--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
among
XXXXXXX WORLDWIDE ASSOCIATES, INC.
and
BERKLEY INC.
------------------------
Dated as of January 12, 2000
------------------------
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STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
1. PURCHASE AND SALE OF SHARES...............................................2
2. PURCHASE PRICE............................................................2
2.1. Purchase Price...................................................2
2.2. Payment of Purchase Price........................................2
2.3. Adjustment of Final Cash Purchase Price..........................2
2.4. Determination of Net Asset Value.................................3
2.5. Prorations.......................................................5
3. REPRESENTATIONS AND WARRANTIES OF JWA.....................................5
3.1. Corporate........................................................5
3.2. Title............................................................7
3.3. No Violation.....................................................7
3.4. Financial Statements.............................................8
3.5. Absence of Undisclosed Liabilities...............................8
3.6. Tax Matters......................................................8
3.7. Absence of Certain Material Changes..............................9
3.8. No Litigation...................................................10
3.9. Compliance with Laws and Orders.................................11
3.10. Title to and Condition of Properties............................11
3.11. Insurance.......................................................12
3.12. Contracts and Commitments.......................................13
3.13. Labor Matters...................................................15
3.14. Employee Benefit Plans..........................................15
3.15. Trade Rights....................................................16
3.16. Major Customers; Suppliers......................................17
3.17. Product Warranty and Product Liability..........................18
3.18. Year 2000 Compliance............................................18
3.19. Bank Accounts...................................................19
3.20. Contracts With Affiliates.......................................19
3.21. No Brokers or Finders...........................................19
3.22. Accounts Receivable of Xxxxxxxx.................................19
3.23. Employees.......................................................19
4. REPRESENTATIONS AND WARRANTIES OF BUYER..................................20
4.1. Corporate.......................................................20
4.2. Authority.......................................................20
4.3. No Violation....................................................20
4.4. No Brokers or Finders...........................................21
4.5. Investment Intent...............................................21
4.6. Financing.......................................................21
5. COVENANTS................................................................21
5.1. Noncompetition; Confidentiality.................................21
5.2. HSR Act Filings.................................................23
5.3. Access to Information and Records...............................23
5.4. Conduct of Business Pending the Closing.........................24
5.5. Execution of Xxxx of Sale.......................................25
5.6. Transition Services Agreement...................................25
5.7. Trademark Application; License Agreements.......................25
5.8. Consents........................................................26
5.9. Other Action....................................................26
5.10. Notification....................................................26
5.11. Employee Matters................................................26
5.12. Co-op Liabilities...............................................27
5.13. Premium Incentive Sales Agreement...............................28
5.14. Minn Kota Distribution Agreement................................28
5.15. [Intentionally Omitted].........................................28
5.16. Payment of Certain Claims and Indebtedness......................28
5.17. Xxxxxxxxx Matter................................................28
5.18. Scubapro........................................................28
5.19. Xxxxxxxx'x Minn Kota Assets.....................................29
5.20. Collection of Accounts Receivable...............................29
5.21. Yamaha..........................................................29
5.22. Cooperation in Terminating Sales Representatives................29
5.23. Product Liability Insurance.....................................30
5.24. Rip Tide........................................................30
5.25. Environmental Site Assessments..................................30
5.26. Letters of Credit...............................................30
5.27. Financing.......................................................31
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS..............................31
6.1. Representations and Warranties True of the Closing Date.........32
6.2. Compliance With Agreement.......................................32
6.3. Absence of Litigation...........................................32
6.4. Xxxx-Xxxxx-Xxxxxx Waiting Period................................32
6.5. Certain Consents................................................32
6.6. Financing Proceeds..............................................32
7. CONDITIONS PRECEDENT TO JWA'S OBLIGATIONS................................33
7.1. Representations and Warranties True on the Closing Date.........33
7.2. Compliance With Agreement.......................................33
7.3. Absence of Litigation...........................................33
7.4. Xxxx-Xxxxx-Xxxxxx Waiting Period................................33
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8. INDEMNIFICATION..........................................................33
8.1. By JWA..........................................................33
8.2. By Buyer........................................................34
8.3. Indemnification of Third-Party Claims...........................34
8.4. Limitations on Indemnification..................................35
8.5. Excepted Claims.................................................36
8.6. Patent Issue....................................................36
8.7. Environmental Claims............................................36
8.8. Certain Litigation..............................................38
9. CLOSING..................................................................39
9.1. Deliveries of JWA and Century...................................39
9.2. Deliveries by Buyer.............................................40
10. TERMINATION..............................................................41
10.1. Right of Termination Without Breach.............................41
10.2. Termination for Breach..........................................42
11. RESOLUTION OF DISPUTES...................................................43
11.1. Arbitration.....................................................43
11.2. Arbitrators.....................................................43
11.3. Procedures; No Appeal...........................................44
11.4. Authority.......................................................44
11.5. Entry of Judgment...............................................44
11.6. Confidentiality.................................................44
11.7. Continued Performance...........................................44
11.8. Tolling.........................................................44
12. MISCELLANEOUS............................................................45
12.1. Further Assurance...............................................45
12.2. Disclosures and Announcements...................................45
12.3. Assignment; Parties in Interest.................................45
12.4. Law Governing Agreement.........................................45
12.5. Amendment and Modification......................................45
12.6. Notice..........................................................46
12.7. Expenses........................................................47
12.8. Certain Legal Matters...........................................47
12.9. Entire Agreement................................................48
12.10. Counterparts....................................................48
12.11. Headings........................................................48
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of January 12,
2000, by and among Xxxxxxx Worldwide Associates, Inc., a Wisconsin corporation
("JWA"), and Berkley Inc., an Iowa corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, among other businesses, JWA is in the business of marketing
and distributing fishing rods, reels, line and lures in the United States,
Canada, Australia, Europe and certain other countries through an unincorporated
division, its wholly-owned foreign subsidiary Xxxxxxxx Sports, S.A., a societe
anonyme organized under the laws of France ("Xxxxxxxx"), and certain other
subsidiaries.
WHEREAS, prior to the Closing (as hereinafter defined), JWA and
Century Divestiture Co., a Wisconsin corporation and wholly-owned subsidiary of
JWA ("Century"), will enter into a Xxxx of Sale, Assignment and Assumption of
Liabilities Agreement, substantially in the form attached hereto as Exhibit A
(the "Xxxx of Sale"), pursuant to which JWA, the record owner of 100% of the
issued and outstanding capital stock of Century (the "Shares"), will transfer to
Century, in the form of a capital contribution, substantially all of the
operating assets and properties held directly or indirectly by JWA that relate
solely to its worldwide fishing business (including assets related to its
Xxxxxxxx rods and reels, SpiderWire and Spiderline high performance and
monofilament fishing line, SpiderCast rods and reels and Xxxxxxx rods, reels,
spoons, soft body plastic lures and accessories, and including all of the issued
and outstanding shares of capital stock of Xxxxxxxx (the "Business"), but
specifically excluding assets related to JWA's diving, outdoor equipment, motors
and watercraft businesses and certain accounts receivable and accounts payable
of the Business). As used herein, the term "European Business" shall mean the
portion of the Business conducted by Xxxxxxxx and the term "North American
Business" shall mean the portion of the Business not conducted by Xxxxxxxx.
WHEREAS, pursuant to the Xxxx of Sale, JWA will also transfer to
Century, and Century will assume, the liabilities and obligations of the
Business which are identified therein as the "Assumed Liabilities", but JWA will
not transfer, and Century will not assume, certain other liabilities and
obligations of the Business which are identified therein as the "Excluded
Liabilities".
WHEREAS, Buyer desires to purchase the Shares from JWA and JWA desires
to sell the Shares to Buyer, upon the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows.
1. PURCHASE AND SALE OF SHARES
Subject to the terms and conditions of this Agreement, on the Closing Date
(as hereinafter defined), JWA shall sell to Buyer and Buyer shall purchase from
JWA all the Shares.
2. PURCHASE PRICE
2.1. Purchase Price.
The purchase price (the "Purchase Price") payable for the Shares
shall be (a) Thirty Four Million Five Hundred Thousand Dollars ($34,500,000),
minus (b) the dollar amount on the Closing Date of the Retained Accounts (as
such term is defined in the Xxxx of Sale), net of reserves (which accounts
receivable and the dollar amount thereof as of December 3, 1999 are set forth on
Schedule 2.1), plus or minus, as the case may be, (c) the amount, if any, by
which the Net Asset Value (as hereinafter defined) on the Closing Date exceeds
or is less than the amount obtained by subtracting the dollar amount, net of
reserves, of the Retained Accounts on the Closing Date from $51,370,000.
2.2. Payment of Purchase Price.
At the Closing, Buyer shall deliver to JWA the sum of (a) Thirty Four
Million Five Hundred Thousand Dollars ($34,500,000), minus (b) the dollar
amount, net of reserves, of the Retained Accounts as reflected on the Estimated
Closing Balance Sheet (as hereinafter defined), plus or minus, as the case may
be, (c) the amount, if any, by which the Net Asset Value as reflected on the
Estimated Closing Balance Sheet exceeds or is less than the amount obtained by
subtracting the dollar amount, net of reserves, of the Retained Accounts as
reflected on the Estimated Closing Balance Sheet from $51,370,000.
2.3. Adjustment of Final Cash Purchase Price.
On or before the tenth business day following the final determination
of the Final Closing Balance Sheet (as hereinafter defined) (such date being
hereinafter referred to as the "Settlement Date"), either (a) JWA shall pay to
Buyer the amount, if any, by which the Net Asset Value as reflected on the
Estimated Closing Balance Sheet exceeds the Net Asset Value as reflected on the
Final Closing Balance Sheet, together with interest on the amount being paid
from the Closing Date to the date of payment at a rate per annum equal to the
U.S. prime rate as of the Closing Date as reported in The Wall Street Journal;
or (b) Buyer shall pay to JWA the amount, if any, by which the Net Asset Value
as reflected on the Final Closing Balance Sheet exceeds the Net Asset Value as
reflected on the Estimated Closing Balance Sheet, together with interest on the
amount being paid from the Closing Date to the date of payment at a rate per
annum equal to the U.S. prime rate as of the Closing Date as reported in The
Wall Street Journal.
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2.4. Determination of Net Asset Value.
2.4. (a) Definition of Net Asset Value. The term "Net Asset Value"
shall mean the dollar amount by which the book value of the assets of the
Business (excluding the Retained Accounts) exceeds the book value of the
liabilities of the Business being transferred to Buyer, both as reflected on the
Estimated Closing Balance Sheet and the Final Closing Balance Sheet, as
applicable.
(i) Estimated Closing Balance Sheet. For purposes of
determining the Net Asset Value, the dollar amount of the Retained
Accounts and the Purchase Price payable by the Buyer at the Closing,
not less than two (2) business days prior to the Closing Date, JWA
shall, in consultation with Buyer, prepare and deliver to Buyer a
projected consolidated balance sheet of the Business as of the
Closing Date which shall represent JWA's reasonable estimate of the
Final Closing Balance Sheet; such balance sheet to be in form and
detail identical to, and in its accounting principles and policies
consistent in every respect with, the Recent Balance Sheet (as
hereinafter defined). Such balance sheet or the accompanying
schedules shall contain sufficient detail of the assets and
liabilities of the Business for the determination of Net Asset Value.
The estimated balance sheet as delivered by JWA pursuant to this
section is herein referred to as the "Estimated Closing Balance
Sheet."
2.3. (b) Final Closing Balance Sheet. The Final Closing Balance
Sheet of the Business prepared as of the Closing Date shall be prepared as
follows:
(i) Within 60 days after the Closing Date, JWA shall
prepare and shall deliver to Buyer a balance sheet of the Business as
of the Closing Date, prepared in accordance with United States
generally accepted accounting principles ("U.S. GAAP") from the books
and records of the Business, on a basis consistent with the U.S. GAAP
theretofore followed by JWA in the preparation of the financial
statements of the Business. The balance sheet shall be accompanied by
a letter or report setting forth the amount of any adjustment to the
Purchase Price to be paid and by whom pursuant to Section 2.3.
(ii) Within 30 days following the delivery of the balance
sheet referred to in (i) above, Buyer may object to any of the
information contained in said balance sheet or accompanying schedules
which could affect the necessity or amount of any payment pursuant to
Section 2.3. Any such objection shall be made in writing and shall
state the Buyer's determination of the amount of the Net Asset Value.
(iii) In the event of a dispute or disagreement relating
to the balance sheet which Buyer and JWA are unable to resolve,
either party may elect to have all such disputes or disagreements
resolved by an accounting firm of nationally recognized standing (the
"Third Accounting Firm") to be mutually selected by JWA and Buyer or,
if no agreement is reached, by JWA's
3
independentaccountants and Buyer's Accountants. The Third Accounting
Firm shall make a resolution of the consolidated balance sheet of the
Business as of the Closing Date and the calculation of Net Asset
Value, which shall be final and binding for purposes of this Article
2. The Third Accounting Firm shall be instructed to use every
reasonable effort to perform its services within 15 days of
submission of the balance sheet to it and, in any case, as soon as
practicable after such submission. The fees and expenses for the
services of the Third Accounting Firm shall be shared equally by
Buyer and JWA. As used in this Agreement, the term "Final Closing
Balance Sheet" shall mean the consolidated balance sheet of the
Business as of the Closing Date as finally determined for purposes of
this Article 2, whether by acquiescence of Buyer in the figures
supplied by JWA in accordance with Section 2.4.(b)(i), by negotiation
and agreement of the parties or by the Third Accounting Firm in
accordance with this Section 2.4.(b)(iii).
(iv) Buyer agrees to permit JWA and its representatives,
during normal business hours, to have reasonable access to, and to
examine and make copies of, all books and records of Century and the
Business, which documents and access are necessary to prepare the
balance sheet to be delivered to Buyer in accordance with this
Section 2.4.
(v) Notwithstanding any provision contained herein to the
contrary, the Final Closing Balance Sheet shall be prepared utilizing
the following principles:
(A) Xxxxxxxx'x portion of the severance payment to
Xxxxxx Xxxxx under his Confidential Separation Agreement,
Century's obligations to Xxxxx Xxxxxxx under his Separation
Agreement and Release, as amended, the Doral receivable in
France and the Cotee matter will either be paid (or settled)
prior to the Closing or fully accrued on the Final Closing
Balance Sheet;
(B) All sales or transfer taxes incurred as a result
of the transactions contemplated by the Xxxx of Sale (i.e., the
transfer of assets and stock of Xxxxxxxx to Century) will be
accrued on the Final Closing Balance Sheet;
(C) All accruals and/or reserves on the Final
Closing Balance Sheet for or relating to (1) inventory
obsolescence, (2) product returns or warranties, (3) accounts
receivable, and (4) JWA fiscal 1999 and 2000 rebates and all
other promotional expenses that have historically been
characterized by JWA as "cooperative advertising liabilities,"
including any accelerated bonuses under European trade accounts
(the "Co-op Liabilities"), all of which will be calculated in a
4
manner consistent with the historical practices followed by JWA
with respect to the Business, shall not be subject to any
objection under this Section 2.4.(b) by Buyer. The reserve for
inventory obsolescence shall not change materially from the
level reflected on the Recent Balance Sheet; and
(D) The Final Closing Balance Sheet shall not
reflect any asset related to an exclusivity prepayment under the
Supply Agreement, dated November 2, 1998 with BBS Tech., Inc.
2.5. Prorations.
With respect to the North American Business only, real and personal
property taxes, rents and other items payable under any lease or other contract
of the North American Business, charges for sewer and utilities and all other
items normally prorated in connection with transactions of this kind will be
made as of the Closing Date, with JWA liable to the extent such items relate to
any time period up to the Closing Date if not already taken into account on the
Final Closing Balance Sheet and Buyer liable to the extent such items relate to
periods including and subsequent to the Closing Date. The net amount of all such
prorations will be settled and paid on the Settlement Date as provided by
Section 2.3.
3. REPRESENTATIONS AND WARRANTIES OF JWA
JWA makes the following representations and warranties to Buyer, each of
which is true and correct on the date hereof and shall remain true and correct
to and including the Closing Date and shall survive the Closing as specified
herein. Where any representation or warranty is made to "Xxxxxxxx'x knowledge"
or "to the knowledge of Xxxxxxxx," such representation or warranty is made only
to the knowledge of Xxxxxx Xxxxx, President of Xxxxxxxx, and Xxx. Xxxxxxx
Xxxxxxxxx, Administrative and Financial Manager of Xxxxxxxx, without imputation
to Mr. Nello or Xxx. Xxxxxxxxx of the knowledge of any other person.
3.1. Corporate.
3.1. (a) Organization. Xxxxxxxx and Century are corporations validly
existing under the laws of France and Wisconsin, respectively. Century is in
good standing (meaning it has filed its most recent annual report and has not
filed articles of dissolution with the Wisconsin Department of Financial
Institutions) under the laws of the State of Wisconsin.
3.1. (b) Corporate Power. Xxxxxxxx has all requisite corporate power
and authority to own, operate and lease its properties and to carry on the
European Business as and where it is now being conducted. Century has all
requisite corporate power and authority to own, operate and lease its properties
and to carry on the North American Business as and where JWA conducted the North
American Business on the date of the Recent Balance Sheet. JWA has full power,
legal right and authority to enter into, execute and deliver this Agreement, and
JWA and Century each have full
5
power, legal right and authority to enter into, execute and deliver the other
agreements, instruments and documents to be executed by JWA and/or Century
pursuant hereto, including, without limitation, the Xxxx of Sale, the Transition
Services Agreement, the Premium Incentive Sales Agreement, the Minn Kota
Distribution Agreement and the License Agreement (as such terms are hereinafter
defined) (such other agreements, instruments and documents are sometimes
referred to herein as the "Ancillary Instruments"), and to carry out the
transactions contemplated hereby and thereby.
3.1. (c) Authority. The execution and delivery of this Agreement and
the Ancillary Instruments and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of JWA,
the Board of Directors of Century and by JWA as the sole shareholder of Century
and prior to the Closing Date will have been duly authorized by the Board of
Directors of Xxxxxxxx. No other corporate act or proceeding on the part of JWA,
Century, Xxxxxxxx, or any of their shareholders is or will be, as the case may
be, necessary to authorize this Agreement or the Ancillary Instruments or the
consummation of the transactions contemplated hereby and thereby. This Agreement
constitutes, and when executed and delivered the Ancillary Instruments will
constitute, valid and binding agreements of JWA and/or Century, as the case may
be, enforceable against JWA and/or Century, as the case may be, in accordance
with their respective terms, except as such may be limited by bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally,
and by general equitable principles.
3.1. (d) Qualification. JWA is, Century will be at the Closing, and,
to the knowledge of Xxxxxxxx, Xxxxxxxx is duly licensed or qualified to do
business as a foreign corporation, and each is or will be, as appropriate, in
good standing, in each jurisdiction wherein the character of the properties
owned or leased by it, or the nature of the Business, makes such licensing or
qualification necessary, except in such jurisdictions where the failure to be so
licensed or qualified would not have a Material Adverse Effect (as hereinafter
defined).
3.1. (e) Corporate Documents, etc. The copies of the charter and
By-Laws of Xxxxxxxx and Century, including any amendments thereto, which have
been delivered by Xxxxxxxx and Century to Buyer are true, correct and complete
copies of such instruments as presently in effect. The corporate minute book and
stock records of Xxxxxxxx and Century which have been furnished to Buyer for
inspection are true and correct.
3.1. (f) Capitalization of Century and Xxxxxxxx. The authorized
capital stock of Century consists entirely of 9,000 shares of common stock, $.01
par value ("Common Stock"). No shares of Century's capital stock are issued or
outstanding except for 100 shares of Common Stock which are owned of record and
beneficially by JWA. All such issued and outstanding shares of Common Stock are
validly issued, fully paid and nonassessable (except as otherwise provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law ("WBCL")).
There are no (i) securities convertible into or exchangeable for any of
Century's capital stock or other securities;
6
(ii) options, warrants or other rights to purchase or subscribe to capital stock
or other securities of Century or securities which are convertible into or
exchangeable for capital stock or other securities of Century; or (iii)
contracts, commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or other equity
securities of Century, any such convertible or exchangeable securities or any
such options, warrants or other rights. None of the outstanding capital stock of
Xxxxxxxx or Century was issued in violation of any Law or Order (as defined
below). Except for director qualifying shares which will be repurchased by JWA
prior to the Closing, all of the issued and outstanding shares of capital stock
of Xxxxxxxx are currently owned by JWA and, as of the Closing Date, will be
owned by Century, in each case free and clear of all Liens (as hereinafter
defined), and are validly issued, fully paid and nonassessable. There are no (i)
securities convertible into or exchangeable for the capital stock or other
securities of Xxxxxxxx, (ii) options, warrants or other rights to purchase or
subscribe to capital stock or other securities of Xxxxxxxx or securities which
are convertible into or exchangeable for capital stock or other securities of
Xxxxxxxx, or (iii) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities of Xxxxxxxx, any such convertible or
exchangeable securities or any such options, warrants or other rights.
3.1. (g) Subsidiaries. Except for Xxxxxxxx, Century, Espace S.A.,
Xxxxxxx Worldwide Associates Canada Inc. and Xxxxxxx Worldwide Associates
Australia Pty. Ltd., JWA currently does not, and as of the Closing JWA and
Century will not, own, directly or indirectly, any capital stock or other equity
securities of any corporation that conducts any portion of the Business or have
any direct or indirect equity or other ownership interest in any such entity or
business.
3.2. Title.
JWA has good and marketable title to the Shares to be sold by JWA
hereunder, free and clear of all Liens including, without limitation, voting
trusts or agreements.
3.3. No Violation.
Except as set forth on Schedule 3.3, neither the execution and
delivery of this Agreement or the Ancillary Instruments nor the consummation by
JWA and/or Century of the transactions contemplated hereby and thereby (a) will
violate any statute, law, ordinance, rule or regulation (collectively, "Laws")
or any order, writ, injunction, judgment, plan or decree (collectively,
"Orders") of any court, arbitrator, department, commission, board, bureau,
agency, authority, instrumentality or other body, whether federal, state,
municipal, foreign or other (collectively, "Government Entities"); (b) except
for applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 0000 (xxx "XXX Xxx"), will require any authorization, consent, approval,
exemption or other action by or notice to any Government Entity (including,
without limitation, under any "plant-closing" or similar law); or (c) except as
would not individually or in the aggregate have a Material Adverse Effect, and
subject to obtaining the consents referred to in Schedule 3.3, will violate or
conflict with, or constitute a
7
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or accelerate
the performance required by, or result in the creation of any Lien upon any of
the assets of Century or Xxxxxxxx (or the Shares) under, any term or provision
of the charter or By-Laws of JWA, Xxxxxxxx or Century or of any contract,
commitment, understanding, arrangement, agreement or restriction of any kind or
character related to the Business to which JWA, Xxxxxxxx or Century is a party
or by which JWA, Xxxxxxxx or Century or any of its or their assets or properties
may be bound or affected.
3.4. Financial Statements.
Included as Schedule 3.4. are true and complete copies of the
financial statements of the Business consisting of (a) an unaudited consolidated
balance sheet of the Business as of October 1, 1999 (the "Recent Balance Sheet,"
which term shall refer to the far right hand column, labeled "Adjusted Fishing,"
of such balance sheet which has been prepared in accordance with U.S. GAAP), and
the unaudited statements of income for the years ended October 1, 1999, October
2, 1998 and October 3, 1997, and (b) French statutory audited balance sheets of
Xxxxxxxx as of October 1, 1999, October 2, 1998 and October 3, 1997, and the
related statements of income for the years then ended (including the notes
contained therein or annexed thereto). All of such financial statements are, or
are prepared from and consistent in all material respects with, such financial
reports as have been prepared and used by JWA and Xxxxxxxx, as appropriate, in
the ordinary course of managing the Business and measuring and reporting its
operating results; have been prepared in accordance with U.S. GAAP (except for
the French statutory financial statements of Xxxxxxxx and except for the nature
and amount of the exceptions thereto set forth in Schedule 3.4) applied on a
consistent basis, and with the books and records of JWA and Xxxxxxxx, as
appropriate; and present fairly the assets, liabilities and financial position
and the results of operations of the Business as of the dates and for the
periods indicated.
3.5. Absence of Undisclosed Liabilities.
Except as and to the extent disclosed in or reflected on the Recent
Balance Sheet, the Final Closing Balance Sheet or in Schedule 3.5 or to the
extent contemplated by the Xxxx of Sale, neither Century nor, to the knowledge
of Xxxxxxxx, Xxxxxxxx has any liabilities, commitments or obligations (secured
or unsecured, whether known or unknown, and whether accrued, absolute,
contingent, direct, indirect or otherwise), other than commercial liabilities
and obligations incurred since the date of the Recent Balance Sheet in the
ordinary course of business and consistent with the past practice of the
Business.
3.6. Tax Matters.
Except as set forth on Schedule 3.6, (a) all federal, state, foreign,
county, local and other tax returns relating and required to be filed by or on
behalf of Xxxxxxxx have been timely filed and when filed were true and correct
in all material respects, and the taxes shown as due thereon were paid or
adequately accrued; (b) the provision made for taxes on the Recent Balance Sheet
is sufficient for the payment of all federal, state, foreign, county, local and
other income, ad valorem, duties, excise, profits, franchise, occupation,
property, payroll,
8
sales, use, gross receipts and other taxes (and any interest and penalties) and
assessments of Xxxxxxxx, whether or not disputed, at the date of the Recent
Balance Sheet in accordance with U.S. GAAP; (c) Xxxxxxxx has not received from
the IRS or from the tax authorities of any foreign, state, county, local or
other jurisdiction any notice of underpayment of taxes or other deficiency which
has not been paid nor any objection to any return or report filed by Xxxxxxxx;
and (d) Xxxxxxxx has duly withheld and paid all taxes required to be withheld
and paid relating to salaries and other compensation heretofore paid to the
employees of Xxxxxxxx or to independent contractors or other persons with
respect to Xxxxxxxx. Since the date of the Recent Balance Sheet, Xxxxxxxx has
not incurred any taxes other than taxes incurred in the ordinary course of
business consistent in type and amount with past practices of Xxxxxxxx. There is
no tax sharing agreement that will require payment by Xxxxxxxx of any tax after
the date of this Agreement.
3.7. Absence of Certain Material Changes.
As used in this Agreement, the term "Material Adverse Effect" shall
mean a condition or circumstance which has a material adverse effect on the
business, financial condition, results of operations or assets or liabilities
(taken as a whole) of the Business. Except as and to the extent set forth in
Schedule 3.7 and with respect to the preparation and negotiation of the
transactions contemplated hereby, since the date of the Recent Balance Sheet,
(a) JWA and Xxxxxxxx have conducted the Business in the ordinary course and
consistent with past practices and (b) there has not been:
3.7. (a) No Material Adverse Change. Any change which would have a
Material Adverse Effect;
3.7. (b) No Material Damage. Any loss, damage or destruction,
whether covered by insurance or not, which would have a Material Adverse Effect;
3.7. (c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any employee or
agent of the Business (including, without limitation, any increase or change
pursuant to any bonus, pension, profit sharing, retirement or other plan or
commitment), or any bonus or other employee benefit granted, made or accrued,
other than in the ordinary course of business consistent with past practices, or
entry into any employment, severance or similar contract with any director,
officer or employee;
3.7. (d) No Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which would not have a Material Adverse
Effect;
3.7. (e) No Commitments. Except with respect to the transactions
contemplated by the Xxxx of Sale, any commitment or transaction by JWA directly
affecting the Business or by Century or Xxxxxxxx (including, without limitation,
any borrowing or capital expenditure) other than in the ordinary course of
business consistent with past practice;
9
3.7. (f) No Disposition of Property. Except with respect to the
transactions contemplated by the Xxxx of Sale, any sale, lease or other transfer
or disposition of any properties or assets of the Business, except in the
ordinary course of business;
3.7. (g) No Liens. Any Lien made on any of the properties or
assets of the Business;
3.7. (h) No Amendment of Contracts. Except with respect to the
transactions contemplated by the Xxxx of Sale, any entering into, amendment or
termination by JWA, Century or Xxxxxxxx of any contract relating to the
Business, or any waiver of material rights thereunder, other than in the
ordinary course of business;
3.7. (i) Credit. Any grant of credit to any customer of the
Business on terms or in amounts more favorable than those which have been
extended to such customer in the past, any other change in the terms of any
credit heretofore extended, or any other change of the policies or practices of
the Business with respect to the granting of credit;
3.7. (j) Accounting Changes. Any material change in the accounting
methods used by Xxxxxxxx, Century or JWA;
3.7. (k) Licenses. Any transfer or granting of any rights or
licenses under, or entry into any settlement regarding the breach or
infringement of, any Trade Rights (as hereinafter defined);
3.7. (l) Inventories. Any failure to replenish the inventories and
supplies of the Business in a manner consistent with prior practice;
3.7. (m) Selling Practices. Any material change in policies or
practices relating to selling practices, returns, discounts or other terms of
sale or accounting therefor or in policies of distribution or sales.
3.7. (n) Capital Expenditures. Any capital expenditures that
materially exceeded the budgeted amounts set forth on Schedule 3.7; or
3.7. (o) Other Agreements. Any written agreement by JWA, Century or
Xxxxxxxx to do any of the foregoing.
3.8. No Litigation.
Except as set forth in Schedule 3.8, (a) there is no written action,
claim, demand, suit, arbitration, proceeding, investigation or inquiry, whether
civil, criminal or administrative ("Litigation") pending or, to the knowledge of
JWA, Xxxxxxxx and Century, threatened against JWA, Xxxxxxxx or Century that
involves the Business and (b) to the knowledge of Xxxxxx Xxxxx, Xxxx Xxxxxxx
and, through December 23, 1999 only, Xxxxx Xxxxxxx, without imputation to Xxxxxx
Xxxxx, Xxxx Xxxxxxx or Xxxxx Xxxxxxx of the knowledge of any other person, no
condition exists that will give rise to any Litigation which
10
involves the Business. Except as set forth in Schedule 3.8, the Business is not
subject to any Order of any Government Entity.
3.9. Compliance with Laws and Orders.
3.9. (a) Compliance. The Business is in compliance with all
applicable Laws and Orders, except as set forth in Schedule 3.9 and except for
instances of noncompliance where neither the costs and penalties associated with
noncompliance nor the costs associated with rectifying the noncompliance would
have a Material Adverse Effect. Except as set forth in Schedule 3.9, none of
JWA, Century or Xxxxxxxx has received written notice of any violation or alleged
violation of any Laws or Orders with respect to the Business. To the knowledge
of JWA, Century and Xxxxxxxx, no event has occurred or condition exists that
will result in a violation of any Law or Order with respect to the Business that
would have a Material Adverse Effect.
3.9. (b) Licenses and Permits. JWA, directly or indirectly, and
Xxxxxxxx now have, and Century and Xxxxxxxx will have as of the Closing Date,
all licenses, permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the conduct of the
Business as presently conducted, except for any such as would not, individually
or in the aggregate, have a Material Adverse Effect. Except as set forth in
Schedule 3.9 and except for violations that would not individually or in the
aggregate have a Material Adverse Effect, the Business (including its
operations, properties and assets) is in compliance with all such permits and
licenses, approvals, authorizations and consents.
3.10. Title to and Condition of Properties.
3.10.(a) Marketable Title. JWA currently has, directly or
indirectly, and as of the Closing Date Century will have, directly or
indirectly, good and marketable title to all of the assets, business and
properties of the Business, including, without limitation, all such properties
(tangible and intangible) reflected in the Recent Balance Sheet, except for
inventory disposed of in the ordinary course of business since the date of such
Recent Balance Sheet and except for other assets disposed of in the ordinary
course of business which are not material to the Business since the date of the
Recent Balance Sheet, free and clear of all mortgages, liens, (statutory or
otherwise) security interests, claims, pledges, licenses, equities, options,
conditional sales contracts, assessments, levies, easements, covenants,
reservations, restrictions, rights-of-way, exceptions, limitations, charges or
encumbrances of any nature whatsoever (collectively, "Liens") except those
described in Schedule 3.10 and other Liens that are not material to the Business
and, in the case of real property, Liens for taxes not yet due or which are
being contested in good faith by appropriate proceedings (and which have been
sufficiently accrued or reserved against in the Recent Balance Sheet), municipal
and zoning ordinances and easements for public utilities, none of which
materially interfere with the use of the property as currently utilized. Except
for director qualifying shares, as of the Closing Date, Century will have good
and
11
marketable title to all of the issued and outstanding shares of capital stock of
Xxxxxxxx, free and clear of all Liens.
3.10.(b) Condition. Except as set forth in Schedule 3.10 and except
for matters which will not in the aggregate interfere in any material respect
with the use, occupancy or operation thereof as currently used, occupied or
operated, all property and assets owned or utilized by the Business are in good
operating condition and repair, free from any defects (except such minor defects
as do not interfere with the use thereof in the conduct of the normal operations
of the Business), have been maintained consistent with the standards generally
followed in the industry and are sufficient to carry on the Business as
conducted during the preceding twelve (12) months.
3.10.(c) Assets Necessary to Business. Except (i) for the Excluded
Assets (as such term is defined in the Xxxx of Sale), (ii) as contemplated by
the Transition Services Agreement, (iii) for working capital, and (iv) for the
combined books and records of the Business and any other business of JWA (access
to which is provided for under Section 5.3.(b)), the property and assets of
Century and Xxxxxxxx as of the Closing Date will include all property and assets
which are necessary to permit Buyer to carry on in all material respects the
Business as presently conducted.
3.10.(d) Real Property. Schedule 3.10 sets forth all real property
owned (the "Owned Real Property"), used or occupied by Century or Xxxxxxxx.
3.10.(e) No Condemnation or Expropriation. None of JWA, Century or
Xxxxxxxx has received any notice that all or any portion of the property or any
other assets of the Business is subject to any Order to be sold or is being
condemned, expropriated or otherwise taken by any Government Entity with or
without payment of compensation therefor, nor, to the knowledge of Century or
JWA, has any such condemnation, expropriation or taking been proposed.
3.10.(f) Inventory. All inventory of Century and Xxxxxxxx related
to the Business will be reflected on the Final Closing Balance Sheet.
3.11. Insurance.
Set forth in Schedule 3.11 is a list and description of all policies
of fire, liability, product liability, workers compensation, health and other
forms of insurance presently in effect with respect to the Business, a summary
of which has heretofore been delivered or made available to Buyer. All such
policies are valid, outstanding and enforceable policies. No notice of
cancellation or termination has been received with respect to any such policy,
and none of JWA, Xxxxxxxx or Century has knowledge of any act or omission which
will result in cancellation of any such policy prior to its scheduled expiration
date. There is no claim by JWA, Xxxxxxxx or Century pending under any such
policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies, and none of JWA, Xxxxxxxx or nor Century knows of
any basis for denial of any claim under any such policy. None of JWA (with
respect to the Business), Xxxxxxxx or Century has any self-insurance arrangement
or any contract or arrangement, other than a policy of insurance, for the
transfer
12
or the sharing of any risk. None of JWA (with respect to the Business), Century
or Xxxxxxxx has received any refusal of coverage or a notice that a defense will
be afforded with reservation of rights, or any notice or other indication that
any such insurance policy will not be renewed or that the issuer of any policy
is not willing or able to perform its obligations thereunder. JWA (with respect
to the Business), Century and Xxxxxxxx have paid all premiums due, and have
otherwise performed all of their respective obligations, under each such
insurance policy.
3.12. Contracts and Commitments.
3.12.(a) Real Property Leases. Except as set forth in Schedule 3.12,
none of JWA, Century or Xxxxxxxx has any leases of real property used or held
for use in connection with the Business.
3.12.(b) Personal Property Leases. Except as set forth in Schedule
3.12, none of JWA, Century or Xxxxxxxx has any leases of personal property used
or held for use in connection with the Business involving consideration or other
expenditure in excess of $100,000 or involving performance over a period of more
than six (6) months after the Closing.
3.12.(c) Powers of Attorney. Except as set forth in Schedule 3.12,
none of JWA, Century or Xxxxxxxx has given a power of attorney, which is
currently in effect, to any person, firm or corporation for any purpose
whatsoever in connection with the Business.
3.12.(d) Collective Bargaining Agreements. Except as set forth in
Schedule 3.12, none of JWA, Century or Xxxxxxxx is a party to any collective
bargaining agreements with any unions, guilds, shop committees or other
collective bargaining groups applicable to employees of the Business. Copies of
any such agreements have heretofore been delivered or made available to Buyer.
3.12.(e) Loan Agreements. Except as set forth in Schedule 3.12,
neither Century nor Xxxxxxxx is obligated under any loan agreement, promissory
note, letter of credit, or other evidence of indebtedness as a signatory,
guarantor or otherwise.
3.12.(f) Guarantees. Except as set forth in Schedule 3.12, neither
Century nor Xxxxxxxx has guaranteed the payment or performance of any person,
firm or corporation, agreed to indemnify any person or act as a surety, or
otherwise agreed to be contingently or secondarily liable for the obligations of
any person.
3.12.(g) Contracts Subject to Renegotiation. None of JWA, Century or
Xxxxxxxx is a party to any contract in connection with or affecting the Business
with any governmental body which is subject to renegotiation.
3.12.(h) Employment and Similar Contracts. Except for the Employee
Benefit Plans (as hereinafter defined) and except as set forth in Schedule 3.12,
none of JWA, Century or Xxxxxxxx is party to any employment, consulting, agency,
collective
13
bargaining or other similar contracts or agreements currently in effect and
relating to or for the benefit of current, future or former employees, officers,
directors, sales representatives, distributors, dealers and consultants who work
solely with or for the Business.
3.12.(i) Joint Venture and Similar Contracts. Except as set forth in
Schedule 3.12, none of JWA, Century or Xxxxxxxx is party to any material joint
venture, partnership or similar contracts (including, but not limited to joint
research and development and joint marketing contracts) relating to the
Business.
3.12.(j) Acquisition Agreements. Except as set forth in Schedule
3.12, none of JWA (with respect to the Business), Century or Xxxxxxxx is party
to any material stock purchase agreements, asset purchase agreements or other
acquisition or divestiture agreements, including, but not limited to, any such
agreements relating to the acquisition, sale, lease or disposal of any assets of
the Business (other than sales of inventory in the ordinary course of business)
or involving continuing indemnity or other obligations relating to the Business.
3.12.(k) Restrictive Agreements. Except as set forth in Schedule
3.12, none of JWA, Century or Xxxxxxxx is party to any contract containing any
covenant that materially restricts the business activity of JWA with respect to
the Business or Century or Xxxxxxxx in any respect.
3.12.(l) Sales or Purchase Commitments. Except as set forth in
Schedule 3.12, none of JWA, Century or Xxxxxxxx has any sales commitment to
customers or distributors of the Business or any purchase commitment for
inventory items or supplies in connection with the Business, in each case in
excess of $100,000 to any one customer, distributor or supplier.
3.12.(m) Other Material Contracts. None of JWA, Century or Xxxxxxxx
has any lease, contract or commitment of any nature in connection with or
affecting the Business involving consideration or other expenditure in excess of
$100,000, or involving performance over a period of more than six (6) months
after the Closing, or which is otherwise individually material to the operations
of the Business, except as described in Schedule 3.12 or in any other Schedule.
3.12.(n) No Default. Except for any such defaults as would not have
a Material Adverse Effect, (i) none of JWA, Century or Xxxxxxxx is in default
under any lease, contract or commitment set forth in Schedule 3.12, nor has any
event or omission occurred which through the passage of time or the giving of
notice, or both, would constitute a default thereunder; (ii) to the knowledge of
JWA with respect to contracts and commitments disclosed in Schedule 3.12 related
to the North American Business and to the knowledge of Xxxxxxxx with respect to
contracts and commitments disclosed in Schedule 3.12 related to the European
Business, no third party is in default under such contract or commitment; and
(iii) since the date of the Recent Balance Sheet, none of JWA, Century or
Xxxxxxxx has given to or received from any other
14
entity or person any written notice regarding any default under any contract or
commitment disclosed in Schedule 3.12.
3.12.(o) Consents. Except as set forth on Schedule 3.3, no consent
or approval of any third party is required to effect the transactions
contemplated hereby or by the Xxxx of Sale under any instrument, contract, lease
or other arrangement required to be set forth on Schedule 3.12.
3.13. Labor Matters.
Except as set forth in Schedule 3.13, within the last two (2) years
the Business has not experienced any labor disputes, union organization attempts
or any work stoppage due to labor disagreements. Except to the extent set forth
in Schedule 3.13 and except for any such as would not have a Material Adverse
Effect, (a) there is no unfair labor practice charge or complaint against the
Business pending or, to the knowledge of JWA, threatened; (b) there is no labor
strike, dispute, request for representation, slowdown or stoppage pending or, to
the knowledge of JWA, threatened against or affecting the Business nor any
secondary boycott with respect to products of the Business; and (c) no grievance
nor any arbitration proceeding arising out of or under collective bargaining
agreements relating to the Business is pending.
3.14. Employee Benefit Plans.
3.14.(a) Plans. Schedule 3.14 identifies each material employee
benefit plan, program or arrangement that is (i) a "pension plan" within the
meaning of Section 3(2) of ERISA (the "Pension Plans"), (ii) a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan")
or (iii) a "welfare plan" within the meaning of Section 3(1) of ERISA (the
"Welfare Plans"), and that is maintained for the benefit of employees of the
Business or to which the Business contributes on behalf of its employees. For
purposes of this Section 3.14, (i) the Pensions Plans that are intended to be
qualified under Section 401(a) of the Internal Revenue Code ("Code") are
referred to as the "Qualified Plans," and the Pension Plans and the Welfare
Plans are collectively referred to as the "Employee Benefit Plans." True,
correct and complete copies of the following documents, to the extent applicable
with respect to each of the Employee Benefit Plans, have been made available or
delivered to Buyer: (i) the plan (including all amendments thereto); (ii) any
related trust document; (iii) the most recent Form 5500 and all applicable
schedules thereto; (iv) the most recent IRS determination letter; and (v) the
summary plan description.
3.14.(b) Qualification. Each Qualified Plan complies in all material
respects with applicable requirements for qualification under Section 401(a) of
the Code as of the date hereof, and the IRS has issued favorable determination
letters to the effect that the form of each Qualified Plan satisfies the
requirements of Section 401(a) of the Code. There are no facts or circumstances
that would jeopardize or adversely affect in any material respect the
qualification under Code Section 401(a) of any Qualified Plan, provided that
each Qualified Plan will require amendment on or before
15
the last day of the "remedial amendment period" under Section 401(b) of the Code
in order to comply with changes in applicable legal requirements.
3.14.(c) Administration. Each Employee Benefit Plan has been
administered substantially in accordance with its terms. In addition, each
Employee Benefit Plan complies, and has been administered substantially in
accordance with, any applicable provisions of ERISA and the rulings and
regulations promulgated thereunder, and all reports, returns and other
documentation that are required to have been filed with the IRS, the Department
of Labor, the Pension Benefit Guaranty Corporation or any other governmental
agency have been filed on a timely basis, in each instance in which the failure
to file such reports, returns and other documents would result in any material
liability or obligation to the Company. Except for routine claims for benefits
being processed through the applicable claims procedure of the relevant Employee
Benefit Plan, no lawsuits or complaints to or by any person or governmental
authority have been filed or, to the knowledge of the Sellers, are contemplated
or threatened, with respect to any Employee Benefit Plan.
3.14.(d) None of JWA, Century or any affiliate which is treated as a
single employer with Century or the Business under Section 4001(b) of ERISA has
(i) incurred liability under Title IV of ERISA (other than with respect to plan
insurance premiums), or (ii) received a notice of, or incurred, any withdrawal
liability with respect to a "multiemployer plan" within the meaning of Section
4001(a)(3) of ERISA.
3.14.(e) Neither JWA nor Century has incurred any material liability
for post-retirement or post-employment medical or life insurance benefits for
employees of the Business that is not fully reflected in the financial
statements of the Business (other than any obligations of the Business to make
available continuation coverage in accordance with the requirements of Section
4980B of the Code and Sections 601 et seq. of ERISA).
3.15. Trade Rights.
Schedule 3.15 lists all material Trade Rights (as defined below) in
which JWA or Xxxxxxxx now has a direct or indirect interest in (and Century will
have a direct or indirect interest in at the Closing) and which relate to or are
otherwise necessary to conduct the Business and indicates which of such Trade
Rights are registered. Except as set forth on Schedule 3.15, such Trade Rights
are held free and clear of all Liens. Except as set forth on Schedule 3.15, JWA
(currently), Century (as of the Closing) and Xxxxxxxx have the right to use,
without compensation or royalty to any person, each of the Trade Rights listed.
Except as set forth on Schedule 3.15, to the knowledge of JWA and Xxxxxxxx,
neither JWA nor Xxxxxxxx is infringing any Trade Rights of another in the
operation of the Business, nor is any other person infringing the Trade Rights
of the Business. Neither JWA nor Xxxxxxxx has granted any license or made any
assignment of any Trade Right except as set forth on Schedule 3.15, nor does JWA
or Xxxxxxxx pay any royalties or other consideration for the right to use any
Trade Rights of others in conducting the Business. There is no Litigation
pending or, to the knowledge of JWA and Xxxxxxxx, threatened to challenge JWA's
(or, as of the
16
closing, Century's) or Xxxxxxxx'x right, title and interest with respect to its
continued use and right to preclude others from using any Trade Rights relating
to the Business. To the knowledge of JWA and Xxxxxxxx, all Trade Rights relating
to the Business are valid, enforceable and in good standing, and, to the
knowledge of JWA and Xxxxxxxx, there are no equitable defenses to enforcement
based on any act or omission of JWA, Century or Xxxxxxxx. Except as set forth on
Schedule 3.15, no maintenance fees, taxes, annuities or other actions are due
for such Trade Rights within 90 days after the Closing. To the knowledge of JWA
or Xxxxxxxx, there are no defects in the validity, enforceability or
assignability of any Trade Rights. All pending registrations and applications
for any trademarks are in a form that is assignable under the laws of the
authorizing jurisdiction. The consummation of the transactions contemplated
hereby will not alter or impair any Trade Rights owned or used by the Business.
To the knowledge of JWA and Xxxxxxxx, no patent listed on Schedule 3.15 has been
or is now involved in any interference, reissue, re-examination or opposition
proceeding. Except as set forth on Schedule 3.15, neither JWA nor Xxxxxxxx is
aware of any potentially interfering patent or patent applications of any third
party. As used herein, the term "Trade Rights" shall mean and include: (a)
trademark rights, business identifiers, trade dress, service marks, trade names
and brand names, all registrations thereof and applications therefor and all
goodwill associated with the foregoing; (b) copyrights, copyright registrations
and copyright applications, and all other rights associated with the foregoing
and the underlying works of authorship; (c) patents and patent applications, and
all international proprietary rights associated therewith; (d) contracts or
agreements granting any right, title, license or privilege under the
intellectual property rights of any third party; (e) inventions, mask works and
mask work registrations, know-how, discoveries, improvements, designs, trade
secrets, shop and royalty rights, employee covenants and agreements respecting
intellectual property and non-competition, confidential information, customer
lists, software, technical information, data, process technology, plans,
drawings, blueprints, market research, and all other types of intellectual
property; and (f) claims for infringement or breach of any of the foregoing.
3.16. Major Customers; Suppliers.
3.16.(a) Major Customers. Schedule 3.16 contains a list of the ten
(10) largest customers, including distributors, of each of the North American
Business and the European Business, respectively, for the last fiscal year
(determined on the basis of the total dollar amount of net sales), showing the
total dollar amount of net sales to each such customer during such year. Except
as disclosed in Schedule 3.16 or in publicly available information regarding
third parties and other than changes attributable to the operation of the
Business by Buyer, neither JWA with respect to the North American Business nor
Xxxxxxxx with respect to the European Business has knowledge or information of
any facts indicating that any of the customers listed on Schedule 3.16 will not
continue to be customers of the Business after the Closing at substantially the
same level of purchases as heretofore.
3.16.(b) Major Suppliers. Schedule 3.16 contains a list of the ten
(10) largest suppliers to each of the North American Business and the European
Business, respectively, for the last fiscal year (determined on the basis of the
total dollar amount of purchases), showing the total dollar amount of purchases
from each such supplier
17
during such year. Except as disclosed in Schedule 3.16 or in publicly available
information regarding third parties and other than changes attributable to the
operation of the Business by Buyer, neither JWA with respect to the North
American Business nor Xxxxxxxx with respect to the European Business has
knowledge of any facts indicating that any of the suppliers listed on Schedule
3.16 will not continue to be suppliers to the Business after the Closing.
3.17. Product Warranty and Product Liability.
3.17.(a) Product Warranty. Schedule 3.17 contains true, correct and
complete copies of the Business' policies with respect to credits, returns and
allowances and standard warranty or warranties for sales of products of the
Business in the past fiscal year and, except as stated therein, there are no
warranties, commitments, guaranties, indemnities or obligations with respect to
the granting of credits or the return or replacement of products of the
Business. None of the products of the Business is the subject of any recall
campaign by JWA, Century or Xxxxxxxx, and, to JWA's and Xxxxxxxx'x knowledge, no
facts or conditions exist which could reasonably be expected to result in such a
recall campaign.
3.17.(b) Product Liability. Except as set forth on Schedule 3.17,
neither JWA nor Xxxxxxxx has any liability in respect of any product, component
or other item sold prior to the Closing by, or service rendered prior to the
Closing by or on behalf of, JWA or Xxxxxxxx, that (i) is not adequately covered
by policies of insurance or by indemnity, contribution, cost sharing or similar
agreements or arrangements by or with other persons; (ii) is not otherwise
adequately reserved against as reflected in the Recent Balance Sheet; or (iii)
will not otherwise be adequately reserved against on the Final Closing Balance
Sheet. Except as set forth on Schedule 3.17, to JWA's knowledge with respect to
the products of the North American Business or to Xxxxxxxx'x knowledge with
respect to the European Business, there are no defects in design of the products
of the North American Business or the European Business, respectively, which
would adversely affect performance or create an unusual risk of injury to
persons or property.
3.18. Year 2000 Compliance.
A "Year 2000 Defect" as used herein means a failure of any property,
equipment or assets of the Business, including but not limited to computer
software, databases, hardware, controls and peripherals, to (a) operate and
produce data on and after January 1, 2000 (including taking into effect that
such year is a leap year), or use data based on time periods on and after
January 1, 2000 (including taking into effect that such year is a leap year),
accurately and without material delay, interruption or error relating to the
fact that the time at which and the date on which such software is operating is
on or after 12:00 a.m. on January 1, 2000 (including taking into effect that
such year is a leap year) and (b) accept, calculate, process, maintain, store
and output, accurately and without material delay, interruption or error, all
times or dates, or both, whether before, on or after 12:00 a.m. January 1, 2000
(including taking into effect that such year is a leap year), and any time
18
periods determined or to be determined based on such times or date or both.
Schedule 3.18 describes the efforts JWA, Century and Xxxxxxxx have made to
determine whether any of the assets or properties of the Business, or of any
vendors or customers of the Business, is subject to a Year 2000 Defect that
could have a Material Adverse Effect, and a brief description of the results
and/or anticipated results of such efforts. None of JWA, Century or Xxxxxxxx has
been notified that any specific vendor or supplier of the Business expects or is
likely to experience a Year 2000 Defect that would reasonably be likely to cause
a Material Adverse Effect.
3.19. Bank Accounts.
Schedule 3.19 sets forth the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which Century and Xxxxxxxx maintain a safe deposit box, lock box or checking,
savings, custodial or other account of any nature, the type and number of each
such account and the signatories therefore, a description of any compensating
balance arrangements, and the names of all persons authorized to draw thereon,
make withdrawals therefrom or have access thereto.
3.20. Contracts With Affiliates.
All leases, contracts, agreements or other arrangements concerning
the Business between the Business and either JWA or any affiliate of JWA are
described on Schedule 3.20.
3.21. No Brokers or Finders.
Except for Xxxxxx Xxxxxxx Xxxxxx Gull and Xxxxxx & Co., neither JWA,
Xxxxxxxx nor Century nor any of their respective directors, officers, employees
or agents have retained, employed or used any broker or finder in connection
with the transaction provided for herein or in connection with the negotiation
thereof.
3.22. Accounts Receivable of Xxxxxxxx.
All accounts receivable of Xxxxxxxx that are reflected on the Recent
Balance Sheet or on the accounting records of Xxxxxxxx as of the Closing Date
(collectively, the "Xxxxxxxx Receivables") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the ordinary course of conducting the European Business. Except for the Doral
receivable in France (which will be disposed of pursuant to Section
2.4.(b)(v)(A)), there is no contest, claim or right of set-off, other than
returns in the ordinary course of business, under any contract of Xxxxxxxx with
any obligor of any Xxxxxxxx Receivables relating to the amount or validity of
such Xxxxxxxx Receivables.
3.23. Employees.
Schedule 3.23 contains a complete and accurate list of the name and
current compensation levels of each employee who works solely for the Business.
19
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to JWA, each of
which is true and correct on the date hereof and shall remain true and correct
to and including the Closing Date and shall survive the Closing as specified
herein.
4.1. Corporate.
4.1. (a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Iowa.
4.1. (b) Corporate Power. Buyer has all requisite corporate power to
enter into this Agreement and the other documents and instruments to be executed
and delivered by Buyer and to carry out the transactions contemplated hereby and
thereby.
4.2. Authority.
The execution and delivery of this Agreement and the other documents
and instruments to be executed and delivered by Buyer pursuant hereto and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by the Board of Directors of Buyer. No other corporate act or
proceeding on the part of Buyer or its shareholders is necessary to authorize
this Agreement or the other documents and instruments to be executed and
delivered by Buyer pursuant hereto or the consummation of the transactions
contemplated hereby and thereby. This Agreement constitutes, and when executed
and delivered, the other documents and instruments to be executed and delivered
by Buyer pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
4.3. No Violation.
Neither the execution and delivery of this Agreement or the other
agreements, instruments and documents to be executed by Buyer pursuant hereto
nor the consummation by Buyer of the transactions contemplated hereby and
thereby (a) will violate any Laws or Orders of any Government Entity, (b) except
for applicable requirements of the HSR Act, will require any authorization,
consent, approval, exemption or other action by or notice to any Government
Entity or (c) will violate or conflict with, or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default)
under, any term or provision of the Articles of Incorporation or By-Laws of
Buyer or of any contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Buyer is a party or by which Buyer
or any of its assets or properties may be bound or affected.
20
4.4. No Brokers or Finders.
Neither Buyer nor any of its directors, officers, employees or agents
have retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation thereof.
4.5. Investment Intent.
The Shares are being acquired by Buyer for investment only and not
with the view to resale or other distribution.
4.6. Financing.
Buyer has received a commitment letter from Xxxxxx Trust and Savings
Bank, Chicago, Illinois ("Xxxxxx Bank") (the commitment letter and attached
Summary of Indicative Terms and Conditions, dated January 10, 2000, attached
hereto as Exhibit B is hereinafter referred to as the "Xxxxxx Commitment"),
pursuant to which Xxxxxx Bank has agreed, subject to the terms and conditions
set forth in the Xxxxxx Commitment, to provide Buyer with adequate financing to
enable Buyer to consummate the purchase of the Shares at the Closing as
contemplated by this Agreement (the financing to be provided pursuant to the
Xxxxxx Commitment is hereinafter referred to as the "Financing"). Buyer also has
received a commitment letter from Prudential Insurance Company of America
("Prudential") (the commitment letter, dated January 10, 2000, attached hereto
as Exhibit C is hereinafter referred to as the "Prudential Commitment"),
pursuant to which Prudential has agreed, subject to the terms and conditions set
forth in the Prudential Commitment, to consent to the purchase of the Shares and
to modify certain terms of Buyer's $35 million senior notes held by Prudential
in order to satisfy the condition set forth in the Xxxxxx Commitment under the
caption "Conditions Precedent." As of the date hereof, Buyer satisfies the
conditions relating to Buyer's pro forma EBITDA as set forth in the Xxxxxx
Commitment, as amended, under the caption "Conditions Precedent." Since
September 30, 1999 to the date hereof, no material adverse change in the
financial condition, prospects, operations or properties of Buyer has occurred.
5. COVENANTS
5.1. Noncompetition; Confidentiality.
As an inducement to Buyer to execute this Agreement and complete the
transactions contemplated hereby, and in order to preserve the goodwill
associated with the Business, JWA hereby covenants and agrees as follows:
5.1. (a) Covenant Not to Compete. For a period of four (4) years and
six (6) months from the Closing Date, JWA will not, directly or indirectly:
(i) engage in, continue in or carry on any business which
competes with the Business, including owning or controlling any
financial interest
21
in any corporation, partnership, firm or other form of business
organization which is so engaged; or
(ii) consult with, advise or assist in any way, primarily
with respect to an activity which is competitive with the Business,
whether or not for consideration, any corporation, partnership, firm
or other business organization which is now or becomes a competitor
of the Business, including, but not limited to, advertising or
otherwise endorsing the products of any such competitor; soliciting
customers or otherwise serving as an intermediary for any such
competitor; loaning money or rendering any other form of financial
assistance to or engaging in any form of business transaction on
other than an arm's length basis with any such competitor;
provided, however, that the foregoing shall not (i) prohibit the ownership
of securities of corporations which are listed on a national securities
exchange or traded in the national over-the-counter market in an amount
which shall not exceed 5% of the outstanding shares of any such
corporation; (ii) preclude the transfer of all or any part of JWA to a
competitor of the Business; (iii) prohibit JWA from conducting or engaging
in promotional activities with competitors of the Business where such
activities primarily involve products or operations of JWA's businesses
other than the Business; or (iv) prohibit JWA from operating under the
terms and conditions of the Premium Incentive Sales Agrement. The parties
agree that the geographic scope of this covenant not to compete shall
extend worldwide. The parties agree that Buyer may sell, assign or
otherwise transfer this covenant not to compete, in whole or in part, to
any person, corporation, firm or entity that purchases all or part of the
Business. In the event a court of competent jurisdiction determines that
the provisions of this covenant not to compete are excessively broad as to
duration, geographical scope or activity, it is expressly agreed that this
covenant not to compete shall be construed so that the remaining provisions
shall not be affected, but shall remain in full force and effect, and any
such over broad provisions shall be deemed, without further action on the
part of any person, to be modified, amended and/or limited, but only to the
extent necessary to render the same valid and enforceable in such
jurisdiction.
5.1. (b) Covenant of Confidentiality. JWA hereby covenants and
agrees that it shall not at any time subsequent to the Closing, except as
explicitly requested by Buyer, (i) use for any purpose, (ii) disclose to any
person or (iii) keep or make copies of documents, tapes, discs, programs or
other information storage media ("records") containing, any confidential
information relating solely to the Business, all such information being deemed
to be transferred to Buyer hereunder. For purposes hereof, "confidential
information" shall mean and include, without limitation, all Trade Rights in
which Century or Xxxxxxxx, as of the Closing, has an interest, all customer and
vendor lists of the Business and customer information and related information of
the Business, and all other information concerning the processes, apparatus,
equipment, packaging, products, marketing and distribution methods of the
Business not previously disclosed to the public directly by JWA, Century,
Xxxxxxxx or Buyer. If at any time
22
after Closing, JWA should discover that it is in possession of any records
relating solely to confidential information of the Business, then JWA shall
immediately turn such records over to Buyer, which shall upon request make
available to the surrendering party any information contained therein which is
not confidential information.
5.1. (c) Covenant of Nonsolicitation. JWA hereby covenants and
agrees that it shall not, until November 4, 2001, without the written consent of
Buyer, directly or indirectly, solicit to hire or seek to cause to leave the
employ of Buyer or any subsidiary of Buyer, including without limitation Century
and Xxxxxxxx (the "Buyer Group") (i) any executive employed by any member of the
Buyer Group or (ii) any other employee of the Buyer Group with whom JWA has had
contact or who (or whose performance) became known to JWA in connection with the
transactions contemplated by this Agreement.
5.2. HSR Act Filings.
To the extent such filings have not been completed prior to the
execution of this Agreement, each party shall, in cooperation with the other
parties, file or cause to be filed any reports or notifications that may be
required to be filed by it under the HSR Act, with the Federal Trade Commission
and the Antitrust Division of the Department of Justice, and shall furnish to
the others all such information in its possession as may be necessary for the
completion of the reports or notifications to be filed by the other. Prior to
making any communication, written or oral, with the Federal Trade Commission,
the Antitrust Division of the federal Department of Justice or any other
governmental agency or authority or members of their respective staffs with
respect to this Agreement or the transactions contemplated hereby, JWA shall
consult with Buyer and Buyer shall consult with JWA.
5.3. Access to Information and Records.
5.3. (a) Prior to Closing. During the period prior to the Closing,
JWA shall give Buyer, its counsel, accountants and other representatives (a)
access during normal business hours to all of the properties, books, records,
contracts and documents of JWA, Xxxxxxxx and Century for the purpose of such
inspection, investigation and testing as Buyer deems appropriate (and JWA shall
furnish or cause to be furnished to Buyer and its representatives all
information with respect to the Business as Buyer may reasonably request); and
(b) with the prior consent of JWA in each instance, access to employees, agents
and representatives for the purposes of such meetings and communications as
Buyer reasonably desires.
5.3. (b) After Closing. After the Closing, each party will afford
the other party, its counsel, accountants and other representatives, during
normal business hours, reasonable access to the books, records and other data in
such party's possession relating directly or indirectly to the properties,
liabilities or operations of the Business, with respect to periods prior to the
Closing, and the right to make copies and extracts
23
therefrom, to the extent that such access may be reasonably required by the
requesting party for any proper business purpose.
5.4. Conduct of Business Pending the Closing.
From the date hereof until the Closing, except as otherwise approved
in writing by Buyer, JWA covenants as follows:
5.4. (a) No Changes. Except (i) for the removal by JWA of any cash
of the Business or (ii) the repurchase of the inventory of Xxxxxxxx relating to
JWA's motors business, JWA and Century will, and will cause Xxxxxxxx to, carry
on the Business diligently and in the same manner as such has been carried on by
JWA and Xxxxxxxx heretofore and neither JWA nor Xxxxxxxx will make or institute
any material changes in the methods of purchase, sale, management, accounting or
operation of the Business.
5.4. (b) Maintain Organization. JWA and Century will take such
action as may be necessary to maintain, preserve, renew and keep in favor and
effect the existence, rights and franchises of the Business and will use their
reasonable best efforts to preserve the Business intact, to keep available to
Century the present officers and employees of the Business, and to preserve for
Century JWA's present relationships with suppliers and customers of the Business
and others having business relationships with the Business.
5.4. (c) No Breach. Neither JWA nor Century will knowingly do or
omit any act, or knowingly permit any omission to act, which will cause a breach
of any contract, commitment or obligation material to the Business, or any
breach of any representation, warranty, covenant or agreement made by JWA
herein, or which would have required disclosure on Schedule 3.7 had it occurred
after the date of the Recent Balance Sheet and prior to the date of this
Agreement.
5.4. (d) No Material Contracts. No contract or commitment will be
entered into, and no purchase of raw materials or supplies and no sale of goods
or services (real, personal, or mixed, tangible or intangible) will be made, by
or on behalf of JWA, Century or Xxxxxxxx in connection with the operation of the
Business, except contracts, commitments, purchases or sales which are in the
ordinary course of business and consistent with past practice, are not material
to the Business or would not have been required to be disclosed in the Schedules
hereto had they been in existence on the date of this Agreement.
5.4. (e) No Corporate Changes. Neither Century nor Xxxxxxxx shall
amend its charter or bylaws or make any changes in authorized or issued capital
stock.
5.4. (f) Maintenance of Insurance. The Business shall maintain all
of the insurance set forth in Schedule 3.11.
24
5.4. (g) Maintenance of Property. JWA, Century and Xxxxxxxx shall
use, operate, maintain and repair all property of the Business in a normal
business manner.
5.4. (h) No Negotiations. Neither JWA nor Century will directly or
indirectly (through a representative or otherwise) solicit or furnish any
information to any prospective buyer, commence, or conduct presently ongoing,
negotiations with any other party or enter into any agreement with any other
party concerning the sale of Century, the Business, Xxxxxxxx or any part thereof
or any equity securities of Century or Xxxxxxxx (an "Acquisition Proposal"), and
JWA shall immediately advise Buyer of the receipt of any Acquisition Proposal.
5.4. (i) No Transfer of Shares. JWA shall not transfer or attempt to
transfer any of the Shares except to Buyer pursuant hereto, and Century shall
refuse to accept any certificates for Shares to be transferred or otherwise to
allow such transfers to occur upon its books other than as contemplated hereby.
5.4. (j) Contract Changes. None of JWA, Xxxxxxxx or Century shall
enter into or terminate any distributorship, sales representative, joint venture
or similar agreement relating to the Business, except for distributorship, sales
representative, joint venture or similar agreements which are in the ordinary
course of business and consistent with past practice, are not material to the
Business or would not have been required to be disclosed in the Schedules hereto
had they been in existence on the date of this Agreement.
5.5. Execution of Xxxx of Sale.
JWA and Century shall each execute the Xxxx of Sale, and JWA and
Century shall cause the transactions contemplated thereby to become effective,
prior to the Closing Date.
5.6. Transition Services Agreement.
On the date hereof, JWA and Buyer are executing and delivering a
transition services agreement, in the form of Exhibit D hereto, relating to the
use of certain of JWA's information systems and employee services by Century and
Buyer in connection with the North American Business subsequent to the Closing
Date, subject to the terms and conditions specified therein (the "Transition
Services Agreement").
5.7. Trademark Application; License Agreements.
Prior to the Closing, JWA shall file a trademark application for the
United States registration of the "Xxxxxxx" name for fishing tackle products. At
the Closing, JWA and Buyer shall execute and deliver license agreements,
substantially in the forms attached hereto as Exhibit E and Exhibit F, relating
to the licensing by JWA to Buyer of (a) any such issued trademark and the use of
the name "Xxxxxxx" subsequent to the Closing Date and (b) the use of the
trademarks "Neptune" and "Maxxum" subsequent to the Closing Date, in
25
each case subject to the terms and conditions specified therein (collectively,
the "License Agreements").
5.8. Consents.
JWA, Xxxxxxxx, Century and Buyer will use commercially reasonable
efforts prior to Closing to obtain all consents necessary for the consummation
of the transactions contemplated hereby.
5.9. Other Action.
JWA, Xxxxxxxx, Century and Buyer shall use commercially reasonable
efforts to cause the fulfillment at the earliest practicable date of all of the
conditions to the parties' obligations to consummate the transactions
contemplated in this Agreement.
5.10. Notification.
Between the date of this Agreement and the Closing Date, JWA will
promptly notify Buyer in writing if JWA, Century or Xxxxxxxx becomes aware of
any fact or condition that causes or constitutes a breach of any of JWA's
representations and warranties as of the date of this Agreement, or if JWA,
Century or Xxxxxxxx becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. JWA and Century shall have a
continuing obligation to notify Buyer with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described in the Schedules hereto.
5.11. Employee Matters.
5.11.(a) Benefit Plans. The participation of eligible employees of
Xxxxxxxx in any employee benefit plan or program that is maintained by Xxxxxxxx
for the benefit of employees of Xxxxxxxx will continue following the Closing
Date, subject to Xxxxxxxx'x right to amend or terminate such program in
accordance with the procedures specified in such plan or program and in
accordance with the requirements of applicable law. The participation of
Affected Employees (as such term is defined in the Xxxx of Sale) in any employee
benefit plan or program that is maintained by JWA but in which Affected
Employees participate will terminate on the Closing Date. JWA agrees to satisfy
(or in the case of an eligible claim paid by Buyer, to reimburse Buyer for) all
eligible claims for benefits that are incurred prior to the Closing Date under
an employee benefit plan or program maintained by JWA, whether insured or
otherwise (including, but not limited to, workers' compensation, life insurance,
medical and disability programs), and that are brought by, or in respect of,
employees and former employees of the Business. Buyer will establish or will
cause Century to establish, effective as of the Closing Date, employee benefit
and fringe benefit plans or arrangements that, in the aggregate, are
substantially equivalent to the employee benefit
26
and fringe benefit plans or arrangements in effect for Buyer's employees
immediately prior to the Closing Date, subject to Buyer's or Century's right to
amend or terminate its plan or program in accordance with the procedures
specified in such plan or program in accordance with the requirements of
applicable law.
5.11.(b) Accrued Wages. The amount of wages and other remuneration
due in respect of periods up to the Closing Date to employees of the North
American Business and the amount of bonuses due to such employees for such
period will be paid by JWA directly to such employees.
5.11.(c) Severance. JWA shall be responsible for satisfying any and
all severance obligations to employees of the North American Business who are
not employed by Century or Buyer immediately following the Closing. Buyer shall
be responsible for satisfying any and all severance obligations to employees of
the North American Business who are employed by Century or Buyer immediately
following the Closing, other than for the specific severance arrangements JWA or
Century has established or entered into with such individuals in contemplation
of the transactions contemplated hereby. Except as may be mutually agreed in
writing by JWA and Buyer, Buyer shall reimburse JWA for any severance
obligations paid by JWA to employees of the North American Business who are not
employed by Century or Buyer immediately following the Closing in the event that
any such employee becomes an employee of, or consultant or agent to, Buyer or
Century within six months following such employee's termination of employment
with JWA.
5.12. Co-op Liabilities.
Within 30 days of the end of JWA's fiscal year 2000, Buyer shall
deliver to JWA a report (the "Co-op Report") setting forth the actual amount of
out-of-pocket expenses incurred by Buyer in satisfaction of the Co-op
Liabilities ("Co-op Expenses"), together with supporting schedules and
information in sufficient detail to allow JWA to confirm the amounts set forth
on the Co-op Report. If on the date that is 30 days after receipt by JWA of the
Co-op Report, JWA has not submitted a written objection to the Co-op Report (a
"Co-op Objection") to Buyer, then either (a) if the accrual set forth on the
Final Closing Balance Sheet related to the Co-op Liabilities (the "Co-op
Accrual") is greater than the Co-op Expenses, then Buyer shall pay to JWA in
cash an amount equal to the difference between the Co-op Accrual and the Co-op
Expenses, or (b) if the Co-op Expenses are greater than the Co-op Accrual, then
JWA shall pay to Buyer in cash an amount equal to the difference between the
Co-op Expenses and the Co-op Accrual. If JWA timely submits a Co-op Objection,
then the parties shall work together in good faith to reach a mutually-agreeable
resolution of such dispute. If such a resolution cannot be reached within 30
days, then either party may submit such dispute to arbitration in accordance
with Article 11. The term "Co-op Expenses" shall only include Buyer's portion of
expenses incurred in satisfaction of the Co-op Liabilities and shall not include
expenses related to any increase in Co-op Liabilities as a result of Buyer's
sale of products other than products of the Business or Buyer's change in any
commitment related thereto. The Co-op Expenses shall be calculated on a per
customer basis to the extent possible.
27
5.13. Premium Incentive Sales Agreement.
At the Closing, JWA and Buyer shall execute and deliver a premium
incentive sales agreement, in a form reasonably satisfactory to JWA and Buyer,
relating to JWA's representation of Buyer with respect to premium incentive
sales of products of the Buyer (including products of the Business), with the
terms of such agreement to include, without limitation, (a) a standard sales
commission rate of 16% and (b) an initial term subject to extensions in one-year
increments based upon the achievement by JWA of mutually agreed upon performance
standards (the "Premium Incentive Sales Agreement").
5.14. Minn Kota Distribution Agreement.
At the Closing, JWA and Buyer shall execute and deliver a
distribution agreement, in a form reasonably satisfactory to JWA and Buyer,
relating to the exclusive distribution of JWA's Minn Kota products by Buyer (or
an affiliate thereof) in Australia and New Zealand (the "Minn Kota Distribution
Agreement"), which shall provide, among other things and subject to further
clarification therein, that (a) JWA will maintain its existing gross margins
with respect to the distributed products during the term thereof and (b) the
term thereof shall extend for a period of 2 1/2 years from the Closing Date,
subject to extensions in one-year increments based upon the achievement by Buyer
of mutually agreed upon performance standards.
5.15. [Intentionally Omitted]
5.16. Payment of Certain Claims and Indebtedness.
JWA will cause all intercompany receivables and payables with Century
or Xxxxxxxx to be satisfied in full prior to the Closing.
5.17. Xxxxxxxxx Matter.
JWA will cooperate with Buyer in the renegotiation of Xxxxxxxxx'x
existing compensation arrangements, without the requirement on the part of JWA
to pay any money or incur any cost in connection therewith.
5.18. Scubapro.
Following the Closing, JWA will cause Scubapro Italy S.r.l., an
indirect wholly-owned subsidiary of JWA ("Scubapro"), to waive or otherwise not
pursue any indemnity rights or Claims (as hereinafter defined) it may have
against Xxxxxxxx with respect to the termination of that certain Commercial
Agent Agreement-Administrative Assistance Agreement, dated September 23, 1994,
by and between Xxxxxxxx and Scubapro (the "Scubapro Contract"), whether arising
under the Scubapro Contract or pursuant to French law applicable thereto, in the
event that Xxxxxxxx desires to terminate the Scubapro Contract for any reason at
any time subsequent to the Closing; provided, however, that Scubapro shall in
all cases be entitled to all amounts owing to Scubapro under the Scubapro
Contract in connection with services provided to Xxxxxxxx prior to such
termination. Buyer shall be solely responsible for
28
any and all severance obligations to the four Scubapro employees who currently
work for the Business as well as any other employees hired after the Closing
Date who work for the Business, and shall indemnify, defend and hold harmless
JWA and Scubapro from and against all Claims of such employees.
5.19. Xxxxxxxx'x Minn Kota Assets.
Prior to the Closing, JWA shall commence or make arrangements for the
return to JWA of assets held by Xxxxxxxx that are utilized in connection with
JWA's motors business, including, without limitation, (a) inventory related to
Minn Kota products and (b) all rights Xxxxxxxx may have to pursue violations of
the trademark "Minn Kota" in Europe. Following the Closing and to the extent
necessary, Buyer shall, and shall cause Buyer's Affiliates to, cooperate with
JWA in promptly completing the return of such assets.
5.20. Collection of Accounts Receivable.
In connection with the collection by JWA after the Closing of the
Retained Accounts and any of Buyer's accounts receivable for the North American
Business under the Transition Services Agreement ("Buyer's Receivables"), and
with respect to the receipt of payments by Buyer after the Closing from any
customer of the Business who has any outstanding Retained Account, the parties
agree that all payments received by JWA or Buyer from customers of the Business
who have outstanding Retained Accounts or Buyer's Receivables shall either be
retained by the recipient or promptly remitted to the other party, as the case
may be, in accordance with the following procedure: All payments from such
customers shall be credited to the specific invoices for which such payments are
submitted if correlation of specific invoices with such payments is reasonably
possible and, if such correlation is not reasonably possible, then such payments
shall be credited first to the invoice item, whether a Retained Account or a
Buyer Receivable, which has been outstanding for the longest period of time.
5.21. Yamaha.
JWA, Xxxxxxxx and Buyer shall cooperate, both prior to and after the
Closing Date, to obtain the assignment to JWA of Xxxxxxxx'x rights and
obligations under that certain Supply Agreement, dated as of March 25, 1998 (the
"Yamaha Agreement"), by and between Xxxxxxxx and Yamaha Motor Europe NV
("Yamaha"). JWA shall indemnify, defend and hold harmless Buyer and Buyer's
Affiliates from and against all claims asserted by or on behalf of Yamaha
following the Closing Date relating to a breach by Xxxxxxxx of, or failure of
Xxxxxxxx to perform under, the Yamaha Agreement.
5.22. Cooperation in Terminating Sales Representatives.
JWA shall use its commercially reasonable efforts following the
Closing Date to cooperate with Buyer in seeking termination, on terms acceptable
to Buyer, of the agreements between JWA and sales representatives of the North
American Business, without the requirement on the part of JWA to pay any money
or incur any cost in connection therewith.
29
5.23. Product Liability Insurance.
JWA agrees to maintain its products liability insurance, or obtain a
products liability insurance tail, insuring against Claims with respect to the
products of the Business that are reported to JWA prior to September 30, 2000
(regardless of when the products that are the subjects of any such Claims were
manufactured).
5.24. Rip Tide.
JWA will use its best efforts prior and subsequent to the Closing
Date, without the requirement on the part of JWA to pay any money or incur any
cost (in either case to or at the direction of the owner of the trademark "Rip
Tide") in connection therewith, to obtain a written license agreement (in a form
reasonably satisfactory to Buyer) providing for the continued use of the
trademark "Rip Tide" by the Business following the Closing (such trademark is
currently utilized by the Business pursuant to the oral permission of the owner
thereof).
5.25. Environmental Site Assessments.
5.25.(a) Phase I. JWA shall engage Dames & Xxxxx to conduct a Phase
I environmental site assessment (the "Phase I") of the real property in France
currently owned by Xxxxxxxx (the "Xxxxxxxx Property"). The Phase I will
expressly state that Buyer and Buyer's lenders are entitled to rely thereon.
5.25.(b) Phase II. At Buyer's option, Buyer may engage an
environmental consultant engaged in the regular business of environmental
engineering that is reasonably acceptable to JWA to conduct soil or groundwater
sampling at the Xxxxxxxx Property, with such activities to be completed within
45 days after the Closing Date (such activities are hereinafter referred to as
the "Phase II"). JWA shall pay one-half of the costs of any Phase II work that
is recommended in the Phase I to be conducted on the Xxxxxxxx Property. Buyer
shall be solely responsible for conducting any Phase II work beyond that
recommended in the Phase I and JWA and Buyer shall each pay one-half of such
additional Phase II work; provided, however, that JWA's costs under this
provision shall not exceed $20,000.
5.26. Letters of Credit.
On the date hereof, Buyer is delivering to JWA an irrevocable letter
of credit in the amount of $500,000 in the form attached hereto as Exhibit G
(the "Letter of Credit"). If the Closing does not occur on or prior to February
4, 2000, then on or before the earlier to occur of (i) February 5, 2000, if on
such date the sole remaining condition to the Closing set forth in Article 6
(assuming the Closing were to occur on such date) is the satisfaction of Section
6.6, or (ii) the second business day subsequent to February 4, 2000 on which the
sole remaining condition to the Closing set forth in Article 6 (assuming the
Closing were to occur on such date) is the satisfaction of Section 6.6, Buyer
shall deliver to JWA an additional irrevocable letter of credit, issued by the
same bank that issued the letter of credit on the date hereof, in the amount of
$500,000, in substantially the form attached hereto as Exhibit G (such letter of
30
credit, together with the Letter of Credit, are collectively referred to as the
"Letters of Credit"), unless Buyer shall have delivered to JWA on or prior to
February 4, 2000 a writing from Xxxxxx Bank that the proceeds of the Financing
will not be made available to Buyer for any reason.
5.27. Financing.
5.27.(a) Buyer will use its best efforts to consummate the
Financing. If any portion of the Financing becomes unavailable, regardless of
fault, Buyer will use its best efforts to obtain from other sources the
financing necessary for the purchase of the Shares at the Closing as
contemplated by this Agreement. Consistent with the foregoing, Buyer will not
take any action or omit to take any action in bad faith that may impair its
ability, or the lenders' willingness, to consummate the Financing. Buyer will
keep JWA reasonably informed as to the status of the Financing and will notify
JWA promptly of any material developments with respect to the Financing.
5.27.(b) As a condition of and inducement to JWA's willingness to
enter into and perform this Agreement and to give Buyer the rights associated
with the condition to the Closing set forth in Section 6.6, if this Agreement is
terminated pursuant to Section 10.1.(c), Section 10.1.(d) or Section 10.1.(e),
then JWA shall receive the proceeds of the Letter(s) of Credit as liquidated
damages. JWA's receipt of the proceeds of the Letter(s) of Credit pursuant to
the foregoing sentence shall be its sole and exclusive remedy for termination of
this Agreement pursuant to Section 10.1.(c), Section 10.1.(d) or Section
10.1.(e); provided, however, that if JWA terminates this Agreement pursuant to
Section 10.1(d)(ii), then JWA shall receive the proceeds of the Letter of Credit
and be entitled to pursue any and all additional remedies it may have hereunder.
5.27.(c) As used herein, the term "Trigger Event" shall mean (i) the
sole remaining condition of Closing set forth in Article 6 on February 29, 2000
is the satisfaction of Section 6.6, and (ii) Buyer shall not have given to JWA
on or prior to February 29, 2000 a writing from Xxxxxx Bank to Buyer that the
proceeds of the Financing have not been made available to Buyer as a result of
(1) a material adverse change in the financial condition, prospects, operations
or properties of Buyer subsequent to the date hereof, (2) a material adverse
change in the financial condition, prospects, operations or properties of the
Business subsequent to September 30, 1999 or (3) a material disruption in the
financial markets, which in Xxxxxx Bank's reasonable opinion impacts pricing or
availability of credit in a material way, has occurred subsequent to the date
hereof.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of the
following conditions:
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6.1. Representations and Warranties True of the Closing Date.
Each of the representations and warranties made by JWA in this
Agreement that is qualified as to materiality shall be true and correct, and
each of the representations and warranties made by JWA in this Agreement that is
not so qualified and the statements contained in any Schedule to this Agreement
or in the certificate delivered by JWA pursuant to Section 9.1.(b) shall be true
and correct in all material respects, in each case as of the date of this
Agreement and, except to the extent that such representations and warranties
speak as of an earlier date, as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing Date,
except for any changes permitted by the terms of this Agreement or consented to
in writing by Buyer.
6.2. Compliance With Agreement.
JWA, Xxxxxxxx and Century shall have in all material respects
performed and complied with all of their agreements and obligations under this
Agreement which are to be performed or complied with by them prior to or on the
Closing Date, including the delivery of the closing deliveries specified in
Section 9.1.
6.3. Absence of Litigation.
No Litigation (i) shall have been commenced or threatened by any
Government Entity, and no investigation by any Government Entity shall have been
commenced, against Buyer, JWA, Xxxxxxxx or Century or any of the affiliates,
officers or directors of any of them (in their capacities as such), with respect
to the transactions contemplated hereby; or (ii) shall have been commenced by
any third party (other than a Governmental Entity) against Buyer or against any
person affiliated with Buyer involving any challenge to, or seeking damages or
other relief in connection with, the transactions contemplated hereby.
6.4. Xxxx-Xxxxx-Xxxxxx Waiting Period.
All applicable waiting periods related to the HSR Act shall have
expired.
6.5. Certain Consents.
The consents to or approvals of the transactions contemplated by this
Agreement and the Ancillary Instruments by the third parties listed on Schedule
6.5 shall have been obtained.
6.6. Financing Proceeds.
Buyer shall have received (a) proceeds of the Financing or (b) the
financing necessary for the purchase of the Shares as contemplated by this
Agreement from sources other than Xxxxxx Bank.
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7. CONDITIONS PRECEDENT TO JWA'S OBLIGATIONS
Each and every obligation of JWA to be performed on the Closing Date shall
be subject to the satisfaction prior to or at the Closing of the following
conditions:
7.1. Representations and Warranties True on the Closing Date.
Each of the representations and warranties made by Buyer in this
Agreement that is qualified as to materiality shall be true and correct, and
each of the representations and warranties made by Buyer in this Agreement that
is not so qualified and the statements contained in the certificate delivered by
Buyer pursuant to Section 9.2.(b) shall be true and correct in all material
respects, in each case as of the date of this Agreement and, except to the
extent that such representations and warranties speak as of an earlier date, as
of the Closing Date as though such representations and warranties were made or
given on and as of the Closing Date, except for any changes permitted by the
terms of this Agreement or consented to in writing by JWA.
7.2. Compliance With Agreement.
Buyer shall have in all material respects performed and complied with
all of Buyer's agreements and obligations under this Agreement which are to be
performed or complied with by Buyer prior to or on the Closing Date, including
the delivery of the closing deliveries specified in Section 9.2.
7.3. Absence of Litigation.
No Litigation (i) shall have been commenced or threatened by any
Governmental Entity, and no investigation by any Government Entity shall have
been commenced, against Buyer, JWA, Xxxxxxxx or Century or any of the
affiliates, officers or directors of any of them (in their capacities as such),
with respect to the transactions contemplated hereby; or (ii) shall have been
commenced by any third party (other than a Governmental Entity) against JWA or
against any person affiliated with JWA involving any challenge to, or seeking
damages or other relief in connection with, the transactions contemplated
hereby.
7.4. Xxxx-Xxxxx-Xxxxxx Waiting Period.
All applicable waiting periods related to the HSR Act shall have
expired.
8. INDEMNIFICATION
8.1. By JWA.
Subject to the terms and conditions of this Article 8, JWA hereby
agrees to indemnify, defend and hold harmless Buyer, its directors, officers,
employees and controlled and controlling persons, including Xxxxxxxx and Century
(hereinafter "Buyer's Affiliates"), from and against all Claims asserted
against, resulting to, imposed upon, or incurred by Buyer
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or Buyer's Affiliates, directly or indirectly, by reason of, arising out of or
resulting from (a) the inaccuracy or breach of any representation or warranty of
JWA contained in or made pursuant to this Agreement when made or deemed made;
(b) the breach of any covenant of JWA contained in this Agreement; or (c) the
Litigation identified on Schedule 3.8 under the heading "Sodeco vs Xxxxxxxx." As
used in this Article 8, the term "Claim" shall include (i) all debts,
liabilities and obligations; (ii) all losses, damages, judgments, awards,
settlements, costs and expenses, penalties, court costs and attorneys fees and
expenses; and (iii) all demands, claims, suits, actions, costs of investigation,
causes of action, proceedings and assessments, whether or not ultimately
determined to be valid, but shall not include any special, consequential or
punitive damages.
8.2. By Buyer.
Subject to the terms and conditions of this Article 8, Buyer hereby
agrees to indemnify, defend and hold harmless JWA, its directors, officers,
employees and controlled and controlling persons from and against all Claims
asserted against, resulting to, imposed upon or incurred by any such person,
directly or indirectly, by reason of or resulting from (a) the inaccuracy or
breach of any representation or warranty of Buyer contained in or made pursuant
to this Agreement or (b) the breach of any covenant of Buyer contained in this
Agreement.
8.3. Indemnification of Third-Party Claims.
The obligations and liabilities of any party to indemnify any other
under this Article 8 with respect to Claims relating to third parties shall be
subject to the following terms and conditions:
8.3. (a) Notice and Defense. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the party from whom
indemnification is sought (the "Indemnifying Party") prompt written notice of
any such Claim, and the Indemnifying Party will undertake the defense thereof by
representatives chosen by it. Failure to give such notice shall not affect the
Indemnifying Party's duty or obligations under this Article 8, except to the
extent the Indemnifying Party is prejudiced thereby. So long as the Indemnifying
Party is defending any such Claim actively and in good faith, the Indemnified
Party shall not settle such Claim. The Indemnified Party shall make available to
the Indemnifying Party or its representatives all records and other materials
required by them and in the possession or under the control of the Indemnified
Party, for the use of the Indemnifying Party and its representatives in
defending any such Claim, and shall in other respects give reasonable
cooperation in such defense.
8.3. (b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such Claim
actively and in good faith, the Indemnified Party will (upon further notice)
have the right to undertake the defense, compromise or settlement of such Claim
or consent to the entry of a judgment with respect to such Claim.
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8.4. Limitations on Indemnification.
All claims for indemnification under this Agreement are subject to
the following limitations:
8.4. (a) Time Limitation. Except for indemnification claims with
respect to the Excepted Claims (as hereinafter defined), no claim or action
shall be brought under this Article 8 after April 30, 2001. Notwithstanding the
foregoing or any other provision of this Agreement:
(i) There shall be no time limitation on claims or actions
brought for breach of any representation or warranty made by JWA in
or pursuant to Sections 3.1.(a), 3.1.(b), 3.1.(c), 3.1.(e), 3.1.(f),
3.1.(g), 3.2 or 3.10.(a).
(ii) Any claim or action brought for breach of any
representation or warranty made by JWA or Century in or pursuant to
Section 3.6 may be brought at any time until the underlying tax
obligation is barred by the applicable period of limitation under
federal and state laws relating thereto (as such period may be
extended by waiver).
(iii) Any claim made by a party hereunder by a demand for
arbitration in accordance with Article 11 hereof prior to April 30,
2001, or, if later, the termination of the survival period for such
claim shall be preserved despite the passing of April 30, 2001, or,
if later, the subsequent termination of such survival period.
8.4. (b) Basket. Except for indemnification claims with respect to
the Excepted Claims, Buyer and Buyer's Affiliates shall not be entitled to
indemnification under this Article 8 except and then only to the extent the
aggregate of JWA's indemnification obligations pursuant to this Article 8 (but
for this Section 8.4.(b)) exceeds Three Hundred Thousand Dollars ($300,000).
8.4. (c) Insurance Offset. The obligation of a party to provide
indemnification for any Claim under this Article 8 shall be reduced by the full
amount of any insurance realized and paid to the Indemnified Party (or any
affiliate thereof) with respect to such Claim or the underlying facts under any
applicable policy or policies. The Indemnified Party (or any affiliate) shall
use its reasonable efforts to make insurance claims relating to any Claim for
which it is seeking indemnification pursuant to this Article 8.
8.4. (d) Tax Effect. The indemnification obligation of an
Indemnifying Party shall be net of a reasonable estimate of the present value of
any tax benefits realized or reasonably expected to be realized by the
Indemnified Party (calculated at the maximum applicable federal and state tax
rates then in effect) by reason of the facts and circumstances giving rise to
the Indemnifying Party's liability.
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8.4. (e) Aggregate Limitation. Except for indemnification claims
with respect to the Excepted Claims, notwithstanding anything to the contrary
herein, the aggregate liability of JWA for Claims under this Article 8 shall not
exceed Twelve Million Dollars ($12,000,000).
8.4. (f) Exclusive Remedy. Except as provided in Section 10.1.(f)
and Section 10.2.(c), the indemnification provisions in this Article 8 shall be
the exclusive remedy of Buyer and Buyer's Affiliates and of JWA for any
liability of any party arising under and pursuant to this Agreement and the
transactions provided for herein and contemplated hereby, whether for the
inaccuracy or breach of any representation or warranty, the breach of any
covenant or otherwise; provided that nothing in this Article 8 shall limit a
party's right to seek and obtain specific performance or other equitable relief
of any covenants and agreements.
8.5. Excepted Claims.
Subject to Sections 8.6, 8.7 and 8.8, JWA agrees to indemnify, defend
and hold harmless Buyer and Buyer's Affiliates from and against all Claims
asserted against, resulting to, imposed upon or incurred by Buyer or Buyer's
Affiliates, directly or indirectly, by reason of or resulting from (a) the
Excluded Liabilities (as such term is defined in the Xxxx of Sale); (b) any
Environmental Claim (as hereinafter defined); (c) the Patent Issue (as
hereinafter defined); (d) the breach by JWA of any of its covenants set forth in
Article 5 or the agreements referred to in Article 5 that, in each case, by
their terms require performance after the Closing including, without limitation,
the License Agreements, the Transition Services Agreement, the Minn Kota
Distribution Agreement and the Premium Incentive Sales Agreement; (e) any Claim
related to the Codex liability in France; and (f) the Excepted Litigation
Matters (as hereinafter defined) (clauses (a), (b), (c), (d), (e) and (f) above,
collectively, the "Excepted Claims"); provided, however, that JWA's
indemnification obligations under this Section 8.5 in connection with the Patent
Issue shall in no event exceed the sum of $140,000.
8.6. Patent Issue.
8.6. (a) Definition. For purposes of this Article 8, the term
"Patent Issue" shall mean the issue described in Schedule 3.5 under the heading
"Patent Issue."
8.6. (b) Buyer's Responsibilities. In the event a Claim is asserted
or threatened against Buyer or Buyer's Affiliates in connection with the Patent
Issue that relates to products of the Business (a "Patent Claim"), Buyer shall,
and shall cause Buyer's Affiliates to, use its or their best efforts to promptly
redesign, re-engineer or otherwise reconfigure the products that are the subject
of such Patent Claim in a manner that results in such products no longer
infringing such patent.
8.7. Environmental Claims.
8.7. (a) Definitions. For purposes of the Article 8, the applicable
Laws in effect on the Closing Date relating to pollution or protection of the
environment,
36
including Laws relating to emissions, discharges, generation, storage, releases
or threatened releases of asbestos, pollutants, contaminants, chemical, toxic,
hazardous or petroleum or petroleum-based substances, wastes or solid wastes
("Waste") into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Waste including, without limitation, the
Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act,
the Toxic Substances Control Act and the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended, and their state and local
counterparts are herein collectively referred to as the "Environmental Laws."
For purposes of this Article 8, "Environmental Claims" shall mean any and all
Claims (including, without limitation, remediation expenses) arising out of (i)
the presence of any Waste on, in, under or from the Xxxxxxxx Property that is
identified in the Phase II; provided, however, that "Environmental Actions"
(defined to be removal, remediation, monitoring, investigation or similar
compliance activities) on the Xxxxxxxx Property shall not be required unless
such Environmental Actions are required under applicable Environmental Laws;
(ii) the release of any Waste on, in, under or from any real property that was
formerly owned or operated by or which received Waste from Xxxxxxxx or by any
entity that was acquired by, merged with or combined (whether by stock purchase,
asset purchase or otherwise) with Xxxxxxxx prior to the Closing Date; (iii) the
presence of any Waste in existence on or prior to the Closing Date on or about
the property located at 000 Xxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxxxx, that is the
result of activities of JWA; provided, however, that Environmental Actions on
this property shall not be required unless such Environmental Actions are
required under applicable Environmental Laws; and (iv) the North Xxxxxxx
Superfund Site as such is described on Schedule 3.9.
8.7. (b) Assumption of Claim. In the event an Environmental Claim is
asserted against Buyer or Buyer's Affiliates, JWA will assume the defense or
otherwise control the disposition of such Environmental Claim and any
Environmental Action, and will be solely responsible for all aspects of such
Environmental Claim. Consequently, JWA has the sole right to defend, settle or
compromise such Environmental Claim with representatives chosen by it; provided,
however, that no settlement or compromise of any such Environmental Claim shall
provide for anything other than the payment of money damages or other money
payments without the consent of Buyer, which consent shall not be unreasonably
withheld.
8.7. (c) Cooperation. In connection with the defense or disposition
of any Environmental Claim, Buyer agrees to, and Buyer shall cause Buyer's
Affiliates to, (i) provide JWA and its representatives with reasonable access to
all personnel of Buyer and Buyer's Affiliates and all records and other
materials reasonably requested by them and in the possession or under the
control of Buyer and Buyer's Affiliates; and (ii) in other respects give full
cooperation in such defense or disposition, in each case without charge. Upon
the request of Buyer, JWA agrees to provide Buyer and Buyer's
37
Affiliates with all reasonably requested information regarding such
Environmental Claim and the defense or disposition thereof.
8.7. (d) Limitations. Notwithstanding anything to the contrary
contained herein, JWA shall not have any indemnification obligations under this
Article 8 in connection with an Environmental Claim with respect to operations
of the Business that are undertaken by Buyer or Buyer's Affiliates after the
Closing.
8.8. Certain Litigation.
8.8. (a) Definition. For purposes of this Article 8, the term
"Excepted Litigation Matters" shall refer to the Litigation identified on
Schedule 3.8 under the headings "Sotufild vs Xxxxxxxx," "La Banque Paribas and
Xxxxxxxx vs La Banque Nationale Agrieole," and "Xxxxxxxx vs Grand Bleu."
8.8. (b) Assumption of Claims. As of the Closing, JWA will assume
the defense and/or pursuit of the Excepted Litigation Matters and be solely
responsible for all aspects of the Excepted Litigation Matters. Consequently,
JWA has the sole right to defend, pursue, settle or compromise the Excepted
Litigation Matters with representatives chosen by it.
8.8. (c) Cooperation. In connection with the defense and/or pursuit
of the Excepted Litigation Matters, Buyer agrees to, and Buyer shall cause
Buyer's Affiliates to, (i) provide JWA and its representatives with reasonable
access during normal business hours to all personnel of Buyer and Buyer's
Affiliates and all records and other materials reasonably requested by them and
in the possession or under the control of Buyer or Buyer's Affiliates and (ii)
shall in other respects give full cooperation in such defense and/or pursuit, in
each case without charge. As part of such cooperation, Buyer shall cause the
President of Xxxxxxxx to continue to oversee and assist JWA in the defense
and/or pursuit of the Excepted Litigation Matters in a manner consistent with
his duties and past practice.
8.8. (d) Insurance Claims. Buyer and Buyer's Affiliates shall
diligently pursue or continue to pursue any and all insurance claims relating to
the Excepted Litigation Matters.
8.8. (e) Recoveries. Buyer and Buyer's Affiliates shall promptly
remit to JWA any amounts received by Buyer or Buyer's Affiliates in connection
with the Excepted Litigation Matters (except amounts received in the form of
indemnification from JWA as provided in this Section 8.8), whether received
through satisfaction of insurance claims in connection therewith, from or on
behalf of an opposing party in any Excepted Litigation Matter or otherwise. JWA
shall be entitled to retain any amounts received by JWA in connection with the
Excepted Litigation Matters, whether received through satisfaction of insurance
claims in connection therewith, from or on behalf of an opposing party in any
Excepted Litigation Matter or otherwise.
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9. CLOSING
The closing of this transaction (the "Closing") shall take place at the
offices of Xxxxx & Xxxxxxx, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx, at
10:00 a.m. on February 4, 2000 or at such other time and place as the parties
hereto shall agree upon. Notwithstanding the foregoing, if the Closing does not
take place on February 4, 2000 because any condition precedent to the
obligations of Buyer, on the one hand, or JWA, on the other hand, under this
Agreement is not met on that date, then either party may postpone the Closing
from time to time to any designated subsequent business day not more than five
(5) business days after February 4, 2000 or the postponed date on which the
Closing was to occur by delivering notice of such postponement, citing the
specific section of this Agreement that forms the basis thereof, on the date the
Closing was to occur. The actual date of Closing is referred to in this
Agreement as the "Closing Date."
9.1. Deliveries of JWA and Century.
At the Closing, JWA and Century shall deliver to Buyer the
following, in each case duly executed or otherwise in proper form:
9.1. (a) Stock Certificate(s). Stock certificates representing the
Shares, duly endorsed for transfer or with duly executed stock powers attached.
9.1. (b) Compliance Certificate. A certificate signed by an officer
of JWA to the effect that each of the representations and warranties made by JWA
in this Agreement that is qualified as to materiality is true and correct, and
each of the representations and warranties made by JWA in this Agreement that is
not so qualified is true and correct in all material respects, on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date (except for any changes
permitted by the terms of this Agreement or consented to in writing by Buyer),
and that JWA has performed and complied in all material respects with all of its
obligations under this Agreement which are to be performed or complied with on
or prior to the Closing Date.
9.1. (c) Xxxx of Sale. The Xxxx of Sale referred to in Section 5.5,
duly executed by JWA, JWA Canada, JWA Australia and Century.
9.1. (d) License Agreements. The License Agreements referred to in
Section 5.7, duly executed by JWA.
9.1. (e) Premium Incentive Sales Agreement. The Premium Incentive
Sales Agreement referred to in Section 5.13, duly executed by JWA.
9.1. (f) Minn Kota Distribution Agreement. The Minn Kota
Distribution Agreement referred to in Section 5.14, duly executed by JWA.
9.1. (g) Certified Resolutions. Certified copies of the resolutions
of the Board of Directors of JWA and the Board of Directors of Century,
authorizing and
39
approving this Agreement, the Ancillary Instruments and the consummation of the
transactions contemplated hereby and thereby.
9.1. (h) Articles; By-Laws. A copy of the By-Laws of Century
certified by the Secretary of Century, and a copy of the Articles of
Incorporation of Century certified by the Department of Financial Institutions
of the State of Wisconsin.
9.1. (i) Opinion of Counsel. A written opinion of Xxxxx & Xxxxxxx,
counsel to JWA and Century, dated as of the Closing Date, addressed to Buyer,
substantially in the form of Exhibit H hereto.
9.1. (j) Resignations. The resignations of all directors of Century,
effective as of the Closing Date and in form satisfactory to Buyer's counsel.
9.1. (k) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing pursuant
to this Agreement, the Ancillary Instruments and such other certificates of
authority and documents as Buyer may reasonably request.
9.2. Deliveries by Buyer.
At the Closing, Buyer shall deliver to JWA the following, in each
case duly executed or otherwise in proper form:
9.2. (a) Cash Purchase Price. Certified or bank cashier's checks (or
wire transfer) as required by Section 2.2 hereof.
9.2. (b) Compliance Certificate. A certificate signed by an officer
of Buyer that each of the representations and warranties made by Buyer in this
Agreement that is qualified as to materiality is true and correct, and each of
the representations and warranties made by Buyer in this Agreement that is not
so qualified is true and correct in all material respects, on and as of the
Closing Date with the same effect as though such representations and warranties
had been made or given on and as of the Closing Date (except for any changes
permitted by the terms of this Agreement or consented to in writing by JWA), and
that Buyer has performed and complied in all material respects with all of
Buyer's obligations under this Agreement which are to be performed or complied
with on or prior to the Closing Date.
9.2. (c) License Agreements. The License Agreements referred to in
Section 5.7, duly executed by Buyer.
9.2. (d) Premium Incentive Sales Agreement. The Premium Incentive
Sales Agreement referred to in Section 5.13, duly executed by Buyer.
9.2. (e) Minn-Kota Distribution Agreement. The Minn Kota
Distribution Agreement referred to in Section 5.14, duly executed by Buyer.
40
9.2. (f) Certified Resolutions. A certified copy of the resolutions
of the Board of Directors of Buyer authorizing and approving this Agreement, the
agreements, documents and instruments to be executed by Buyer pursuant hereto
and the consummation of the transactions contemplated hereby and thereby.
9.2. (g) Opinion of Counsel. A written opinion of Xxxxx Xxxxxx
XxXxxxxxx Xxxxxxx Xxxxx, P.C., counsel to Buyer, dated as of the Closing Date,
addressed to JWA, in substantially the form of Exhibit I hereto.
9.2. (h) Other Documents. All other documents, instruments or
writings required to be delivered to JWA or Century at or prior to the Closing
pursuant to this Agreement, the Ancillary Instruments and such other
certificates of authority and documents as JWA or Century may reasonably
request.
10. TERMINATION
10.1. Right of Termination Without Breach.
10.1.(a) Mutual Agreement. This Agreement may be terminated without
further liability of any party at any time prior to the Closing by mutual
written agreement of Buyer and JWA.
10.1.(b) By Either Party by Written Notice. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing by either JWA or Buyer by written notice to the other party, if any of
the conditions set forth in Section 6 (other than Section 6.6), in the case of
written notice by Buyer, or Section 7, in the case of written notice by JWA,
shall not have been fulfilled by 5:00 p.m. on February 29, 2000, unless such
failure shall be due to the failure of the party giving such notice to have
performed or complied with any of the covenants, agreements or conditions hereto
to be performed or complied by it prior to Closing.
10.1.(c) By Buyer by Written Notice. Except to the extent described
in Section 10.1. (f), this Agreement may be terminated without further liability
of Buyer or JWA by written notice by Buyer to JWA at any time prior to Closing
but on or after the occurrence of a Trigger Event.
10.1.(d) By JWA by Written Notice. Except to the extent provided in
Section 10.1.(f), this Agreement may be terminated without further liability of
JWA or Buyer by written notice by JWA to Buyer at any time prior to Closing but
on or after (i) the occurrence of a Trigger Event, (ii) the date which is ten
(10) days after JWA has given written notice to Buyer of Buyer's failure to
deliver the second Letter of Credit required by Section 5.26 or (iii) Buyer
shall have delivered to JWA a writing from Xxxxxx Bank that the proceeds of the
Financing will not be made available to Buyer that did not include any of the
conditions described in clauses (1), (2), or (3) set forth in Section 10.1.(g).
10.1.(e) [Intentionally Omitted]
41
10.1.(f) Post-Termination Obligation. Termination of this Agreement
pursuant to Section 10.1.(c), Section 10.1.(d) or Section 10.1.(e) shall not in
any way terminate, limit or restrict the right of JWA to receive the proceeds of
the Letter(s) of Credit, to the extent required under Section 5.27.(b).
10.1.(g) By JWA as a Result of Financing Conditions. This Agreement
may be terminated by written notice by JWA to Buyer without further liability of
Buyer or JWA at any time prior to Closing if Buyer shall have given to JWA a
writing from Xxxxxx Bank to Buyer that the proceeds of the Financing will not be
made available to Buyer as a result of (1) a material adverse change in the
financial condition, prospects, operations or properties of Buyer subsequent to
the date hereof, (2) a material adverse change in the financial condition,
prospects, operations or properties of the Business subsequent to September 30,
1999 or (3) a material disruption in the financial markets, which in Xxxxxx
Bank's reasonable opinion impacts pricing or availability of credit in a
material way, has occurred subsequent to the date hereof.
If Buyer gives the writing from Xxxxxx Bank as described in
this Section 10.1.(g) at anytime on or before February 29, 2000, Buyer shall
nevertheless continue to use its best efforts to acquire financing as required
by Section 5.27.(a). If Buyer does not acquire financing as result of its
efforts as required by Section 5.27.(a), this Agreement shall terminate
effective at 5:00 p.m. on February 29, 2000 without further liability to Buyer
or JWA.
10.2. Termination for Breach.
10.2.(a) Termination by Buyer. If (i) there has been a material
violation or breach by JWA of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in writing by
Buyer, or (ii) there has been a failure of satisfaction of a condition to the
obligations of Buyer which has not been so waived, or (iii) JWA shall have
attempted to terminate this Agreement under this Article 10 or otherwise without
grounds to do so, then Buyer may give written notice to JWA specifying such
violation, breach, failure or wrongful termination attempt and if the same is
not cured within ten (10) days, then Buyer may at any time prior to the Closing
that such violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in Section
10.2.(c) hereof.
10.2.(b) Termination by JWA. If (i) there has been a material
violation or breach by Buyer of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in writing by
JWA, or (ii) there has been a failure of satisfaction of a condition to the
obligations of JWA which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement under this Article 10 or otherwise without
grounds to do so, then JWA may give written notice to Buyer specifying such
violation, breach, failure or wrongful termination attempt and if the same is
not cured within ten (10) days, then JWA may at any time prior to the Closing
that such violation, breach, failure or wrongful termination attempt is
42
continuing, terminate this Agreement with the effect set forth in Section
10.2.(c) hereof.
10.2.(c) Effect of Termination. Termination of this Agreement
pursuant to this Section 10.2 shall not in any way terminate, limit or restrict
rights and remedies of any party hereto against any other party which has
violated, breached or failed to satisfy any of the representations, warranties,
covenants, agreements, conditions or other provisions of this Agreement prior to
termination hereof; provided JWA is prohibited from receiving the proceeds of
the Letter(s) of Credit under Section 5.27.(b) if this Agreement is terminated
pursuant to this Section 10.2 other than as a result of JWA's termination of
this Agreement pursuant to Section 10.1.(d)(ii) (and, thereby, this Section
10.2). In addition to the right of any party under common law to redress for any
such breach or violation, each party whose breach or violation has occurred
prior to termination shall jointly and severally indemnify each other party for
whose benefit such representation, warranty, covenant, agreement or other
provision was made ("indemnified party") from and against all losses, damages
(excluding consequential damages), costs and expenses (including, without
limitation, interest (including prejudgment interest in any litigated matter),
penalties, court costs, and attorneys fees and expenses) asserted against,
resulting to, imposed upon, or incurred by the indemnified party, directly or
indirectly, by reason of, arising out of or resulting from such breach or
violation. Subject to the foregoing, the parties' obligations under Section 12.7
of this Agreement shall survive termination.
11. RESOLUTION OF DISPUTES
11.1. Arbitration.
Except as otherwise provided herein, any dispute, controversy or
claim arising out of or relating to this Agreement or any contract or agreement
entered into pursuant hereto or the performance by the parties of its or their
terms shall be settled by binding arbitration held in Chicago, Illinois in
accordance with the expedited procedures (irrespective of the amount in
controversy) of the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") then in effect, except as specifically otherwise provided in
this Article 11. Except as modified herein, the Federal Arbitration Act, 9 USC
ss.1 et. seq. shall apply to any arbitration hereunder.
11.2. Arbitrators.
If the matter in controversy (exclusive of attorney fees and
expenses) shall appear, as at the time of the demand for arbitration, to exceed
One Million Dollars ($1,000,000), then the panel to be appointed shall consist
of three neutral arbitrators; otherwise, one neutral arbitrator. All arbitrators
shall be drawn from when it exists, the AAA Large Complex Case Panel.
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11.3. Procedures; No Appeal.
The arbitrator(s) shall allow such discovery as the arbitrator(s)
determine appropriate under the circumstances and shall resolve the dispute as
expeditiously as practicable, and if reasonably practicable, within one hundred
twenty (120) days after the selection of the arbitrator(s). The arbitrator(s)
shall give the parties written notice of the decision, with the reasons therefor
set out, and shall have thirty (30) days thereafter to reconsider and modify
such decision if any party so requests within ten (10) days after the decision.
Thereafter, the decision of the arbitrator(s) shall be final, binding, and
nonappealable with respect to all persons, including (without limitation)
persons who have failed or refused to participate in the arbitration process.
11.4. Authority.
The arbitrator(s) shall have authority to award relief under legal or
equitable principles, including interim or preliminary relief, and to allocate
responsibility for the costs of the arbitration and to award recovery of
attorneys fees and expenses in such manner as is determined to be appropriate by
the arbitrator(s).
11.5. Entry of Judgment.
Judgment upon the award rendered by the arbitrator(s) may be entered
in any court having in personam and subject matter jurisdiction. Buyer and each
Seller hereby submit to the in personam jurisdiction of the Federal and State
courts in Wisconsin and Iowa, for the purpose of confirming any such award and
entering judgment thereon.
11.6. Confidentiality.
All proceedings under this Article 11, and all evidence given or
discovered pursuant hereto, shall be maintained in confidence by all parties.
11.7. Continued Performance.
The fact that the dispute resolution procedures specified in this
Article 11 shall have been or may be invoked shall not excuse any party from
performing its obligations under this Agreement and during the pendency of any
such procedure all parties shall continue to perform their respective
obligations in good faith, subject to any rights to terminate this Agreement
that may be available to any party.
11.8. Tolling.
All applicable statutes of limitation shall be tolled while the
procedures specified in this Article 11 are pending. The parties will take such
action, if any, required to effectuate such tolling.
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12. MISCELLANEOUS
12.1. Further Assurance.
From time to time, at Buyer's request and without further
consideration, JWA and Century will execute and deliver to Buyer such documents
and take such other action as Buyer may reasonably request in order to
consummate more effectively the transactions contemplated hereby.
12.2. Disclosures and Announcements.
Announcements concerning the transactions provided for in this
Agreement by Buyer, Century or JWA shall be subject to the approval of the other
parties in all essential respects, except that after the Closing, or after the
first public disclosure of such transactions made with joint approval, approval
of Buyer shall not be required as to any statements and other information which
JWA may submit to the Securities and Exchange Commission, The Nasdaq Stock
Market or JWA's shareholders or be required to make pursuant to any rule or
regulation of the Securities and Exchange Commission or The Nasdaq Stock Market,
or otherwise required by law.
12.3. Assignment; Parties in Interest.
12.3. (a) Assignment. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other parties.
Notwithstanding the foregoing, Buyer may, without consent of any other party,
cause one or more subsidiaries of Buyer to carry out all or part of the
transactions contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of its obligations, and those of any such
subsidiary, to JWA and Century hereunder.
12.3. (b) Parties in Interest. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successors and
permitted assigns of the parties hereto. Nothing contained herein shall be
deemed to confer upon any other person any right or remedy under or by reason of
this Agreement.
12.4. Law Governing Agreement.
This Agreement may not be modified or terminated orally, and shall be
construed and interpreted according to the internal laws of the State of
Wisconsin, excluding any choice of law rules that may direct the application of
the laws of another jurisdiction.
12.5. Amendment and Modification.
Century, Buyer and JWA may amend, modify and supplement this
Agreement in such manner as may be agreed upon in writing among Century, Buyer
and JWA.
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12.6. Notice.
All notices, requests, demands and other communications hereunder
shall be given in writing and shall be: (a) personally delivered; (b) sent by
telecopier, facsimile transmission or other electronic means of transmitting
written documents; or (c) sent to the parties at their respective addresses
indicated herein by registered or certified U.S. mail, return receipt requested
and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
12.6.(a) If to Buyer, or to Century after the Closing, to:
Berkley Inc.
0000 - 00xx Xxxxxx
Xxxxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(with a copy to)
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxx Xxxxxx XxXxxxxxx Xxxxxxx Xxxxx, P.C.
The Financial Center
000 Xxxxxx Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000-0000
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to JWA in writing.
12.6.(b) If to JWA, or to Century prior to the Closing, to:
Xxxxxxx Worldwide Associates, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx-Xxxxxxx
Facsimile: (000) 000-0000
(with a copy to)
Xxxxxxxx X. Xxxxxx, III
Xxxxxxx X. Xxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
or to such other person or address as JWA shall furnish to Buyer in writing.
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If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section.
12.7. Expenses.
Regardless of whether or not the transactions contemplated hereby are
consummated:
12.7.(a) Brokerage. Except as to Xxxxxx Xxxxxxx Xxxxxx Gull and
Xxxxxx & Co., each of whom shall be compensated by JWA, JWA, Century and Buyer
each represent and warrant to each other that there is no broker involved or in
any way connected with the transfer provided for herein on their behalf
respectively (and JWA represents and warrants that there is no broker involved
on behalf of Century) and each agrees to hold the other harmless from and
against all other claims for brokerage commissions or finder's fees in
connection with the execution of this Agreement or the transactions provided for
herein.
12.7.(b) Expenses to be Paid by Buyer. Buyer shall pay the filing
fees for reports or notifications required to be filed under the HSR Act.
12.7.(c) Other. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its counsel and other
agents in connection with the transactions contemplated hereby.
12.7.(d) Costs of Litigation or Arbitration. The parties agree that
(subject to the discretion, in an arbitration proceeding, of the arbitrator as
set forth in Section 11.4.) the prevailing party in any action brought with
respect to or to enforce any right or remedy under this Agreement shall be
entitled to recover from the other party or parties all reasonable costs and
expenses of any nature whatsoever incurred by the prevailing party in connection
with such action, including without limitation attorneys' fees and prejudgment
interest.
12.8. Certain Legal Matters.
12.8.(a) Transfer and Consent. Buyer acknowledges that Xxxxx &
Xxxxxxx has represented JWA and Century in connection with the transactions
provided for herein. Effective upon the Closing, Century shall, without the
necessity of further documentation of transfer, be deemed to have irrevocably
assigned and transferred to JWA all of Century's right to title to and interest
in all communications with, and work
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product of, Xxxxx & Lardner as they relate to this Agreement, all Ancillary
Instruments and the transactions effected by each and the preparation and
negotiation thereof, together with all written or other materials consisting of,
containing, summarizing or embodying such communications and work product.
Buyer, for itself and all its affiliated persons and entities, hereby consents
to the representation by Xxxxx & Xxxxxxx of JWA in any future matter including,
without limitation, post-closing disputes concerning this Agreement and all
transactions provided for herein.
12.8.(b) Waiver of Privilege. Buyer covenants that after the
Closing, no attorney-client privilege belonging to Century relating to any
matter occurring before the Closing will be waived, nor will the content of
communications or work product related to such privilege be disclosed to any
person, without the express written consent of JWA.
12.9. Entire Agreement.
This Agreement, the Ancillary Instruments and the Confidentiality
Agreement, dated November 4, 1999, between JWA and Buyer embody the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements, representations
or warranties between the parties other than those set forth or provided for
herein or therein.
12.10. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.11 Headings.
The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
BERKLEY INC. XXXXXXX WORLDWIDE ASSOCIATES, INC.
("Buyer") ("JWA")
By: /s/ Xxx Xxxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------------ ------------------------------
President and CEO Senior Vice President and CFO
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