activity of the
Acquired Companies or limit the freedom of the Acquired Companies to engage in
any line of business, to compete with any Person or solicit or hire any person
with respect to employment;
(ix) pursuant
to which an Acquired Company extends a written warranty, guaranty or other
similar undertaking with respect to contractual performance, other than in
connection with the sale of Products;
(x) except
for employment Contracts with Employees of Cinch U.K., any Seller, any Affiliate
of any Seller (other than an Acquired Company), any director or officer of an
Acquired Company is also party;
(xi) provides
for payments to employees as a result of the transactions contemplated by this
Agreement or the Ancillary Agreements;
(xii) involves
the sale of any of the assets of any Acquired Company, other than Inventory, and
other than in the ordinary course of business or for the grant to any Person of
any preferential rights to purchase any of an Acquired Company's
assets;
(xiii) relates
to the acquisition (by merger, purchase of stock or assets or otherwise) by the
Acquired Companies of any operating business or material assets or the capital
stock of any other Person;
(xiv) obligates
an Acquired Company to provide or obtain products or services for a period of
one (I) year or more or requiring an Acquired Company to purchase or sell a
stated portion of its requirements or outputs;
(xv) under
the terms thereof, an Acquired Company has made advances or loans to any other
Person;
(xvi) except
for employment Contracts with Employees of Cinch U.K., provides for severance,
retention, change in control or other similar payments;
(xvii) except
for employment Contracts with Employees of Cinch U.K., provides for the
employment of any individual on a full-time, part-time or consulting or other
basis providing annual compensation in excess of $75,000; and
(xviii)
is otherwise material to any Acquired Company.
The
Contracts listed in Section 3.10(a) of
the Seller Disclosure Schedule are referred to in this Agreement as the "Material
Contracts".
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(b) With respect to each such Material
Contract, neither any Acquired Company party to the Material Contract,
nor, to the Sellers' Knowledge, any other party to the Material Contract is in
breach or default under any material provisions of such Material Contract
except for such breaches or defaults as to which requisite waivers or
consents have been issued or obtained. To the Sellers' Knowledge, no event has
occurred that with the lapse of time or the giving of notice or both would
constitute a material breach or default on the part of an Acquired Company or
any other party under any Material Contract. Upon consummation of the
transactions contemplated by this Agreement, each Material Contract will, except
as otherwise stated in Section 3.10(b) of
the Seller Disclosure Schedule, continue in full force and effect without
penalty or other adverse consequence triggered by the consummation of the
transactions contemplated by this Agreement. To the Sellers' Knowledge, each
Material Contract is enforceable as to the applicable Acquired Company party
thereto in accordance with its terms subject to (i) Laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of
Law governing specific performance, injunctive relief and other equitable
remedies. From January 1, 2009 to the date hereof, (i) no party to any of the
Material Contracts has exercised any termination rights with respect thereto,
(ii) no party has given written notice of any significant dispute with respect
to any Material Contract, and (iii) no party has provided written notification
to the Seller or any Acquired Company that it will stop or, other than generally
applicable price increases, materially alter the pricing or terms of any
Material Contract. The Sellers have delivered to the Purchaser true, correct and
complete copies of all of the Material Contracts, together with all amendments,
modifications or supplements thereto.
Section
3.11 Tax
Matters.
(a) (i)
All Tax Returns required to be filed by or on behalf of each of the Acquired
Companies and any Affiliated Group of which an Acquired Company is or was a
member have been duly and timely filed with the appropriate Governmental
Authority in all jurisdictions in which such Tax Returns are required to be
filed (after giving effect to any valid extensions of time in which to make such
filings), and all such Tax Returns have at all times been and remain true,
complete and correct in all material respects and were prepared in substantial
compliance with all applicable laws and regulations; and (ii) all Taxes payable
by or on behalf of each of the Acquired Companies and any Affiliated Group of
which an Acquired Company is or was a member have been fully and timely paid to
the Knowledge of the Sellers. With respect to any period for which Tax Returns
have not yet been filed or for which Taxes are not yet due or owing, the
Acquired Companies have made due and sufficient accruals for such Taxes in the
Financial Statements and its books and records. All required estimated Tax
payments sufficient to avoid any underpayment penalties or interest have been
made by or on behalf of the Acquired Companies. There are no Encumbrances for
unpaid Taxes upon any of the assets of any Acquired Company.
(b) Each
of the Acquired Companies has withheld and paid all Taxes required to have been
withheld and paid by any Governmental Authority in connection with any amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(c) The
Purchaser has received complete copies of (i) all federal, state, local and
foreign income or franchise Tax Returns of the Acquired Companies relating to
the taxable periods since January 1, 2006 and (ii) any audit report issued
within the last three (3) years relating to any Taxes due from or with respect
to an Acquired Company.
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(d) No
federal, state, local or non-U.S. tax audits or administrative or judicial Tax
proceedings are pending, being conducted, or have been conducted with respect to
any Acquired Company. Since January 1, 2006, none of the Acquired Companies has
received from any Governmental Authority (including jurisdictions where no
Acquired Company has filed a Tax Return) any written (i) notice indicating an
intent to open an audit or other review, (ii) request for information related to
Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount
of Tax proposed, asserted, or assessed by any taxing authority against any
Acquired Company.
(e) Except
as set forth on Section 3.11 of the
Seller Disclosure Schedule, no Acquired Company is a party to any contract,
agreement, plan or arrangement that has resulted or could result, separately or
in the aggregate, in the payment of (i) any "excess parachute payment" within
the meaning of Code §280G (or any corresponding provision of state, local, or
non-U.S. Tax law) and (ii) any amount that will not be fully deductible as a
result of Code § 162(m) (or any corresponding provision of state, local, or
non-U.S. Tax law). No Acquired Company has been a U.S. real property holding
corporation within the meaning of Code §897(c)(2) during the applicable period
specified in Code §897(c)(1)(A)(ii). Each of the Acquired Companies have
disclosed on their federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Code §6662. No Acquired Company is a party to or bound by any tax
sharing, allocation, indemnity or similar agreement or arrangement (whether or
not written). No Acquired Company (A) has ever been a member of any
consolidated, combined, affiliated or unitary group of corporations filing a
consolidated return for any Tax purposes other than a group in which one of the
other Acquired Companies is the common parent; or (B) has any liability for the
Taxes of any Person (other than an Acquired Company) under Treasury Regulations
§1.1502-6 (or any similar provision of state, local, or non-U.S. law), as a
transferee or successor, by contract, or otherwise.
(f) Since
January 1, 2006, no claim has been made in writing by a Governmental Authority
in a jurisdiction where an Acquired Company does not file Tax Returns such that
it is or may be subject to taxation by that jurisdiction.
(g) No
Acquired Company nor any Seller nor any other Person on their behalf has (i)
agreed to or is required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of Law or has any Knowledge that any
Governmental Authority has proposed any such adjustment, or has any application
pending with any Governmental Authority requesting permission for any changes in
accounting methods that relate to any Acquired Company, (ii) executed or entered
into a closing agreement pursuant to Section 7121 of the Code or any similar
provision of Law with respect to any Acquired Company, (iii) requested any
extension of time within which to file any Tax Return, which Tax Return has
since not been filed, (iv) waived any statute of limitations in respect of Taxes
or granted any extension for the assessment or collection of Taxes, or (v)
granted to any Person any power of attorney that is currently in force with
respect to any Tax matter.
(h) No Acquired Company will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any (i) intercompany transaction or excess loss account
described in Treasury Regulations under Code §1502 (or any corresponding or
similar provision of state, local, or non-U.S. income Tax law); (ii) installment
sale or open transaction disposition made on or prior to the Close Date; or
(iii) prepaid amount received on or prior to the Closing Date. There is no
material amount of taxable income of any Acquired Company that will be required
under applicable Tax Law to be reported by the Purchaser or any of its
Affiliates, including the Acquired Companies, for a taxable period beginning
after the Closing Date which taxable income was realized (and reflects economic
income) on or prior to the Closing Date.
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(i)
Since January 1, 2006, no Acquired Company has distributed stock of
another Person, or has had its stock distributed by another Person, in a
transaction that was purported or intended to be governed in whole or in part by
Code §355 or Code §361.
(j)
No Acquired Company, since January 1, 2006, is or has been a party to any
"reportable transaction," as defined in Code §6707A(c)(1) and Treasury
Regulations §1.6011-4(b).
(k) None
of the Acquired Companies (A) is currently the subject of any agreement or
ruling in respect of Taxes with any Governmental Authority, and no such
agreement or ruling is pending; or (B) is or has been entitled to any Tax
holiday, Tax credit, or other similar Tax incentive or benefit from any
jurisdiction (other than such benefits as are generally available to all Persons
engaged in business and subject to tax as a resident in such jurisdiction),
which would be subject to forfeiture, recapture, or other recovery by the
Governmental Authority granting such benefit in connection with the transactions
contemplated hereby or in connection with any dissolution, or cessation of
business in, or withdrawal of assets from or a reduction of the number of
employees in the relevant jurisdiction.
(l) Seller
U.S. is not a foreign person within the meaning of Section 1445 of the
Code.
(m) Each
of the Acquired Companies is, and at all times since January 1, 2006 has been,
classified for U.S. income Tax purposes as a corporation.
(n) Since
January 1, 2006, each of the Acquired Companies has, within applicable time
limits, preserved all material records required by law to be preserved and all
other material records required for the delivery of correct and complete Tax
Returns or the computation of any Tax.
(o) No
Acquired Company or Affiliate of an Acquired Company is a "passive foreign
investment corporation" as defined in Code § 1297.
(p) Neither
the execution nor completion of this Agreement nor the Closing will result in
any asset being deemed to have been disposed of and reacquired by Cinch U.K. for
the purposes of Section 179 Taxation of Chargeable Gains Xxx 0000 or Xxxxxxx 000
Xxxxxxxxxxx Xxx Xxx 0000.
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Section
3.12 Employee Benefit
Matters.
(a) Cinch U.S. and its
Subsidiaries.
(i) Section 3.12(a)(i) of
the Seller Disclosure Schedule sets forth a correct and complete list of all
Company Plans.
(ii) There
is no Liability under (A) Title IV of ERISA, (B) Section 302 of ERISA, or (C)
Sections 412 and 4971 of the Code, in each case, that would be Liability of
Purchaser or any Acquired Company following the Closing. No Acquired Company has
contributed to or has had an obligation to contribute to any plan subject to
Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code within the
last six (6) years of the date of this Agreement.
(iii) Correct
and complete copies of the following documents, with respect to each of the
Company Plans, have been made available or delivered to the Purchaser by the
Sellers, to the extent applicable: (i) any plans, all amendments thereto and
related trust documents, insurance contracts or other funding arrangements, and
amendments thereto; (ii) the three (3) most recent Forms 5500 and all schedules
thereto and the most recent actuarial report, if any; (iii) the most recent IRS
determination letter;
(iv) summary
plan descriptions; (v) written communications to employees relating to the
Company Plans; and (vi) written descriptions of all non-written agreements
relating to the Company Plans.
(iv) The
Company Plans have been maintained in all material respects in accordance with
their terms and with all provisions of ERISA, the Code (including rules and
regulations thereunder) and other applicable Laws and regulations, and to the
Knowledge of Sellers, neither Cinch U.S. (or any of the Subsidiaries) nor any
"party in interest" or "disqualified person" with respect to the Company Plans
has engaged in a non-exempt "prohibited transaction" within the meaning of
Section 4975 of the Code or Section 406 of ERISA that would result in a
Liability for Purchaser or any Acquired Company.
(v) Each
Company Plan that is intended to meet the requirements of a "qualified plan"
under Section 401(a) of the Code has, as of the date of this Agreement, received
a favorable determination letter or opinion letter from the Internal Revenue
Service, and, to the Knowledge of Sellers, nothing has occurred that would
reasonably be expected to adversely affect such Company Plans qualified or
tax-exempt status.
(vi) All contributions (including all
employer contributions and employee salary reduction contributions) required to
have been made by Cinch U.S. or its Subsidiaries under any of the Company
Plans by Law (without regard to any waivers granted under Section 412 of the Code),
to any funds or trusts established thereunder or in connection therewith have been made
by the due date thereof (including any valid extension), and all contributions for
any period ending on or before the Closing Date that are not yet due will have been paid or
sufficient accruals for such contributions and other payments in
accordance with U.S. GAAP are duly and fully provided for on the Financial
Statements.
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(vii) There
are no pending actions, claims or lawsuits that have been asserted or instituted
against the Company Plans, the assets of any of the trusts under the Company
Plans or the sponsor or administrator of any of the Company Plans, or against
any fiduciary of the Company Plans with respect to the operation of any of the
Company Plans (other than routine benefit claims) that would result in a
Liability for Cinch U.S. or its Subsidiaries, nor do Cinch U.S., its
Subsidiaries or the Sellers have any Knowledge of facts that could form the
basis for any such claim or lawsuit.
(viii) None
of the Company Plans providing benefits to Employees of Cinch U.S. or its
Subsidiaries provides for post-employment life or health insurance, benefits or
coverage for any participant or any beneficiary of a participant, except as may
be required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"), and at the expense of the participant or the participant's
beneficiary. Each of Cinch U.S., its Subsidiaries and any ERISA Affiliate which
maintains a "group health plan" within the meaning Section 5000(b)(1) of the
Code has materially complied with the notice and continuation requirements of
Section 4980B of the Code, COBRA, Part 6 of Subtitle B of Title I of ERISA and
the regulations thereunder.
(ix) Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any Employee, (ii) increase any benefits otherwise payable under any Company
Plan or (iii) result in the acceleration of the time of payment or vesting of
any such benefits under any Company Plan or Title IV Plan in each case that
would be a Liability of Purchaser, Cinch U.S. or its Subsidiaries.
(x) Except
to the extent required by a previous obligation or Law, neither Cinch U.S. nor
its Subsidiaries has a contract, plan or commitment, whether legally binding or
not, to create any additional Company Plan or to modify any existing Company
Plan.
(xi) To
the Knowledge of Sellers, Cinch U.S. and its Subsidiaries have identified each
Company Plan to which Cinch U.S. or its Subsidiaries is a party or otherwise has
liability that is a "nonqualified deferred compensation plan" (within the
meaning of Section 409A of the Code) subject to Section 409A of the Code, and
each Company Plan so identified, to the extent subject to Section 409A of the
Code, has been operated and administered since January 1, 2005 in good faith
compliance with Section 409A of the Code and IRS regulations and guidance issued
thereunder. Neither Cinch U.S. nor any of its Subsidiaries has any commitment to
compensate or reimburse any individual for penalty taxes imposed under Section
409A of the Code.
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(b) Cinch U.K.
(i) Other
than the Cinch Connectors Limited Pension Plan (the "Main Scheme") and the
Cinch Connectors Limited Group Stakeholder Plan (the "Stakeholder Scheme")
(together the "Pension Schemes")
Cinch U.K. has never sponsored, designated, participated in assumed
liability for or contributed to any arrangement (whether or not closed, funded
or tax registered) for providing pension or other benefits on, or in
anticipation of, the retirement, death, or ill health of any Employee, nor has
it agreed or announced any proposal to enter into or establish any such
arrangement.
(ii)
Except as otherwise provided for in this Agreement, to the Sellers' Knowledge,
Cinch U.K. has not made any undertaking or assurance to any Employee
about:
(A) the
continuation of the Stakeholder Scheme or the Main Scheme or any alteration to
or exception from their terms or the increase or improvement of benefits or the
exercise of any discretion; or
(B) the
introduction of, or a contribution towards, any new or alternative pension
arrangement.
(iii) The
Stakeholder Scheme only provides money purchase benefits, as defined in section
181 of the Xxxxxxx Xxxxxxx Xxx 0000. Cinch U.K. has not made any assurance,
promise or guarantee to an Employee of a particular level or amount of benefit
to be provided for or in respect of him under the Stakeholder Scheme on death,
retirement or leaving service.
(iv) To
the Sellers' Knowledge, and solely with respect to the Pension Schemes, (x)
there arc no civil, criminal, arbitration, administrative or other proceedings
or disputes (which includes, without limitation, contact with the Pensions
Regulator, the Pensions Advisory Service or the Pensions Ombudsman or an
application under the Pension Schemes' dispute resolution arrangements) by or
against the trustees, managers or administrators of the Pension Schemes, the
Sellers or Cinch U.K. and none is pending or threatened, and (y) the Sellers are
not aware of a matter which might give rise to a proceeding or dispute of that
type.
(v) Cinch
U.K. has complied with its obligations (if any) under section 3 of the Welfare
Reform and Pensions Xxx 0000.
(vi) To
the Sellers' Knowledge, no Contribution Notice, Financial Support Direction or
restoration order has been issued to Cinch U.K. or any of its Affiliates with
respect to Cinch U.K. by the Pensions Regulator in accordance with its powers
under the Pensions Act 2004 and there is no fact or circumstance likely to give
rise to any such notice or direction.
(vii) No
Employees have a right to require the early payment of any benefit as a result
of the operation of the Transfer of Undertakings (Protection of Employment)
Regulations 1981 or 2006.
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(c) Section 3.12(c) of
the Seller Disclosure Schedule lists, by individual name, each employee who has
a change of control agreement, and Sellers have delivered to the Purchaser true,
correct and complete copies of all change of control agreements together with
all amendments, modifications or supplements thereto.
Section
3.13 Employment and
Labor Matters. Except as set forth in Section 3.13 of the
Seller Disclosure Schedule, as of the date hereof, none of the Acquired
Companies is a party to or bound by any collective bargaining agreement and, to
the Knowledge of the Sellers, no petition has been filed or Proceedings
instituted by any Employee or group of Employees of the Acquired Companies with
any labor relations board seeking recognition of a bargaining representative.
Except as set forth in Section 3.13 of the
Seller Disclosure Schedule, there is no labor strike, picketing, slowdown,
lockout, employee grievance process or other work stoppage or labor dispute
pending or, to the Knowledge of the Sellers, threatened between any Acquired
Company on the one hand, and any of their Employees, on the other hand, except
as would not have a Material Adverse Effect and except for such disputes with
individual employees arising in the ordinary course of business. To the Sellers'
Knowledge, as of the date of this Agreement, there is no organizing activity
involving the Acquired Companies pending or threatened by any labor organization
or group of Employees. Except as would not have a Material Adverse Effect, there
are no complaints, charges or claims against the Acquired Companies pending or,
to the Knowledge of the Sellers, threatened that could be brought or filed, with
any Governmental Authority based on, arising out of, in connection with or
otherwise relating to the employment or termination of employment of or failure
to employ, any individual. Except as would not have a Material Adverse Effect,
to the Sellers' Knowledge, the Acquired Companies (i) have no direct or indirect
liability with respect to any misclassification of any Person as an independent
contractor rather than as an employee, (ii) are in compliance in all material
respects with all applicable Laws respecting employment, employment practices,
labor relations, employment discrimination, health and safety, terms and
conditions of employment and wages and hours, and (iii) have not received any
written remedial order or notice of offense under applicable occupational health
and safety Law. To the Sellers' Knowledge, none of the Acquired Companies have
incurred, and nor do any of them reasonably expect to incur, any liability or
obligation under the WARN Act, and the regulations promulgated thereunder, or
any similar state or local Law which remains unsatisfied.
Section
3.14 Environmental,
Health and Safety Matters.
(a) The
Sellers have made available to Purchaser complete and correct copies, either in
paper or electronic form, of all material environmental audits, assessments,
investigations, studies, reports, data and other information, including but not
limited to Phase I and Phase II environmental studies, with respect to any real
property currently owned, operated or leased by, or utilized in the business of
the Acquired Companies or any Previously-owned Land and Buildings within their
possession or control (the "Environmental
Assessments"). Each of the Environmental Assessments is listed in Section 3.14(a) of
the Seller Disclosure Schedule.
(b) Except
as set forth in the Environmental Assessments, and except as would not have a
Material Adverse Effect:
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(i) Since
January 1, 2005, the business of the Acquired Companies is, and has been, in
material compliance with all applicable Environmental Laws.
(ii) There
is no Proceeding relating to or arising under Environmental Laws that is pending
or, to the Sellers' Knowledge, threatened against or affecting the business of
the Acquired Companies or any real property currently or formerly owned,
operated or leased by or utilized in the business of the Acquired Companies (in
the case of a formerly owned, operated, leased or utilized property to which an
Acquired Company has been named a party), and to the Knowledge of the Sellers,
no facts, circumstances or conditions exist that would reasonably be expected to
form the basis of any such Proceeding.
(iii) Since
January 1, 2005, none of the Acquired Companies have received written notice
from any Governmental Entity or any other Person of any actual or threatened
Environmental Liabilities with respect to the business of the Company or any
real property currently or formerly owned, operated or leased by or utilized in
the business of the Company or its Subsidiaries, including third-party owned or
operated real property at which Hazardous Materials from the business have been
or are alleged to have been taken.
(iv) None
of the Acquired Companies have assumed, by Contract or operation of law, any
Environmental Liabilities of a third party.
(v) Each
of the Acquired Companies has obtained, and currently maintains, as applicable,
all material Environmental Permits for its operations. Each of the Acquired
Companies has fulfilled and performed all material obligations under each of its
Environmental Permits and to the Knowledge of the Sellers, no event has occurred
or condition or state of facts exists that constitutes or, after notice or lapse
of time or both, would constitute a breach or default under any such
Environmental Permit, or, after notice or lapse of time or both, would permit
revocation or termination of any such Environmental Permit, or that might
adversely affect the rights of the Acquired Companies under any such
Environmental Permit. The Acquired Companies have not received written notice
that there is lacking any material Environmental Permit for the conduct of their
business. Neither the execution and delivery of this Agreement by the Acquired
Companies, nor the consummation by the parties of the actions contemplated by
this Agreement, nor compliance by the Acquired Companies with any of the
provisions herein, will result in the termination or revocation of, or a right
of termination or cancellation under, any material Environmental Permit
necessary for the continued operation of the Acquired Companies'
business.
(vi) To the Knowledge of the Sellers, no
Company Property contains and during the ownership, operation,
leasing or utilization in the business of the Acquired Companies no Previously-owned Land and
Buildings contained any Hazardous Materials in, at, on, over, under, or emanating
from such real property in concentrations which would presently violate any applicable
Environmental Law or would be reasonably likely to result in the imposition of
Liability on the Acquired Companies under any applicable Environmental Law,
including any Liability for the assessment, investigation, corrective
action, remediation, removal, monitoring or reporting on the presence of
such Hazardous Materials in, at, on, over, under, or emanating from such real
property.
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(vii) To
the Knowledge of the Sellers, there has not been during the ownership,
operation, leasing, or utilization in the business of the Acquired Companies of
any Company Property or Previously-owned Land and Buildings: (A) any underground
storage tanks, above-ground storage tanks, dikes, ponds, lagoons or
impoundments, (B) any friable asbestos or asbestos-containing materials, (C) any
polychlorinated biphenyls or (D) any radioactive substances.
(viii) During
the five (5) years prior to the Closing Date, no Products manufactured by the
Acquired Companies have contained any asbestos or asbestos- containing materials
other than any asbestos or asbestos-containing materials included in any
components manufactured by third parties that have been incorporated into the
Products by the Acquired Companies. During the five (5) years prior to the date
of this Agreement, to the Knowledge of the Sellers, none of the components
manufactured by third parties that have been incorporated into the Products by
the Acquired Companies have contained any asbestos or asbestos-containing
materials.
(c) Section 3.14(c) of
the Seller Disclosure Schedule provides a complete list of all current, and
applications for pending, material Permits related to Environmental Laws used or
to be used in the conduct of the business of the Acquired
Companies.
Section
3.15 Governmental
Authorizations. Section 3.15 of the
Seller Disclosure Schedules contains a list of all Governmental Authorizations
which are required for the operation of the business of the Acquired Companies
as presently conducted, other than those the failure of which to possess would
not result in a Material Adverse Effect. To the Sellers' Knowledge, the Acquired
Companies have all Governmental Authorizations that are necessary for them to
conduct their business in the manner in which it is presently conducted. The
Acquired Companies are, and during the three (3) years prior to the Closing Date
have been, in compliance with all Governmental Authorizations that are necessary
for them to conduct their business in the manner in which it was being conducted
at the applicable time, except as would have a Material Adverse Effect. There
are no Proceedings pending or, to the Knowledge of the Sellers, threatened,
relating to the suspension, revocation or modification of any Governmental
Authorization. The representations and warranties contained in this Section 3.15 are
intended to apply generally to all matters falling within their scope and, thus,
notwithstanding any other representations and warranties contained in this
Agreement that cover any such matters with more particularity, such other
representations and warranties will be deemed to apply in addition to, and not
in limitation of, the more broad representations and warranties of general
applicability contained in this Section
3.15.
Section 3.16 Compliance
with Laws. The Acquired
Companies are, and during the three (3) years prior to the Closing
Date have been, in compliance with all Laws applicable to them or the conduct of their business
or the ownership or use of their properties and assets except as would have a Material Adverse
Effect. Since January 1, 2009, no Acquired Company has received any written notice of or been
charged with the violation of any Laws, except as would not have a Material Adverse Effect. To
the Knowledge of the Sellers, no Acquired Company is under investigation
with respect to the violation of any Laws and there are no facts or
circumstances which could form the basis for any such violation, in each case,
except as would not have a Material Adverse Effect. The representations and
warranties contained in this Section 3.16 are intended to
apply generally to all matters falling within their scope and, thus,
notwithstanding any other representations and warranties contained in this
Agreement that cover any such matters with more particularity, such other
representations and warranties will be deemed to apply in addition to, and not
in limitation of, the more broad representations and warranties of general
applicability contained in this Section
3.16.
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Section
3.17 Legal
Proceedings. As of the date of this Agreement, there is no Proceeding
pending or, to the Sellers' Knowledge, threatened: (i) against either Seller
that questions or challenges the validity of this Agreement or the ability of
the Sellers to consummate any of the transactions contemplated by this
Agreement; or (ii) against any Acquired Company or any of its properties or
assets that, if adversely determined, would have a Material Adverse Effect.
Other than as disclosed on Section 3.17(a) of
the Seller Disclosure Schedule, no Acquired Company is subject to any
outstanding Judgment that would have a Material Adverse Effect. Section 3.17(b) of
the Seller Disclosure Schedule sets forth a list of those Proceedings that have
been pending during the last three (3) years prior to the date of this Agreement
that, if adversely determined, are, or would have been, reasonably likely to
result in a Material Adverse Effect or a liability in excess of $250,000 by any
one or more of the Acquired Companies.
Section
3.18 Insurance.
The Acquired Companies hold, or there are applicable to the Acquired
Companies, insurance policies in full force and effect (i) for such amounts as
are sufficient for all requirements of Law and all agreements to which one or
more of the Acquired Companies is a party or by which it is bound, and (ii)
which are in such amounts, with such deductibles and against such risks and
losses, as are, in Sellers' judgment, reasonable for the business, assets and
properties of the Acquired Companies. Set forth in Section 3.18 of the
Seller Disclosure Schedule is a list of all insurance policies and all fidelity
bonds as of the date hereof held by or applicable to the Acquired Companies
setting forth, in respect of each such policy, the policy number, carrier, term,
type and amount of coverage, whether the policies may be terminated upon
consummation of the transactions contemplated hereby and if and to what extent
events being notified to the insurer after the Closing Date are generally
excluded from the scope of the respective policy. Excluding insurance policies
that have expired and been replaced in the ordinary course of business, no
insurance policy has been cancelled within the last two (2) years and, to the
Knowledge of the Sellers, no threat has been made to cancel any insurance policy
of the Acquired Companies during such period. Except as noted on Section 3.18 of the
Seller Disclosure Schedule, all such insurance will remain in full force and
effect immediately following the consummation of the transactions contemplated
hereby. To the Sellers' Knowledge, no event has occurred as of the date hereof,
including the failure by the Acquired Companies to give any notice or
information or the Acquired Companies giving any inaccurate or erroneous notice
or information, which limits or impairs the rights of the Acquired Companies
under any such insurance policies. Also attached to Section 3.18 of the
Seller Disclosure Schedule is a claims history evidencing all claims made
against any insurance policies and binders of the Acquired Companies from July
1, 2004 to the date of this Agreement.
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Section 3.19 Inventories.
Except as set forth on
Section
3.19 of the Seller
Disclosure Schedule, each
item of FG is in good and marketable condition, and each item of Inventory is
usable and of a quantity and quality that is saleable in the ordinary
course of business, except for items for which reserves have been provided on
the Financial Statements. All Inventories of the Acquired Companies as of the
Balance Sheet Date are set forth in the Financial Statements and were valued at
the lower of cost (on a FIFO/LIFO basis) or market and were properly stated
therein in accordance with U.K. GAAP or U.S. GAAP, as applicable, consistently
applied. Adequate reserves have been reflected in the Financial Statements for
obsolete, excess, damaged, slow-moving, or otherwise unusable Inventory, which
reserves include the cost of disposal and were calculated in a manner consistent
with past practice and in accordance with U.K. GAAP or U.S. GAAP, as applicable,
consistently applied. As of October 31, 2009, the Acquired Companies do not hold
in excess of five percent (5%) of the Inventory on consignment and no more than
ten percent (10%) of the Inventory of the Acquired Companies is in the
possession of third parties who are not Affiliates of the Acquired
Companies.
Section
3.20 Accounts and
Notes Receivable and Payable.
(a) All
accounts and notes receivable of the Acquired Companies have arisen from bona
fide transactions in the ordinary course of business consistent with past
practice. None of the accounts or other notes receivable of the Acquired
Companies (i) are subject to any setoffs or counterclaims or (ii) represent
obligations for goods sold on consignment, on approval or on a sale-or-return
basis or subject to any other repurchase or return arrangement. Notwithstanding
the foregoing, nothing in this Agreement will constitute a guaranty or warranty
by Sellers or their Affiliates that such account or note receivable will
ultimately be collected.
(b) All
accounts payable of the Acquired Companies reflected in the Financial Statements
or arising after the Balance Sheet Date are the result of bona fide transactions
in the ordinary course of business and have been paid or are not yet due and
payable, except for any late payments that would not have a Material Adverse
Effect.
(c) Section 3.20(c) of
the Seller Disclosure Schedule includes an aging schedule for the accounts
receivable and the accounts payable of the Acquired Companies reflecting, as of
October 31, 2009, the aggregate amount of the accounts receivable and accounts
payable, respectively, outstanding: (i) thirty (30) days or less; (ii) more than
thirty (30) days but less than or equal to sixty (60) days; (iii) more than
sixty (60) but less than or equal to ninety (90) days; (iv) more than ninety
(90) but less than or equal to one hundred twenty (120) days and (v) more than
one hundred twenty (120) days.
Section
3.21 Related Party
Transactions.
(a) As of
the date hereof, other than, in the case of employees of any Acquired Company,
salaries, benefits and other transactions pursuant to Company Plans, no
employee, officer or director of the Acquired Companies ("Related Persons")
(i) owes any amount to the Acquired Companies nor do the Acquired
Companies owe any amount to, or have the Acquired Companies committed to make
any loan or extend or guarantee credit to or for the benefit of, any Related
Person, (ii) is involved in any business arrangement or other relationship with
the Acquired Companies (whether written or oral), (iii) owns any property or
right, tangible or intangible, that is used by the Acquired Companies, or (iv)
to Sellers' Knowledge, owns any direct or indirect interest of any kind in, or
controls or is a director, officer, employee or partner of, or consultant to, or
lender to or borrower from or has the right to participate in the profits of,
any Person which is a competitor, supplier, customer, landlord, tenant, creditor
or debtor of an Acquired Company.
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(b) Section 3.21(b) of
the Seller Disclosure Schedule sets forth a list of all Contracts and commercial
dealings between or among any Seller and/or any of their Affiliates (other than
the Acquired Companies), on the one hand, and any Acquired Company, on the other
hand (each an "Affiliate Contract")
and identifies and details the aggregate dollar amounts of all purchase
and sale transactions between or among any Seller and/or any of their Affiliates
(other than the Acquired Companies), on the one hand, and any Acquired Company,
on the other hand, from January 1, 2008 to October 31, 2009 whether pursuant to
an Affiliate Contract or otherwise. Section 3.21(b) of
the Seller Disclosure Schedule also details all properties and/or services
shared (directly or indirectly) between or among, or utilized (directly or
indirectly) by both, any Seller and/or any of their Affiliates (other than the
Acquired Companies), on the one hand, and any Acquired Company, on the other
hand (such properties and/or services being, the "Intragroup
Services).
Section
3.22 Customers and
Suppliers.
(a) Section 3.22(a) of
the Seller Disclosure Schedule sets forth a list of the ten (10) largest
customers and the ten (10) largest suppliers of each of the Acquired Companies,
as measured by the dollar amount of purchases therefrom or thereby, during each
of the fiscal years ended December 31, 2007 and December 31, 2008 and the
completed portions of the fiscal year from January 1, 2009 to October 31, 2009
showing the approximate total sales by the Acquired Companies to each such
customer and the approximate total purchases by the Acquired Companies from each
such supplier, during such period.
(b) From
the Balance Sheet Date to the date hereof, to the Sellers' Knowledge and except
as would not have a Material Adverse Effect, (i) none of the customers set forth
in Section 3.22(a)
of the Seller Disclosure Schedule has provided written notification to
the Seller or an Acquired Company that it will stop its purchases of materials,
products or services from an Acquired Company, and (ii) none of the suppliers
set forth in Section
3.22(a) of the Seller Disclosure Schedule has provided written
notification to the Seller or any Acquired Company that it will stop or, other
than generally applicable price increases, materially increase the cost of, its
supply of materials, products or services used by the Acquired
Companies.
Section
3.23 Product Warranty;
Product Liability.
(a) Section 3.23(a)(i) of
the Seller Disclosure Schedule contains a copy of the standard terms and
conditions customarily provided by Cinch U.S. and Cinch U.K. as of the date of
this Agreement. Section 3.23(a)(ii)
of the Seller Disclosure Schedule sets forth a list of those Contracts in
effect as of the date of this Agreement pursuant to which an Acquired Company
has provided a warranty for a Product beyond the standard terms and conditions
customarily provided by the Acquired Companies.
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(b) To Sellers Knowledge, none of the
Acquired Companies has any material liability arising out of any injury to
individuals or property as a result of the ownership, possession, or use
of any Product. Except as would not have a Material Adverse Effect and to
Sellers' Knowledge, none of the Acquired Companies has committed any act or
failed to commit any act, which would result in, and there has been no
occurrence which would give rise to or form the basis of, any product liability
or liability for breach of warranty (whether covered by insurance or not) on the
part of the Acquired Companies with respect to Products.
Section
3.24 Banks; Power of
Attorney. Section 3.24 of the Seller Disclosure Schedule contains a
complete and correct list of the names and locations of all banks in which any
Acquired Company has accounts or safe deposit boxes and the names of all persons
authorized to draw thereon or to have access thereto. Except as set forth on
Section 3.24 of
the Seller Disclosure Schedule, no Person has any power, whether singly or
jointly, to sign any checks on behalf of the Acquired Companies, to withdraw any
money or other property from any bank, brokerage or other account of the
Acquired Companies or to act under any power of attorney granted by any Acquired
Company at any time, for any purpose. Section 3.24 of the
Seller Disclosure Schedule also sets forth the names of all Persons authorized
to borrow money or sign notes on behalf of the Acquired Companies (the authority
granted to any Person listed on Section 3.24 of the
Seller Disclosure Schedule, the "Authority
Granted").
Section
3.25 Certain Payments.
To the Sellers' Knowledge, none of the Acquired Companies, or any
director, officer, employee, or other Person acting on behalf of any of them,
has directly or indirectly (i) made any contribution, gift, bribe, rebate,
payoff, influence payment, kickback, or other payment to any Person, private or
public, regardless of form, whether in money, property, or services (A) to
obtain favorable treatment in securing business for an Acquired Company, (B) to
pay for favorable treatment for business secured by an Acquired Company, (C) to
obtain special concessions or for special concessions already obtained, for or
in respect of an Acquired Company, or (D) in violation of any Law, or (ii)
established or maintained any fund or asset with respect to an Acquired Company
that has not be recorded in the books and records of the Acquired
Companies
Section
3.26 Sufficiency of
the Assets. The Acquired Companies own, have a valid leasehold interest
in or have a valid contractual right to use all of the material assets used to
conduct the business of the Acquired Companies (other than the Intragroup
Services). Upon the consummation of the transactions contemplated hereby, the
Acquired Companies (taking into account the services to be provided under Section 5.23 below)
will own, have a valid leasehold interest in or a valid contractual right to use
all of the tangible assets, intangible assets and real property rights necessary
to conduct the business of the Acquired Companies in substantially the same
manner as it is conducted immediately prior to the Closing (other than with
respect to the Intragroup Services not to be provided under Section 5.23 below by
the Sellers or their Affiliates).
Section
3.27 Military
Specification Testing. Cinch U.S. is listed on the U.S. Department of
Defense Qualified Products List with the Defense Logistics Agency and Defense
Supply Center Columbus (the "DoD List") for those
Products, and only those Products, listed on Section 3.27 of the
Seller Disclosure Schedule (the ''Mil Spec Products").
As of the date of this Agreement, the Acquired Companies are, in all
material respects, in compliance with the testing and reporting requirements of
the Defense Logistics Agency and Defense Supply Center Columbus applicable to
each Mil Spec Product.
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Section
3.28 Brokers Fees.
No Acquired Company has incurred any Liability to pay any fees or
commissions to any broker, finder or agent in connection with any of the
transactions contemplated by this Agreement for which the Purchaser would become
liable or obligated or for which any Acquired Company, after the Closing Date,
will have any continuing obligation.
Section
3.29 Disclaimer of
Other Representations and Warranties. THE REPRESENTATIONS AND WARRANTIES
SET FORTH IN THIS ARTICLE 3 ARE THE
ONLY REPRESENTATIONS AND WARRANTIES MADE BY THE SELLERS WITH RESPECT TO THE
SHARES, THE SELLERS, THE ACQUIRED COMPANIES OR ANY OTHER MATTER RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EXCEPT AS SPECIFICALLY SET FORTH IN
THIS ARTICLE 3,
THE SELLERS ARE SELLING THE SHARES TO THE PURCHASER "AS IS" AND "WHERE
IS" AND WITH ALL FAULTS, AND MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER RELATING TO THE SHARES, THE SELLERS, THE ACQUIRED COMPANIES OR
ANY OTHER MATTER RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
INCLUDING AS TO (I) MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE OR
PURPOSE, (II) THE OPERATION OF THE BUSINESS OF THE ACQUIRED COMPANIES AFTER THE
CLOSING IN ANY MANNER OR (III) THE PROBABLE SUCCESS OR PROFITABILITY OF THE
BUSINESS OF THE ACQUIRED COMPANIES AFTER THE CLOSING. ANY OTHER REPRESENTATION
OR WARRANTY IS EXPRESSLY DISCLAIMED. Other than the indemnification obligations
of the Sellers set forth in the Indemnification Articles, none of the Sellers,
the Acquired Companies, any of their Affiliates, or any of their respective
officers, directors, employees, agents, representatives or stockholders will
have, or will be subject to, any Liability or indemnification obligation to the
Purchaser or any other Person resulting from the distribution to the Purchaser
or its Affiliates or representatives of, or the Purchaser's use of, any
information relating to the Sellers, the Acquired Companies or any of their
Affiliates, including any descriptive memoranda, summary business descriptions
or any information, documents or material made available to the Purchaser or its
Affiliates or representatives, whether orally or in writing, in certain "data
rooms," management presentations, functional "break-out" discussions, responses
to questions submitted on behalf of the Purchaser or in any other form in
expectation of the transactions contemplated by this Agreement.
ARTICLE 4
REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
The
Purchaser represents and warrants to the Sellers as follows, except as set forth
on the disclosure schedule delivered by the Purchaser to the Sellers
concurrently with the execution and delivery of this Agreement and dated as of
the date of this Agreement (the "Purchaser Disclosure
Schedule"):
Section
4.1 Organization and
Good Standing. The Purchaser is a corporation duly organized, validly
existing and in good standing under the Laws of the State of New Jersey, and has
all requisite corporate power and authority to conduct its business as it is
presently conducted.
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Section
4.2 Authority and
Enforceability. The Purchaser has all requisite corporate power and
authority to execute and deliver this Agreement and each Ancillary Agreement to
which it is a party and to perform its obligations under this Agreement and each
such Ancillary Agreement. The execution, delivery and performance of this
Agreement and each Ancillary Agreement to which the Purchaser is a party and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Purchaser. The Purchaser
has duly and validly executed and delivered this Agreement and, on or prior to
the Closing, the Purchaser will have duly and validly executed and delivered
each Ancillary Agreement to which it is a party. Assuming the due authorization,
execution and delivery of this Agreement and the Ancillary Agreements by the
Sellers and the other parties thereto, this Agreement constitutes, and at the
Closing each Ancillary Agreement to which the Purchaser is a party will
constitute, the valid and binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject to (a) Laws of
general application relating to bankruptcy, insolvency and the relief of debtors
and (b) Laws governing specific performance, injunctive relief and other
equitable remedies.
Section
4.3 No
Conflict.
(a) Neither
the execution, delivery and performance of this Agreement by the Purchaser and
any Ancillary Agreement to which the Purchaser is a party, nor the consummation
by the Purchaser of the transactions contemplated by this Agreement and/or any
Ancillary Agreement, will (a) conflict with or violate Purchaser's Governing
Documents or (b) violate any Law or Judgment applicable to the
Purchaser.
(b) No
consent, waiver, approval, order, permit, Governmental Authorization or other
authorization of, or declaration or filing with, or notification to, any Person
or Governmental Authority is required on the part of the Purchaser in connection
with the execution and delivery of this Agreement and the Ancillary Agreements,
respectively, the compliance by the Purchaser with any of the provisions hereof
and thereof, or the consummation of the transactions contemplated hereby or
thereby.
Section
4.4 Legal Proceedings.
There is no Proceeding pending or, to the Purchaser's Knowledge,
threatened against the Purchaser that questions or challenges the validity of
this Agreement or that may prevent, delay, make illegal or otherwise interfere
with the ability of the Purchaser to consummate any of the transactions
contemplated by this Agreement.
Section
4.5 Brokers Fees.
Neither the Purchaser nor any Person acting on its behalf has incurred
any Liability to pay any fees or commissions to any broker, finder or agent in
connection with any of the transactions contemplated by this
Agreement.
Section
4.6 Financial
Capacity. The Purchaser has, or will at the time of Closing have,
immediately available cash in an amount sufficient to pay the Purchase Price. As
of the date of this Agreement, the Purchaser knows of no circumstance or
condition that it expects will prevent the availability at the Closing of the
requisite financing to consummate the transactions contemplated by this
Agreement on the terms set forth in this Agreement.
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Section
4.7 No Knowledge of
Breach or Inaccuracy. The Purchaser has no Knowledge of any breach of, or
inaccuracy in, any representation or warranty made by the Sellers in this
Agreement.
Section
4.8 Independent
Investigation. The Purchaser has conducted its own independent
investigation, review and analysis of the business, operations, assets,
liabilities, results of operations, financial condition and prospects of the
business of the Acquired Companies as it has deemed appropriate, which
investigation, review and analysis was done by the Purchaser and its Affiliates
and representatives. The Purchaser acknowledges that it and its Affiliates and
representatives have been provided adequate access to the personnel, properties,
premises and records of the Acquired Companies for such purpose. In entering
into this Agreement, the Purchaser acknowledges that it has relied solely upon
the aforementioned investigation, review and analysis and not on any factual
representations or opinions of the Sellers, the Acquired Companies or their
representatives (except the representations and warranties set forth in Article 3). The
Purchaser hereby acknowledges and agrees that (a) other than the representations
and warranties set forth in Article 3, none of
the Sellers, the Acquired Companies, any of their Affiliates, or any of their
respective officers, directors, employees, agents, representatives or
stockholders make or have made any representation or warranty, express or
implied, at law or in equity, as to any matter whatsoever relating to the
Shares, the Sellers, the Acquired Companies or any other matter relating to the
transactions contemplated by this Agreement including as to (i) merchantability
or fitness for any particular use or purpose, (ii) the operation of the business
of the Acquired Companies after the Closing in any manner or (iii) the probable
success or profitability of the business of the Acquired Companies after the
Closing, and (b) other than the indemnification obligations of the Sellers set
forth in the Indemnification Articles, none of the Sellers, the Acquired
Companies, any of their Affiliates, or any of their respective officers,
directors, employees, agents, representatives or stockholders will have or will
be subject to any Liability or indemnification obligation to the Purchaser or
any other Person resulting from the distribution to the Purchaser or its
Affiliates or representatives of, or the Purchaser's use of, any information
relating to the Sellers, the Acquired Companies or any other matter relating to
the transactions contemplated by this Agreement, including any descriptive
memoranda, summary business descriptions or any information, documents or
material made available to the Purchaser or its Affiliates or representatives,
whether orally or in writing, in certain "data rooms," management presentations,
functional "break-out" discussions, responses to questions submitted on behalf
of the Purchaser or in any other form in expectation of the transactions
contemplated by this Agreement.
Section 4.9 Disclaimer
of Other Representations and Warranties. THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN THIS ARTICLE 4
ARE THE ONLY REPRESENTATIONS AND WARRANTIES
MADE BY THE PURCHASER WITH RESPECT TO THE PURCHASER AND/OR ANY OTHER MATTER
RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EXCEPT AS
SPECIFICALLY SET FORTH IN THIS ARTICLE 4, THE
PURCHASER MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER
RELATING TO THE PURCHASER AND/OR ANY OTHER MATTER RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. ANY OTHER REPRESENTATION OR WARRANTY IS EXPRESSLY
DISCLAIMED. Other than the indemnification obligations of the
Purchaser set forth in the Indemnification Articles, none of the
Purchaser, any of their Affiliates, or any of their respective officers,
directors, employees, agents, representatives or stockholders will have, or will
be subject to, any Liability or indemnification obligation to the Sellers or any
other Person resulting from the distribution to the Sellers or their Affiliates
or representatives of, or the Sellers' use of, any information relating to the
Purchaser or any of its Affiliates, including any descriptive memoranda, summary
business descriptions or any information, documents or material made available
to the Sellers or their Affiliates or representatives, whether orally or in
writing, in any form, in expectation of the transactions contemplated by this
Agreement.
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ARTICLE
5
COVENANTS
Section
5.1 Access and
Investigation. Until the Closing and upon reasonable advance notice from
the Purchaser (except as may be necessary to comply with Law (including
Antitrust Laws)), the Sellers will, and will cause the Acquired Companies to,
allow the Purchaser and its accountants, counsel, financial advisors and other
representatives reasonable access during normal business hours and without
unreasonable interference with the operation of the business of the Acquired
Companies to (a) the Company Properties and facilities (including all the
buildings, structures, fixtures, appurtenances and improvements erected,
attached or located thereon), (b) the Acquired Companies' books, financial
information (including working papers and data in the possession of the Acquired
Companies or the Sellers or their respective independent public accountants,
internal audit reports, and "management letters" from such accountants with
respect to the Acquired Companies' systems of internal control), (c) Contracts
and records of the Acquired Companies, (d) such other materials and information
about the Acquired Companies as the Purchaser may reasonably request and (e)
members of management of the Acquired Companies as the Purchaser may reasonably
request. The Purchaser will, and will cause its representatives to, hold
confidential all information so obtained in accordance with the terms of the
Confidentiality Agreement.
Section
5.2Operation of the Businesses
of the Acquired Companies.
(a)
Until the Closing, except as otherwise set forth in this Agreement, the Seller
Disclosure Schedule or as otherwise consented to by the Purchaser (which consent
will not be unreasonably withheld, conditioned or delayed), the Sellers will
cause the Acquired Companies to:
(i) conduct
their business in the ordinary course of business in all material respects;
and
(ii) use
their commercially reasonable efforts to (A) preserve the present business
operations, organization (including officers and employees) and goodwill of the
Acquired Companies and (B) preserve the present relationships with Persons
having business dealings with the Acquired Companies (including customers and
suppliers).
(b) Until the Closing, except as otherwise
set forth in this Agreement, the Seller Disclosure Schedule or as
otherwise consented to in writing by the Purchaser (which consent will
not be unreasonably withheld, conditioned or delayed), the Sellers will not
cause or permit any Acquired Company to:
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(i) amend
its Governing Documents;
(ii) transfer,
issue, sell, dispose or, pledge or encumber any shares of its capital stock or
securities convertible into any such shares, or any options, warrants or rights
to acquire any such shares or other convertible securities;
(iii) with
respect to the Sellers, transfer, issue, sell, dispose or, pledge or encumber
any Shares, MX Shares or any additional shares of capital stock of any Acquired
Company or securities convertible into any such shares, or any options, warrants
or rights to acquire any such shares or other convertible securities of any
Acquired Company;
(iv) purchase,
redeem or otherwise acquire any outstanding shares of its capital
stock;
(v) declare,
set aside or pay any dividend or other distribution in respect of its capital
stock, other than dividends and other distributions payable solely in
cash;
(vi) effect
any recapitalization, reclassification, stock split, combination or like change
in the capitalization of the Acquired Companies, or amend the terms of any
outstanding securities of an Acquired Company;
(vii) terminate,
amend, restate, supplement or waive any rights under any (A) Material Contract
or Real Property Lease, other than in the ordinary course of business or (B)
material Governmental Authorization;
(viii) waive,
compromise, cancel or release any debt, right or claim of a material value to
the Acquired Companies other than in the ordinary course of
business;
(ix) acquire,
by merger or consolidation with another entity, by purchase or otherwise, any
material properties or assets or sell, assign, license, transfer, convey, lease
or otherwise dispose of any of the material properties or assets of, or used by,
the Acquired Companies, other than in the ordinary course of
business;
(x) except
as provided for under the terms of this Agreement in relation to the transfer of
the Main Scheme, (A) increase the salary or other compensation of any director,
officer or employee of the Acquired Companies, except for normal yearend
increases in the ordinary course of business, (B) grant any unusual or
extraordinary bonus, benefit or other direct or indirect compensation to any
director, officer, employee or consultant, (C) increase the coverage or benefits
available under any (or create any new) severance pay, termination pay, vacation
pay, company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan or arrangement made to, for, or with any of the directors,
officers, employees, agents or representatives of the Acquired Companies or
otherwise modify or amend or terminate any such plan or arrangement or (D) enter
into any deferred compensation, severance, special pay, consulting, non-
competition or similar agreement or arrangement with any directors, officers or
employees of an Acquired Company (or amend any such agreement to which the
Acquired Companies is a party);
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(xi) (A)
issue, create, incur, assume, guarantee, endorse or otherwise become liable or
responsible with respect to (whether directly, contingently or otherwise) any
Indebtedness from third parties who are not Affiliates which borrowing exceed
$100,000;
(xii) enter
into any commitment for capital expenditures of the Acquired Companies in excess
of $100,000 for any individual commitment and $200,000 for all commitments in
the aggregate;
(xiii) enter
into, modify or terminate any labor or collective bargaining agreement of the
Acquired Companies or, through negotiation or otherwise, make any commitment or
incur any liability to any labor organization with respect to the Acquired
Companies;
(xiv) except
for transfers of cash pursuant to normal cash management practices in the
ordinary course of business, make any investments in or loans to, or pay any
fees or expenses to, or enter into or modify any Contract with any Related
Persons;
(xv) make
a change in its accounting or Tax reporting principles, methods or
policies;
(xvi) (A)
make, change or revoke any Tax election, settle or compromise any Tax claim or
liability or enter into a settlement or compromise, or change (or make a request
to any taxing authority to change) any material aspect of its method of
accounting for Tax purposes, or (B) prepare or file any Tax Return (or any
amendment thereof) unless such Tax Return will have been prepared in a manner
consistent with past practice and the Company will have provided the Purchaser a
copy thereof (together with supporting papers) at least three (3) Business Days
prior to the due date thereof for the Purchaser to review and approve (such
approval not to be unreasonably withheld or delayed);
(xvii) enter
into any Contract, understanding or commitment that restrains, restricts, limits
or impedes the ability of an Acquired Company to compete with or conduct any
business or line of business in any geographic area or solicit the employment of
any persons (other than restrictions in Intellectual Property
Licenses);
(xviii) settle
or compromise any pending or threatened Proceeding or any claim or claims, in
each case involving an amount individually in excess of $100,000;
(xix) change
or modify its credit, collection or payment policies, procedures or practices,
including acceleration of collections or receivables (whether or not past due)
or fail to pay or delay payment of payables or other
liabilities;
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(xx) take
any action which would adversely affect the ability of the parties to consummate
the transactions contemplated by this Agreement; or
(xxi) agree
to do anything (A) prohibited by this Section 5.2, or (B)
intended to make any of the representations and warranties of the Sellers in
this Agreement or any of the Ancillary Agreements or instruments or documents
delivered in connection herewith or therewith untrue or incorrect in any
material respect or could result in any of the conditions to the Closing not
being satisfied.
Section
5.3 Consents and Filings;
Commercially Reasonable Efforts.
(a) Subject
to the terms and conditions provided in this Section 5.3, the
Sellers will, and will cause the Acquired Companies to, use their commercially
reasonable efforts to obtain at the earliest practicable date all consents,
waivers and approvals from, and provide all notices to, all Persons that are not
a Governmental Authority, which consents, waivers, approvals and notices are
required to consummate, or in connection with, the transactions contemplated by
this Agreement (except for such matters covered by Section 5.4). All
such consents, waivers, approvals and notices will be in writing and in form and
substance satisfactory to the Purchaser, and executed counterparts of such
consents, waivers and approvals will be delivered to the Purchaser promptly
after receipt thereof, and copies of such notices will be delivered to the
Purchaser promptly after the making thereof. Notwithstanding anything to the
contrary in this Agreement, neither the Sellers nor any of its Affiliates, nor
the Purchaser nor any of its Affiliates (which for purposes of this sentence
will include the Acquired Companies), will be required to pay any amounts in
connection with obtaining any consent, waiver or approval.
(b) Subject
to the terms and conditions provided in this Section 5.3, the
Sellers and the Purchaser each will use their commercially reasonable efforts to
(i) obtain at the earliest practicable date all consents, waivers and approvals
from, and provide all notices to, all, Governmental Authorities necessary to
obtain all Governmental Authorizations that are required to be obtained under
any Law in connection with the transactions contemplated by this Agreement; (ii)
lift or rescind any injunction, restraining order or other Judgment adversely
affecting the ability of such party to this Agreement to consummate the
transactions contemplated by this Agreement; (iii) effect all necessary
registrations and filings including filings and submissions of information
requested or required by any Governmental Authority, including the Antitrust
Division of the United States Department of Justice, the Federal Trade
Commission, any State Attorney General and any other national antitrust
authorities with mandatory pre-merger filing requirements that are deemed by the
Sellers and the Purchaser, after consulting with one another, to be applicable
to the transactions contemplated by this Agreement ("Governmental Antitrust
Authority"); (iv) transfer, re-issue or modify, as required by
Environmental Law, any Environmental Permit and (v) fulfill all conditions to
this Agreement.
(c) Subject to, and not in limitation of,
Section
5.3(a) and Section
5.3(b), each Seller will, and will cause each
Acquired Company to, and the Purchaser will use its commercially reasonable efforts to (i)
take, or cause to be taken, all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to
their respective obligations to consummate the transactions contemplated by this
Agreement.
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(d) In
furtherance, and not in limitation of, the foregoing, each Seller will, and will
cause each Acquired Company to, and the Purchaser will each (i) use its
commercially reasonable efforts to resolve such objections, if any, as may be
asserted with respect to the transactions contemplated by this Agreement under
any antitrust, competition or trade regulatory Laws ("Antitrust Laws"),
(ii) use its commercially reasonable efforts to avoid the entry of, or to
have vacated or terminated, any Judgment that would restrain, prevent or delay
the consummation of the transactions contemplated by this Agreement, including
defending through litigation on the merits and through any available appeals any
claim asserted in any court by any party, and (iii) take any and all actions
reasonably required by any Governmental Antitrust Authority as a condition to
grant any consent necessary for the consummation of the transactions
contemplated by this Agreement or as may be required to avoid (or eliminate)
each and every impediment under any Antitrust Laws that may be asserted by any
Governmental Antitrust Authority with respect to the transactions contemplated
by this Agreement so as to enable the consummation of such transactions to occur
as expeditiously as reasonably possible. Without limiting the generality of the
foregoing, such actions will include proposing, negotiating, committing to and
effecting (by consent decree, hold separate order or otherwise) the sale,
divestiture or disposition of any assets or businesses of the Acquired Companies
(or otherwise taking or committing to take any action that limits its freedom of
action with respect to any of the businesses, product lines or assets of the
Acquired Companies) as may be required to obtain such a consent of a
Governmental Antitrust Authority or in order to avoid the pursuit or entry of,
or to effect the dissolution of, any injunction, temporary restraining order or
other Judgment in any Proceeding, which would otherwise have the effect of
preventing or delaying the consummation of the transactions contemplated by this
Agreement; provided,
however, that notwithstanding anything in this Agreement to the contrary,
Purchaser will not be required to sell, divest or dispose of any assets or
businesses of the Acquired Companies, in any such case, that in the aggregate
accounted for in excess of five percent (5%) of its business (measured in terms
of turnover in its last accounting year) for all such assets or businesses to be
sold, divested or disposed by the Purchaser or its Affiliates or the Acquired
Companies.
(e) The
Sellers and the Purchaser will keep each other apprised of the status of matters
relating to the completion of the transactions contemplated by this Agreement
and work cooperatively in connection with obtaining the requisite Governmental
Authorizations, including: (i) cooperating with the other party in connection
with filings under the HSR Act or any other Antitrust Laws (to the extent, if
any, that such filings are necessary) including with respect to the party making
a filing, (A) providing copies of all such documents to the non-filing party and
its advisors prior to filing (other than documents containing confidential
business information that will be shared only with outside legal counsel to the
non-filing party) and (B) if requested, accepting all reasonable additions,
deletions or changes suggested in connection with any such filing; (ii)
furnishing to each other all information required for any application or other
filing to be made pursuant to the HSR Act or any other Antitrust Laws (to the
extent, if any, that such application or filings are necessary) in connection
with the transactions contemplated by this Agreement; (iii) promptly notifying
the other of and if in writing furnishing the other with copies of, any
communications from or with any Governmental Antitrust Authority with respect to
the transactions contemplated by this Agreement; (iv) permitting the other party
to review in advance and considering in good faith the views of one another in
connection with any proposed communication with any Governmental Antitrust
Authority in connection with Proceedings under or relating to the HSR Act or any
other Antitrust Laws, if applicable; (v) not agreeing to participate in any
meeting or discussion with any Governmental Antitrust Authority in connection
with Proceedings under or relating to the HSR Act or any other Antitrust Laws,
if applicable, unless it consults with the other party in advance, and, to the
extent permitted by such Governmental Antitrust Authority, gives the other party
the opportunity to attend and participate in such meetings or discussions; and
(vi) consulting and cooperating with one another in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of either party to this Agreement in
connection with Proceedings under or relating to the HSR Act or any other
Antitrust Laws, if applicable. If either party or any Affiliate thereof receives
a request for additional information or documentary material from any such
Governmental Antitrust Authority with respect to the transactions contemplated
by this Agreement, then such party will endeavor in good faith to make, or cause
to be made, as soon as practicable and after consultation with the other party,
an appropriate response in compliance with such request. Each party will advise
the other parties promptly in respect of any understandings, undertakings or
agreements (oral or written) which such party proposes to make or enter into
with any Governmental Antitrust Authority in connection with the transactions
contemplated by this Agreement.
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Section
5.4 Supplements to
Disclosure Schedules. The Sellers may, from time to time prior to the
Closing by written notice to the Purchaser, supplement the Seller Disclosure
Schedule or add a schedule to the Seller Disclosure Schedule (such added
schedule to be deemed a supplement hereunder) in order to disclose any matter
which, if occurring prior to the date of this Agreement, would have been
required to be set forth or described in the Seller Disclosure Schedule or to
correct any inaccuracy or breach in the representations and warranties made by
the Sellers in this Agreement. Subject to this Section 5.4, none of
such supplements to the Seller Disclosure Schedule will be deemed to cure the
representations and warranties to which such matters relate with respect to
satisfaction of the conditions set forth in Section 6.1(a) or
otherwise affect any other term or condition contained in this Agreement; provided, however,
that unless the Purchaser will have delivered a notice of termination
with respect to such matter as contemplated by Section 7.1(b) (to
the extent the Purchaser is entitled to deliver such notice pursuant to Section 7.1(b))
within fifteen (15) Business Days of the receipt by the Purchaser of any
supplement to the Seller Disclosure Schedule pursuant to this Section 5.4, then the
Purchaser will be deemed to have waived any and all rights to terminate this
Agreement pursuant to Section 7.1(b) arising out of
or relating to the contents of such supplement and the resulting breach or
breaches of the representations and warranties; provided, however,
that no other rights of the Purchaser or the Purchaser Indemnified
Parties hereunder, including the right to indemnification provided in the
Indemnification Articles below, will be deemed to be waived, limited or impaired
by the delivery and/or acceptance of any supplement to the Seller Disclosure
Schedule.
Section
5.5 Financing.
Notwithstanding anything contained in this Agreement to the contrary, the
Purchaser expressly acknowledges and agrees that the Purchaser's obligations
under this Agreement are not conditioned in any manner whatsoever upon the
Purchaser's obtaining any financing and any failure to fulfill any obligation
under this Agreement arising from the failure of the Purchaser to obtain
financing or the unavailability of such financing will be deemed to be
intentional for purposes of this Agreement.
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Section
5.6 Non-Competition;
Non-Solicitation; Confidentiality.
(a) The
parties agree to continue to abide by that certain Confidentiality Agreement
between the Sellers and the Purchaser dated May 20, 2009 (the "Confidentiality
Agreement"),
which will survive until the Closing, at which time the Confidentiality
Agreement will terminate; provided, however,
that if this Agreement is, for any reason, terminated prior to the
Closing, the Confidentiality Agreement will continue in full force and effect in
accordance with its terms.
(b) After
the Closing, the Sellers will not and will cause their directors, officers,
employees and Affiliates not to, directly or indirectly, disclose, reveal,
divulge or communicate to any Person other than authorized officers, directors
and employees of the Purchaser or use or otherwise exploit for its own benefit
or for the benefit of anyone other than the Purchaser, the Company Information,
except to the extent compelled by Law or to the extent that such Company
Information (i) must be disclosed in connection with the obligations of the
Sellers pursuant to this Agreement and the Ancillary Agreements or (ii) can be
shown to have been in the public domain through no fault of the Sellers.
Notwithstanding the foregoing, in no event will this Section 5.6(b) limit
or otherwise restrict the right of the Sellers to disclose such Company
information (i) to its and its Affiliates' respective directors, officers,
employees, agents and advisors to the extent reasonably required to facilitate
the negotiation, execution, delivery or performance of this Agreement and the
Ancillary Agreements, (ii) to any Governmental Authority or arbitrator to the
extent reasonably required in connection with any Proceeding relating to the
enforcement of this Agreement or any Ancillary Agreement, (iii) in connection
with its indemnification obligations under this Agreement, including the defense
of any Third Party Claim, and (iv) as permitted in accordance with Section 5.7. "Company
Information" means any information with respect to the Acquired
Companies, including methods of operation, customer lists, products, prices,
fees, costs, Technology, inventions, Trade Secrets, know-how, Software,
marketing methods, plans, personnel, suppliers, competitors, markets or other
specialized information or proprietary matters.
(c) For
a period of two (2) years from and after the Closing Date (the "Non-Compete Period"), the
Sellers will not, and will cause their Affiliates not to, directly or
indirectly, anywhere in the world, own, manage, engage in, operate, control, or
maintain any interest in (proprietary, financial or otherwise) or participate in
the ownership, management, operation or control of, any business, whether in
corporate, proprietorship or partnership form or otherwise, engaged in the
manufacture and sale of interconnect products competing with the Products for
the electronic and communication systems, military/aerospace and transportation
markets (a "Competing
Business"); provided, however, that, for the purposes of this Section 5.6(c), the Sellers
or any of their Affiliates will not be prevented from:
(i) being the holder or beneficial
owner by way of bona fide investment purposes only of any units
of an authorized unit trust and/or any securities in any company carrying on any Competing
Business which are listed or traded on any recognized stock exchange, regulated
market or trading facility provided always that Sellers do not hold or are not
beneficially interested in more than a total of ten percent (10%) of any single class of the equity
securities in such listed company, and provided that Sellers do not have
directly or indirectly any management functions or any material influence in
such a company; or
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(ii)
acquiring in a single transaction or a series of related transactions any one or
more companies and/or businesses (taken together, the "Acquired Business")
and carrying on that Acquired Business although its activities include a
Competing Business (the "Acquired Competing
Business") if the Acquired Competing Business represents not more than
twenty percent (20%) of the Acquired Business (measured in terms of turnover in
its last accounting year) (a "Less Than 20% Acquired
Competing Business"); provided,
however, that if the Sellers or any of their Affiliates acquires during the
Non-Compete Period an Acquired Business with a Less Than 20% Acquired Competing
Business, then the Sellers or their Affiliates, as applicable, will enter into
good faith negotiations with the Purchaser regarding the sale to the Purchaser
of such Less Than 20% Acquired Competing Business (it being agreed and
understood that Sellers or their Affiliates, as applicable, will not be
obligated to sell such Less Than 20% Acquired Competing Business to the
Purchaser unless terms and conditions are mutually agreed upon by the
parties).
(d) For
a period of two (2) years from and after the Closing Date, the Sellers will not,
and will cause their directors, officers, employees and Affiliates not to,
directly or indirectly hire, solicit or assist others in soliciting the
employment of any of the Employees of the Acquired Companies; provided, however,
nothing in this Agreement will prohibit or limit (i) Sellers from making
general employment solicitations through public advertisements, or (ii)
solicitations by employee search firms engaged by the Sellers but not directed
by the Sellers towards any such Employees of the Acquired Companies or prohibit
or limit the Sellers from hiring any individuals who respond to such
solicitations.
(e) The
covenants and undertakings contained in this Section 5.6 relate to
matters which are of a special, unique and extraordinary character and a
violation of any of the terms of this Section 5.6 will
cause irreparable injury to the Purchaser, the amount of which will be
impossible to estimate or determine and which cannot be adequately compensated.
Accordingly, the remedy at law for any breach of this Section 5.6 will be
inadequate. Therefore, the Purchaser will be entitled to a temporary and
permanent injunction, restraining order or other equitable relief from any court
of competent jurisdiction in the event of any breach of this Section 5.6 without
the necessity of proving actual damage or posting any bond whatsoever. The
rights and remedies provided by this Section 5.6 are
cumulative and in addition to any other rights and remedies which Purchaser may
have hereunder or at law or in equity.
(f) The
parties hereto agree that, if any court of competent jurisdiction determines
that a specified time period, a specified geographical area, a specified
business limitation or any other relevant feature of this Section 5.6 is
unreasonable, arbitrary or against public policy, then a lesser period of time,
geographical area, business limitation or other relevant feature which is
determined by such court to be reasonable, not arbitrary and not against public
policy may be enforced against the applicable party.
Section
5.7 Public
Announcements. Each party
agrees not to issue any press release or make any other public announcement
relating to this Agreement without the prior written approval of the
other party unless required by applicable securities Law or securities listing
standards (in the reasonable opinion of counsel to the disclosing party) in
which case the Sellers and the Purchaser will have the right to review such
press release or other announcement prior to issuance, distribution or
publication.
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Section
5.8 Use of Seller
Brand.
(a) Except
as specifically provided in this Section 5.8, from and
after the Closing, the Purchaser will have no right to use the Seller Name.
"Seller Name" means the marks or names "SAFRAN" or "Snecma" or any variations
and derivatives thereof and any other logos, trademarks, service marks, names,
corporate names, tradenames, and other similar designators of origin of the
Sellers or their Affiliates that incorporate, represent or are used in
conjunction with Seller Name or such variations or derivations.
(b) The
Purchaser will promptly, and in any event within sixty (60) days after the
Closing Date, cause the Acquired Companies to cease to use and remove or cover
the Seller Name from all signs, billboards, telephone listings, sales invoices,
printed forms, documents, stationery, office supplies or other similar
materials.
(c) The
Purchaser may use product literature that bears the Seller Name for a reasonable
time after the Closing Date, not to exceed ninety (90) days. No product
literature used after the ninety (90) day anniversary of the Closing Date may
include a reference to the Sellers or any of their Affiliates after the Closing,
including any addresses or telephone numbers.
(d) Each
of the parties hereto acknowledges and agrees that the remedy at Law for any
breach of the requirements of this Section 5.8 would be
inadequate, and agrees and consents that without intending to limit any
additional remedies that may be available, the Sellers will be entitled to a
temporary or permanent injunction, without proof of actual damage or inadequacy
of legal remedy, and without posting any bond or other undertaking, any
Proceeding that may be brought to enforce any of the provisions of this Section
5.8.
Section
5.9 Affiliate
Transactions.
(a) On
or prior to the Closing Date, the Sellers will, and will cause their Affiliates
to, (i) terminate, effective as of the Closing, all Affiliate Contracts, except
for those Contracts listed in Section 5.9(a) of the
Seller Disclosure Schedule, and (ii) deliver releases (the "Affiliate Releases")
executed by such Affiliates with whom such Contracts have been terminated
pursuant to this Section 5.9(a)
providing that no further payments are due, or may become due, under or
in respect of any such terminated Contracts; provided that in no
event will the Acquired Companies pay any fee or otherwise incur any expense or
financial exposure with respect to any such termination or release other than
amounts due in accordance with the termination of such Affiliate
Contracts.
(b) Immediately prior to the Closing,
except for those with respect to those Contracts listed on Section
5.9(a) of the Seller
Disclosure Schedule, all intercompany receivables, payables and loans between
the Sellers or any of their Affiliates (other than the Acquired Companies), on the one hand,
and an Acquired Company, on the other hand, will be, at the Sellers' election, settled, paid,
capitalized, distributed or otherwise terminated, with the result that
there will not be intercompany receivables, payables and loans between the
Sellers or any of their Affiliates (other than the Acquired Companies), on the
one hand, and an Acquired Company, on the other hand, immediately after Closing,
except for those with respect to those Contracts listed on Section 5.9(a) of the
Seller Disclosure Schedule.
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(c) Prior
to the Closing, the Sellers will be permitted to cause the Acquired Companies to
distribute any and all cash balances as directed by the Sellers.
Section
5.10 Termination of
Seller Insurance Coverage. The Purchaser acknowledges that all insurance
coverage for the Acquired Companies under policies of the Sellers and their
Affiliates (other than the Acquired Companies) will terminate as of the Closing
and, following the Closing, no claims may be brought against any policy of the
Sellers and their respective Affiliates in respect of the Acquired Company
regardless of whether the events underlying such claim arose prior to or after
the Closing.
Section
5.11 Credit and
Performance Support Obligations. The Purchaser will use its commercially
reasonable efforts to cause the Sellers and their Affiliates (other than the
Acquired Companies) to be absolutely and unconditionally relieved (each relevant
release of liability, a "Support Obligation
Release") on or prior to the Closing of all Liabilities arising out of
any letters of credit, performance bonds, corporate guarantees and other similar
items issued and outstanding on behalf of the Acquired Companies, including
those guarantees set forth on Section 5.11 of the
Seller Disclosure Schedule (the "Support Obligation
Liabilities"). From and after the Closing, the Purchaser will indemnify
the Sellers and their Affiliates (other than the Acquired Companies) against any
Losses of any kind whatsoever with respect to any Support Obligation Liabilities
for which a Support Obligation Release is not obtained. The parties agree that
they will cooperate and use commercially reasonable efforts to obtain the relief
provided in this Section 5.11 as
promptly as practicable following the date hereof.
Section
5.12 Amended and
Restated Labinal Supply Agreement. Prior to the Closing, Cinch U.S. will
enter into an amended supply agreement with Labinal, Inc. substantially in the
form of Exhibit B
attached hereto (the "Amended And Restated
Labinal Supply Agreement").
Section
5.13 Contact with
Customers and Suppliers.
(a) Until
the Closing Date, none of the Purchaser, its Affiliates and their
representatives may contact or communicate with the customers, suppliers,
distributors and licensors of the Acquired Companies in connection with the
transactions contemplated hereby without the prior written consent of the
Sellers, which consent will not be unreasonably withheld. Nothing in this Section 5.13 will
prohibit the Purchaser from contacting the customers, suppliers and licensors of
the Acquired Companies in the ordinary course of the Purchaser's businesses for
the purpose of selling products of the Purchaser's businesses or for any other
purpose unrelated to the Acquired Companies and the transactions contemplated by
this Agreement.
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(b) From the date hereof until the Closing
Date, if a party to a Material Contract or any of the customers listed
on Section
3.22(a) of the Seller
Disclosure Schedule provide written notice to an Acquired
Company that it intends to materially decrease the rate of purchases of
materials, products or services from an Acquired Company, Sellers will use
commercially reasonable efforts to notify Purchaser of such decrease and
will cooperate in good faith with Purchaser with respect to communicating with
the counterparty to such Material Contract or such customer, as applicable, with
respect to such decrease. From the date hereof until the Closing Date, if any of
the suppliers listed on Section 3.22(a) of
the Seller Disclosure Schedule provide written notice to an Acquired Company
that it intends to materially increase the cost of its supply of materials,
products or services used by the Acquired Companies, Sellers will use
commercially reasonably efforts to notify Purchaser of such increase and will
cooperate in good faith with Purchaser with respect to communicating with such
supplier with respect to such increase.
Section
5.14 No
Shop.
(a) The
Sellers and the Acquired Companies will not, and will not permit their
respective Affiliates, directors, officers, employees, representatives or agents
(collectively, the "Representatives")
to, directly or indirectly, (i) discuss, encourage, negotiate, undertake,
initiate, authorize, recommend, propose or enter into, whether as the proposed
surviving, merged, acquiring or acquired corporation or otherwise, any
transaction involving a merger, consolidation, business combination, purchase or
disposition of any material amount of the assets of the Acquired Companies or
any capital stock or other ownership interests of the Acquired Companies other
than the transactions contemplated by this Agreement (an "Acquisition Transaction"), (ii)
facilitate, encourage, solicit or initiate discussions, negotiations or
submissions of proposals or offers in respect of an Acquisition Transaction,
(iii) furnish or cause to be furnished, to any Person, any information
concerning the business, operations, properties or assets of the Acquired
Companies in connection with an Acquisition Transaction, or (iv) otherwise
cooperate in any way with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other Person to do or seek any of the
foregoing.
(b) The
Sellers and the Acquired Companies will (and the Sellers and the Acquired
Companies will cause their Representatives to) immediately cease and cause to be
terminated any existing discussions or negotiations with any Persons (other than
the Purchaser) conducted heretofore with respect to any Acquisition Transaction.
The Sellers and the Acquired Companies agree not to release any third party from
the confidentiality and standstill provisions of any agreement to which any of
the Acquired Companies is a party.
Section 5.15 Preservation
of Records. Subject to any
retention requirements relating to the preservation of Tax records, the
Sellers and the Purchaser agree that each of them will (and will cause the
Acquired Companies to) preserve and keep the records held by them relating to
the respective businesses
of the Acquired Companies for a period of seven years from the Closing
Date and will make such
records and personnel available to the other as may be reasonably required by such party in connection
with, among other things, any insurance claims by, legal proceedings against or governmental
investigations of the Sellers, the Acquired Companies or the Purchaser or any of their
Affiliates or in order to enable the Sellers or the Purchaser to comply with their respective
obligations under this Agreement and each other agreement, document or instrument contemplated
hereby or thereby. In the event the Sellers or the Purchaser wishes to destroy (or permit
to be destroyed) such records after that time, such party will first give ninety (90) days prior
written notice to the other and such other party will have the right at its option and expense, upon
prior written notice given to such party within that ninety (90) day
period, to take possession of the records within one hundred eighty (180) days
after the date of such notice. Sellers shall cause the Cinch U.K. Books to be
delivered to Cinch U.K. or Purchaser as promptly as practicable upon the
Closing.
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Section
5.16 Use of Name of
Acquired Companies. The Sellers hereby acknowledge that upon the Closing,
the name "Cinch Connectors, Inc.", "Cinch Connectors Ltd.", "Cinch Connectors de
Mexico, S.A. de C.V." or similar names, derivatives thereof and any service
marks, trademarks, trade names, d/b/a names, fictitious names, identifying
symbols, logos, emblems, signs or insignia related thereto or containing or
comprising the foregoing, or otherwise used in the business of the Acquired
Companies (the "Cinch
Name"), including any name or xxxx confusingly similar thereto and the
Marks listed on Section 3.9(a) of the
Seller Disclosure Schedule (collectively, the "Company Marks") will
be owned by the Purchaser and/or the Acquired Companies. Following the Closing,
the Sellers will not, and will not permit their respective Affiliates to, use
the Cinch Name or any variation or simulation thereof or any of the Company
Marks. Each of the Sellers will, and will cause each its Affiliates to,
immediately after the Closing, cease to hold itself out as having any
affiliation with the Acquired Companies or any of its Affiliates after the
Closing. In furtherance thereof, as promptly as practicable but in no event
later than ninety (90) days following the Closing Date, the Sellers will remove,
strike over or otherwise obliterate all Company Marks from all materials held
by, or under the control of, the Sellers and their post-closing Affiliates,
including any vehicles, business cards, schedules, stationery, packaging
materials, displays, signs, promotional materials, manuals, forms, computer
software and other materials. Further, at, or as soon as legally practicable
after, the Closing (but in any event within ten days after the Closing Date),
each of the Sellers will, and will cause its respective Affiliates to, remove
any Company Xxxx from its legal name by appropriate legal proceedings in the
jurisdiction of its organization and in each jurisdiction where such entity has
registered to do business.
Section
5.17 Monthly Financial
Statements.
(a) As
soon as reasonably practicable, but in no event later than five (5) Business
Days after the end of each calendar month during the period from the date hereof
to the Closing, the Sellers will provide the Purchaser with a written
calculation of the Aggregate Revenues for such preceding calendar
month.
(b) As
soon as reasonably practicable, but in no event later than thirty (30) days
after the end of each calendar month during the period from the date hereof to
the Closing, the Sellers will provide the Purchaser with (i) unaudited monthly
financial statements and (ii) operating or management reports (such reports to
be in the form prepared by the Acquired Companies for the Sellers in the
ordinary course of business) of the Acquired Companies for such preceding
month.
(c) Between
the date hereof and the Closing, Sellers will cooperate in good faith with
Purchaser with respect to the preparation of any audited balance sheets for the
Acquired Companies in accordance with U.S. GAAP and the related statements of
income, changes in equity and cash flows that may be required by Purchaser to
satisfy the reporting requirements of the United States Securities and Exchange
Commission following the Closing.
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Section
5.18 Fees and
Expenses. No later than three (3) Business Days prior to the Closing
Date, the Sellers will deliver to the Purchaser (i) pay-off letters or final
invoices in respect of the Company Transaction Expenses from third-party service
providers to whom payments are required to be made by the Acquired Companies,
and (ii) a certificate of the Sellers setting forth an estimate of the unpaid
balance of all Company Transaction Expenses as of the close of business on the
day immediately preceding the Closing. On the Closing Date prior to the Closing,
the Sellers will deliver to the Purchaser a certificate of the Sellers setting
forth the unpaid balance of all Company Transaction Expenses as of the close of
business on the day immediately preceding the Closing.
Section
5.19 Notification of
Certain Matters. The Sellers will give notice to the Purchaser and the
Purchaser will give notice to the Sellers, as promptly as reasonably practicable
upon becoming aware of (a) any fact, change, condition, circumstance, event,
occurrence or nonoccurrence that has caused or is reasonably likely to cause any
representation or warranty in this Agreement made by it to be untrue or
inaccurate in any respect at any time after the date hereof and prior to the
Closing, (b) any material failure on its part to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder or (c) the institution of or the threat of institution of any
Proceeding against any of the Sellers or any of the Acquired Companies related
to this Agreement or the transactions contemplated hereby; provided that the
delivery of any notice pursuant to this Section 5.19 will not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice, or the representations or warranties of, or the
conditions to the obligations of, the parties hereto.
Section
5.20 Debt; Payables.
No later than the third (3rd) Business
Day prior to the Closing Date, the Sellers will provide the Purchaser with a
certificate of the Sellers setting forth an estimate of the balance of all
Indebtedness of the Acquired Companies as of the close of business on the day
immediately preceding the Closing Date. On the Closing Date, prior to the
Closing, the Sellers will deliver to the Purchaser a certificate of the Sellers
setting forth all Indebtedness of the Acquired Companies as of the close of
business on the day immediately preceding the Closing Date.
Section
5.21 Resignation of
Directors and Officers; Removal and Replacement of Authorized Persons.
The Sellers will use commercially reasonable efforts to cause each of the
directors and officers of the Acquired Companies to submit a letter of
resignation effective on or before the Closing Date. Effective on or before the
Closing, the Sellers will, or will cause the Acquired Companies, to take all
actions necessary to eliminate the Authority Granted to each Person identified
on Section 3.24
of the Seller Disclosure Schedule and designate with the relevant parties
their replacements as will be determined and identified in the sole and absolute
discretion of the Purchaser.
Section
5.22 Relationship
Managers.
(a) For a period of two (2) years from
and after the Closing Date, Seller U.K. and Cinch U.K. will, or will cause one
of their respective Affiliates to, each maintain a relationship manager (each a
"U.K. Relationship
Manager") to coordinate
the relationship and dealings between Cinch U.K. and the
Safran group of companies (the "Safran
Group") in connection with existing and future
projects. Each U.K. Relationship Manager will be designated, from time to
time, by written notice to the other party at the time of designation and any
change of designation. The U.K. Relationship Manager will be a point of contact
between the Safran Group and Cinch U.K. for purposes of the continuing business
relationship between the Safran Group and Cinch U.K. and the U.K. Relationship
Managers will act in good faith to coordinate existing and future projects
between Cinch U.K. and the Safran Group. Effective as of the Closing, (i) Seller
U.K. hereby designates Thierry Viguier as its U.K. Relationship Manager and (ii)
Purchaser hereby agrees to cause Cinch U.K. to designate Xxxxx Xxxxxx as its
U.K. Relationship Manager.
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(b)
For a period of two (2) years from and after the Closing Date, Seller U.S. (or
an Affiliate of Seller U.S.) and Cinch U.S. will, or will cause one of their
respective Affiliates to, each maintain a relationship manager (each a "U.S. Relationship Manager")
to coordinate the relationship and dealings between Cinch U.S. and the
Safran Group in connection with existing and future projects. Each U.S.
Relationship Manager will be designated, from time to time, by written notice to
the other party at the time of designation and any change of designation. The
U.S. Relationship Manager will be a point of contact between the Safran Group
and Cinch U.S. for purposes of the continuing business relationship between the
Safran Group and Cinch U.S. and the U.S. Relationship Managers will act in good
faith to coordinate existing and future projects between Cinch U.S. and the
Safran Group. Effective as of the Closing, (i) Seller U.S. hereby designates
Thierry Viguier as its U.S. Relationship Manager and (ii) Purchaser hereby
designates Xxxxx Xxxxxxx as its U.S. Relationship Manager.
Section
5.23 Transition
Services. To the extent permitted under the terms of the Services
Agreement, for a period of thirty-five (35) days following the Closing, the
Sellers shall permit, and take all actions necessary to cause their Affiliates
to permit, the Acquired Companies to continue to access the benefits of and use
that certain payroll services agreement between Seller U.S. and/or one or more
of its Affiliates, on the one hand, and the Ultimate Software Group, Inc.
(UltiPro), on the other hand (the "Services Agreement")
to the same extent as, and in a manner consistent with, the historical
practices of the Acquired Companies.
Section
5.24 Further Actions.
Subject to the other express provisions of this Agreement, upon the
request of any party to this Agreement, the other parties will execute and
deliver such other documents, instruments and agreements as the requesting party
may reasonably require for the purpose of carrying out the intent of this
Agreement and the transactions contemplated by this Agreement.
ARTICLE
6
CONDITIONS
PRECEDENT TO OBLIGATION TO CLOSE
Section
6.1 Conditions to the
Obligation of the Purchaser. The obligation of the Purchaser to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction, on or before the Closing Date, of each of the following conditions
(any of which may be waived by the Purchaser, in whole or in part):
(a)
Accuracy of
Representations and Warranties. The representations and warranties of the
Sellers in Article 3
must be true and correct in all material respects as of the Closing
(except to the extent any such representation or warranty is expressly made as
of the date of this Agreement or any other specific date, in which case such
representation or warranty must have been true and correct in all material
respects as of such date);
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(b) Performance of Covenants.
All of the covenants and obligations that the Sellers and/or the Acquired
Companies are required to perform or comply with under this Agreement on or
before the Closing Date must have been duly performed and complied with in all
material respects;
(c) No Material Adverse Effect.
If Closing has not occurred on or prior to January 31, 2010, there will
not have occurred, as measured from or after February 1, 2010, any Closing
Condition Material Adverse Effect; provided, however,
that if all of the conditions set forth in this Article 6 have been
satisfied or waived on or prior to January 31, 2010 (other than those conditions
that by their nature can only be satisfied at the Closing), then this condition
to Closing shall not be applicable in connection with the consummation of the
transactions contemplated by this Agreement;
(d) No Action. There must
not be in effect any Law or Judgment that would prohibit or make illegal the
consummation of the transactions contemplated by this Agreement or cause the
transactions contemplated by this Agreement to be rescinded following
consummation;
(e) No Proceedings. No
Proceedings will have been instituted by any Governmental Authority against the
Sellers, the Acquired Companies, or the Purchaser, seeking to restrain or
prohibit the consummation of the transactions contemplated hereby;
(f) Consents. The Sellers
and the Acquired Companies will have obtained those consents listed in Section 6.1(f) of the
Purchaser Disclosure Schedule in a form reasonably satisfactory to the Purchaser
and copies thereof will have been delivered to the Purchaser;
(g) Transfer of Governmental
Authorizations. The Acquired Companies will have obtained the issuance,
reissuance or transfer of those Governmental Authorizations listed in Section 6.1(g) of the
Purchaser Disclosure Schedule in a form reasonably satisfactory to the Purchaser
and copies thereof will have been delivered to the Purchaser;
(h) Shareholders Meetings.
The Purchaser will have received a written consent or copies of the
minutes of meetings of the shareholders of the Acquired Companies from meetings
duly held (i) evidencing the removal or resignation directors and officers of
the Acquired Companies identified by the Purchaser prior to Closing and
appointing their replacements, and (ii) revoking and granting powers of attorney
as deemed appropriate by Purchaser, all in accordance with Section
5.21;
(i) Transaction Documents.
The Sellers must have delivered or caused to be delivered each document
that Section 2.5(a)
requires it to deliver;
(j) Main Scheme. The
Transfer of the Main Scheme will have occurred; and
(k) Closing Certificates.
The Purchaser will have received a certificate signed by each Seller,
each in form and substance reasonably satisfactory to the Purchaser, dated as of
the Closing Date, to the effect that each of the conditions specified in this
Section 6.1
have been satisfied in all respects (with respect to the condition
specified in Section
6.1(e), only insofar as such Section 6.1(e)
relates to Proceedings involving the Sellers or its Affiliates, which
includes the Acquired Companies) (each such certificate, a "Closing
Certificate").
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Section
6.2 Conditions to the
Obligation of the Sellers. The obligation of the Sellers to consummate
the transactions contemplated by this Agreement is subject to the satisfaction,
on or before the Closing Date, of each of the following conditions (any of which
may be waived by the Sellers, in whole or in part):
(a) Accuracy of Representations
and Warranties. The representations and warranties of the Purchaser in
Article 4 must
be true and correct in all material respects as of the Closing (except to the
extent any such representation or warranty is expressly made as of the date of
this Agreement or any other specific date, in which case such representation or
warranty must have been true and correct in all material respects as of such
date);
(b) Performance of Covenants.
All of the covenants and obligations that the Purchaser is required to
perform or comply with under this Agreement on or before the Closing Date must
have been duly performed and complied with in all material
respects;
(c) No Action. There must
not be in effect any Law or Judgment that would prohibit or make illegal the
consummation of the transactions contemplated by this Agreement or cause the
transactions contemplated by this Agreement to be rescinded following
consummation;
(d) No Proceedings. No
Proceedings will have been instituted by any Governmental Authority against the
Sellers, the Acquired Companies, or the Purchaser, seeking to restrain or
prohibit the consummation of the transactions contemplated hereby;
(e) Credit and Performance
Support Obligations. The Sellers and their Affiliates (other than the
Acquired Companies) will have been absolutely and unconditionally relieved of
all Liabilities under those guarantees set forth in Section 6.2(e) of the
Seller Disclosure Schedule, in a form reasonably satisfactory to the Sellers and
copies thereof will have been delivered to the Sellers
(f) Main Scheme. The
Transfer of the Main Scheme will have occurred; and
(g) Transaction Documents.
The Purchaser must have delivered or caused to be delivered to the
Sellers each document that Section 2.5(b)
requires it to deliver.
Section
6.3 Transfer of Main
Scheme.
(a) For
purposes of this Agreement, the "Transfer of the Main
Scheme" will be defined to occur when each of the following four elements
have been completed:
(i) Cinch
U.K. being substituted as Principal Company (as such term is defined in the Main
Scheme) under the Main Scheme by Seller U.K. or one of its
Affiliates;
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(ii) an
active member from both Seller U.K. or one of its Affiliates and Cinch U.K.
joining the Main Scheme and the active member from Cinch U.K. subsequently
ceasing to be an active member of the Main Scheme;
(iii) A
scheme apportionment arrangement (as defined in Regulation 2 of the Occupational
Pension Schemes (Employer Debt) Regulations 2005) being entered into providing
for any Cinch U.K. section 75 debt to be apportioned to Seller U.K. or one of
its Affiliates; and
(iv) Seller
U.K. or one of its Affiliates, as Principal Company under the Main Scheme,
providing notification to the Trustees of the Main Scheme and Cinch U.K. (as a
Participating Employer under the Main Scheme) of the cessation of the
participation of Cinch U.K. as a Participating Employer under the Main
Scheme.
(b)
Seller U.K. will provide the Purchaser with drafts of the documentation required
to implement the Transfer of the Main Scheme not less than three (3) Business
Days prior to the anticipated date of execution of such documentation and shall
consider in good faith any comments on such documentation made by the
Purchaser.
It is
agreed and understood by the parties that neither the completion of any
consultation with Cinch U.K. employees nor the receipt by Seller U.K. of formal
approval of the UK pensions regulator will be required for the Transfer of the
Main Scheme to have been deemed to occur.
ARTICLE 7
TERMINATION
Section
7.1 Termination Events.
This Agreement may, by written notice given before or at the Closing, be
terminated:
(a) by
mutual consent of the Purchaser and the Sellers;
(b) by
the Purchaser (so long as the Purchaser is not then in material breach of any of
its representations, warranties or covenants contained in this Agreement) if (i)
there has been a breach of any of the Sellers' representations, warranties or
covenants contained in this Agreement, which would result in the failure of a
condition set forth in Section 6.1(a) or
Section 6.1(b),
and (ii) such breach is not cured within twenty (20) days following
receipt by the Sellers of notice of such breach from the Purchaser (or, in the
case of a breach triggering a right of termination pursuant to Section 7.1(b)(i)
that is included in a supplement to the Seller Disclosure Schedule
delivered by Sellers pursuant to the terms of Section 5.4, during
the fifteen (15) Business Days following receipt by the Purchaser of such
supplement);
(c) by
the Sellers (so long as the Sellers are not then in material breach of any of
their representations, warranties or covenants contained in this Agreement) if
there has been a breach of any of the Purchaser's representations, warranties or
covenants contained in this Agreement, which would result in the failure of a
condition set forth in Section 6.2(a) or
Section 6.2(b), and which
breach is not cured within twenty (20) days following receipt by the Purchaser
of notice of such breach from the Sellers;
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(d) by
either the Purchaser or the Sellers if any Governmental Authority has issued a
nonappealable final Judgment or taken any other nonappealable final action, in
each case having the effect of permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement; provided, however,
that the right to terminate this Agreement under this Section 7.1(d) will
not be available to any party whose failure to fulfill any material covenant
under this Agreement has been the cause of or resulted in the action or event
described in this Section 7.1(d)
occurring;
(e) by
the Purchaser if the Closing has not occurred (other than through the failure of
the Purchaser to comply fully with its obligations under this Agreement) on or
before April 30, 2010 (the "Termination Date");
provided, however, if the date on which the last of the conditions set
forth in Article 6
have been satisfied or waived (other than those conditions that by their
nature can only be satisfied at the Closing) is after April 15, 2010 but on or
before April 30, 2010, the Termination Date will be extended until May 15, 2010
so that it can be determined whether a Closing Condition Material Adverse Effect
has occurred; provided, further, however
that if as of the Termination Date all of the conditions set forth in
Article 6 have heretofore been satisfied or waived (other than those conditions
that by their nature can only be satisfied as of the Closing) other than the
conditions set forth in Section 6.1(f), Section
6.1(j), Section 6.2(e) and/or Section 6.2(f), then
such date may be extended by the Purchaser, in its sole and absolute discretion,
to May 30, 2010 by Purchaser's providing written notice of such extension to
Sellers on or prior to April 30, 2010 and; provided further that
if following such an extension, as of May 30, 2010 all of the conditions set
forth in Article 6 have heretofore been satisfied or waived (other than those
conditions that by their nature can only be satisfied as of the Closing) other
than the conditions set forth in Section 6.1(f), Section
6.1(j), Section 6.2(e) and/or Section 6.2(f), then
such date may be extended by the Purchaser, in its sole and absolute discretion,
to June 30, 2010 by Purchaser's providing written notice of such extension to
Sellers on or prior to May 30, 2010 (each of such extensions by Purchaser being,
an "Extension").
If, after any Extension, the date on which the last of the conditions set
forth in Article 6 have been satisfied or waived (other than those conditions
that by their nature can only be satisfied at the Closing) is after the
fifteenth (15th) day of the final month covered by such Extension(s), but on or
before the last day of such month, the Termination Date will be extended until
the fifteenth (15th) of the immediately succeeding month so that it can be
determined whether a Closing Condition Material Adverse Effect has
occurred.
(f) by
the Purchaser on or after February 1, 2010, if (i) the Closing has not occurred
on or prior to January 31, 2010 and (ii) a Closing Condition Material Adverse
Effect occurs from or after February 1, 2010 (it being agreed and understood
that if all of the conditions set forth in Article 6 have been
satisfied or waived on or prior to January 31, 2010 (other than those conditions
that by their nature can only be satisfied at the Closing), then the termination
right set forth in this Section 7.1(f) shall
not be applicable); or
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(g) by
the Sellers if the Closing has not occurred (other than through the failure of
any Seller to comply fully with its obligations under this Agreement) on or
before the Termination Date; provided, however, if
the date on which the last of the conditions set forth in Article 6 have been
satisfied or waived (other than those conditions that by their nature can only
be satisfied at the Closing) is after April 15, 2010 but on or before April 30,
2010, the Termination Date will be extended until May 15, 2010 so that it can be
determined whether a Closing Condition Material Adverse Effect has occurred;
provided, further,
however that if as of the Termination Date all of the conditions set
forth in Article 6 have heretofore been satisfied or waived (other than those
conditions that by their nature can only be satisfied as of the Closing) other
than the conditions set forth in Section 6.1(f), Section
6.1(j), Section 6.2(e) and/or Section 6.2(f), then such
date may be extended by the Purchaser, in its sole and absolute discretion, to
May 30, 2010 by Purchaser's providing written notice of such extension to
Sellers on or prior to April 30, 2010 and; provided further that
if following such an extension, as of May 30, 2010 all of the conditions set
forth in Article 6 have heretofore been satisfied or waived (other than those
conditions that by their nature can only be satisfied as of the Closing) other
than the conditions set forth in Section 6.1(f), Section
6.1(j), Section 6.2(e) and/or Section 6.2(f), then
such date may be extended by the Purchaser, in its sole and absolute discretion,
to June 30, 2010 by Purchaser's providing written notice of such extension to
Sellers on or prior to May 30, 2010 (each of such extensions by Purchaser being,
an "Extension").
If, after any Extension, the date on which the last of the conditions set
forth in Article 6 have been satisfied or waived (other than those conditions
that by their nature can only be satisfied at the Closing) is after the
fifteenth (15th) day of the final month covered by such Extension(s), but on or
before the last day of such month, the Termination Date will be extended until
the fifteenth (15th) of the immediately succeeding month so that it can be
determined whether a Closing Condition Material Adverse Effect has
occurred.
Section
7.2 Effect
of Termination. If this Agreement is terminated pursuant to Section
7.1,
this Agreement and all rights and obligations of the parties under this
Agreement automatically end without Liability against any party or its
Affiliates, except that (a) Section
5.6(a)
(Non-Competition;
Non-Solicitation; Confidentiality), Section
5.7 (Public
Announcements),
Section
7.4 (Certain
Effects of
Termination),
Article
11 (General
Provisions) (except for Section
11.12 (Specific
Performance) and this Section
7.2 will remain in full force and survive any termination of this
Agreement and (b) if, with respect to a party (the "Compliant
Party")
this Agreement is terminated by the other because of the knowing and
intentional breach of this Agreement by the other party or because one or more
of the conditions to the Compliant Party's obligations under this Agreement is
not satisfied as a result of the other party's knowing and intentional failure
to comply with its obligations under this Agreement, the Compliant Party's right
to pursue all legal remedies will survive such termination
unimpaired.
Section
7.3 Procedure Upon
Termination. In the event of termination and abandonment by the Purchaser
or the Sellers, or both, pursuant to Section 7.1, after
the expiration of any applicable cure periods, written notice thereof will
forthwith be given to the other party or parties, and this Agreement will
terminate, and the purchase of the Shares hereunder will be abandoned, without
further action by the Purchaser, the Acquired Companies or the
Sellers.
Section
7.4 Certain Effects of
Termination. If the Purchaser or the Sellers terminates this Agreement
pursuant to Section
7.1, the Purchaser will comply with the Confidentiality Agreement
regarding the return and/or destruction of any information furnished to the
Purchaser in connection with this Agreement.
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ARTICLE
8
INDEMNIFICATION
Section
8.1 Indemnification by
the Sellers. If the Closing occurs, and subject to the limitations
expressly set forth in Section 8.4 and Section 8.5, the
Sellers will jointly and severally indemnify and hold harmless the Purchaser and
its directors, officers, employees, agents, representatives, stockholders and
Affiliates (collectively, the "Purchaser Indemnified
Parties") from and against any and all Losses (other than Losses with
respect to Taxes, for which the provisions of Section 9.1(a) will
govern) incurred by the Purchaser Indemnified Parties arising or resulting from
(a) the failure of any of the representations or warranties made by the Sellers
in this Agreement or in any Ancillary Agreements or other agreements delivered
in connection herewith or therewith to be true and correct in all respects at
and as of the date hereof and at and as of the Closing Date (other than breaches
of the representations and warranties set forth in Section 3.27, for
which the provisions of Section 8.1(d) will
govern); (b) the breach of any covenant or other agreement on the part of the
Sellers under this Agreement or any Ancillary Agreements or other agreements
delivered in connection herewith or therewith; (c) the indemnification
obligations set forth in Section 10.7 of this
Agreement; (d) the Acquired Companies' failure to comply, at any time prior to
the Closing, with the testing and reporting requirements of the Defense
Logistics Agency and Defense Supply Center Columbus, whether applicable directly
or indirectly, including, without limitation, the requirements necessary for any
Acquired Company to be listed on the DoD List for the Mil Spec Products and the
requirements applicable to those other Products of the Acquired Companies that
are or have been on the DoD List (in which case, for the avoidance of doubt,
Losses will include, without limitation, all costs associated with any and all
criminal fines, applicable penalties and product recall expenses arising out of
such failure to comply); and (e) to the extent not already reduced from the
Purchase Price pursuant to the terms of Article 2, any fees,
commissions, or like payments by any Person having acted or claiming to have
acted, directly or indirectly, as a broker, finder or financial advisor for the
Acquired Companies in connection with the transactions contemplated by this
Agreement.
Section
8.2 Indemnification by
the Purchaser. If the Closing occurs, and subject to the limitations
expressly set forth in Section 8.4 and Section 8.5, the
Purchaser will indemnify and hold harmless the Sellers and its directors,
officers, employees, agents, representatives and Affiliates (collectively, the
"Seller Indemnified
Parties") from and against any and all Losses (other than Losses with
respect to Taxes, for which the provisions of Section 9.1(b) will
govern) incurred by the Seller Indemnified Parties arising or resulting from (a)
the failure of any of the representations or warranties made by the Purchaser in
this Agreement or in any Ancillary Agreements or other agreements delivered in
connection herewith or therewith to be true and correct in all respects at and
as of the date hereof and at and as of the Closing Date; (b) the breach of any
covenant or other agreement on the part of the Purchaser under this Agreement or
any Ancillary Agreements or other agreements delivered in connection herewith or
therewith;
(c) any
Change of Control Payment other than any obligation of Sellers under Section 2.7;
and
(d) arising
from or related to any fees, commissions, or like payments by any Person having
acted or claiming to have acted, directly or indirectly, as a broker, finder or
financial advisor for the Purchaser in connection with the transactions
contemplated by this Agreement.
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Section
8.3 Claim
Procedure.
(a) A
party that seeks indemnity under the Indemnification Articles (an "Indemnified Party")
will give written notice (a "Claim Notice") to
the party from whom indemnification is sought (an "Indemnifying Party")
whether the Losses sought arise from matters solely between the parties
or from Third Party Claims described in Section 8.3(b). The
Claim Notice must contain (i) a description and, if known, the estimated amount
of any Losses incurred or reasonably expected to be incurred by the Indemnified
Party, (ii) a reasonable explanation of the basis for the Claim Notice to the
extent of the facts then known by the Indemnified Party and (iii) a demand for
payment of those Losses.
(b) If
the Indemnified Party seeks indemnity under the Indemnification Articles in
response to a claim or Proceeding by another Person not a party to this
Agreement (a "Third
Party Claim"), then the Indemnified Party will promptly give a Claim
Notice to the Indemnifying Party after the Indemnified Party has received notice
or otherwise learns of the assertion of such Third Party Claim and will include
in the Claim Notice (i) the facts constituting the basis for such Third Party
Claim and the amount of the damages claimed by the other Person, in each case to
the extent known to the Indemnified Party, accompanied by reasonable supporting
documentation submitted by such third party (to the extent then in the
possession of the Indemnified Party) and (ii) the assertion of the claim or the
notice of the commencement of any Proceeding relating to such Third Party Claim;
provided, however,
that no delay or deficiency on the part of the Indemnified Party in so
notifying the Indemnifying Party will relieve the Indemnifying Party of any
Liability under this Agreement except to the extent such delay or deficiency
prejudices or otherwise adversely affects the rights of the Indemnifying Party
with respect thereto.
(c) Subject to the provisions of this
Section
8.3, the Indemnifying
Party will have the right,
at its sole expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to
the Indemnified Party, and to defend against, negotiate, settle or otherwise
deal with any Third Party Claim which relates to any Losses indemnified against
hereunder; provided that
the Indemnifying Party will have acknowledged in writing to the Indemnified Party its unqualified
obligation to indemnify the Indemnified Party as provided hereunder. If the Indemnifying Party
elects to defend against, negotiate, settle or otherwise deal with any Third Party Claim which
relates to any Losses indemnified by it hereunder, it will within ninety (90) days of the
Indemnifying Party's receipt of the Third Party Claim related thereto, notify the Indemnified Party
of its intent to do so. If the Indemnified Party defends any Third Party Claim, then the
Indemnifying Party will reimburse the Indemnified Party for the expenses of defending such Third Party
Claim upon submission of periodic bills. If the Indemnifying Party will assume the
defense of any Third Party Claim, the Indemnified Party may participate, at his or its own
expense, in the defense of such Third Party Claim; provided, however, that such Indemnified Party
will be entitled to participate in any such defense with separate counsel at the expense of the
Indemnifying Party if (i) so requested by the Indemnifying Party to participate or (ii) in the
reasonable opinion of counsel to the Indemnified Party, a conflict or potential conflict exists
between the Indemnified Party and the Indemnifying Party that would make such separate
representation advisable; and provided, further, that the Indemnifying Party will not be required
to pay for more than one such counsel in any particular jurisdiction for all
Indemnified Parties in connection with any Third Party Claim. The parties
hereto agree to provide reasonable access to the other to such documents
and information as may be reasonably requested in connection with the defense,
negotiation or settlement of any such Third Party Claim. The Indemnifying Party
will not agree to any settlement of, or consent to the entry of any Judgment
(other than a Judgment of dismissal on the merits without costs) arising from,
any such Third Party Claim without the prior written consent of the Indemnified
Party; provided,
however, that the consent of the Indemnified Party will not be required
if the Indemnifying Party agrees in writing to pay any amounts payable pursuant
to such settlement or any Judgment and such settlement or Judgment includes a
full, complete and unconditional release of the Indemnified Party from further
Liability. The Indemnified Party will not agree to any settlement of, or the
entry of any Judgment (other than a Judgment of dismissal on the merits without
costs) arising from, any such Third Party Claim without the prior written
consent of the Indemnifying Party unless the Indemnifying Party notifies the
indemnified Party that it elects to not defend against, negotiate, settle or
otherwise deal with such Third Party Claim or if the Indemnifying Party fails to
provide notice within ninety (90) days of the Indemnifying Party's receipt of
the Third Party Claim related thereto that it intends to defend against,
negotiate, settle or otherwise deal with such Third Party Claim. It is agreed
and understood that, to the extent it is obligated to indemnify an Indemnified
Party hereunder with respect to a Third Party Claim, the Indemnifying Party will
be liable for the fees and expenses incurred by the Indemnified Party in
connection with such Third Party Claim for any period during which the
Indemnifying Party has failed to assume the defense of such Third Party Claim
(other than during the period prior to the delivery of the Claim Notice relating
to such Third Party Claim as provided above).
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(d)
After any final decision, judgment or award will have been rendered by a
Governmental Authority of competent jurisdiction and the expiration of the time
in which to appeal therefrom, or a settlement will have been consummated, or the
Indemnified Party and the Indemnifying Party will have arrived at a mutually
binding agreement, in each case with respect to a Third Party Claim hereunder,
the Indemnified Party will forward to the Indemnifying Party notice of any sums
due and owing by the Indemnifying Party pursuant to this Agreement with respect
to such matter and the Indemnifying Party will pay all of such remaining sums so
due and owing to the Indemnified Party by check or wire transfer of immediately
available funds to an account designated by the Indemnified Party within five
(5) Business Days after the date of such notice.
Section 8.4 Survival.
All representations and warranties contained in this Agreement or in any
certificate delivered pursuant hereto will survive the Closing until the earlier
of: (i) the date that is fifteen (15) months following the Closing Date; or (ii)
June 30, 2011; provided,
however,
that the representations and warranties (a) of the Sellers set forth in
Section
3.1 (Organization
and Good Standing), Section
3.2 (Authority
and Enforceability), and Section
3.4 (Capitalization
and Ownership, Subsidiaries) will survive the Closing indefinitely, (b)
of the Purchaser set forth in Section
4.1 (Organization
and Good Standing) and Section
4.2 (Authority
and
Enforceability) will survive the Closing indefinitely, (c) of the Sellers
set forth in respect of Taxes, including Section
3.11, will be subject to the indemnification provisions of Article
9, and (d) of the Sellers set forth in Section
3.14 (Environmental,
Health and Safety Matters) will survive the Closing until the third
anniversary of the Closing Date (as the case may be, the "General
Survival Period"). The indemnification obligations of the Sellers set
forth in Section
8.1(d) will survive the Closing until the third anniversary of the
Closing Date (the "Mil
Spec Survival
Period", and each of the General Survival Period and Mil Spec Survival
Period being referred to herein individually as a "Survival
Period"). All claims for indemnification pursuant to Section
8.1(a), Section 8.1(d) and/or Section
8.2(a) must be asserted pursuant to a Claim Notice given prior to the
expiration of the applicable Survival Period set forth in this Section
8.4; provided,
however, that any representations, warranties or covenants underlying any
claim for indemnification is asserted pursuant to a Claim Notice given after the
Closing Date within the Survival Period specified in this Section
8.4 will survive until, but only for purposes of, the resolution of such
claim.
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Section
8.5 Limitations on Liability.
Notwithstanding anything to the contrary contained in this
Agreement:
(a) no
indemnification payments will be made by or on behalf of (i) the Sellers
pursuant to Section
8.1(a) or Section 8.1(d) or
(ii) the Purchaser pursuant to Section 8.2(a), in respect of
any individual claim or series claims having the same nature or origin where the
Losses relating thereto are less than $15,000, and such items less than $15,000
will not be aggregated for purposes of calculating the Basket in clause (b)
below;
(b) no
indemnification payments will be made by or on behalf of (i) the Sellers
pursuant to Section
8.1(a) or Section 8.1(d) or
(ii) the Purchaser pursuant to Section 8.2(a), until the
aggregate amount of Losses for which the Sellers or the Purchaser, as the case
may be, would (but for this clause (b)) be liable thereunder exceeds one percent
(1%) of the Purchase Price (such amount being, the "Basket"), in which
case (that is, in the case the Basket is exceeded), the Sellers or the
Purchaser, as the case may be, will be required to pay the entire amount of such
Losses from dollar one; and
(c) the
aggregate total amount in respect of which the Sellers will be liable to
indemnify
and hold harmless the Purchaser Indemnified Parties pursuant to Section
8.1(a) and
Section
8.1(d) will not
exceed thirty-five percent (35%) of the Purchase Price (the "Cap"); provided,
however, that (i)
except as set forth in Section
8.5(c)(ii), the
aggregate total amount in respect
of which the Sellers will be liable to indemnify and hold harmless the Purchaser
Indemnified
Parties pursuant to Section
8.1(a) will not
exceed twenty percent (20%) of the Purchase
Price (the "Seller
Representation Cap"),
and (ii) neither the Cap nor the Seller Representation
Cap will apply to any indemnification obligations of any party pursuant to
Sellers'
breach of the representations and warranties set forth in Section
3.1 (Organization
and Good
Standing), Section
3.2 (Authority
and Enforceability), Section
3.4 (Capitalization
and Ownership,
Subsidiaries), Section
3.11 (Taxes)
or
Section
3.28 (Brokers
Fees).
(d) the
aggregate total amount in respect of which the Purchaser will be liable
to
indemnify and hold harmless the Seller Indemnified Parties pursuant to
Section
8.2(a) will not
exceed
twenty percent (20%) of the Purchase Price (the "Purchaser
Representation Cap");
provided,
however, that the
Purchaser Representation Cap will not apply to any indemnification obligations
of any party pursuant to Purchaser's breach of the representations and
warranties set forth in
Section
4.1 (Organization
and Good Standing), Section
4.2 (Authority
and Enforceability),
Section
4.5 (Brokers
Fees) or
Section
4.6 (Financial
Capacity).
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Notwithstanding the foregoing, the
parties agree and acknowledge that (i) the limitations set forth in this Section 8.5
will not be applicable in
the case of fraud, and (ii) if the facts underlying a matter would
constitute a breach of a representation contained in Article 3 and, in
addition, the Purchaser would be entitled to indemnification under Article 9 for losses
in connection therewith, the Purchaser may elect to be indemnified for the
Losses arising from such breach pursuant to either Section 8.1(a) or
Article 9, as
determined in the Purchaser's sole and absolute discretion (provided that in any
case there will not be duplication of recovery under both Section 8.1(a) and
Article
9).
Section
8.6 Materiality
Thresholds Disregarded. For purposes of determining the failure of any
representations or warranties to be true and correct, the breach of any
covenants and agreements, and calculating Losses hereunder, any materiality or
Material Adverse Effect qualifications in the representations, warranties,
covenants and agreements will be disregarded.
Section
8.7 Knowledge.
No Person will he entitled to indemnification under this Agreement with
respect to any breach of any representation, warranty or covenant by the Sellers
or the Purchaser if, on the date of this Agreement, the Person seeking such
indemnification had Knowledge of the existence of such breach.
Section
8.8 Tax Refunds and
Other Payments. The amount of any and all Losses for which
indemnification is provided pursuant to the Indemnification Articles will be net
of (i) any Tax benefit to which an Indemnified Party is entitled by reason of
payment of such Losses (taking into account any Tax cost or reduction in such
Tax benefit), but only if such Tax benefits is identifiable and able to be used
by the Indemnified Party within one year from the date the Indemnified Party
receives the indemnification payment; and (ii) any amounts of any insurance
proceeds, indemnification payments, contribution payments or reimbursements
receivable by, or payable in kind to, the Indemnified Party with respect to such
Losses or any of the circumstances giving rise thereto. In connection therewith,
if, at any time following payment in full by the Indemnifying Party of any
amounts of Losses due under this Agreement, the Indemnified Party receives any
insurance proceeds, indemnification payments, contribution payments or
reimbursements relating to the circumstances giving rise to such Losses, the
Indemnified Party will promptly remit to the Indemnifying Party such proceeds,
payments or reimbursements in an amount not to exceed the amount of the
corresponding indemnification payment made by the Indemnifying Party. The
Purchaser will use (and will cause its Affiliates to use) commercially
reasonable efforts to collect the proceeds of any available insurance which
would have the effect of reducing any Losses (in which case the net proceeds
thereof will reduce the Losses).
Section
8.9 Mitigation.
The Indemnified Party will use its commercially reasonable efforts to
mitigate any Losses with respect to which it may be entitled to seek
indemnification pursuant to this Agreement.
Section
8.10 Subrogation.
If an Indemnified Party is indemnified for any Losses pursuant to this
Agreement with respect to any claim by a Person not party to this Agreement,
then the Indemnifying Party will be subrogated to all rights and remedies of the
Indemnified Party against such third party, and the Indemnified Party will
cooperate with and assist the Indemnifying Party in asserting all such rights
and remedies against such third party.
Section 8.11 No Right to
Recover Against Acquired Companies. The Sellers and their Affiliates will have no right of
contribution or other recourse against the Acquired Companies for any
claims, including Third Party Claims, asserted by any Purchaser Indemnified
Party, it being acknowledged and agreed that any covenants and agreements
applicable to any Acquired Company are solely for the benefit of the Purchaser
and the other Purchaser Indemnified Parties.
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Section
8.12 Exclusive Remedy.
Subject to Section 11.12, from
and after the Closing, the sole and exclusive remedy of the Purchaser and the
Sellers for any matter arising out of the transactions contemplated by this
Agreement will be pursuant to the indemnification obligations set forth in the
Indemnification Articles and, except for their respective rights to
indemnification under the Indemnification Articles, (i) the Purchaser will have
no remedy against the Sellers and (ii) the Sellers will have no remedy against
the Purchaser, for any breach of any provision of this Agreement. In no event
will the Sellers have any Liability for Losses arising from the conduct of the
business of the Acquired Companies after the Closing.
ARTICLE
9
TAX
MATTERS
Section
9.1 Liability and
Indemnification for Taxes.
(a) If
the Closing occurs, and except to the extent any Taxes are reserved or accrued
on the Purchaser Estimated Closing Balance Sheets, as finally determined by
Section 2.3(b), the Sellers
will, jointly and severally, indemnify the Purchaser Indemnified Parties from
and against any and all Losses incurred by a Purchaser Indemnified Party (i) in
respect of and including all Taxes of the Acquired Companies that are
attributable to the Pre-Closing Period (including, without limitation, any
Losses in connection with those matters disclosed in Section 3.11 of the Seller
Disclosure Schedules, regardless of any liability estimates or other
qualifications stated therein and regardless of the taxable period in which the
relevant income is recognized), (ii) all Taxes of any member of an affiliated,
consolidated, combined or unitary group of which an Acquired Company was a
member on or prior to the Closing Date, including pursuant to Treasury
Regulations §1.1502-6 or any analogous or similar state, local, or non-U.S. law
or regulation, (iii) any and all Taxes of any person (other than an Acquired
Company) imposed on an Acquired Company as a transferee or successor, by
contract or pursuant to any law, rule, or regulation, which Taxes relate to an
event or transaction occurring before the Closing, (iv) for all Taxes
attributable to any breach of the Sellers representations and warranties set
forth in Section 3.11
and (v) for all Taxes arising solely out of or due to any breach of any
covenant of the Sellers set forth in this Agreement.
(b) If
the Closing occurs, the Purchaser will indemnify the Seller Indemnified Parties
from and against any and all Losses of a Seller Indemnified Party (i) for all
Taxes of the Acquired Companies that are attributable to any Post-Closing
Period, except to the extent that such Losses for Taxes are attributable to any
breach of a Sellers' representations and warranties set forth in Section 3.11 or fall
within Section 9.1(a)
and (ii) for all Taxes arising solely out of or due to any breach of any
covenant of the Purchaser set forth in this Agreement.
(c) With respect to any Straddle Period,
the amount of any Taxes based on or measured by income or receipts of any
Acquired Company for the Pre-Closing Period will be determined as if it were a separate
reporting period and by employing accounting methods which are consistent with those employed in
preparing the Tax Returns for the Acquired Companies in prior reporting
periods and which do not have the effect of distorting income or expenses
(taking into account the transactions contemplated by this Agreement), except
that Tax items of a periodic nature, such as property taxes or depreciation
allowances calculated on an annual basis, will be allocated by apportioning a
pro-rata portion of such Taxes to each day in the relevant Straddle
Period.
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(d) The
Sellers will not be required to indemnify the Purchaser Indemnified Parties for
reductions in any Tax Attributes. The Sellers will not be required to indemnify
the Purchaser Indemnified Parties against Losses for Taxes attributable to the
Pre-Closing Period to the extent such Losses for Taxes could be reduced under
applicable Law by reason of net operating loss carryovers, Tax credits and other
Tax Attributes arising in the Pre-Closing Period (otherwise than as a result of
any event, transaction or circumstance occurring in any Post- Closing Period)
which are not taken into account or otherwise reflected in the Purchaser
Estimated Closing Balance Sheets as finally determined pursuant to Section 2.3(b)
(assuming for the purposes of this sentence that such attributes are not
used to reduce Taxes in the Post-Closing Period).
(e) Any
payment required to be made under this Section 9.1 will be
made on (i) the later of the date falling five (5) Business Days after notice is
served by the relevant indemnifying party on the other and the date falling in a
case where there is a liability to make a payment of or on account of Taxes
three (3) Business Days before the last date upon which such payment is or
would, but for the utilization of a Post Closing Tax Attribute, be required to
be made in order to prevent a liability to fines, interest or penalties arising
or (ii) the earliest date on which Taxes would have been reduced had the
relevant Tax Attribute been available (assuming for these purposes that the
relevant Acquired Company would have been in a position to utilize such Tax
Attribute). Any payment made after the due date specified in this Section 9.1(e) will
carry interest at a rate of one percent (1%) above the base lending rate of
JPMorgan Chase Bank, N.A. from time to time from the due date to the date of
actual payment (both dates inclusive).
(f)
Notwithstanding anything contrary herein, all representations contained in Section 3.11 and the
indemnification obligations set forth in this Article 9 will
survive until thirty (30) days after the after the expiration of the applicable
statute of limitation.
Section
9.2Tax Return Filing; Audit
Responsibilities.
(a)
The Sellers will prepare and file or cause to be prepared and filed when due all
Tax Returns that are required to be filed by or with respect to all Acquired
Companies for taxable years or periods ending on or before the Closing Date with
respect to such Acquired Companies and all consolidated, combined, unitary or
similar group Tax Returns with respect to periods that include the Closing Date
and that include an Acquired Company for such period but with respect to which
an Acquired Company does not have primary responsibility for filing. Such Tax
Returns will be prepared in a manner consistent with Sellers' past practice in
respect of the Acquired Companies. The Sellers will remit any Tax Returns to the
Purchaser not later than forty-five (45) Business Days before the applicable due
date (including extensions) of such Tax Returns for their review and approval
(not to be unreasonably withheld or delayed) not later than thirty (30) Business
Days before the applicable due date of such Tax Returns. If, upon expiration of
the Purchaser's period of review set forth in the preceding sentence, the
parties disagree as to any item for which Purchaser's approval is required, the
parties will promptly submit the item to a mutually acceptable internationally
recognized accounting or law firm for final resolution, such resolution to be
completed (where possible) five (5) days prior to the applicable due date
(including extensions) for filing such Tax Return. The determination of such
accounting or law firm will be binding upon the parties. The Sellers will timely
pay to the Purchaser an amount equal to any Taxes for which the Sellers are
liable pursuant to Section 9.1 (but
which are payable with Tax Returns to be filed by the Purchaser). With respect
to Tax Returns described in this Section 9.2(a), and
subject to the limitations set forth in this Section 9.2, the
Purchaser will cooperate with the Sellers in filing such Tax Returns, including
causing the Acquired Companies to sign and file such Tax Returns, provided that
such cooperation will not include the taking, or causing to be taken, any action
inconsistent with, or in violation of, Law. With respect to any net refunds and
credits attributable to the payment of Taxes for a Pre-Closing Period and for
any portion of a Straddle Period ending on the Closing Date will be for the
account of Seller, and the Purchaser will promptly pay to Seller any such refund
or credit; provided, however, that the Purchaser shall be under no obligation
pursue or seek any such refunds or credits.
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(b) With
respect to Tax Returns in respect of taxable years or periods beginning before
the Closing Date and ending after the Closing Date, the Purchaser will prepare
and file or cause to be prepared and filed such Tax Returns. The Purchaser will
remit any such Tax Returns to the Sellers not later than forty-five (45)
Business Days before the applicable due date (including extensions) of such Tax
Returns for their review and approval (not to be unreasonably withheld or
delayed) not later than thirty (30) Business Days before the applicable due date
of such Tax Returns. If, upon expiration of the Sellers' period of review set
forth in the preceding sentence, the parties disagree as to any item for which
Sellers' approval is required, the parties will promptly submit the item to a
mutually acceptable internationally recognized accounting or law firm for final
resolution, such resolution to be completed (where possible) five (5) days prior
to the applicable due date (including extensions) for filing such Tax Return.
The determination of such accounting or law firm will be binding upon the
parties. The Sellers will timely pay to the Purchaser an amount equal to any
Taxes for which the Sellers are liable pursuant to Section 9.1 (but
which are payable with Tax Returns to be filed by the Purchaser). With respect
to Tax Returns described in this Section 9.2(b), and
subject to the limitations set forth in this Section 9.2, the
Sellers will cooperate with the Purchaser in filing such Tax Returns, including
causing the Acquired Companies to sign and file such Tax Returns, provided that
such cooperation will not include the taking, or causing to be taken, any action
inconsistent with, or in violation of, Law. With respect to any net refunds and
credits attributable to the payment of Taxes for a Post-Closing Period and for
any portion of a Straddle Period ending after the Closing Date will be for the
account of Purchaser, and Sellers will promptly pay to Purchaser any such refund
or credit; provided, however, that the Sellers shall be under no obligation
pursue or seek any such refunds or credits.
(c) Without
limitation of the obligation to make payment by the due date, in the event that
the Sellers or the Purchaser are liable under this Agreement for any Taxes paid
by the other party with respect to any Tax Return, prompt reimbursement will be
made.
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(d) Each
of the Purchaser and the Sellers will promptly notify the other in writing upon
receipt of notice of any pending or threatened audits or assessments with
respect to Taxes for which such other party (or any such other party's
Affiliates) may be liable under this Agreement. If the Purchaser receives notice
of a Tax Contest with respect to any Acquired Company which could reasonably be
expected to cause the Sellers to have an indemnification obligation under this
Article 9, then
the Purchaser will promptly notify the Sellers in writing of such Tax Contest
after receiving such notice. Subject to the Sellers indemnifying the Purchaser
against all Losses which may thereby be incurred, the Purchaser will and will
procure that any relevant Acquired Company will take such action to resist,
avoid, dispute, appeal or defend such Tax Contest as the Sellers may reasonably
request, provided that the Purchaser will not be required to take or procure the
taking of action which involves agreeing to the settlement or compromise of the
Tax Contest or any proposal for the same which is likely to increase the amount
of Taxes involved or the future liability to Taxes of any Purchaser Affiliate.
If the Sellers fail to make such request within thirty (30) Business Days of
receipt of notification of the Tax Contest from the Purchaser or indicate that
they do not wish any such action to be taken, the Purchaser will be free to pay
or settle the Tax Contest or take such other action in connection therewith as
it may in its absolute discretion decide. If they so request in writing, the
Sellers will have the right, at their own expense, to control the conduct of
such Tax Contest; provided, however, that, in
such case, the Sellers (i) will obtain the prior written consent of the
Purchaser to the appointment of any professional advisers (such consent not to
be unreasonably withheld or delayed); (ii) will keep the Purchaser fully and
promptly informed of all matters pertaining to a Tax Contest and provide the
Purchaser with all correspondence and notes or other written records of
telephone conversations or meetings; (iii) will submit to the Purchaser in draft
all material written communications pertaining to a Tax Contest for its approval
and will only transmit such communications if such approval is given (such
approval not to be unreasonably withheld or delayed), and (iv) will not make any
settlement or compromise of the Tax Contest or agree any matter in the conduct
of the Tax Contest which is likely to affect the amount of any Taxes subject of
the Tax Contest or the future liability to Taxes of any Purchaser Affiliate
without the approval of the Purchaser (such approval not to be unreasonably
withheld or delayed).
(e) To
the extent not inconsistent with the provisions of this Section 9.2, the
procedures of Article
8 will apply in the case of any claim for Losses related to
Taxes.
Section
9.3 Section 338
Elections.
(a) Seller U.S. and Purchaser will join
in making an election under Section 338(h)(10) of the Code (and any
corresponding elections under applicable Law) (collectively, a "Section
338(h)(10) Election") with
respect to the purchase and sale of the stock of Cinch U.S. Seller will pay any Tax attributable to
the making of the Section 338(h)(10) Election. The Parties agree to allocate the aggregate
of that portion of the Purchase Price allocated to Cinch U.S. pursuant to Section 2.6
and the liabilities of
Cinch U.S. among the assets in accordance with Sections 338 and 1060 of the Code as
mutually agreed to by the Parties within one hundred and eighty (180) days following the Closing
Date. All such mutually agreed to allocations will be used by each Party in
preparing any filings required pursuant to Sections 338 and 1060 of the
Code or any similar
provisions of state or local Law and all relevant Tax Returns, subject to
adjustment to reflect the adjustment to the Purchase Price provided for in
Section 2.3
of this Agreement. Neither Purchaser nor Seller
U.S. will take any position before any taxing authority or in any judicial proceeding that is
inconsistent with such mutually agreed to allocations without the prior
consent of the other party. The Parties will in good faith exercise reasonable
efforts to support such reported allocations in any audit proceedings initiated
by any taxing authority.
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(b)
Seller U.K. agrees that during the period of nine (9) months following the
Closing Date it will take all reasonable steps to cooperate with any election
under Section 338(g) of the Code (collectively a "Section 338(g) Election")
that the Purchaser may choose to make in connection with the acquisition
of Cinch U.K.
Section
9.4 Transfer Taxes.
All federal, state, provincial, local or foreign or other excise, sales,
use, transfer (including real property transfer or gains Taxes and stamp duty on
the transfer of the U.K. Shares, but excluding nonresident capital gains and
similar Taxes), stamp, documentary, filing, recordation and other similar Taxes
and fees that may be imposed or assessed as a result of the transactions
contemplated by this Agreement, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or
penalties ("Transfer
Taxes"), will be borne fifty percent (50%) by Sellers and fifty percent
(50%) by Purchaser. Any Tax Returns that must be filed in connection with
Transfer Taxes will be prepared by the party primarily or customarily
responsible under applicable Law for filing such Tax Returns, and such party
will use its reasonable best efforts to provide such Tax Returns to the other
party at least ten (10) Business Days prior to the date such Tax Returns are due
to be filed. The Purchaser and Sellers will cooperate in the timely completion
and filing of all such Tax Returns. Any Transfer Taxes resulting from any
subsequent increase in the Purchase Price, as adjusted pursuant to the terms of
this Agreement, will be borne in accordance with the provisions of this Section
9.4.
Section
9.5Cooperation.
(a) The
Purchaser, the Acquired Companies, and the Sellers will cooperate fully, as and
to the extent reasonably request by the other party, in connection with the
filing of Tax Returns pursuant to this Section 9.5 and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
will include the retention and (upon the other provide assistance to the other
party's request) the provision of records and information that are reasonably
relevant to any such audit, litigation or other proceeding and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Acquired Companies and the
Sellers agree (i) to retain all books and records with respect to Tax matters
pertinent to the Acquired Companies relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations (and,
to the extent notified by the Purchaser or the Sellers, any extensions thereof)
of the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (ii) to give the other
party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, i f the other party so requests, the Acquired
Companies or the Sellers, as the case may be, will allow the other party to take
possession of such books and records.
(b) The
Purchaser and the Sellers further agree, upon request, to use their best efforts
to obtain any certificate or other document from any governmental authority or
any other Person as may be necessary to mitigate, reduce or eliminate any Tax
that could be imposed (including, but not limited to, with respect to the
transactions contemplated hereby).
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(c)
The Purchaser and the Sellers further agree, upon request, to provide the other
party with all information that either party may be required to report pursuant
to Code §6043, or Code §6043A, or Treasury Regulations promulgated
thereunder.
Section
9.6 Tax-Sharing
Agreements. All tax-sharing agreements or similar agreements with respect
to or involving the Acquired Companies will be terminated as of the Closing Date
and, after the Closing Date, the Acquired Companies will not be bound thereby or
have any liability thereunder.
ARTICLE
10
EMPLOYEE
BENEFITS MATTERS
Section
10.1 Seller Plans.
The Sellers, Cinch U.S. and its Subsidiaries will take such actions prior
to the Closing as are necessary and appropriate to cause Cinch U.S and its
Subsidiaries to cease participation in each and every Company Plan sponsored or
maintained by the Sellers or to which any Seller is a party (other than the
change of control agreements listed on Section 2.7 of the
Seller Disclosure Schedule) ("Seller Plans"). The
Sellers will retain and/or assume all liabilities under the Seller Plans from
and after the Closing, including any and all liabilities attributable to any
current or former employee of any Acquired Company (or any Subsidiaries)
(including the Transferred Employees). Neither Cinch U.S. (nor its Subsidiaries)
nor the Purchaser will be treated as assuming any Seller Plan or any liabilities
under any Seller Plan. The Sellers will cause the accounts or benefits of each
Transferred Employee under the Cinch U.S. 401(k) and Retirement Account Plan
(the "U.S.
Savings Plan"),
to be fully vested as of the Closing. The Sellers will take such actions
as are necessary or appropriate to permit Transferred Employees to receive a
distribution of their benefits under the U.S. Savings Plan in connection with
the consummation of the transactions contemplated by this Agreement and will
cause Transferred Employees to receive the benefits of the Sellers' matching
and/or profit- sharing contributions under such plan(s) through the Closing Date
without regard to any requirement that such Transferred Employees be employed on
the last day of the plan year or satisfy other service requirements. The Sellers
will allow Transferred Employees who have taken loans under the U.S. Savings
Plan to elect either to rollover their loans in kind to another plan or continue
to pay off the loans in accordance with the existing terms of the loan, the
terms of the U.S. Savings Plan and applicable Laws.
Section
10.2 Defined
Contribution Plan — U.K. Effective as of the Closing Date, the Employees
will continue to participate in the Stakeholder Scheme.
Section 10.3 Welfare
Arrangements. With respect
to the Company Plans maintained by the Sellers and set forth on
Section
10.3 of the Seller
Disclosure Schedule (the "Welfare
Plans"), the Purchaser
agrees to designate or establish, effective as of the Closing, one or more
benefit plans, programs or
arrangements for the purpose of providing such benefits to Transferred
Employees. The Purchaser
will cause such benefit plans, programs or arrangements to (i) waive
any preexisting condition
limitations for conditions covered under the applicable Welfare Plans
available to the
Transferred Employees immediately prior to the Closing and any applicable
waiting periods, and (ii)
credit Transferred Employees with any deductible and out-of-pocket expenses incurred by such employees and
their dependents under the Welfare Plans during the portion of the current year preceding
the Closing Date for purposes of satisfying any applicable deductible or
out-of-pocket requirements under any similar plan, program or arrangement in
which such employees may be eligible to participate after the Closing Date to
the same extent as such expenses are taken into account for the benefit of
similarly situated employees of the Purchaser. With respect to aggregate
lifetime maximum benefits available under the Purchaser's welfare benefit plans,
a Transferred Employee's prior claim experience under any of the Welfare Plans
will not be taken into account. Effective as of the Closing Date, the
Transferred Employees (and their dependents) will no longer participate in the
Welfare Plans and the Sellers will have taken all such action prior to the
Closing Date as may be required to achieve this result. Notwithstanding anything
contained in this Agreement to the Contrary, the Purchaser will have no
obligation to provide any employee benefit plan, program, policy or fringe
benefit after the Closing Date, and the Purchaser retains and reserves the right
to amend, modify or terminate any such plan, program, policy or fringe benefit
at any time. Nothing herein expressed or implied will confer or is intended to
confer upon any Transferred Employee, beneficiary or legal representative
thereof, any rights or remedies, including, without limitation any right to
employment, or continued employment for any specified period of time, of any
nature or kind whatsoever under or by reason of this Agreement.
-78-
Section
10.4 Indemnity.
Subject to the other terms of this Agreement (including, without
limitation, Section
2.7 (Change of Control
Costs) and Section 8.1 (Indemnification by Sellers)), from and after the
Closing, the Purchaser will indemnify and hold harmless the Seller Indemnified
Parties against all Losses arising or resulting from (a) any Company Plan
maintained or sponsored directly by any Acquired Company that transfers with the
Acquired Companies by operation of Law, (b) any claim with respect to any
Company Plan which transfers in whole, or in part, by operation of this Article 10, (c) any
claim made by any Transferred Employee against the Sellers or any of its
Affiliates for any severance or termination benefits pursuant to the provisions
of any Company Plan or any applicable Law, (d) any suit or claim of violation
brought against the Sellers or any of its Affiliates under WARN Act for any
actions taken by the Purchaser on or after the Closing Date with respect to any
facility, site of employment, operating unit or Transferred Employee, and (e)
any failure of the Purchaser to discharge its obligations under this Article
10.
Section
10.5 COBRA. The
Sellers will be responsible for providing the notices and making available
health care continuation coverage, as required by Sections 601 et seq. of ERISA and COBRA,
for all of the Employees of Cinch U.S. and its Subsidiaries (and their
respective covered dependents) whose qualifying events (as defined under COBRA)
occur prior to the Closing Date. The Purchaser will be responsible for providing
the notices and making available health care continuation coverage, as required
by Sections 601 et seq.
of ERISA and COBRA, for all of the Employees of Cinch U.S. and its
Subsidiaries (and their respective covered dependents) whose qualifying events
(as defined under COBRA) occur on or after the Closing Date.
Section
10.6 Defined Benefit
Plan — U.K.
(a) Prior to the Closing, the Sellers
will, and will cause Cinch U.K. to, use their commercially reasonable efforts to
cause Seller U.K. or one of its Affiliates, to assume all liabilities under the Main Scheme on
and after Closing and, without limiting the generality of this provision, the Sellers will, and
will cause Cinch U.K. to, pursue, and use their commercially reasonable
efforts to expedite the completion of, a scheme of apportionment arrangement
transferring the Main Scheme's liabilities to Seller U.K. or one of its
Affiliates.
-79-
(b) The
Sellers will request a letter or deed of discharge from the Trustees of the Main
Scheme for the benefit of Cinch U.K. in substantially the same terms as follows:
"The Trustees confirm that, further to
the payment of the scheme apportionment arrangement share (£1) by Cinch Connectors Limited to
the Trustee in accordance with the scheme apportionment arrangements, Cinch Connectors
Limited has no further liability to the Main Scheme, whether under the Main
Scheme Rules, applicable legislation or otherwise, and that Cinch Connectors
Limited has ceased to
be an Employer under the Main Scheme Rules and an employer for the purposes of Part 3 of the Pensions
Xxx 0000 and section 75 of the Pensions Xxx 0000 and, in either case, regulations made
thereunder."
Section
10.7 Indemnity —
Sellers.
(a) For a
period of twenty-five (25) years from and after the completion of the Transfer
of the Main Scheme, the Sellers will, jointly and severally, indemnify and hold
harmless the 10.7 Indemnified Parties from and against any and all Losses
incurred by a 10.7 Indemnified Party arising in relation to the Main Scheme. It
is agreed and understood by the parties that, for the purposes of the
indemnification obligations set forth in this Section 10.7, "Losses"
will:
(i) not
include any payments to be made to participants in the Main Scheme that are
covered by assets held by the Main Scheme;
(ii) include
all of Cinch U.K.'s liabilities and costs arising in respect of the Main Scheme
(including, for the avoidance of doubt, any debt under section 75 of the
Pensions Xxx 0000 which becomes payable by Cinch U.K.); and
(iii) include
any liability of a Section 10.7 Indemnified Party under a Contribution Notice or
the requirements of a Financial Support Direction in relation to the Main
Scheme.
(b)
Notwithstanding the terms of Section 10.7(a), the
Purchaser agrees that, in the event any 10.7 Indemnified Parties incur any
Losses for which the Sellers would be obligated to make indemnification payments
pursuant to this Section 10.7, then
the Purchaser will, and will cause the Indemnified Parties to, (i) promptly
notify the Sellers after it has received notice or otherwise learns of an
assertion that may lead to such Losses, (ii) provide the Sellers the opportunity
to mitigate or cure such Losses for a period not to exceed ten (10) days after
the incurrence of the subject Losses and (iii) cooperate with the Sellers in
connection with any attempts to mitigate or cure such Losses during such
period.
(c) For
purposes of this Agreement:
(i) "10.7 Indemnified Parties"
shall include all Purchaser Indemnified parties
as well as any Connected Person.
-80-
(ii) ''Connected Person"
means a person who, as at any time, is both (A) associated with, or
connected to, Cinch U.K. or any other person who has at any time participated in
the Main Scheme and (B) associated with, or connected to, the Purchaser, for the
purposes of section 249 and/or section 435 of the Insolvency Xxx
0000.
(iii) "Contribution Notice"
has the meaning given in section 38 of the Pensions Xxx
0000.
(iv) "Financial Support
Direction" has the meaning given in section 43 of the Pensions Xxx
0000.
ARTICLE
11
GENERAL
PROVISIONS
Section
11.1 Notices.
All notices and other communications under this Agreement must be in
writing and are deemed duly delivered when (a) delivered if delivered personally
or by nationally recognized overnight courier service (costs prepaid), (b) sent
by facsimile with confirmation of transmission by the transmitting equipment
(or, the first Business Day following such transmission if the date of
transmission is not a Business Day) or (c) received or rejected by the
addressee, if sent by U.S. certified or registered mail, return receipt
requested; in each case to the following addresses or facsimile numbers and
marked to the attention of the individual (by name or title) designated below
(or to such other address, facsimile number or individual as a party may
designate by notice to the other parties):
If to the
Sellers or a Company:
Safran
USA, Inc.
0000
Xxxxxx Xxxxx
Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile:
(000) 000-0000
Attention:
General Counsel
with
copies to (which will not constitute notice) to:
Xxxxxx
XX
0,
Xxxxxxxxx xx Xxxxxxx Xxxxxxx Xxxxx
00000
Xxxxx Cedex 15
Facsimile:
x00 (0) 0 0000 0000
Attention:
General Counsel
Xxxxx
& XxXxxxxx LLP One
Prudential
Plaza
000 X.
Xxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Xxxxxx
Xxxxxx of America
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. XxXxxxxx, Esq.
-81-
If to the
Purchaser:
Bel Fuse
Inc.
000 Xxx
Xxxxx Xxxxxx
Xxxxxx
Xxxx, Xxx Xxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx Xxxxxxxxx, President and Chief Executive Officer
with a
copy (which will not constitute notice) to:
Xxxxxxxxxx
Xxxxxxx PC
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxx,
Xxx Xxxxxx 00000
Facsimile:
(000) 000-0000 and (000) 000-0000
Attention:
Xxxxx X. Xxxxxxxxx, Esq. and Xxxxxxxx San Xxxxxxx XX, Esq.
Section
11.2 Amendment.
Except as contemplated by Section 5.4, this
Agreement may not be amended, supplemented or otherwise modified except in a
written document signed by each party to be bound by the amendment and that
identifies itself as an amendment to this Agreement.
Section
11.3 Waiver and
Remedies. The parties may (a) extend the time for performance of any of
the obligations or other acts of any other party to this Agreement, (b) waive
any inaccuracies in the representations and warranties of any other party to
this Agreement contained in this Agreement or (c) waive compliance with any of
the covenants or conditions for the benefit of such party contained in this
Agreement. Except as contemplated by Section 5.4: (i) any
such extension or waiver by any party to this Agreement will be valid only if
set forth in a written document signed on behalf of the party or parties against
whom the extension or waiver is to be effective; (ii) no extension or waiver
will apply to any time for performance, inaccuracy in any representation or
warranty, or noncompliance with any covenant or condition, as the case may be,
other than that which is specified in the written extension or waiver; and (iii)
no failure or delay by any party in exercising any right or remedy under this
Agreement or any of the documents delivered pursuant to this Agreement, and no
course of dealing between the parties, operates as a waiver of such right or
remedy, and no single or partial exercise of any such right or remedy precludes
any other or further exercise of such right or remedy or the exercise of any
other right or remedy. Except as provided in Section 5.4 any
enumeration of a party's rights and remedies in this Agreement is not intended
to be exclusive, and a party's rights and remedies are intended to be cumulative
to the extent permitted by law and include any rights and remedies authorized in
law or in equity.
Section
11.4 Entire Agreement.
This Agreement (including the Schedules and Exhibits hereto and the
documents and instruments referred to in this Agreement that are to be delivered
at the Closing) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, or any of them, written or oral, with respect to the subject matter
of this Agreement. Notwithstanding the foregoing, the Confidentiality Agreement
will remain in effect in accordance with its terms as modified pursuant to Section
5.6.
-82-
Section
11.5 Assignment,
Successors and No Third Party Rights. This Agreement binds and benefits
the parties and their respective successors and assigns, except that no party
may assign any rights under this Agreement, whether by operation of law or
otherwise, without the prior written consent of the other parties. No party may
delegate any performance of its obligations under this Agreement, except that
the Purchaser may at any time delegate the performance of its obligations (other
than the obligation to pay the Purchase Price) to any Affiliate of the Purchaser
so long as the Purchaser remains fully responsible for the performance of the
delegated obligation. Nothing expressed or referred to in this Agreement will be
construed to give any Person, other than the parties to this Agreement, any
legal or equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement except such rights as may inure to
a successor or permitted assignee under this Section
11.5.
Section
11.6 Severability.
If any provision of this Agreement is held invalid, illegal or
unenforceable, the remaining provisions of this Agreement remain in full force
and effect, if the essential terms and conditions of this Agreement for each
party remain valid, binding and enforceable.
Section
11.7 Exhibits and
Schedules. The Exhibits and Schedules to this Agreement are incorporated
herein by reference and made a part of this Agreement. The Seller Disclosure
Schedule and the Purchaser Disclosure Schedule are arranged in sections and
paragraphs corresponding to the numbered and lettered sections and paragraphs of
Article 3 and
Article 4,
respectively. The disclosure in any section or paragraph of the Seller
Disclosure Schedule or the Purchaser Disclosure Schedule, and those in any
amendment or supplement thereto, will be deemed to relate to each other
provision of Article 3
or Article 4,
respectively, if the relationship to such other provision(s) is readily
apparent on the face of the Seller Disclosure Schedule or the Purchaser
Disclosure Schedule, as the case may be.
Section
11.8 Interpretation.
In the negotiation of this Agreement, each party has received advice from
its own attorney. The language used in this Agreement is the language chosen by
the parties to express their mutual intent, and no provision of this Agreement
will be interpreted for or against any party because that party or its attorney
drafted the provision.
Section
11.9 Expenses.
Except as otherwise set forth in this Agreement, whether or not the
transactions contemplated by this Agreement are consummated, each party will pay
its own direct and indirect expenses incurred by it in connection with the
preparation and negotiation of this Agreement and the consummation of the
transactions contemplated by this Agreement, including all fees and expenses of
its advisors and representatives.
Section
11.10 Governing Law.
Unless any Exhibit or Schedule specifies a different choice of law, the
internal laws of the State of New York (without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of laws of any other
jurisdiction) govern all matters arising out of or relating to this Agreement
and its Exhibits and Schedules and the transactions contemplated by this
Agreement, including its validity, interpretation, construction, performance and
enforcement and any disputes or controversies arising therefrom or related
thereto.
-83-
Section
11.11 Limitation on
Liability. Notwithstanding any other provision of this Agreement to the
contrary, in no event will any party or any of its Affiliates be liable for any
special, incidental, indirect, exemplary, punitive or consequential damages
(including lost profits, loss of revenue or lost sales) in connection with any
claims, losses, damages or injuries arising out of the conduct of such party
pursuant to this Agreement regardless of whether the nonperforming party was
advised of the possibility of such damages or not.
Section
11.12 Specific
Performance. The parties agree that irreparable damage would occur in the
event that all conditions to the relevant provisions of Sections 2.4 and
2.5 of this
Agreement were satisfied but not performed by Purchaser or the Sellers, as the
case may be (the "Non-Performing Party"),
in accordance with their specific terms or were otherwise breached by the
Non-Performing Party. The parties accordingly agree that, prior to any
termination of this Agreement pursuant to Section 7.1, in
addition to any other remedy to which a party may be entitled at law or in
equity, the Purchaser or the Sellers, as the case may be (the "Performing Party"), will be
entitled to injunctive relief to prevent breaches of Sections 2.4 and 2.5
of this Agreement by the Non-Performing Party and otherwise to enforce
specifically such provisions of this Agreement. The Non-Performing Party
expressly waives any requirement that the Performing Party obtain any bond or
provide any indemnity in connection with any action seeking injunctive relief or
specific enforcement of the provisions of this Agreement pursuant to this Section
11.12.
Section
11.13 Dispute
Resolution.
(a) Any
claims or disputes arising out of or in connection with this Agreement that
cannot be amicably resolved by the parties will be exclusively and finally
settled by binding, confidential arbitration. The arbitration will be conducted
under the auspices of the International Chamber of Commerce International Court
of Arbitration in accordance with the Rules of Conciliation and Arbitration of
the International Chamber of Commerce in effect at the time of the arbitration,
except as they may be modified herein or by mutual written agreement of the
parties. The arbitration tribunal will be composed of one (1) expert arbitrator
as appointed in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce. The seat of the arbitration will be New York,
New York, US, and the arbitral proceedings will be conducted in the English
language. Any award of the arbitral tribunal may be entered into judgment and
enforced by any court having jurisdiction. The parties hereby agree and
acknowledge that the arbitration award granted in accordance with this Section
11.13 will be final, binding and conclusive upon the
parties.
(b) Nothing in this Agreement will prevent
either party from resorting to judicial proceedings for the limited
purpose of seeking a preliminary injunction, specific performance or other equitable remedy
to preserve the status quo and bar further breaches of this Agreement. To this extent, the parties
irrevocably consent to the non-exclusive jurisdiction of the United States
District Court for the Southern District of New York and hereby waive any
objection to personam
jurisdiction or venue of any such court, including, without limitation, that
any such action has been
brought in an inconvenient forum. In addition, resort by either party to
negotiation, mediation or
arbitration pursuant to this Agreement will not be construed under the doctrine
of laches, waiver or estoppel to affect adversely the rights of either party to
pursue any such judicial
relief; provided,
however, that irrespective
of the filing of any such request for judicial relief the party will
continue to participate in the dispute resolution proceedings required by this
Section 11.13.
Any negotiation or mediation which takes place pursuant to this Agreement
will be confidential and will be treated as a compromise and settlement
negotiation for purposes of the Federal Rules of Evidence and State Rules of
Evidence.
-84-
Section
11.14 No Joint
Venture. Nothing in this Agreement creates a joint venture or partnership
between the parties. This Agreement does not authorize any party (a) to bind or
commit, or to act as an agent, employee or legal representative of, another
party, except as may be specifically set forth in other provisions of this
Agreement, or (b) to have the power to control the activities and operations of
another party. Each party agrees not to hold itself out as having any authority
or relationship contrary to this Section
11.14.
Section
11.15 Counterparts.
The parties may execute this Agreement in multiple counterparts, each of
which constitutes an original as against the party that signed it, and all of
which together constitute one (1) agreement. This Agreement is effective upon
delivery of one (1) executed counterpart from each party to the other parties.
The signatures of all parties need not appear on the same counterpart. The
delivery of signed counterparts by facsimile or email transmission that includes
a copy of the sending party's signature(s) is as effective as signing and
delivering the counterpart in person.
[Signature
page follows.]
The
parties have executed and delivered this Agreement as of the date indicated in
the first sentence of this Agreement.
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SAFRAN
USA, INC.
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By:
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Name:
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Title:
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SAFRAN
UK LIMITED
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By:
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Name:
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Title:
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BEL
FUSE INC.
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By:
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Name:
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Title:
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EXHIBIT -
A
POWER
OF ATTORNEY
THIS POWER OF ATTORNEY is made
on 2009
by SAFRAN UK LIMITED of Xxxxxxxx Xxx,
Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx, X000 0XX (the "Grantor")
INTRODUCTION:
The
Grantor is the registered holder of 5,300,000 ordinary shares of £1 each (the
"Shares") in the capital
of Cinch Connectors Limited (no. 2178707) whose registered office is at
Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxxxx X00 31-IA (the "Company").
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1.
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APPOINTMENT
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The
Grantor appoints any director of Bel Fuse Inc of 000 Xxx Xxxxx Xxxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx, 00000 XXX to be its attorney (the "Attorney") to do, subject to
clause 3, all or any of the things set out in paragraph 2 of this
Power.
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2.
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AUTHORITY
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The
matters and things referred to in paragraph I are:
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2.1
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to
exercise all voting and other rights attaching to the Shares whether
pursuant to the Company's Articles of Association, the Companies Acts 1985
and 2006 (as amended), or otherwise
howsoever;
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2.2
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to
execute a form of proxy in favour of such person or persons as the Attorney thinks
fit to attend and to vote as the Grantor's proxy at any general meeting of
the members of the Company in respect of the Shares in such manner as the
Attorney may decide;
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2.3
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to
exercise all rights to call for or requisition any such general meeting of
the Company;
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2.4
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to
consent to the convening and holding of any such general meeting of the
Company and the
passing of the resolutions to be submitted at any such meeting on short
notice;
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2.5
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to
settle the terms of and consent and agree to any resolutions of the
Company dealt with by written resolution whether pursuant to the Company's
Articles of Association, the Companies Xxx 0000 or otherwise howsoever;
and
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2.6
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otherwise
executing, delivering and doing all deeds, instruments and acts in the
Grantor's name insofar as may be done in the
Grantor's capacity as registered holder of the
Shares
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3.
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LIMITS
ON AUTHORITY
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The
Attorney may not sell, transfer or otherwise dispose of the Shares.
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4.
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RATIFICATION
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The
Grantor undertakes to ratify and confirm all documents, acts and transactions
entered into or done by the Attorney in the exercise or purported exercise of
his powers under this Power of Attorney.
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5.
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NATURE
OF THIS POWER OF ATTORNEY
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This
Power of Attorney is a deed and has been executed as a
deed.
EXHIBIT
- A
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6.
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GOVERNING
LAW
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This
Power of Attorney shall be governed by and construed in accordance with English
Law. The parties irrevocably agree that the courts of England and Wales shall
have non-exclusive jurisdiction to settle any dispute or claim that arises out
of or in connection with this agreement or its subject matter.
This
document is executed as a deed and delivered on the date stated at the beginning
of this document.
EXECUTED as a DEED by
SAFRAN UK LIMITED
acting by
[ ]
(one of its directors) in the
presence
of:
Director
Witness
signature
Name
Address
______________________________________
______________________________________
Occupation
2
EXHIBIT
- B
AMENDED
AND RESTATED SUPPLY AGREEMENT LTA-CINCH-BF-2009-09
This
Amended and Restated Supply Agreement LTA-Cinch-BF-2009-09 (this "Agreement") is
made this ___ day of _____________ 20__, by and between Cinch Connectors,
Inc., a Delaware corporation
("Cinch") having its principal place of business at 0000 Xxxxxx Xxxx, Xxxxxxx,
Xxxxxxxx 00000, Labinal, Inc., a Delaware corporation having its principal place
of business at 0000 X. Xxxxxxxx, Xxx. 000, Xxxxxxx, Xxxxx 00000-0000 and its
affiliate and subsidiary Xxxxxxx xx Xxxxxx, X.X. xx X.X., Xxxxxxxxxx 0000 Int.
Circuito Xxxxxxxx 00, Xxxxxxxxx 00000 Xxxxxx, (hereinafter collectively referred
to as "LABINAL").
WHEREAS,
Cinch is in the business of designing, manufacturing and selling electronic and
electrical connectors.
WHEREAS,
Labinal is in the business of designing and manufacturing electrical wire
harness assemblies for use in aircrafts.
WHEREAS,
pursuant to that certain Supply Agreement LTA-Cinch-BF-2009-09, dated as of
September 21, 2009 (the "Original Agreement"), Labinal and Cinch have entered
into a business relationship whereby Cinch will provide Labinal with certain
products.
WHEREAS,
prior to the date hereof, Cinch and Labinal were affiliates of one
another.
WHEREAS,
pursuant to the terms of that certain Stock Purchase Agreement (the "SPA"),
dated as of _____________, 2009, by and among Bel Fuse Inc., Safran USA, Inc.
and Safran UK Limited, all of
the issued and outstanding capital stock of Cinch has been sold to Bel Fuse Inc.
and/or one of its affiliates (the "Transaction").
WHEREAS,
as a result of the Transaction, Cinch and Labinal are no longer affiliated and,
in connection with the Transaction, Cinch and Labinal now desire to amend and
restate the Original Agreement in its entirety, as set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the above premises and for other good and
valuable consideration, the sufficiency of which is acknowledged by the parties,
the parties hereto agree as follows:
1. PURCHASE
OF PRODUCT
1.1
Except as otherwise provided for herein, Cinch shall provide to Labinal and
Labinal shall purchase from Cinch all of Labinal's requirements for BACC 45 and
BACC 63 series connectors as specified on Exhibit A, which is attached hereto
and made a part hereof ("Products"). The price and lead-time for each Product
shall be specified adjacent to each part number listed on Exhibit A, and shall
be fixed for the Term of this Agreement. The unit pricing shall not exceed the
Boeing contract pricing during the same period. Exhibit A shall reflect periodic
additions/deletions mutually agreed upon by both parties.
1.2 The
parties acknowledge and agree that Labinal will provide Cinch with the
opportunity to produce and provide to Labinal, all of Labinal's requirements for
any BACC 63 series connectors not otherwise included herein.
EXHIBIT -
B
1.3
Notwithstanding the provisions in Section 1.1 above, subject to Section 8.1
below, Labinal may elect to purchase certain part numbers of the Product from a
different source other than Cinch in the event that (i) any of the below events
occur and (ii) solely in the case of Section 1.3.3 or 1.3.4, are continuing for
a period of thirty (30) days after Cinch is provided with notice of Labinal's
intent to purchase certain part numbers of the Product from a different source
as a result of such event:
1.3.1
Cinch is no longer qualified by Boeing to manufacture and sell such part
numbers; provided,
however, that (i) Labinal shall advise Cinch in writing within five (5)
days of becoming aware that Cinch is so no longer qualified, (ii) Labinal shall
use its commercially reasonable efforts to persuade Boeing to so qualify Cinch
to manufacture and sell such part numbers, and (iii) Labinal shall cooperate and
consult with Cinch to allow Cinch the opportunity to satisfy any concerns Boeing
may have. This exception to the requirements provision in section 1.1 above
shall apply only to those part numbers for which Cinch is no longer qualified by
Boeing to manufacture.
1.3.2
Boeing has requested Labinal in writing to purchase certain part numbers of the
Product from a source other than Cinch; provided, however, that (i) Labinal
shall advise Cinch in writing within five (5) days of such request by Boeing,
(ii) Labinal shall use its commercially reasonable efforts to persuade Boeing to
withdraw any such request, (iii) Labinal shall cooperate and consult with Cinch
to allow Cinch the opportunity to satisfy any concerns Boeing may
have.
1.3.3
Cinch fails to meet contractual lead times for a particular part number (defined
as failing to meet contractual lead times for a particular part number >5% of
the time over the course of a month, lead time being defined as the time to
produce and deliver to Cinch's dock, from the date of reception of Labinal's
order by Cinch) for more than 3 calendar months in a row, provided that Cinch
has received prompt written notice from Labinal upon such occurrence. Such
failure to adequately perform shall also constitute a "breach" under Section
13.2(iii) below.
1.3.4
Cinch continuously provides products of a defective quality, defined as 12 month
rolling ppm > 700 ppm for 3 months in a row, or poor on-time delivery
performance, defined as monthly on-time delivery <95% for 3 months in a row;
provided that Cinch has received prompt written notice from Labinal upon the
occurrence of (i) the 12 month rolling ppm exceeding 400 ppm and/or (ii) the
monthly on-time delivery falling below 97%. Such failure to adequately perform
shall also constitute a "breach" under Section 13.2(iii) below.
1.4 VALUE
ENGINEERING
Cinch is
encouraged to develop, prepare and submit value engineering change proposals
(VECP's). These proposals may include proposed changes to drawings, designs,
specifications, or other requirements, provided that such changes do not impair
any essential functions or characteristics of the Products, that (1) decrease
Cinch's performance costs or (2) produce a net reduction in the cost to Labinal
of installations, operation, maintenance or production of the
Product.
-2-
EXHIBIT -
B
Proposals
shall be submitted to Labinal's purchasing representative, however, Labinal
shall not be liable for any delay in action upon a proposal. Labinal's decision
to accept or reject any proposal shall be final. If there is a delay and the net
result in savings no longer justifies the investment, Cinch will not be
obligated to proceed with the change.
Cinch has
the right to withdraw, in whole or in part, any proposal not accepted by Labinal
within the time period specified in the proposal. Cinch shall submit, as a
minimum, the following information with the proposal:
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1.
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description
of the difference between the existing requirement and the proposed
change, and the comparative advantages and disadvantages of
each;
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2.
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the
specific requirements which must be changed if the proposal is adopted;
and,
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3.
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the
cost savings and Cinch's implementation
costs.
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Each
proposal shall include the need dates for engineering release and the time by
which a proposal must be approved so as to obtain the maximum cost
reduction.
Labinal
may accept, in whole or in part, any proposal by issuing a change order. Until
such change order has been issued, Cinch shall remain obligated to perform in
accordance with the terms and requirements of the original Purchase Order as
written.
Labinal
and Cinch shall share the savings as follows:
· 50%
of the savings to Labinal;
· 50%
of the savings to Cinch.
Cinch
shall include with each proposal verifiable cost records and other data for
proposal review and analysis. Labinal shall issue a change order, and the unit
price shall be reduced in an amount equal to the savings portion attributable to
Labinal as set forth above.
2. ORDERING AND
PAYMENT
2.1 Cinch
and Labinal agree to negotiate a mutually agreeable Consignment and Min/Max
agreement for certain of the Products covered by this agreement.
2.2
Labinal shall issue to Cinch a purchase order either in tangible format or
electronically which shall specify the Products ordered, the quantity thereof,
the delivery dates and all other information, including special instructions,
relating to the order. Such Purchase Order shall reference this Agreement and
shall incorporate by such reference the terms and conditions and prices as
provided for herein.
2.3 All
Products shall be invoiced to Labinal by Cinch at the time of actual shipment to
Labinal. The full amount of any invoice shall be paid in U.S. currency within
Forty five (45) days following the receipt of the product by
Labinal.
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EXHIBIT -
B
2.4 Parts
managed under the Consignment program will be paid Thirty (30) days net date of
inventory pull.
2.5
Except as otherwise provided, associated freight expenses and duties for
Products shipped under the Vendor Managed Inventory (Min Max and Consignment)
shall be paid directly by Cinch. Labinal shall pay all associated freight
expenses and duties for all Products Ordered outside the Vendor Managed
Inventory (Min Max and Consignment) with the exception of expedited freight for
which costs will be paid by Cinch if Cinch is not in compliance with the
contractual lead-times referenced in Exhibit A.
3.
SHIPMENT AND DELIVERY
3.1
Each delivery of the Products shall be initiated by a written or electronic
purchase order ("Purchase Order") issued to Cinch. Each Purchase Order shall
specify the date on which the Products must be received at Labinal (the
"Delivery Date") which shall be no sooner than the lead times as specified for
each Product on Exhibit A. Cinch will use its commercially reasonable efforts to
accommodate the requests for parts within lead-times which are less than those
established in Exhibit A.
3.2 An
order shall be deemed to have been placed as of the date of Cinch's receipt of
the Purchase Order.
3.3
Labinal may, without charge, postpone, decrease, increase or cancel any Purchase
Order by prior notice to Cinch, provided such advance notice to Cinch is at
least equal to the lead time for the affected Products, as specified on Exhibit
A.
In the
event that Labinal postpones, decreases, or cancels a Purchase Order after the
lead time period specified has begun, Cinch shall be entitled to be reimbursed
by Labinal for all actual costs incurred by Cinch as a direct result of such
postponement, decrease, or cancellation which are not recoverable
by:
|
(a)
|
The
shipment of the Products affected to other parties within a reasonable
period of time; or
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|
(b)
|
The
exercise by Cinch, in a commercially reasonable manner, of other
mitigation measures.
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3.4 Exhibit
A specifies the lead-time for the shipment of the Products to Labinal after
Cinch's receipt of a Purchase Order. This lead-time is exclusive of transit
time.
3.5
3.5a-All
Shipments for parts managed under the Vendor Managed Inventory (Min Max and
Consignment) shall be delivered DDU to Labinal location, with title to Products
released hereunder and risk of loss or damage passing from Cinch to Labinal upon
Cinch's delivery of the Products to Labinal's Location.
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EXHIBIT -
B
3.5b-All
parts managed outside of the Vendor Managed Inventory program (Min Max and
Consignment) shall be delivered EXW Cinch location and in that latter case title
to Products released hereunder and risk of loss or damage shall pass from Cinch
to Labinal upon Cinch's delivery of the Products to Labinal's Carrier, subject
to the provisions of Section 3.6 below.
3.6 Cinch
shall preserve, package, handle and pack the Products so as to protect the
Products from loss or damage, in conformance with good commercial practice for
similar products, Labinal specifications, government regulations and other
applicable standards.
3.7 Each
delivery of Products to the Labinal location shall include a packing list that
contains at least the following information:
(a) the
Purchase Order number;
(b) the
Cinch or Boeing part number, including revision level; and
(c) the
quantity of Product shipped.
3.8
Replenishment of parts elected to participate to the Min/Max — Consignment
replenishment system will be managed under the specific agreement between Cinch
and Labinal pertaining to Vendor Managed Inventory.
4.
ORDER QUANTITIES
4.1
During the term of this Agreement Labinal shall purchase from Cinch, and Cinch
shall supply to Labinal, subject to the terms and conditions set forth herein,
all of Labinal's requirements for the Products, including any amendments
thereto, at the prices indicated on Exhibit A as may be amended from time to
time. The minimum order quantity (MOQ) will be as follows:
|
a.
|
Discrete
purchase orders for all part numbers with less than 25 piece EAU will have
a 15 piece MOQ
|
|
b.
|
Discrete
purchase orders for all parts with 25 pieces or larger EAU will have a 25
piece MOQ.
|
4.2 Labinal
shall, on a periodic basis, deliver to Cinch a written estimate of Labinal's
requirements and its anticipated required delivery dates as defined by the
Labinal MRP system.
4.3
It is acknowledged and agreed by the parties hereto that Labinal's obligation to
purchase the Products is strictly limited to its requirements for products
during the term of this Agreement, as contemplated by Section 1.3.2 above, and,
further, that Labinal does not, nor can it, guarantee any minimum-quantity
purchase of the Products.
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EXHIBIT -
B
5. WARRANTY
5.1 Cinch
warrants that the Products sold to Labinal hereunder will be free from defects
in material and workmanship furnished by Cinch and will conform, within normal
commercial tolerances, to applicable specifications. This warranty shall apply
only where Labinal has given Cinch written notice of such defect or
nonconformity within thirty-six (36) months after delivery of the products by
Cinch. The warranty does not extend to any Product which has been subjected to
abuse, misuse, neglect or accident, nor to any Product which has been repaired
or altered by other than Cinch. Cinch's liability for defective or non
conforming Products, whether based on breach of warranty, negligent manufacture
or product liability, is exclusively limited to repair or replacement, at
Cinch's election, of such Products. Cinch assumes no risk and shall be subject
to no liability for any damages or loss resulting from the specific use or
application made of the Products. The foregoing warranty is Labinal's exclusive
remedy and in lieu of all other warranties, express or implied, including,
without limitation, merchantability, fitness for a particular use or purpose,
description, quality, productiveness, or otherwise. In no event shall Cinch be
liable for any special, incidental or consequential damages (including, without
limitation, cover, loss of use, loss of profit and claims of third parties)
howsoever based, whether in negligence, tort, breach of warranty or breach of
contract by Cinch or otherwise. Any other representation or warranty is
expressly disclaimed.
6. RETURN
OF PRODUCTS
6.1 All
Products returned by Labinal to Cinch, including non-complying Products as
defined in Section 7.1 below, shall be accompanied by a return materials
authorization ("RMA"). Unless further verification is reasonably required by
Cinch, Cinch shall supply an RMA within five (5) business days after Labinal's
request for the return of non-complying and other returns of Products. If
further verification is required, the RMA shall be supplied by Cinch within ten
business days after receipt of the appropriate verification from Labinal, If
Cinch fails to timely provide the RMA after appropriate verification has been
provided by Labinal, Labinal may return the Product(s) without an
RMA.
6.2 All
non-complying Products, returned by Labinal to Cinch and all replacement or
reworked Products shipped by Cinch to Labinal to replace non-complying Products
shall be at Cinch's expense, including transportation charges.
7. NON-COMPLYING
PRODUCTS
7.1 If
any Product is defective or otherwise not in conformity with the requirements of
this Agreement or of any Purchase Order (collectively "Non-complying Product"),
Labinal may, subject to the provisions of Section 7.2 below, return the
Non-complying Product for replacement or reworking at Cinch's option and
expense.
7.2 Cinch
shall ship the replacement or reworked Product as soon as possible but in no
event later than fifteen (15) business days after receipt of the Non-complying
Product from Labinal. Labinal may elect, in its sole discretion, to purchase
replacement Product from other sources until such time as Cinch notifies Labinal
that Cinch is able to replace Product, provided however, that Cinch and Labinal
shall use commercially reasonable efforts to discuss Labinal's
requirements
of Products to satisfy customer needs in the meantime, and Labinal shall not
purchase from alternate suppliers replacement Products in excess of the minimum
amount necessary to maintain continuity of supply to its customers (it being
agreed and understood that, if Cinch and Labinal do not agree on such minimum
amount, Labinal, acting in good faith, shall have final decision making
authority so long as such determination is based upon, and supported by,
ordinary course customer demand/forecast reports).
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EXHIBIT -
B
8. CONTINGENCIES
8.1 Cinch
shall not be liable for, nor shall Labinal exercise any right to terminate this
Agreement or purchase Products from a source other than Cinch as a result of,
any delay in performance under this Agreement caused by an act of God or any
other cause beyond Cinch's control and without Cinch's fault or negligence
(collectively "Delaying Cause"). Cinch shall, in the event of a Delaying Cause,
to the extent practicable, provide notice to Labinal of the Delaying Cause
within ten (10) days of occurrence. In the event of a Delaying Cause that
precludes Cinch from performing hereunder that continues for twenty 20 days or
more, Labinal may elect, in its sole discretion, to purchase replacement product
from other sources until such time as Cinch notifies Labinal that Cinch is able
to perform hereunder; provided, however, that while such Delaying Cause is
occurring Cinch and Labinal, to the extent practicable, shall use commercially
reasonable efforts to meet weekly to discuss Labinal's requirements of Products
to satisfy customer needs and Labinal shall not purchase from alternate
suppliers replacement Products in excess of the minimum amount necessary to
maintain continuity of supply to its customers (it being agreed and understood
that, if Cinch and Labinal do not agree on such minimum amount, Labinal, acting
in good faith, shall have final decision making authority so long as such
determination is based upon, and supported by, ordinary course customer
demand/forecast reports).
9. SUPPLY
CHAIN LOGISTICS
9.1 Cinch
and Labinal agree to meet periodically, as agreed between the parties, to
discuss, address and implement supply chain initiatives with an overall goal of
optimizing the supply chain for both companies.
10. NOTICES
10.1 All
notices, requests and other communications hereunder shall he in writing and
shall be deemed to have been duly given at the time of receipt if delivered by
hand or communicated by electronic transmission, one (1) day after being sent by
an overnight delivery service, properly addressed and postage prepaid, or if
mailed, five (5) days after mailing certified mail, return receipt
requested.
10.2 Any
notice sent to Labinal or Cinch pursuant to this Agreement shall be sent to the
address specified in the preamble to this Agreement.
10.3
Either party may change its address for purposes of notice by giving notice to
the other party.
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EXHDHT-B
11.
FORECASTS AND CONFIDENTIAL INFORMATION
11.1
Neither Cinch nor Labinal shall disclose to any person or entity, other than its
employees, parent organizations, lenders, professional advisors and agents who
have a need to know and have executed an agreement imposing the same
restrictions and obligations as imposed by this Section 11, any confidential
information, whether written or oral, which it may obtain from the other or
otherwise discover in the performance of this Agreement. As used in this Section
11, the term "confidential information" shall include, without
limitation:
|
(a)
|
all
information or data concerning or related to the Products (including the
discovery, invention, research, improvement, development, manufacture or
sale of the Products) or business operations (including sales costs,
profits, pricing methods, organizations, employee lists and
processes);
|
|
(b)
|
all
forecasts for production, support or service requirements submitted by
Labinal pursuant to this Agreement
("Forecast");
|
|
(c)
|
all
Labinal property of a confidential
nature.
|
11.2
Without limiting the generality of Section 11.1 above, each party shall maintain
all confidential information in strict confidence. Each party shall take all
reasonable steps to ensure that no unauthorized persons or entity has access to
confidential information and that all authorized persons having access to
confidential information refrain from any unauthorized disclosure.
11.3 All
written Forecasts or those communicated in computer-readable format shall be
clearly marked by Labinal as a Forecast and as confidential and proprietary. Any
oral Forecasts shall be reduced by Labinal to writing or computer-readable
format within thirty (30) days of disclosure to Cinch.
11.4 With
respect to each Forecast, the obligations imposed by this Section 11 shall
continue in full force and effect for a period of one (1) year from the date of
the Forecast. regardless of whether this Agreement is earlier terminated. With
respect to other confidential information, the provisions of this Section 11
shall continue indefinitely regardless of the termination of this
Agreement.
11.5 The
provisions of this Section 11 shall not apply to any information
that:
|
(a)
|
is
rightfully known to either party prior to
disclosure;
|
|
(b)
|
is
rightfully obtained from any third party without any breach of obligation
of confidentiality;
|
|
(c)
|
is
made available to the public without restrictions;
or
|
|
(d)
|
is
disclosed with the prior written approval of the
provider.
|
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EXHIBIT -
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12. ASSIGNMENT
12.1
Neither Labinal nor Cinch shall delegate any duties or assign any rights or
claims under this Agreement without the prior written consent of the other
party. Any such attempted delegation or assignment shall be void.
Notwithstanding the foregoing, such consent to an assignment shall not be
required in the event that either party is acquired, either in whole or in part,
by a third party (including in the event of a party's sale or transfer of a
relevant manufacturing or production facility to a third party).
13. TERM
AND TERMINATION
13.1 This
Agreement shall be effective for the period commencing on January 1st, 2010 and
continuing until the earlier of the effective date of any notice of termination
given in accordance with Section 13.2 below or December 31, 2014.
13.2
Subject to Section 8.1, this Agreement may be terminated by either party with
such termination having immediate effect, upon written notice to the party in
breach if said party has committed a material breach of this Agreement. For
purposes of this Section 13.2, the term "material breach" shall include, but not
be limited to, those events where: (i) such party becomes insolvent or is unable
to pay its debts as they become due, makes an assignment for the benefit of its
creditors or files a petition of insolvency or bankruptcy; (ii) a receiver or
liquidator is appointed for such party's assets, or a petition in any
insolvency, bankruptcy, or similar proceeding is filed against such party; (iii)
either party commits a breach of any of its obligation or covenants under this
Agreement and fails to cure such breach within thirty (30) days following its
receipt of a written notice from the other party advising of such
breach.
13.3 Upon
the expiration or termination of this Agreement, the terms and conditions
contained herein shall apply to all Purchase Orders previously transmitted by
Labinal to Cinch and to all Products shipped there under.
14. OTHER
14.1 This
Agreement takes precedence over Cinch's or Labinal's additional or different
terms and conditions, to which objection is hereby made by the other party. The
parties' contract with regard to the Products is limited to the terms and
conditions of this Agreement.
14.2 This
Agreement comprises the entire understanding between the parties with respect to
the subject matter contained herein and supersedes any previous communications,
representations or agreements, whether oral or written, with respect to the
subject matter of this Agreement. No modification of this Agreement shall be
binding on either party unless in writing and signed by an authorized
representative of each party.
14.3 In
the event of any conflict between the provisions of this Agreement and any
Purchase Order or exhibit, the order of precedence is as follows:
(a) this
Agreement, and
(b) any
instructions written on the face of the Purchase Order.
-9-
EXHIBIT -
B
14.4 The
waiver of any term, condition or provision of this Agreement by Labinal or Cinch
must be in writing. No such waiver shall be construed as a waiver of any other
term, condition or provision except as provided in writing, nor as a waiver of
any subsequent breach of the same term, condition or provision.
14.5 This
Agreement shall be interpreted and governed in all respects by the laws of the
State of New York without reference to its conflicts of laws
provisions.
14.6 All
references in this Agreement to "days" shall, unless otherwise specified, mean
calendar days.
14.7 The
section headings used in this Agreement are for convenience or reference only.
They shall not limit or extend the meaning of any provision of this Agreement,
and they shall not be relevant in interpreting any provision of this
Agreement.
14.8 The
provisions contained in the present contract will apply to MATIS Aerospace,
Xxxxxxxxxx xx Xxxxxxxx X.X. 00 - Aeroport Xxxxxxxx V Casablanca,
MAROC.
IN
WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Agreement on the day and in the year first above
written.
|
Labinal,
Inc.
|
Cinch
Connectors, Inc.
|
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|
By:
|
By:
|
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|
Name:
|
Name:
|
|||
|
Title:
|
Title:
|
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