<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 1, 1996
GenCorp Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 1-1520 34-0244000
- -------------------------------------------------------------------------------
(State of (Commission File Number) (IRS Employer
incorporation) Identification No.)
175 Ghent Road, Fairlawn, Ohio 44333-3300
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 869-4200
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
- ---------------------------------------------
(a) On March 1, 1996, GenCorp Inc. completed the sale of substantially all of
the assets of its Reinforced Plastics Division (which is described in GenCorp's
most recent Annual Report on Form 10-K for the fiscal year ended November 30,
1995) to Cambridge Industries, Inc. of Madison Heights, Michigan for an
aggregate consideration of approximately $42 million, of which approximately
$18 million was paid in cash at the closing, approximately $14 million of which
was paid by delivery of a Subordinated Promissory Note of Cambridge Industries
Holdings, Inc. and approximately $10 million of which was paid through the
retention of receivables. The consideration was determined by negotiations
between the parties.
Previously, on February 15, 1996, GenCorp Inc. completed the sale of
substantially all of the assets of its Vibration Control Division (which is
described in GenCorp's most recent Annual Report on Form 10-K for the fiscal
year ended November 30, 1995) to BTR Antivibration Systems, Inc., a subsidiary
of BTR plc. for an aggregate consideration of approximately $80 million paid in
cash at the closing. The consideration was determined by negotiations between
the parties. (On its own, this transaction was not required to be reported
pursuant to General Instructions to Form 8-K. The Vibration Control Division
divestiture is being reported now, together with the Reinforced Plastics
Division divestiture, due to its proximity in time to the reportable Reinforced
Plastics Division divestiture.)
Item 7. Financial Statements and Exhibits
- ------------------------------------------
(b) Unaudited Pro Forma Financial Information
-----------------------------------------
Basis of Presentation
Unaudited Pro Forma Consolidated Statement of Income for the year ended
November 30, 1995
Unaudited Pro Forma Consolidated Balance Sheet as of November 30, 1995
Notes to Unaudited Pro Forma Consolidated Financial Statements
(2)
<PAGE> 3
(c) Exhibits
<TABLE>
<CAPTION>
Table Exhibit
Item No. Exhibit Description Letter
-------- ------------------- --------
<S> <C> <C>
2 Asset Purchase Agreement dated A
March 1, 1996 among GenCorp Inc.,
Cambridge Industries Holdings, Inc.
and Cambridge Industries, Inc.
Asset Purchase Agreement dated B
February 14, 1996 between BTR
Antivibration Systems, Inc. and
GenCorp Inc.
</TABLE>
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
GENCORP INC.
By /s/ D. M. Steuert
-----------------------------------
Name: D.M. Steuert
Title: Senior Vice President and
Chief Financial Officer
Dated: March 13, 1996
(3)
<PAGE> 4
GenCorp Inc.
Unaudited Pro Forma Consolidated Financial Statements
Basis of Presentation
The unaudited pro forma consolidated statement of income for the year ended
November 30, 1995, presents the operating results of GenCorp Inc. (the
"Company"), excluding the operations of its Reinforced Plastics and Vibration
Control divisions (the "Divisions"). The unaudited pro forma consolidated
statement of income is presented as if the transactions had occurred at the
beginning of the year ended November 30, 1995. The unaudited pro forma
consolidated balance sheet has been prepared assuming the transactions had
occurred as of November 30, 1995.
The net cash proceeds from the sales of the Divisions have been applied to
reduce the Company's long-term debt. Any gains or losses resulting from the
sales of the Divisions are excluded from the unaudited pro forma consolidated
statement of income.
The unaudited pro forma consolidated financial statements and the notes thereto
should be read in conjunction with the Company's historical financial
statements and related notes thereto included in the Company's Annual Report on
Form 10-K for the fiscal year ended November 30, 1995.
The unaudited pro forma information is not necessarily indicative of the
results of operations or financial position that would have resulted had the
transactions occurred as described above, nor is it necessarily indicative of
the results of operations for future periods or future financial position.
The accompanying notes are an integral part of these financial statements.
(4)
<PAGE> 5
GenCorp Inc.
Unaudited Pro Forma Consolidated Statement of Income
Year ended November 30, 1995
(Dollars in millions, except per-share data)
<TABLE>
<CAPTION>
Elimination of
GenCorp Inc. Divested GenCorp Inc.
Historical Divisions (1) Pro Forma
---------- ------------- ------------
<S> <C> <C> <C>
Net Sales $ 1,772 $ 271 $ 1,501
Costs and Expenses
Cost of products sold 1,430 239 1,191
Selling, general and administrative 174 23 151
Depreciation 70 13 57
Interest expense 34 7 27
Other (income) and expense, net (5) (4) (1)
Unusual items 5 0 5
-------------- -------------- -------------
1,708 278 1,430
Income (Loss) Before Income Taxes 64 (7) 71
Income tax provision (benefit) 26 (3) 29
-------------- -------------- -----------
Net Income (Loss) $ 38 $ (4) $ 42
============== ============== ===========
Earnings Per Share:
Primary $ 1.17 $ 1.28
Fully diluted $ 1.10 1.20
Average number of shares of common
stock outstanding (in thousands):
Primary 32,814 32,814
Fully diluted 39,972 39,972
<FN>
The accompanying notes are an integral part of these financial statements.
(1) See footnotes A and B.
</TABLE>
(5)
<PAGE> 6
GenCorp Inc.
Unaudited Pro Forma Consolidated Balance Sheet
November 30, 1995
<TABLE>
<CAPTION>
(Dollars in millions)
Elimination of
GenCorp Inc. Divested Consolidating GenCorp Inc.
Historical Divisions (2) Adjustments (3) Pro Forma
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Current Assets
Cash and equivalents $ 17 $ (1) $ $ 16
Accounts receivable 242 (30) 10 222
Inventories 161 (20) 141
Prepaid expenses and other 45 45
--------------- --------------- --------------- ---------------
Total Current Assets 465 (51) 10 424
Investments and other assets 450 14 464
Property, plant and equipment, at cost
Land 41 (1) 40
Buildings and building equipment 309 (24) 285
Machinery and equipment 919 (175) 744
Construction in progress 33 (7) 26
--------------- --------------- --------------- ---------------
1,302 (207) 0 1,095
Accumulated depreciation (759) 97 (662)
--------------- --------------- --------------- ---------------
Net property, plant and equipment 543 (110) 0 433
--------------- --------------- --------------- ---------------
Total Assets $ 1,458 $ (161) $ 24 $ 1,321
=============== =============== =============== ===============
Current Liabilities
Notes payable $ 21 $ $ $ 21
Accounts payable-trade 99 (18) 81
Income taxes 5 5
Accrued expenses 251 (5) 246
--------------- --------------- --------------- ---------------
Total Current Liabilities 376 (23) 0 353
Long-term debt 383 (98) 285
Postretirement benefits other than pensions 372 (16) 356
Other long-term liabilities 292 6 298
Shareholders' Equity
Preference stock-$1.00 par value; 15 million
shares authorized; none outstanding -- -- -- --
Common stock - $.10 par value; 90 million
shares authorized; 33.4 million shares
outstanding 3 3
Other capital 22 22
Retained earnings (deficit) 2 (6) (4)
Cumulative currency translation adjustment 8 8
--------------- --------------- --------------- ---------------
Total Shareholders' Equity 35 0 (6) 29
--------------- --------------- --------------- ---------------
Total Liabilities and Shareholders' Equity $ 1,458 $ (23) $ (114) $ 1,321
=============== =============== =============== ===============
<FN>
The accompanying notes are an integral part of these financial statements.
(2) See footnotes A and C.
(3) See footnotes A and D.
</TABLE>
(6)
<PAGE> 7
GenCorp Inc.
Notes to Unaudited Pro Forma Consolidated Financial Statements
Note A
- ------
The divested divisions include the Reinforced Plastics Division and the
Vibration Control Division.
Note B
- ------
The elimination of net sales and expenses of the divested divisions included an
allocated amount for interest expense. Interest rates are variable, primarily
based on LIBOR, and were at an average rate of 6.75 percent for the year ending
November 30, 1995.
Note C
- ------
The elimination of assets sold to and liabilities assumed by the buyers of the
divested divisions reflect the terms of the asset purchase agreements.
Note D
- ------
The consolidating adjustments include/reflect:
- The repayment of long-term debt from the net cash proceeds from the
sales of the divested divisions.
- Receivables retained by the Company and the receipt of a note receivable
from the sale of the Reinforced Plastics Division.
- The gains and losses resulting from the curtailment of the pension and
retiree medical benefit plans.
- Retained earnings as a result of the sales of the divested divisions.
(7)
<PAGE> 1
Execution Copy
EXHIBIT A
ASSET PURCHASE AGREEMENT
DATED MARCH 1, 1996
AMONG
GENCORP INC.,
CAMBRIDGE INDUSTRIES HOLDINGS, INC.
AND
CAMBRIDGE INDUSTRIES, INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Article I - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article II - Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01 Purchase and Sale . . . . . . . . . . . . . . . . . . . . 2
Section 2.02 Excluded Assets . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03 Assumption of Liabilities . . . . . . . . . . . . . . . . 5
Section 2.04 Excluded Liabilities . . . . . . . . . . . . . . . . . . 6
Section 2.05 Consents to Assignment . . . . . . . . . . . . . . . . . 7
Section 2.06 Purchase Price; Payment . . . . . . . . . . . . . . . . . 7
Section 2.07 Purchase Price Adjustment . . . . . . . . . . . . . . . . 9
Section 2.08 Purchase Price Allocation . . . . . . . . . . . . . . . . 11
Section 2.09 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 12
Article III - Representations and Warranties of the Seller . . . . . . . . . . . . . . . . 15
Section 3.01 Organization and Existence . . . . . . . . . . . . . . . 15
Section 3.02 Corporate Authorization . . . . . . . . . . . . . . . . . 15
Section 3.03 Authorization . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.04 Non-contravention . . . . . . . . . . . . . . . . . . . . 16
Section 3.05 Properties . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.07 Material Contracts . . . . . . . . . . . . . . . . . . . 17
Section 3.08 Compliance with Laws . . . . . . . . . . . . . . . . . . 18
Section 3.09 Permits . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.10 Labor and Employment Matters . . . . . . . . . . . . . . 19
Section 3.11 Intellectual Property . . . . . . . . . . . . . . . . . . 20
Section 3.12 Fees and Commissions . . . . . . . . . . . . . . . . . . 20
Section 3.13 Investment Intent . . . . . . . . . . . . . . . . . . . . 21
Section 3.14 Absence of Certain Changes . . . . . . . . . . . . . . . 21
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.15 Real Property Owned . . . . . . . . . . . . . . . . . . . 22
Section 3.16 Real Property Leased . . . . . . . . . . . . . . . . . . 22
Section 3.17 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.18 Environmental Matters . . . . . . . . . . . . . . . . . . 23
Section 3.19 Financial . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.21 Tooling Receivables . . . . . . . . . . . . . . . . . . . 25
Section 3.22 Inspections; Limitation of Seller's . . . . . . . . . . . 25
Warranties . . . . . . . . . . . . . . . . . . . . . . .
Article IV - Representations and Warranties of the Buyer . . . . . . . . . . . . . . . . . 26
Section 4.01 Organization and Existence . . . . . . . . . . . . . . . 26
Section 4.02 Corporate Authorization . . . . . . . . . . . . . . . . . 26
Section 4.03 Organization and Good Standing of
Company Subsidiaries . . . . . . . . . . . . . . . . . . 26
Section 4.04 Authorization . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.05 Non-contravention . . . . . . . . . . . . . . . . . . . . 27
Section 4.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.07 Compliance with Laws . . . . . . . . . . . . . . . . . . 28
Section 4.08 Subordinated Debt . . . . . . . . . . . . . . . . . . . . 28
Section 4.09 Offering of Securities . . . . . . . . . . . . . . . . . 28
Section 4.10 Fees and Commission . . . . . . . . . . . . . . . . . . . 28
Section 4.11 Financial Statements . . . . . . . . . . . . . . . . . . 29
Section 4.12 Inspections; Limitation of Seller's Warranties . . . . . 29
Article V - Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.01 Further Conveyances . . . . . . . . . . . . . . . . . . . 30
Section 5.02 Non-Compete . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.03 Non-Solicitation of Employees . . . . . . . . . . . . . . 31
Section 5.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Article VI - Covenants of the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.01 GenCorp Name . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.02 Vacation of Shared Facility . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 6.03 Vacation of Marion Facility . . . . . . . . . . . . . . . 32
Section 6.04 Non-Solicitation of Employees . . . . . . . . . . . . . . 34
Section 6.05 Title Insurance . . . . . . . . . . . . . . . . . . . . . 34
Section 6.06 Environmental Reports . . . . . . . . . . . . . . . . . . 34
Section 6.07 Investigation Limitation . . . . . . . . . . . . . . . . 35
Section 6.08 Rushville Lease Termination . . . . . . . . . . . . . . . 35
Article VII - Covenants of Both Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.01 Administration of Accounts . . . . . . . . . . . . . . . 35
Section 7.02 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . 36
Section 7.03 Access to Former Business Records . . . . . . . . . . . . 36
Section 7.04 Access to Former Employees . . . . . . . . . . . . . . . 36
Section 7.05 Inventory . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.06 Reimbursement of Certain Costs . . . . . . . . . . . . . 37
Article VIII - Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 8.01 Salaried Employees . . . . . . . . . . . . . . . . . . . 37
Section 8.02 Union Employees . . . . . . . . . . . . . . . . . . . . . 42
Section 8.03 No Third Party Claims . . . . . . . . . . . . . . . . . . 42
Section 8.04 Workers' Compensation . . . . . . . . . . . . . . . . . . 42
Section 8.05 Plan Payments . . . . . . . . . . . . . . . . . . . . . . 43
Article IX - Survival; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.01 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . 43
Section 9.02 Seller's Agreement to Indemnify . . . . . . . . . . . . . 44
Section 9.03 Buyer's Agreement to Indemnify . . . . . . . . . . . . . 44
Section 9.04 Indemnification Limits; Exclusive Remedy . . . . . . . . 44
Section 9.05 Procedure for Third Party Claims . . . . . . . . . . . . 46
Section 9.06 Procedure for Direct Claims . . . . . . . . . . . . . . . 48
Section 9.07 Environmental Claims . . . . . . . . . . . . . . . . . . 49
Article X - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 10.01 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.02 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . 50
Section 10.03 Assignment . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.04 Severability . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.05 Amendment and Waiver . . . . . . . . . . . . . . . . . . 51
Section 10.06 Parties in Interest; Limitation on Rights of Others . . . 51
Section 10.07 Counterparts; Effectiveness . . . . . . . . . . . . . . . 51
Section 10.08 Entire Agreement . . . . . . . . . . . . . . . . . . . . 51
Section 10.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.11 Interpretation . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
iv
<PAGE> 6
Exhibit A - Definitions
Exhibit B - Working Capital Items
Exhibit C - Cambridge Benefits
Exhibit D - Environmental Reports
Exhibit E - Farmington Hills RPD Equipment
Exhibit F - GenCorp Accounting Principles
Exhibit G - Marion RPD Equipment
Exhibit H - Closing Liability List
v
<PAGE> 7
Execution Copy
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated March 1, 1996,
among CAMBRIDGE INDUSTRIES HOLDINGS, INC., a Delaware corporation (the
"Parent") CAMBRIDGE INDUSTRIES, INC., a Delaware corporation ("Cambridge")
(Parent and Cambridge collectively, "Buyer"), and GENCORP INC., an Ohio
corporation (the "Seller").
WHEREAS, the Seller, among other things, conducts a business through
its Reinforced Plastics Division which manufactures and sells reinforced
plastics components for automobile and truck applications; and
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Buyer desires to purchase from the Seller and Seller desires to
sell to Buyer substantially all of the assets associated with such business,
and the Seller desires to transfer to the Buyer, and the Buyer has agreed to
assume, certain liabilities associated with such business.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements herein set forth, the
parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. DEFINITIONS. Defined terms used in this Agreement have
the meanings ascribed to them by definition in this Agreement or in Exhibit A.
<PAGE> 8
ARTICLE II
PURCHASE AND SALE
-----------------
SECTION 2.01. PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, Cambridge hereby purchases from Seller and Seller
hereby sells, transfers, assigns and delivers to Cambridge, all of its right,
title and interest in and to the assets and properties of Seller which are
Attributable to the RPD Business, wherever located, whether tangible or
intangible, real or personal, whether owned directly or indirectly, other than
the Excluded Assets (all the assets and properties to be transferred to
Cambridge by Seller pursuant to this Agreement are referred to collectively
herein as the "Purchased Assets"). Without limiting the foregoing, the
Purchased Assets include all of Seller's right, title and interest in, to and
under the following (except as otherwise specified herein and other than those
which are Excluded Assets):
(a) the Shelbyville Facility together with all buildings, fixtures
and improvements erected thereon and appurtenances thereto (the "Shelbyville
Real Property");
(b) the Shadeland Lease and the Rushville Lease (the "Leased
Property");
(c) (i) all machinery, equipment, tooling, dies, furniture,
office equipment, communications equipment, vehicles, spare and replacement
parts and other similar tangible personal property Attributable to the RPD
Business (collectively, the "Equipment") including, without limitation, all
such property used or held for use by Seller at the RPD Facilities and (ii) the
Marion RPD Equipment and Farmington Hills RPD Equipment;
(d) (i) all raw materials, work-in-process, finished goods,
supplies, spare parts, samples and stores Attributable to the RPD Business
(collectively, the "Inventory") including, without limitation, all such items
used or held for use by Seller at the RPD Facilities, and (ii) the Marion RPD
Inventory;
(e) all contracts, agreements, options, personal property leases,
licenses, sales and purchase orders, commitments and other instruments of any
kind, whether
2
<PAGE> 9
written or oral, to which Seller is a party and which are Attributable to the
RPD Business (collectively, the "Contracts");
(f) all quotations, bids and proposals made or received by Seller
and Attributable to the RPD Business (collectively, "Bids");
(g) all accounts receivable and receivables of Seller with respect
to customer tooling ("Tooling Receivables") together with any unpaid interest
or fees accrued thereon or other amounts due with respect thereto, which are
Attributable to the RPD Business;
(h) all petty cash of Seller located at the RPD Facilities ("Petty
Cash");
(i) all rights, claims, credits, causes of action, rights of set
off, indemnity rights, defenses and warranty and other claims of Seller against
third parties which are Attributable to the RPD Business, whether accrued to or
to accrue, including, without limitation, claims under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers,
contractors and other third parties;
(j) all prepaid charges and expenses of Seller Attributable to the
RPD Business;
(k) all licenses, permits, approvals, certificates, consents,
orders or other authorizations issued or granted to Seller by any Governmental
Authority and Attributable to the RPD Business (the "Permits");
(l) originals or copies of all books, records, files, books of
account, invoices, engineering information, sales and promotional literature,
manuals, sales and purchase correspondence, lists of suppliers and customers,
personnel and employment records of Transferred Employees, and accounting,
marketing, engineering and manufacturing documentation, whether in hard copy or
computer format, to the extent Attributable to the RPD Business; and
(m) subject to rights held by third parties that have been
licensed by the Seller prior to the Closing Time, the RPD Intellectual
Property.
SECTION 2.02. EXCLUDED ASSETS. Cambridge expressly understands and
3
<PAGE> 10
agrees that the following assets, properties and rights (the "Excluded Assets")
are excluded from, and shall not be counted among, the Purchased Assets:
(a) all of the Seller's cash, negotiable securities, letters of
credit, bonds and cash equivalents (whether or not Attributable to the RPD
Business), except for the Petty Cash;
(b) all Intellectual Property which is not RPD Intellectual
Property;
(c) the Ionia Facility and the Ionia Facility permits being
retained by Seller as described on Exhibit A to Section 3.09 of the Seller
Disclosure Schedule;
(d) (i) the Marion Facility, (ii) the CTC Facility, (iii) the
Farmington Hills Facility, (iv) all machinery, tooling, dies, equipment,
furniture, office equipment, communications equipment, vehicles, spare and
replacement parts and other similar tangible personal property and all raw
materials, work-in-process, finished goods, supplies, spare parts, samples and
stores used or held for use at the Marion Facility, the CTC Facility, or the
Farmington Hills Facility except for the Marion RPD Equipment, the Marion RPD
Inventory and the Farmington Hills RPD Equipment, and (v) The GenCorp Master
Lease with GE Capital and all cars leased thereunder.;
(e) The names and trademarks "GenCorp", and "GenCorp Automotive"
and related trademarks, corporate names, and trade names incorporating
"GenCorp", and all stylized logos incorporating the name "GenCorp";
(f) All rights, claims, credits, causes of action, rights of set
off, indemnity rights, refunds, rebates, defenses and warranty and other claims
against third parties, whether accrued or to accrue, to the extent relating to
any Excluded Assets or to any liability or obligation of Seller which is not an
Assumed Liability;
(g) All deposits, prepaid charges and advance payments to the
extent relating to Excluded Assets or to any liability or obligation of Seller
which is not an Assumed Liability;
(h) All rights or claims to Tax refunds and all Tax benefits;
(i) All policies of insurance and claims and rights under such
policies of
4
<PAGE> 11
insurance;
(j) Any item described in Section 2.01(1) which is subject to
attorney client privilege and copies of any of the items described in 2.01(1)
and all books and records pertaining to Seller's employee benefit plans;
(k) All employee benefit plans and any assets of any such plans;
(l) All bank checks, bank accounts, safety deposit boxes, lock
boxes and agreements with banks and other financial institutions; and
(m) All of Seller's rights under this Agreement and any other
agreement or instrument delivered by Seller in connection herewith.
SECTION 2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject
to the conditions of this Agreement, Cambridge hereby assumes and becomes
directly and solely responsible for the payment, performance and discharge of
the following (collectively, the "Assumed Liabilities):
(a) All liabilities and obligations to the extent reflected on the
Closing Liability List;
(b) Any liability of Seller for unpaid amounts for charges
incurred, goods received, or services rendered to the RPD Business in the
ordinary course prior to the Closing;
(c) All liabilities and obligations arising out of or resulting
from any obligation to accept return of, provide refunds for, or to repair,
replace, recall or service any RPD Business product produced by Seller before
the Closing or produced by Cambridge after the Closing;
(d) All liabilities and obligations arising out of or resulting
from any injury to person or damage to property resulting from RPD Business
products produced, or any RPD Business services performed by Cambridge after
the Closing;
(e) All liabilities and obligations arising under or resulting
from the performance of or any nonperformance under any Contract or Bid
(excluding: (i)
5
<PAGE> 12
the oral understanding described in Section 3.07(a)(ix) of the Seller
Disclosure Schedule and (ii) the COBRA obligations described in Section
3.07(a)(v) of the Seller Disclosure Schedule) to the extent occurring after the
Closing;
(f) All liabilities and obligations arising under or resulting
from the compliance with or any noncompliance under any Permit to the extent
occurring after the Closing, except as otherwise provided in the Ionia Lease as
to the Ionia Leased Facility;
(g) All liabilities and obligations arising out of or resulting
from violation of any Applicable Law in the conduct of the RPD Business by
Cambridge to the extent occurring after the Closing, except as otherwise
provided in the Ionia Lease as to the Ionia Leased Facility; and
(h) All liabilities and obligations arising out of or resulting
from any infringement or other misappropriation of the Intellectual Property
rights of third parties in the conduct of the RPD Business by Buyer to the
extent occurring after the Closing.
SECTION 2.04. EXCLUDED LIABILITIES. Except for the Assumed
Liabilities Cambridge does not hereby assume, and shall not as a result of the
transactions contemplated hereby at any time hereafter become liable for, any
liability or obligation of Seller of any nature whatsoever, whether accrued,
liquidated, unliquidated, known, unknown or otherwise. Without limiting the
foregoing the Excluded Liabilities include the following liabilities and
obligations of Seller (other than those which are Assumed Liabilities): (a) any
litigation in respect of a liability or obligation of Seller arising from the
conduct of the RPD Business by Seller prior to the Closing Time, (b) any
liability or obligation of Seller to satisfy customer claim(s) reflected in
Account 424 (Allowance for Other Claims and Rebates) of Seller's account(s),
(c) any liability or obligation of Seller under the Environmental Laws in
respect of solid waste or Hazardous Materials which have been transported by or
on behalf of Seller for offsite disposal, (d) any liability or obligation of
Seller for any violation of the Environmental Laws to the extent arising from
the operation of the RPD Business by Seller prior to the Closing Time,
including, without limitation, in respect of any fine or penalty arising from
any permit violation and (e) any liability or obligation arising from an
Environmental Claim (collectively, the "Excluded Liabilities").
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SECTION 2.05. CONSENTS TO ASSIGNMENT. The following shall apply to
all Contracts, Bids and Permits:
(a) Anything in this Agreement to the contrary notwithstanding,
this Agreement shall not constitute an assignment or agreement to assign any
Contract, Bid or any Permit (or any rights thereunder) if an attempted
assignment thereof, without the consent waiver, confirmation, novation or
approval (a "Consent") of a third party thereto, would constitute a breach or
other contravention thereof, be ineffective with respect to any party thereto
or in any way adversely affect the rights of Cambridge or Seller thereunder.
(b) With respect to any such Contract, Bid or Permit, after the
Closing, the Seller and Cambridge will use all reasonable good faith efforts to
obtain as expeditiously as possible the Consent of the other parties to such
item for the assignment thereof to Cambridge or, alternatively, written
confirmation from such parties reasonably satisfactory in form and substance to
Cambridge and the Seller that such Consent is not required; provided, however,
that Seller will not be obligated to pay any consideration therefor or to incur
any other obligation in connection therewith.
(c) To the extent that any such Consent is not obtained, Seller
shall, to the extent it may lawfully and without breach do so, use all
reasonable efforts to: (i) cooperate with Cambridge in any reasonable
arrangement intended to provide to Cambridge the benefits of any such Contract,
Bid or Permit and (ii) upon Cambridge's reasonable request enforce for the
benefit of Cambridge, any rights of Seller arising from any such Contract, Bid
or Permit. Cambridge will reimburse Seller for all reasonable out-of-pocket
costs incurred by Seller in using such reasonable efforts under this Section
2.05(c).
(d) Provided that Seller has complied with its obligations under
Section 2.05(b) and (c), then, notwithstanding the absence of any such
Consents, from and after the Closing, Buyer shall perform all obligations under
such Contracts, Bids and Permits on behalf of Seller.
SECTION 2.06. PURCHASE PRICE; PAYMENT.
(a) For purposes of this Agreement, the term "Purchase Price"
means:
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(i) Twenty-Seven Million Five Hundred Sixty Thousand
Dollars ($27,560,000);
(ii) MINUS Nine Million Dollars ($9,000,000) (the
"Estimated Non-Tooling Accounts Receivable Amount");
(iii) MINUS the amount that (A) $10,600,000 exceeds (B)
Fifteen Million Four Hundred Thousand Dollars ($15,400,000) (the "Estimated
Trade Accounts Receivable Amount") less Five Million Two Hundred Thousand
($5,200,000) the ("Estimated Accounts Payable Amount");
(iv) PLUS The Subordinated Note; and
(v) PLUS or MINUS the amount of the Adjustment (as
defined in Section 2.07).
For purposes of this Agreement, the "Estimated Cash Purchase Price"
shall be the resulting amount of (i) through (iii) above and equals Eighteen
Million One Hundred Sixty Thousand Dollars ($18,160,000).
(b) At the Closing: (i) Cambridge shall pay to Seller by wire
transfer the Estimated Cash Purchase Price, and (ii) Parent shall deliver to
Seller the Subordinated Note. When finally determined in accordance with
Section 2.07, Cambridge shall pay to Seller or Seller shall pay to Cambridge,
as the case may be, the amount of the Adjustment.
(c) All payments of cash hereunder shall be made by delivery to
the payee as follows:
(i) Payments under this Agreement in excess of $10,000
shall be made by wire transfer (in immediately available funds) to the account
designated by the payee.
(ii) In all other cases, the party obligated to make a
payment under this Agreement will do so by delivering to the payee a bank
cashier's check (in immediately available funds) payable to the order of the
payee.
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SECTION 2.07. PURCHASE PRICE ADJUSTMENT. The Adjustment (as defined
below) will be determined as follows:
(a) Cambridge and Seller agree that the Final Cash Purchase Price
shall be determined as follows:
(i) Twenty-Seven Million Five Hundred Sixty Thousand
Dollars ($27,560,000);
(ii) MINUS the Actual Non-Tooling Accounts Receivable
Amount; and
(iii) plus any amount that (A) Actual Total Accounts
Receivable Amount less Actual Trade Accounts Payable amount exceeds (B)
$10,600,000 or minus any that (A) $10,600,000 exceeds (B) the Actual Total
Accounts Receivables Amount less the Actual Trade Accounts Payable Amount, as
the case may be.
(b) As promptly as possible following the Closing Time, but in any
event within thirty (30) days following the Closing Time, Seller shall prepare
and deliver to Cambridge a closing statement (the "Closing Statement") setting
forth the Actual Non-Tooling Accounts Receivable Amount, the Actual Total
Accounts Receivable Amount and the Actual Trade Accounts Payable Amount
(collectively, the "Actual Receivable and Payable Items") as of the Closing
Time. The Closing Statement shall be prepared in accordance with the GenCorp
Accounting Principles and, to the extent not described in the GenCorp
Accounting Principles, in accordance with GAAP consistently applied (for
purposes of this Section 2.07 collectively referred to as the "Accounting
Principles"). Cambridge shall give Seller access to the data necessary to
prepare the Closing Statement and provide Seller with the reasonable
assistance of Cambridge's employees in connection therewith. Representatives
of Cambridge shall have the right to participate with representatives of Seller
in the process of preparing the Closing Statement and shall have access to all
data, schedules and work papers used by Seller in preparing the Closing
Statement. Cambridge shall have the right to have the Closing Statement
audited and Seller shall reasonably cooperate with Cambridge and Cambridge's
accountants in conducting such audit.
(c) The Closing Statement shall become final and binding upon
Cambridge unless on or before the (30th) day after Cambridge's receipt of the
Closing
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Statement Cambridge shall deliver to Seller a written notice of its objection
to the amount of any Actual Receivable and Payable Item on the Closing
Statement, together with proposed changes thereto and the reasons for such
changes; provided, however, that the only objection to the Closing Statement
which Cambridge may make is whether the Closing Statement accurately reflects,
in accordance with the Accounting Principles used to prepare the Closing
Statement, the book value or book amount of the Actual Receivable and Payable
Items included thereon. Cambridge may not object to any other matter
pertaining to the Closing Statement. All matters on which no notice of
objection is given shall be deemed final and binding. In no event may
Cambridge submit a notice of objection which suggests a change in the Closing
Statement of less than $100,000 in the aggregate.
(d) If Cambridge issues a notice of objection, Seller and
Cambridge shall meet and attempt to resolve the dispute within fifteen (15)
days following Cambridge's notice of objection. If the parties resolve all or
some of the matters in dispute within such fifteen (15) day period then the
parties shall prepare and sign an Adjusted Closing Statement reflecting such
agreement which shall be deemed final and binding. As to matters which remain
in dispute after such fifteen (15) day period ("Unresolved Matters"), the
Closing Statement shall be deemed final unless Cambridge shall within ten (10)
days after the end of such fifteen (15) day period request that the Closing
Statement be reviewed by the Accounting Firm.
(e) Cambridge shall give notice of its request for review by the
Accounting Firm to Seller in writing and shall within ten (10) days after such
notice submit a written statement of its position to the Accounting Firm and to
Seller. Seller may within ten (10) days of Cambridge submitting its written
statement to the Accounting Firm respond to such written statement with its own
written statement. The Accounting Firm shall consider both written statements
as it performs its duties. The authority of the Accounting Firm in reviewing
the Closing Statement shall be limited to determining whether, as to the Actual
Receivable and Payable Items included within the Unresolved Matters, the
Closing Statement accurately reflects, in accordance with the Accounting
Principles used to prepare the Closing Statement, the book value or book amount
of such Actual Receivable and Payable Items. The Accounting Firm shall not have
the authority to review or make a determination with respect to any matter
except the Actual Receivable and Payable Items included within Unresolved
Matters, it being understood that the Accounting Firm shall not be retained to
conduct its own independent audit or review, but rather shall be
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retained only to resolve specific differences between Seller and Cambridge
within the range of such difference and consistent with the Accounting
Principles. The Accounting Firm may request that each of the parties provide
it additional information in connection with its review of the Unresolved
Matters. The parties shall require the Accounting Firm to complete its review
not later than the thirtieth (30th) day following the submission of the matter
to the Accounting Firm. Cambridge and Seller shall bear the fees and expenses
of review by the Accounting Firm in the same proportion as the ratio of each
parties' position is to the final determination by the Accounting Firm, as
determined by the Accounting Firm, whose determination shall be final and
binding on the parties.
(f) The Accounting Firm shall prepare a report of any adjustments
to such Actual Receivable and Payable Items it deems necessary so that such
Actual Receivable and Payable Items are reflected on the Closing Statement in
accordance with the Accounting Principles. Such report shall contain an
explanation of any such adjustment and a description of why the Accounting
Principles required such adjustment. Promptly after its completion, the
Accounting Firm shall provide such report to Seller and Cambridge. Seller
shall incorporate all such adjustments into the Closing Statement within
fifteen (15) days after receipt of such adjustments, which shall thereupon
become the Adjusted Closing Statement and which shall be final and binding
upon Cambridge and Seller.
(g) Within ten (10) days after the date the Closing Statement or
the Adjusted Closing Statement becomes final in accordance with this Section
2.07 (such tenth day being referred to herein as the "Settlement Date"), Seller
shall pay to Cambridge the amount, if any, by which the Final Cash Purchase
Price Capital Amount is less than the Estimated Cash Purchase Price or
Cambridge shall pay to Seller the amount, if any, by which the Final Cash
Purchase Price is more than the Estimated Cash Purchase Price, together with,
in either case, interest from the Closing Time on the amount paid under this
Section 2.07(g) calculated at an annual rate equal to the prime rate as
publicly announced by Citibank, N.A., New York, New York as of the Closing Time
(any amount so paid under this Section 2.07(h) the "Adjustment").
SECTION 2.08. PURCHASE PRICE ALLOCATION. Not later than sixty (60)
days after the Closing, Cambridge shall provide to the Seller proposed
statements (the "Allocation Statements") allocating, in accordance with
generally accepted appraisal
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techniques, the total of the Purchase Price and the Assumed Liabilities
pursuant to this Agreement, to the different items of Purchased Assets and to
the Seller's obligations hereunder. Cambridge and the Seller agree to
negotiate in good faith definitive Allocation Statements within 10 calendar
days following the date of delivery of such proposed Allocation Statements.
Any costs or expenses incurred by Cambridge in connection with such Allocation
Statements (including appraisal fees) shall be borne by Cambridge. Cambridge
and the Seller agree to file all income, franchise and other Tax returns, and
execute such other documents as may be required by any Governmental Authority,
in a manner consistent with the Allocation Statements. Cambridge shall prepare
the Form 8594 under Section 1060 of the Code relating to this transaction based
on the Allocation Statements and deliver such Form to the Seller within 30
calendar days after finalization of the Allocation Statements as provided
above. Cambridge and the Seller agree to file such Form with each relevant
taxing authority, and to refrain from taking any position inconsistent with
such Form or Allocation Statements with any taxing authority unless otherwise
required by Applicable Law.
SECTION 2.09. CLOSING.
(a) CLOSING. The closing (the "Closing") of the purchase and sale
of the Purchased Assets and the assumption of the Assumed Liabilities hereunder
shall take place simultaneously with the execution and delivery of this
Agreement at the offices of Seller, 175 Ghent Road, Fairlawn, Ohio 44333-3300
and/or at such other place as the parties may agree and shall be deemed to have
occurred for all purposes under this Agreement as of 11:59 p.m. on the day
prior to the date of this Agreement (such time the "Closing Time").
(b) CLOSING DELIVERIES.
(i) DELIVERIES BY BUYER. At the Closing, Cambridge
and/or Parent shall deliver to Seller the following:
(A) By wire transfer in immediately available
funds the sum of Eighteen Million One Hundred Sixty Thousand Dollars
($18,160,000);
(B) The Subordinated Note and Subordinated Note
Credit Agreement;
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(C) A copy of resolutions of the Board of
Directors of each Buyer, certified by its Secretary authorizing the
negotiation, execution, delivery and performance of this Agreement and all
related agreements, documents and certificates;
(D) A Services Agreement covering the production
of sheet molding compound for Buyer (the "SMC Services Agreement");
(E) A side letter with respect to the supply of
in-mold coatings and adhesives to Buyer by Seller (the "IMC Side Letter");
(F) A lease of a portion of the Ionia Facility
(the "Ionia Lease");
(G) A legal opinion of Jaffe, Raitt, Heuer & Weiss as to authority and
enforceability;
(H) The Union Novation Agreements;
(I) Assignment and Assumption of the Rushville
Lease and Shadeland Lease;
(J) Transition Services Agreement.
(K) Offering Side Letter.
(ii) DELIVERIES BY SELLER. At the Closing, Seller shall
deliver to Buyer the following:
(A) A deed with respect to the Shelbyville Real
Property; provided, however, any and all warranties, expressed or implied, from
the use of the words "grant" or "convey" in the deeds are hereby disclaimed and
excluded.
(B) A Patent Assignment for the Patents.
(C) A copy of resolutions of the Board of
Directors of Seller, certified by its Secretary authorizing the negotiation,
execution, delivery and
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performance of this Agreement and all related agreements, documents and
certificates;
(D) The SMC Services Agreement;
(E) The IMC Side Letter;
(F) The Ionia Lease;
(G) A legal opinion of C. R. Ennis as to
authority and enforceability;
(H) The Union Novation Agreements;
(I) A Bill of Sale and Assignment of Intangibles;
(J) Assignment and Assumption of the Rushville
Lease and Shadeland Lease;
(K) A Responsible Party Transfer form with
respect to the Shelbyville Real Property;
(L) Transition Services Agreement;
(M) MESC Form;
(N) Consent and Estoppel Certificates relating to
Leased Real Property; and
(O) Offering Side Letter.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
Except as otherwise set forth on the Seller Disclosure Schedule,
Seller hereby represents and warrants to each Buyer as follows as of the date
hereof:
SECTION 3.01. ORGANIZATION AND EXISTENCE. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Ohio and has all corporate power and authority to own and operate its
properties and to carry on the RPD Business as now conducted. Seller is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction where the nature of its activities makes such qualification
necessary to carry on the RPD Business as now conducted.
SECTION 3.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Seller of this Agreement and each other agreement or instrument
executed and delivered or to be executed and delivered by Seller pursuant to
this Agreement and the consummation by Seller of the transactions contemplated
hereby and thereby are within Seller's corporate powers and have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement constitutes, and each other agreement or instrument executed and
delivered or to be executed and delivered by Seller pursuant to this Agreement
constitutes or will constitute, a legal, valid and binding obligation of Seller
enforceable against the Seller in accordance with its terms.
SECTION 3.03. AUTHORIZATION. Except as set forth in Section 3.03 of
the Seller Disclosure Schedule, the execution, delivery and performance by the
Seller of this Agreement require no action by, consent or approval of, or
filing with, any Governmental Authority other than:
(a) compliance with any applicable requirements of any Antitrust
Laws (including the HSR Act); and
(b) any actions, consents, approvals or filings otherwise
expressly referred to in this Agreement (including the Seller Disclosure
Schedule).
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SECTION 3.04. NON-CONTRAVENTION. Except as set forth in Section 3.04
of the Seller Disclosure Schedule, the execution, delivery and performance by
the Seller of this Agreement and the consummation of the transactions
contemplated hereby, do not and will not:
(a) conflict with the Articles of Incorporation or Code of
Regulations of the Seller;
(b) assuming compliance with the matters referred to in Section
3.03 conflict with or constitute a violation of any provision of any Applicable
Law binding upon or applicable to the RPD Business.
(c) conflict with or result in the breach of any material
agreement or instrument to which Seller is a party or by which it is bound or
constitute a default thereunder which would result in the Purchased Assets
being subject to a lien or other encumbrance.
SECTION 3.05. PROPERTIES.
(a) Except as set forth in Section 3.05 of the Seller Disclosure
Schedule, the Seller owns the Equipment, the Marion RPD Equipment, the
Farmington Hills RPD Equipment, the Inventory, the Marion RPD Inventory, and
the Tooling Receivables free and clear of all liens and encumbrances except
for: (i) Permitted Liens, and (ii) liens and encumbrances to secure the
payment of liabilities reflected on the Closing Liability List.
(b) Section 3.05 of the Seller Disclosure Schedule sets forth a
true and complete list of all real property owned by the Seller that is
Attributable to the RPD Business.
(c) Except for the Excluded Assets, the Contracts, Bids and
Permits described in Section 2.05(a), and as set forth in Section 3.05(c) of
the Seller Disclosure Schedule, the Purchased Assets, together with the SMC
Services Agreement and the IMC Side Letter, constitute or provide Cambridge
with access to (subject to the terms of such Agreements), all of the real
property, tangible personal property and Intellectual Property owned by Seller
and used or held for use by Seller in the operation of the RPD Business
immediately prior to the Closing.
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(d) To Seller's knowledge, and taking into account age, ordinary
wear and tear and current business requirements, the Equipment currently being
operated by Seller in the conduct of the RPD Business requires no major
repairs. Section 3.05 of the Seller Disclosure Schedule lists any corrective
action required as a result of an inspection by OSHA, IOSHA or MIOSHA of the
Shelbyville, Shadeland, Rushville or Ionia Leased Facility which has not been
completed by Seller.
SECTION 3.06. LITIGATION. Except as disclosed in Section 3.06 of
the Seller Disclosure Schedule:
(a) there are no actions, suits, or proceedings by any
Governmental Authority or any other Person pending or, to the knowledge of
Seller, threatened against Seller in respect of the RPD Business;
(b) there are no existing orders, judgments or decrees (other than
those of general application) of any Governmental Authority adversely affecting
the RPD Business; and
(c) there are no actions, suits or proceedings by any Governmental
Authority or any other Person pending or, to the knowledge of Seller,
threatened against Seller which are reasonably likely to adversely affect
Seller's ability to perform its obligations hereunder or which seek to enjoin
the transactions contemplated by this Agreement.
SECTION 3.07. MATERIAL CONTRACTS.
(a) Section 3.07 of the Seller Disclosure Schedule identifies by
date and the parties thereto the following (collectively, the "Scheduled
Contracts"):
(i) each executory agreement between the Seller and any
customer of the RPD Business for a dollar volume of purchases of products or
services from the RPD Business which (together with all prior purchases under
such agreement) is reasonably expected to exceed $250,000;
(ii) each executory agreement between the Seller and any
supplier of products or services to the RPD Business for a dollar volume of
sales to the RPD Business which (together with all prior sales under such
agreement) is reasonably
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expected to exceed $250,000;
(iii) all leases of real property which are Attributable to
the RPD Business;
(iv) all leases of tangible personal property Attributable
to the RPD Business with annual lease payments in excess of $20,000;
(v) oral or written contracts with employees of the RPD
Business;
(vi) manufacturers' representative agreements Attributable
to the RPD Business;
(vii) agreements for the license of or requiring the
payment of royalties with respect to Intellectual Property Attributable to the
RPD Business;
(viii) consulting agreements Attributable to the RPD
Business; and
(ix) any contract Attributable to the RPD Business not
listed in (i) through (viii) above which requires future expenditure of more
than $500,000, excluding any such contract which may be terminated without
material penalty.
(b) Except as disclosed in Section 3.07 of the Seller Disclosure
Schedule neither Seller nor, to Seller's knowledge, any other party to any
Scheduled Contract is in material default or has failed to perform any material
obligation thereunder.
SECTION 3.08. COMPLIANCE WITH LAWS. To the knowledge of Seller,
except as set forth in Section 3.08 of the Seller Disclosure Schedule, the
operation of the RPD Business as presently conducted by Seller does not
violate, in any material respect, any Applicable Law.
SECTION 3.09. PERMITS
(a) Section 3.09 of the Seller Disclosure Schedule lists all
material licenses, permits and authorizations issued by a Governmental
Authority which are used or held for use by Seller with respect to the RPD
Business (the "Scheduled Permits").
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(b) Except as set forth in Section 3.09 of the Seller Disclosure
Schedule, each Scheduled Permit is valid and in full force and effect.
(c) Except as set forth in Section 3.09 of the Seller Disclosure
Schedule, there is no pending, or to the knowledge of Seller, threatened
proceeding by any Governmental Authority to cancel, modify or fail to renew any
Scheduled Permit.
(d) Except as set forth in Section 3.09 of the Seller Disclosure
Schedule, the Scheduled Permits represent all material licenses, permits and
authorizations of Governmental Authorities necessary to conduct the RPD
Business as currently conducted.
SECTION 3.10. LABOR AND EMPLOYMENT MATTERS. Except as set forth in
Section 3.10 of the Seller Disclosure Schedule:
(a) Section 3.10 of the Seller Disclosure Schedule lists all
employees of the RPD Business.
(b) Section 3.10 of the Seller Disclosure Schedule lists each
"employee pension benefit plan", as such term is defined in Section 3(2) of
ERISA, each "employee welfare benefit plan", as such term is defined in Section
3(1) of ERISA, and each compensation, vacation, insurance, disability,
severance, or other plan providing employee benefits maintained by the Seller
in which any employees of the RPD Business participate (collectively, the
"Plans"). Seller has provided Buyer true and correct copies of all current
material documents relating to the employee benefit plans listed in Section
3.10 of the Seller Disclosure Schedule, including, but not limited to, with
respect the employee benefit plans covering the union employees of the RPD
Business: (i) current plan documents; (ii) current trust documents; (iii)
current summary plan descriptions; (iv) the most recent financial statements;
(v) the most recent actuarial valuation for the pension plan; (vi) the most
recent annual report; (vii) all Internal Revenue Service Rulings, if any; and
(viii) the most recent Internal Revenue Service determination letter. The
defined benefit plans included within the Union contracts are not
multi-employer plans as defined in Section 3(37) of ERISA.
(c) Section 3.10 of the Seller Disclosure Schedule lists each
collective bargaining agreement respecting employees of the RPD Business which
is binding
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on the Seller. Except as set forth in Section 3.10 of the Seller Disclosure
Schedule: (i) there is no labor strike, slowdown or stoppage pending or, to
Seller's knowledge, threatened by employees of the RPD Business; and (ii) no
grievance or arbitration proceeding under any collective bargaining agreement
applicable to the RPD Business is pending or, to the knowledge of Seller,
threatened.
(d) Except as provided in Section 3.10 of the Seller Disclosure
Schedule, there are no severance payments which could become payable by Buyer
under the terms of any oral or written agreement or commitment between Seller
and any employee of Seller.
SECTION 3.11. INTELLECTUAL PROPERTY.
(a) Except as set forth in Section 3.11 of the Seller Disclosure
Schedule:
(i) The Patents constitute all patents and patent
applications owned by Seller which are solely and exclusively useful in the RPD
Business;
(ii) There are no registered trademarks or trademark
registration applications owned by Seller which are solely and exclusively
useful in the RPD Business.
(b) Except as set forth in Section 3.11 of the Seller Disclosure
Schedule the Seller has not, during the two years preceding the date of this
Agreement, been a party to any action, claim or proceeding, that involved a
claim by any Person that the conduct of the RPD Business by Seller infringes on
the Intellectual Property rights of any Person and, to Seller's knowledge, no
such action, claim or proceeding has been threatened against Seller.
(c) To the knowledge of Seller, no Person is infringing on the RPD
Intellectual Property and the use by Seller of the RPD Intellectual Property
does not infringe upon the Intellectual Property rights of any other Person.
SECTION 3.12. FEES AND COMMISSIONS. No agent, broker, investment
banker, person or firm acting on behalf of under the authority of Seller is or
will be entitled to any broker's, finder's or investment banker's fees or any
other commission or similar fee directly or indirectly in connection with the
transactions
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contemplated hereby, and no such fees are or will be chargeable to or for the
account of Buyer nor have or will any such fees be paid or payable out of or in
any manner constitute a lien or charge against the Purchased Assets.
SECTION 3.13. INVESTMENT INTENT. Seller is acquiring the
Subordinated Note for investment solely for the account of Seller and not with
a view to or for resale in connection with the distribution or other
disposition thereof in violation of the Securities Act.
SECTION 3.14. ABSENCE OF CERTAIN CHANGES. Except as contemplated
by this Agreement or as set forth in Section 3.14 of the Seller Disclosure
Schedule and, other than in the ordinary course of business, since November 30,
1995 Seller has not:
(a) made or incurred any capital expenditures in excess of
$100,000 in any one transaction or series of related transactions for the RPD
Business;
(b) made any change in the rate of compensation, commission, bonus
or other direct or indirect remuneration payable or to become payable to any
RPD Business employee;
(c) sold or transferred any of the assets Attributable to the RPD
Business;
(d) terminated or materially amended any Scheduled Contract;
(e) incurred or guaranteed any loan which would become a liability
or obligation of Buyer;
(f) subjected any of the Purchased Assets to any mortgage, pledge,
lien or other material encumbrance which would become a liability or obligation
of Buyer; or
(g) entered into any agreement or commitment (other than this
Agreement or any arrangement provided for or contemplated in this Agreement) to
take any of the types of action which would be required to be disclosed under
subsections (a) through (f) of this Section 3.14.
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SECTION 3.15. REAL PROPERTY OWNED. Except as set forth in Section
3.15 of the Seller Disclosure Schedule:
(a) Other than the Shelbyville Real Property and Ionia Facility,
Seller owns no real property Attributable to the RPD Business. Section 3.15 of
the Seller Disclosure Schedule contains a true and accurate legal description
of the Shelbyville Real Property. Seller has fee simple title to the
Shelbyville Real Property free and clear of all mortgages, liens, encumbrances,
encroachments, easements, restrictions, reservations and tenancies other than
the Permitted Liens.
(b) There is no pending or, to Seller's knowledge, threatened
condemnation or eminent domain proceeding with respect to the Shelbyville Real
Property.
(c) Except for the Permitted Liens: (i) there are no real property
taxes or special assessments (other than ordinary real estate taxes) pending or
payable against the Shelbyville Real Property (ii) to Seller's knowledge
there are no contingencies existing under which any assessment for real estate
taxes may be retroactively filed against the Shelbyville Real Property; (iii)
to Seller's knowledge there are no proposed special real property taxes or
assessments that may be assessed against the Shelbyville Real Property or any
part thereof; (iv) there are no penalties due with respect to real estate taxes
and/or assessments in respect of the Shelbyville Real Property, and all real
estate taxes and/or assessments which are due and payable with respect to the
Shelbyville Real Property have been paid in full; and (v) there are no taxes,
permit fees or connection fees which must be paid respecting existing curb
cuts, sewer hookups, water-main hookups or services of a like nature in respect
of the Shelbyville Real Property.
(d) Except as set forth on Schedule 3.15, to Seller's knowledge,
and taking into account age and ordinary wear and tear, the structural
components of the buildings located at the Shelbyville Facility require no
major repairs.
SECTION 3.16. REAL PROPERTY LEASED. Section 3.16 of the Seller
Disclosure Schedule lists and briefly describes all real properties leased or
subleased to Seller for use solely in connection with the RPD Business (the
"Leases"). Seller has delivered to Buyer correct and complete copies of the
Leases. With respect to each such Lease:
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(a) to Seller's knowledge, each Lease is legal, valid, binding,
enforceable and in full force and effect except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers and subject to the limitations imposed
by general equitable principles (regardless of whether such enforceability is
considered in a proceeding at law or in equity);
(b) to Seller's knowledge, each Lease will continue to be legal,
valid, binding, enforceable and in full force and effect on identical terms
following the Closing except to the extent such terms are changed in connection
with the transactions contemplated hereby and except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers and subject to the limitations imposed
by general equitable principles (regardless of whether such enforceability is
considered in a proceeding at law or in equity);
(c) Seller has not assigned, transferred, conveyed, mortgaged,
deeded in trust or encumbered any interest in any Lease.
SECTION 3.17. INSURANCE. Section 3.17 of the Seller Disclosure
Schedule contains loss runs for the last five years setting forth all property,
general and products liability and workers compensation claim activity against
the RPD Business, including the date and place of the occurrence, claimant's
name, reserves, amounts paid, and whether the claim is open or closed. Except
as set forth in Section 3.17 of the Seller Disclosure Schedule, Seller knows of
no occurrence or event which could reasonably be expected to result in the
claim against it of the type covered by general or product liability insurance.
SECTION 3.18. ENVIRONMENTAL MATTERS. Except as set forth in the
Environmental Reports or Section 3.18 to the Seller Disclosure Schedule, to
Seller's knowledge:
(a) There are no pending proceedings or claims, and Seller does
not have any information which reasonably indicates that Seller will be
receiving notice of proceedings or claims, arising, in either case, from: (i)
alleged violations by the
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Seller of any Environmental Laws in respect of the conduct by it of the RPD
Business, or (ii) the presence, discharge, release or disposal of Hazardous
Materials in the soil or ground water of the Shelbyville Real Property or
Leased Property;
(b) Seller has not received notice under the Environmental Laws as
a potentially responsible party ("PRP") for any facility, site or location in
respect of the conduct by it of the RPD Business;
(c) Seller is in compliance with all applicable limitations,
restrictions, conditions, standards, prohibitions, requirements and obligations
established under the requirements of Environmental Laws in respect of the
conduct by it of the RPD Business as currently conducted, except where such
noncompliance would not have any reasonable likelihood, singly or in the
aggregate, of materially adversely affecting the financial condition,
operations, assets, business or properties of the RPD Business, taken as a
whole;
(d) Seller has timely filed all notices, reports and other
submissions required under all Environmental Laws in respect of the conduct by
it of the RPD Business, except for such notices, reports or other submissions
with respect to which the failure to so file would not have any reasonable
likelihood, singly or in the aggregate, of materially adversely affecting the
financial condition, operations, assets, business or properties of the RPD
Business taken as a whole;
(e) Seller has been issued in respect of its current conduct of
the RPD Business all permits, certificates, approvals, licenses and other
authorizations required under all Environmental Laws and is, in respect of the
current conduct by it of the RPD Business, in compliance therewith except for
such permits and other authorizations with respect to which the failure to
obtain or to comply with would not have any reasonable likelihood, singly or in
the aggregate, of materially adversely affecting the financial condition,
operations, assets, business or properties of the RPD Business, taken as a
whole;
(f) There is no contamination in soils or groundwater of or
beneath the Shelbyville Real Property or Leased Property above levels that
exceed remediation standards based on regulations, guidance or risk-based
criteria warranting studies or remediation or both which would have any
reasonable likelihood, singly or in the aggregate, of materially adversely
affecting the financial condition, operations,
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assets, business or properties of the RPD Business, taken as a whole;
(g) There have not been and there are no underground storage
tanks, active or abandoned, on or under the Shelbyville Real Property or the
Leased Property;
(h) There are no written environmental investigations, audits,
reviews or assessments prepared by Seller in respect of the Shelbyville Real
Property or Leased Property which have not been provided or made available to
Buyer.
SECTION 3.19. FINANCIAL. The financial statements described in
Section 3.19 of the Seller Disclosure Schedule were prepared in accordance with
the GenCorp Accounting Principles, and, to the extent not described in the
GenCorp Accounting Principles, in accordance with GAAP, consistently applied,
and fairly present the income statement and balance sheet for Seller's
Reinforced Plastics Division taken as a whole.
SECTION 3.20. TAXES. Seller represents to Buyer that, with respect
to the RPD Business, it is not a party to any agreement with any other person
regarding allocation or payment of Taxes or amounts in lieu of Taxes which
would have a material adverse effect on the Purchased Assets or the RPD
Business.
SECTION 3.21. TOOLING RECEIVABLES. The Tooling Receivables arose
in the ordinary course of the RPD Business and have been accounted for
consistent with GenCorp's Accounting Principles.
SECTION 3.22. INSPECTIONS; LIMITATION OF SELLER'S WARRANTIES. Seller
is an informed and sophisticated participant in the transactions contemplated
by this Agreement and has undertaken such investigation, and has been provided
with and has evaluated such documents and information, as it has deemed
necessary in connection with the execution, delivery and performance of this
Agreement. Seller acknowledges that, except for the representations and
warranties expressly set forth herein, neither Buyer nor any Affiliate of Buyer
makes any, and does hereby disclaim all, representations or warranties, express
or implied, including, without limitation, any warranty of merchantability or
fitness for a particular purpose. In furtherance of the foregoing, and not in
limitation thereof, Seller acknowledges that no representation or warranty,
express or implied, has been made by the Buyer or any of its Affiliates, with
respect to any financial projection or forecast delivered to
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Seller with respect to the revenues or profitability which may arise from the
operation of the Buyer's business after the Closing Time. With respect to any
projection or forecast delivered by or on behalf of Buyer to Seller, Seller
acknowledges that (i) there are uncertainties inherent in attempting to make
such projections and forecasts and (ii) it is familiar with such uncertainties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
Except as set forth on the Buyer Disclosure Schedule, the Parent and
Cambridge hereby jointly and severally represent and warrant to Seller as
follows as of the date hereof:
SECTION 4.01. ORGANIZATION AND EXISTENCE. Each Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and authority to own
and operate its properties and to carry on its business as now conducted. Each
Buyer is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the nature of its activities makes such
qualification necessary to carry on its business as now conducted.
SECTION 4.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by each Buyer of this Agreement each other agreement or instrument
executed and delivered or to be executed and delivered by each Buyer pursuant
to this Agreement and the consummation by each Buyer of the transactions
contemplated hereby and thereby are within the corporate powers of each Buyer,
and have been duly authorized by all necessary corporate action on the part of
each Buyer. This Agreement constitutes, and each other agreement or instrument
executed and delivered or to be executed and delivered by a Buyer pursuant to
this Agreement constitutes or will constitute, a legal, valid and binding
obligation of such Buyer, enforceable against such Buyer in accordance with its
terms.
SECTION 4.03. ORGANIZATION AND GOOD STANDING OF COMPANY
SUBSIDIARIES. Section 4.03 of the Buyer Disclosure Schedule lists all
Subsidiaries of Parent and the
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respective jurisdictions of incorporation (collectively, the "Company
Subsidiaries" and individually a "Company Subsidiary"). Except as set forth in
Section 4.03 of the Buyer Disclosure Schedule, Parent owns, directly or
indirectly, all the shares of outstanding capital stock of each Company
Subsidiary.
SECTION 4.04. AUTHORIZATION. The execution, delivery and performance
by each Buyer of this Agreement require no action by, consent or approval of,
or filing with, any Governmental Authority other than:
(a) compliance with any applicable requirements of any Antitrust
Laws (including the HSR Act); and
(b) any actions, consents, approvals or filings otherwise
expressly referred to in this Agreement (including the Buyer Disclosure
Schedule).
SECTION 4.05. NON-CONTRAVENTION. Except as set forth in Section 4.05
of the Buyer Disclosure Schedule, the execution, delivery and performance by
each Buyer of this Agreement and the consummation of the transactions
contemplated hereby (including, without limitation, the Subordinated Note and
the Subordinated Note Credit Agreement) do not and will not:
(a) contravene or conflict with its Certificate of Incorporation
and Bylaws;
(b) assuming compliance with the matters referred to in Section
4.04 contravene or conflict with or constitute a violation of any provision of
any Applicable Law binding upon or applicable to the its business; or
(c) conflict with or contravene any mortgage, note, indenture,
deed of trust, lease, loan agreement, warrant, registration rights agreement or
other agreement or instrument of Parent or any Company Subsidiary.
SECTION 4.06. LITIGATION. Except as disclosed in Section 4.06 of
the Buyer Disclosure Schedule:
(a) there are no actions, suits, or proceedings by any
Governmental Authority or any other Person (collectively, "Proceedings")
pending or, to the knowledge of either Buyer, threatened against a Buyer;
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(b) there are no existing orders, judgments or decrees (other than
those of general application) of any Governmental Authority adversely affecting
a Buyer; and
(c) there are no actions, suits or proceedings by any Governmental
Authority or any other Person pending or, to the knowledge of either Buyer,
threatened against a Buyer which are reasonably likely to adversely effect a
Buyer's ability to perform its obligations hereunder or which seek to enjoin
the transactions contemplated by this Agreement.
SECTION 4.07. COMPLIANCE WITH LAWS. To the knowledge of Buyer,
except as set forth in Section 4.07 of the Buyer Disclosure Schedule, the
operation by each Buyer of its business as presently conducted by it does not
violate, in any material respect, any Applicable Law.
SECTION 4.08. SUBORDINATED DEBT. The Subordinated Note and the
Subordinated Note Credit Agreement have been duly authorized by all necessary
corporate action. At the Closing Seller will receive valid title to the
Subordinated Note free and clear of any claim, lien, security interest or other
encumbrance.
SECTION 4.09. OFFERING OF SECURITIES. Except as set forth in Section
4.09 of the Buyer Disclosure Schedule, neither Parent nor any Person acting on
its behalf has offered the Subordinated Note or any similar securities of the
Company for sale to, solicited any offers to buy any of the Subordinated Note
or any similar securities of the Company from or otherwise approached or
negotiated with respect to any of the Subordinated Note or any similar
securities of the Company with any Person other than Seller. Neither Parent
nor any Person acting on its behalf has taken or will take any action
(including without limitation any offering of any securities of Parent under
circumstances which would require the integration of such offering with the
offering of any of the Subordinated Note under the Securities Act and the rules
and regulations of the SEC thereunder) which might subject the offering,
issuance or sale of any of the Subordinated Note to the registration
requirements of the Securities Act. The offer, sale and issuance of the
Subordinated Note by the Company under this Agreement will not violate the
Securities Act, the Exchange Act or any applicable state securities or "blue
sky" laws.
SECTION 4.10. FEES AND COMMISSION. Except as set forth in Section
4.10 of the Buyer Disclosure Schedule, no agent, broker, investment banker,
person or
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firm acting on behalf of under the authority of Buyer is or will be entitled to
any broker's, finder's or investment banker's fees or any other commission or
similar fee directly or indirectly in connection with the transactions
contemplated hereby and no such fees are or will be chargeable to or for the
account of Buyer.
SECTION 4.11. FINANCIAL STATEMENTS. Parent has previously delivered
to Seller copies of (a) the consolidated balance sheet of the Parent and the
Company Subsidiaries as of December 31 for the fiscal years 1995 and 1994, and
the related consolidated statements of operations, statements of stockholders'
equity and cash flows for the fiscal years 1993 through 1995 (subject to
auditor's adjustment), accompanied for the 1994 fiscal year by the audit report
of Deloitte & Touche, independent public accountants and, for the 1993 fiscal
year by the audit reports of Arthur Anderson and Welsh Simko, independent
public accountants and (b) the unaudited consolidated balance sheet of the
Parent and the Company Subsidiaries as of January 31, 1996 and the related
unaudited consolidated statement of operations, statements of stockholders'
equity and cash flows for the one month period then ended. All of such
financial statements fairly present the consolidated financial position of the
Parent and the Company Subsidiaries as of the dates shown and the results of
the consolidated operations, statements of stockholders' equity and cash flows
of the Parent and the Company Subsidiaries for the respective fiscal periods or
as of the respective dates therein set forth, in each case subject, as to
interim statements, to changes resulting from year-end adjustments (none of
which will be material in amount and effect). All of such financial statements
have been prepared in accordance with GAAP consistently applied during the
periods involved, except as otherwise set forth in the notes thereto, and
Parent and the Company Subsidiaries have no liabilities or obligations of any
nature (absolute, accrued, contingent or otherwise) which are not fully
reflected or reserved against in the balance sheet as of December 31, 1994
included in such financial statements, except for liabilities that may have
arisen in the ordinary and usual course of business and consistent with past
practice and that, individually or in aggregate, do not have and could not
reasonably be expected to have a material adverse effect on the financial
condition of the Parent and Company Subsidiaries taken as a whole.
SECTION 4.12. INSPECTIONS; LIMITATION OF SELLER'S WARRANTIES. Each
Buyer is an informed and sophisticated participant in the transactions
contemplated by this Agreement and has undertaken such investigation, and has
been provided with and has evaluated such documents and information, as it has
deemed necessary in
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connection with the execution, delivery and performance of this Agreement.
Each Buyer acknowledges that, except for the representations and warranties
expressly set forth herein, neither Seller nor any Affiliate of Seller makes
any, and does hereby disclaim all, representations or warranties, express or
implied, including, without limitation, any warranty of merchantability or
fitness for a particular purpose. In furtherance of the foregoing, and not in
limitation thereof, each Buyer acknowledges that no representation or warranty,
express or implied, has been made by the Seller or any of its Affiliates, with
respect to: (i) any information provided to the Buyer pursuant to the
Confidentiality Agreement or (ii) any financial projection or forecast
delivered to a Buyer with respect to the revenues or profitability which may
arise from the operation of the RPD Business after the Closing Time. With
respect to any projection or forecast delivered by or on behalf of the Seller
to a Buyer, each Buyer acknowledges that (i) there are uncertainties inherent
in attempting to make such projections and forecasts and (ii) it is familiar
with such uncertainties.
ARTICLE V
COVENANTS OF THE SELLER
-----------------------
The Seller agrees that:
SECTION 5.01. FURTHER CONVEYANCES. After the Closing, Seller will
execute and deliver to Cambridge (or cause to be executed and delivered to
Cambridge), such additional instruments of conveyance, and Seller shall take
such other and further actions as Cambridge may reasonably request and which
are ordinarily provided by a seller, more completely to sell, transfer, and
assign to Cambridge and vest in Cambridge such title to the Purchased Assets as
is provided for in this Agreement.
SECTION 5.02. NON-COMPETE. For a period of three (3) years after the
Closing Time neither Seller nor any Affiliate of Seller will own, manage,
operate or control, anywhere within the United States any business engaged in
compression molding of sheet mold compound for automotive, truck and industrial
applications provided, however, nothing in this Section 5.02 shall preclude
Seller or any Affiliate of Seller from: acquiring any entity or business which
includes operations which engage in such business so long as Seller divests
such business within one year after
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the date of such acquisition. Prior to divesting any such business, Seller
shall notify Cambridge of its intent to so divest and Cambridge shall have a
period of thirty (30) days to make an offer to purchase such business from
Seller.
SECTION 5.03. NON-SOLICITATION OF EMPLOYEES. Seller shall not, for a
period of one (1) year from and after the Closing Time, directly or indirectly
or through any Affiliate, employ or attempt to induce any person who is during
such period in the employ of Cambridge to leave the employ of Cambridge or any
subsidiary of Cambridge.
SECTION 5.04. TAXES. Seller will be responsible for the preparation
and filing of all Tax returns for Seller for all periods as to which Tax
returns are due after the Closing Time (including the consolidated, unitary,
and combined Tax returns for Seller which include the operations of the RPD
Business for any period ending on or before the Closing Time). Seller will
make all payments required with respect to any such Tax returns.
ARTICLE VI
COVENANTS OF THE BUYER
----------------------
The Buyer agrees that:
SECTION 6.01. GENCORP NAME.
(a) Except as otherwise permitted by Sections 6.01(b) and (c),
Buyer will discontinue the use of, and delete, paint over or otherwise strike
or remove from any Purchased Assets any names, logos and designs which identify
GenCorp as promptly as reasonably practical after the Closing.
(b) Buyer shall have the right to continue to use the trademark
"GenCorp" (i) on inventory existing on the Closing Date until the depletion of
such inventory, (ii) on packaging materials existing on the Closing Date for a
period of six (6) months after the Closing Date, (iii) on patterns, molds and
tools existing on the Closing Date for a period of twelve (12) months after the
Closing Date, and (iv) on
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inventory manufactured by Buyer within a period of twelve (12) months after the
Closing Date from patterns, molds and tools existing on the Closing Date which
contain such trademark.
(c) Buyer shall delete the trademark "GenCorp" from all sales aids
and sales literature sold hereunder within a reasonable period after the
Closing Date, but in no event later than six (6) months after the Closing Date.
Such sales aids and sales literature which bear the trademarks of "GenCorp"
which are used by Buyer must state on the face thereof that the RPD Business is
now owned by Buyer.
SECTION 6.02. VACATION OF SHARED FACILITY. Buyer will, within
thirty (30) days after the Closing, vacate the Farmington Hills Facility and
the "A" building to be razed at Seller's Ionia Facility and remove all
Purchased Assets. Buyer will promptly restore and repair, at its sole expense,
any damage done by the Buyer in vacating the Farmington Hills Facility and
removing such Purchased Assets.
SECTION 6.03. VACATION OF MARION FACILITY. Buyer will in
accordance with this Section 6.03, within one year after the Closing and at its
sole cost, risk and expense, remove all RPD Marion Equipment and any other
property of Buyer from the Marion Facility.
(a) Any RPD Marion Equipment property which is affixed to the
Marion Facility or any Marion Facility building system is collectively referred
to herein as the "Equipment". The removal of the Equipment from the Marion
Facility is hereinafter referred to as the "Equipment Removal". Buyer shall
not, in connection with the Equipment Removal, engage in any other activities
at the Marion Facility including, without limitation, any cleaning or
rebuilding of any Equipment except for normal shut-down procedures necessary to
move the Equipment as reasonably agreed upon by Buyer and Seller.
(b) Prior to commencing the Equipment Removal Buyer shall submit
to Seller and obtain Seller's approval (which approval shall not be
unreasonably withheld) of a reasonably detailed written plan for the Equipment
Removal. Such plan shall provide: (1) a schedule for the Equipment Removal;
(2) a general description of the manner in which the Equipment will be removed
from the Marion Facility; (3) a list of the contractors and other third parties
to be used by Buyer in performing the Equipment Removal; (4) a description of
all licenses, permits and
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other governmental approvals required by Applicable Law to be obtained in
connection with the Equipment Removal; (5) such other information pertaining to
the Equipment Removal as Seller may reasonably request (such plan, the
"Approved Plan"). The Equipment Removal shall be undertaken in a manner which
will not effect the structural integrity of the Marion Facility. If Seller
reasonably determines that any of the Equipment Removal may affect the
structural integrity of the Marion Facility, then Buyer shall obtain if
requested by Seller, appropriate architectural and/or engineering certificates
that the affected building remains in compliance with Applicable Law and
applicable safety standards. Buyer shall be solely responsible for planning and
implementing the Equipment Removal and Seller's review and approval of the
Approved Plan shall not in any manner relieve Buyer of or transfer to Seller
any risk, liability or obligation in respect of the Equipment Removal, which
risks, liabilities and obligations shall at all times remain solely with Buyer.
(c) Buyer shall give Seller ten days advance written notice of its
intention to commence the removal of any items of Equipment. Such notice shall
specify the Equipment to be removed, the dates and times at which such removal
will commence and the dates and times at which such removal is estimated to be
completed.
(d) Buyer shall at its sole risk, cost and expense: (1) conduct
the Equipment Removal in a manner which: will not unreasonably interfere with
the Seller's activities at the Marion Facility and, will minimize any damage to
the Marion Facility; (2) conduct the Equipment Removal in a safe and
workmanlike manner using due care and in accordance with all Applicable Laws
and the Approved Plan; (3) obtain all licenses, permits and other governmental
approvals required by Applicable Law in connection with the Equipment Removal
prior to undertaking the Equipment Removal and maintain in force and comply
with such licenses, permits and approvals to the extent required by Applicable
Law including, without limitation, any license, permit or approval which may be
required to perform any "demolition" or its functional equivalent under
Applicable Law; (4) maintain any Equipment Removal work site in a safe
condition; and (5) engage contractors that have the equipment, skill and
experience necessary to perform the Equipment Removal in accordance with
accepted standards of industrial practice and who possess all licenses, permits
and approvals required by Applicable Law.
(e) Buyer shall promptly (and in any event within 20 business days) after
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each Equipment Removal, and at its sole cost and expense, remove from the
Marion Facility any debris resulting from the Equipment Removal and commence
and diligently prosecute the repair or replacement in a good and workmanlike
manner using first quality materials any loss or damage to the Marion Facility
resulting from the Equipment Removal, including, without limitation, by:
filling in and leveling all holes in floors; patching all roofs, ceilings and
walls; repairing, replacing, rewiring, replumbing or rerouting all building
system wires, pipes, ducts and other items so that all building systems
perform in substantially the same manner as prior to any such damage or loss.
Without limiting the foregoing sentence, such repairs and replacements will, at
a minimum, include such repairs and replacements as are necessary: (1) to
prevent any additional damage or loss to the Marion Facility, (2) to eliminate
a risk to health or safety, and (3) to correct any violations Applicable Law
resulting from the Equipment Removal.
SECTION 6.04. NON-SOLICITATION OF EMPLOYEES. Buyer shall not for a
period of one year from and after the Closing, directly or indirectly or
through any Affiliate, employ or attempt to induce any person who is during
such period in the employ of the Seller to leave the employ of Seller; provided
that the foregoing restriction shall not apply to any RPD Business employee at
the Marion Facility.
SECTION 6.05. TITLE INSURANCE. At the Closing Buyer shall obtain,
at its expense, an ALTA Extended Coverage Owner's Policy of Title Insurance in
an amount not less than the fair market value of the Shelbyville Facility,
naming Buyer as an insured and covering the Shelbyville Facility (the "Title
Policy") from Lawyers Title Company (the "Title Company"). Buyer covenants and
agrees that prior to making an Indemnification Claim against Seller in respect
of any Title Matter it will exhaust its remedies against the Title Company
under the Title Policy in respect of such Title Matters. Seller shall not be
liable to or through Buyer and Buyer shall not assert against Seller and hereby
waives any and all claims against Seller in respect of any Title Matter to the
extent covered by the Title Policy.
SECTION 6.06. ENVIRONMENTAL REPORTS. Buyer will file in respect of
the Shadeland, Rushville, Shelbyville and Ionia Facilities with respect to the
1995 calendar year the following: SARA 312 (Tier 2), SARA 313 (Form R),
Biennial Waste Report, and State Air Emissions Summary, in each case as
required by Applicable Law.
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SECTION 6.07 INVESTIGATION LIMITATION. Buyer will not do any
investigation or testing of soil or groundwater at the Shadeland Facility or
Rushville Facility or take any other action to solicit, promote, or encourage
the making of any Environmental Claim or which is otherwise reasonably likely
to result in an Environmental Claim being made.
SECTION 6.08 RUSHVILLE LEASE TERMINATION. Within ninety (90) days
after the Closing, Cambridge shall, at its sole cost and expense, permanently
cease all operations at the Rushville Facility, vacate the Rushville Facility,
remove all of its assets and property from the Rushville Facility and terminate
the Rushville Lease.
ARTICLE VII
COVENANTS OF BOTH PARTIES
-------------------------
The parties agree that:
SECTION 7.01. ADMINISTRATION OF ACCOUNTS.
(a) All payments and reimbursements made in the ordinary course by
any third party in the name of or to the Seller in connection with or arising
out of the Purchased Assets or the Assumed Liabilities, received after the
Closing Time shall be held by the Seller in trust for the benefit of the Buyer
and, immediately upon receipt by the Seller of any such payment or
reimbursement, the Seller shall pay over to the Buyer the amount of such
payment or reimbursement without right of set-off.
(b) All payments and reimbursements made in the ordinary course by
any third party in the name of or to the Buyer in connection with or arising
out of Excluded Assets or the Excluded Liabilities, received after the Closing
Time shall be held by the Buyer in trust for the benefit of the Seller and,
immediately upon receipt by the Buyer of any such payment or reimbursement, the
Buyer shall pay over to the Seller the amount of such payment or reimbursement
without right of set-off.
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SECTION 7.02. TRANSFER TAXES. All transfer, documentary, sales, and
other similar Taxes ("Transfer Taxes") incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Seller.
The Seller and the Buyer shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of such
Transfer Tax laws.
SECTION 7.03. ACCESS TO FORMER BUSINESS RECORDS. For a period of
seven (7) years after the Closing Time, or until any audits of Seller's tax
returns relating to periods prior to or including the Closing Time are
completed, whichever occurs later, Buyer will retain all business records
constituting part of the Purchased Assets. During such period, Buyer will
afford duly authorized representatives of Seller free and full access to all of
such records and will permit such representatives, at Seller's expense, to make
abstracts from, or to take copies of any of such records, or to obtain
temporary possession of any thereof as may be reasonably required by Seller.
For a like period, Seller will retain all business records related to the RPD
Business which constitutes part of the Excluded Assets. During such period,
Seller will afford duly authorized representatives of Buyer free and full
access to all of such records and will permit such representatives, at Buyer's
expense, to make abstracts from, or to take copies of any of such records, or
to obtain temporary possession of any thereof as may be reasonably required by
Buyer.
SECTION 7.04. ACCESS TO FORMER EMPLOYEES. After the Closing, each
of Buyer and Seller will cooperate with the other, and cause its employees to
cooperate with the other, in furnishing information, evidence, testimony, and
other assistance as may be reasonably requested by the other party in
connection with any action, proceeding, or investigation by a third party
relating to the RPD Business. The party requesting such assistance will pay or
reimburse the other party for all reasonable out-of-pocket expenses incurred by
the party providing such assistance in connection therewith, including, without
limitation, all travel, lodging, and meal expenses.
SECTION 7.05. INVENTORY. Buyer shall, after the Closing Time, use
efforts consistent with the efforts used by Buyer in the use and sale of its
own inventory, to use or sell the inventory of the RPD Business being sold by
Seller to Buyer hereunder. For purposes of this Section 7.05 all such
inventory shall be deemed to be used or sold to the extent that Buyer uses or
sells any inventory not sold to Buyer hereunder which is substitutable for the
inventory sold to Buyer hereunder except to the extent such substitution is
required because such inventory was at the Closing
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Time damaged, deteriorated or obsolete. To the extent that all such inventory
is not used or sold or deemed used or sold by Buyer within twelve (12) months
after the Closing Time (such inventory, the "Unsold Inventory"), it shall be
repurchased by Seller as provided in this Section 7.05. Buyer shall furnish
Seller with a schedule of the unsold inventory and such other documents
pertaining thereto as Seller may reasonably request. The repurchase price of
the unsold inventory shall be the amount paid therefore by Buyer at Closing.
For purposes of this Section 7.05 "inventory of the RPD Business" shall mean
raw materials, finished goods and work in process but shall exclude and Seller
shall have no obligation to repurchase supplies, service parts, spare parts,
and recycled materials (including recycled materials purchased pursuant to the
Phoenix contract).
SECTION 7.06. REIMBURSEMENT OF CERTAIN COSTS. If Cambridge
reasonably incurs out-of-pocket expenses in excess of $50,000 as a result of a
contractual obligation to a customer which was assumed by Cambridge under this
Agreement to accept return of, provide refunds for, or to repair, replace,
recall or service any RPD Business product produced by Seller prior to the
Closing Time, then Cambridge shall be entitled to be reimbursed by Seller as
follows: 50% of the next $200,000 of such out-of-pocket expenses and 75% of
such out-of-pocket expenses in excess of $250,000; provided that (a) Cambridge
gives Seller prompt notification at the time it becomes aware that it may have
a claim for such reimbursement, (b) Cambridge provides Seller with such
information regarding such customer claim as Seller may reasonably request, (c)
Cambridge permits Seller to participate in, but not control, the resolution of
any such customer claim, and (d) the out-of-pocket costs incurred by Cambridge
as a result of such customer claim are commercially reasonable in the context
of the particular customer claim and not in respect of any other consideration
of Cambridge.
ARTICLE VIII
EMPLOYEE MATTERS
----------------
SECTION 8.01. SALARIED EMPLOYEES. The following shall apply with
respect to all Employees who are not covered by a Union Contract (the "Salaried
Employees"):
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(a) OFFERS OF EMPLOYMENT. At or prior to the Closing Time, Buyer
will make offers of employment to all Salaried Employees including, without
limitation, any Salaried Employee who is not at work but is on salary
continuation (but not Salaried Employees who are not on salary continuation and
are on education, military, personal, family or short or long term disability
leave at the Closing Time) providing for wages and other terms and conditions
of employment, which are substantially comparable to the terms and conditions
on which such Salaried Employees were employed by Seller immediately prior to
the Closing except that the benefits to be provided to such Salaried Employees
shall be as described in Exhibit C hereto (the "Cambridge Benefits"). In
addition, Buyer shall make such an offer of employment to any Salaried Employee
who, at the Closing Time, is on leave without salary continuation to the extent
required by law and to any such Salaried Employee who, within two years after
the Closing Time gives written notice to Buyer of his or her desire to return
to work; provided that Buyer has a position available for which such Salaried
Employee is qualified and, if such Salaried Employee was on long or short term
disability, such Salaried Employee is fit for work.
(b) EMPLOYMENT.
(i) All Salaried Employees who have accepted at the
Closing Time, or who subsequently accept Buyer's offer of employment with Buyer
made pursuant to Section 8.01(a) (the "Transferred Salaried Employees") will be
employed by Buyer at the time of such acceptance on the terms and conditions of
such offers (with the effect that no period of unemployment shall have occurred
with respect to any such Transferred Salaried Employees) and the employment by
Seller of such Salaried Employees will terminate for all purposes effective as
of the time of such acceptance; provided, however, that any such Salaried
Employee who is not at work but on salary continuation or short or long term
disability at the Closing Time may only accept such offer at such time as he or
she is fit for work and presents himself or herself to Buyer for work. The
Applicable Employment Date (the "Applicable Employment Date") in respect of any
Transferred Salaried Employee is the date such Transferred Salaried Employee
reports to work for Buyer.
(ii) After Buyer has complied with its obligations under
this Section 8.01, nothing in this Section 8.01 shall create any obligation on
the part of Buyer to thereafter continue the employment of any such Employee
for any definite period
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following the Closing or shall prevent Buyer from changing the terms or
conditions of employment, including employee benefit plans, at any time
following the Closing.
(C) SALARIED PENSION PLAN. Seller currently maintains the
"Pension Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary
Companies" (the "Salaried Pension Plan") which provides certain retirement
benefits to eligible salaried employees of GenCorp, including eligible
Transferred Salaried Employees. With respect to the Salaried Pension Plan the
following shall apply:
(i) Buyer will not assume the Salaried Pension Plan or
any trust pertaining thereto or become a sponsor of the Salaried Pension Plan
and no assets of the Salaried Pension Plan will be transferred to Buyer or any
plan or trust maintained by Buyer.
(ii) Seller shall retain all liability to fully perform,
pay and discharge all liabilities under its Salaried Pension Plan.
(iii) Effective as of the Closing, all Salaried Employees
will cease to accrue service credit, any benefits or any other right or
entitlement under the Salaried Pension Plan.
(D) SAVINGS PLAN. Seller currently maintains the "GenCorp
Retirement Savings Plan" (the "Savings Plan") which provides certain
tax-advantaged savings opportunities for eligible employees, including eligible
Transferred Salaried Employees. With respect to the Savings Plan, the
following will apply:
(i) Buyer will not assume the Seller's Savings Plan or
any trust related thereto nor become a sponsor of the Savings Plan and no
assets of the Savings Plan will be transferred to Buyer or any plan or trust
maintained by Buyer.
(ii) Seller shall retain all liability to fully perform,
pay and discharge all liabilities under its Savings Plan.
(iii) Effective as of the Closing, Buyer will establish or
otherwise make available to Transferred Salaried Employees who are participants
in the Savings Plan as of the Closing a savings plan qualified under Section
401(k) of the Internal Revenue Code of 1986.
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(e) MEDICAL PLANS. Seller currently maintains the "GenCorp Medical
Plan" and the "GenCorp Dental Plan" (collectively, the "Medical Plans")
providing medical and dental benefits for eligible active employees of
GenCorp and their respective eligible dependents, including eligible
Transferred Salaried Employees. With respect to the medical and dental
benefits for Transferred Salaried Employees, the following will apply:
(i) Effective as of the Applicable Employment Date, the
Transferred Salaried Employees and eligible dependents will cease to be covered
by the Medical Plans and neither GenCorp nor any of the Medical Plans will be
responsible for medical or dental charges or expenses incurred by or in respect
of such Buyer Salaried Employees or eligible dependents after the Closing.
(ii) Seller will be responsible for medical and dental
charges or expenses incurred by or in respect of such Transferred Employees or
Eligible Dependents for services rendered prior to the Applicable Employment
Date.
(iii) Effective as of the Applicable Employment Date,
Transferred Salaried Employees and their eligible dependents will be eligible
to participate in the employee medical and dental plans established and
maintained by Buyer as described in Exhibit C and Buyer or such plans will be
responsible for medical and dental charges or expenses incurred by or in
respect of such Transferred Salaried Employees and eligible dependents after
the Applicable Employment Date.
(iv) Effective as of the Applicable Employment Date, Buyer
will waive or cause the medical and dental plans described in Section
8.01(e)(iii) to waive any pre-existing condition exclusions applicable to the
Transferred Salaried Employees and their eligible dependents that may exist
under the employee medical and dental plans established and maintained by Buyer
if such Transferred Salaried Employee was eligible to participate in Seller's
medical and dental plans at the time employment with Seller terminated.
(v) Effective as of the Applicable Employment Date, Buyer
will provide the Transferred Salaried Employees with equitable credit under the
medical plans described in Section 8.1(e)(iii) for any amounts previously paid
by such Transferred Salaried Employees under the Medical Plans as deductibles
or co-payments during the plan year in which the Closing occurs but only to the
extent that
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Seller provides Buyer with information in a form reasonably satisfactory to
Buyer showing amounts credited in respect of Buyer's medical and dental plans
as deductible or co-pays.
(f) LIFE INSURANCE PLANS. Seller currently maintains employee
life insurance benefit plans for eligible active employees of GenCorp,
including eligible Transferred Salaried Employees (the "Active Employee Life
Insurance Plans"). With respect to the Active Employee Life Insurance Plans,
the following will apply:
(i) Effective as of the Closing, the Salaried Employees
will cease to be covered by the Active Employee Life Insurance Plans
(ii) Effective as of the Closing the Transferred Salaried
Employees will become covered under employee life insurance plans established
and maintained by Buyer as described in Exhibit C.
(iii) Buyer will waive or cause such Buyer life
insurance plans to waive any pre-existing condition exclusions applicable to
such Transferred Salaried Employees that may exist under the employee life
insurance plans established and maintained by Buyer.
(g) LONG TERM AND SHORT TERM DISABILITY PLANS. Seller currently
maintains employee long term disability and short term disability plans for
eligible employees of GenCorp, including eligible Transferred Salaried
Employees. With respect to such plans:
(i) Effective as of the Applicable Employment Date, the
Transferred Salaried Employees will cease to be covered by such long term
disability and short term disability plans and will become covered under
employee long term disability and short term disability plans established and
maintained by Buyer as described in Exhibit C.
(ii) Buyer will waive or cause such Buyer disability plans
to waive any pre-existing condition exclusions applicable to such Transferred
Salaried Employees that may exist under the employee long term disability
and short term disability plans established and maintained by Buyer if such
employee was eligible to participate in Seller's long term and short term
disability plans at the time
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employment with Seller terminated.
(h) VACATION BENEFITS. Seller currently maintains a vacation plan
for eligible employees of GenCorp including eligible Transferred Salaried
Employees. With respect to such vacation plan after the Closing, Buyer shall
make available to each Transferred Salaried Employee accrued but unused
vacation time under Buyer's vacation plan and shall pay each Transferred
Salaried Employee for any vacation accrued but unused under Seller's vacation
plan prior to the Closing when such vacation is taken. In determining the
amount of vacation for which a Transferred Salaried Employee is eligible under
Buyer's vacation plant, Buyer shall give each such Transferred Salaried
Employee credit for service with Seller.
(i) SEPARATION PAY. If Buyer terminates the employment of any
Transferred Salaried Employee for any reason other than "for cause", within
twelve (12) months after the Closing, then Buyer will provide such terminated
Transferred Salaried Employee with separation pay in an amount equal to one
week of pay for each year of service up to a maximum of eight weeks of pay.
(j) RETIREE MEDICAL PLANS. Seller shall retain all assets and
liabilities relating to Seller's retiree medical plans for Salaried Employees.
Seller shall hold Buyer harmless from any and all claims and/or liabilities to
any Salaried Employee arising under or pursuant to the Seller's retiree medical
plan for Salaried Employees.
SECTION 8.02. UNION EMPLOYEES. At the Closing, Buyer, Seller and
the Union will execute and deliver the Union Novation Agreements pursuant to
which Buyer will become the employer under the Union Agreement and GenCorp
will be released from its obligations under each Union Agreement.
SECTION 8.03. NO THIRD-PARTY CLAIMS. No Transferred Salaried
Employee nor any spouse, former spouse or beneficiary under any of the Plans,
or under any plan from time to time established by the Buyer for the benefit of
the Transferred Salaried Employees, shall be entitled to assert any claim based
on any of the provisions of this Agreement (including but not limited to this
Article VIII) against either party to this Agreement (or any of its
Affiliates).
SECTION 8.04. WORKERS' COMPENSATION. Notwithstanding Sections 2.03
and 2.04, Seller shall be liable for any workers' compensation claim relating
to an
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occurrence prior to Closing Time and Buyer shall be liable for any workers'
compensation claim relating to an occurrence after the Closing Time. If a
workers' compensation claim arises in connection with a "continuing" occurrence
before and after the Closing, the liability of Buyer and Seller for such claim
shall be determined by Applicable Law or in the absence of such Applicable Law
on an equitable basis.
SECTION 8.05. PLAN PAYMENTS. Seller will with respect to each
Transferred Salaried Employee pay all costs, expenses, benefits and claims
incurred prior to the Applicable Employment Date in respect of such Transferred
Salaried Employee under its benefit plans and will pay all accrued payroll up
to the Closing Time.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
-------------------------
SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties set forth in Article III
shall survive the Closing for a period of 540 days after the Closing Time,
except that the representations and warranties contained in Section 3.18 shall
survive for a period of three years after the Closing Time and the
representations and warranties contained in Sections 3.01, 3.02, 3.04(a) shall
survive indefinitely.
(b) The representations and warranties set forth in Article IV
shall survive the Closing for the greater of (i) a period of 540 days after the
Closing Time or (ii) the period during which all or any portion of the
Subordinated Note remains outstanding, except that the representations and
warranties contained in Sections 4.01, 4.02, 4.03, 4.04, and 4.06(a) shall
survive indefinitely.
(c) Upon the expiration of the survival period of a representation
and warranty as described in Section 9.01(a) or (b) such representation and
warranty shall expire and terminate and there shall be no liability or
obligation whatsoever in respect thereof whether such liability has accrued
prior to or will accrue after the expiration of such representations and
warranties unless prior to the expiration
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thereof an Indemnification Claim is made with respect thereto. The
representations and warranties referred to in Sections 9.01(a) and (b) are, to
the extent and so long as they survive the Closing, referred to as the
"Surviving Representations".
SECTION 9.02. SELLER'S AGREEMENT TO INDEMNIFY. Subject always to
Sections 9.04, 9.05, 9.06 and 9.07 the Seller shall indemnify Cambridge in
respect of any and all Damages incurred by Buyer as a result of the following:
(a) any inaccuracy or misrepresentation in or breach of any
Surviving Representation made by the Seller in this Agreement;
(b) any breach or failure to perform by the Seller after the
Closing Time of any of its covenants contained in this Agreement; or
(c) any Third Party Claim against Buyer resulting from the failure
of Seller to perform, pay or discharge any Excluded Liability.
SECTION 9.03 BUYER'S AGREEMENT TO INDEMNIFY. Subject always to
Sections 9.04, 9.05, 9.06 and 9.07 each Buyer jointly and severally shall
indemnify Seller in respect of any and all Damages incurred by Seller as a
result of the following:
(a) any inaccuracy or misrepresentation in or breach of any
Surviving Representation made by a Buyer in this Agreement;
(b) any breach or failure to perform by a Buyer after the Closing
Time of any of its covenants contained in this Agreement; or
(c) a Third Party Claim against Seller resulting from the failure
of a Buyer to perform, pay or discharge any Assumed Liability.
SECTION 9.04. INDEMNIFICATION LIMITS; EXCLUSIVE REMEDY.
Notwithstanding any other provisions of this Agreement:
(a) No Buyer shall be entitled to indemnification pursuant to this
Article IX for any Damages under Sections 9.02(a) unless and to the extent (y)
Damages incurred with respect to a given instance exceed $10,000 and (z) the
amount by
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which Damages for all such instances in excess of such amount exceed $500,000.
(b) Neither party to this Agreement shall be entitled to
indemnification pursuant to this Article IX for any Damages under Sections
9.02(a) or 9.03(a), unless the party seeking such indemnification shall make
its claim therefor on or prior to the date on which the relevant representation
or warranty shall expire pursuant to Section 9.01.
(c) In no event will Seller be liable under Section 9.02(a) for
any Damages or any portion of any Damages in excess of $10,000,000. So long as
all or any portion of the Subordinated Note is outstanding, the first remedy of
Buyer for any breach by Seller of any of its representation and warranties
contained herein shall be to, after complying with this Article IX, including
without limitation, Section 9.04(a), not pay amounts owing under the
Subordinated Note.
(d) In no event will any party be liable to any other party under
this Agreement for punitive, exemplary, special or consequential damages.
(e) Each party hereto acknowledges and agrees that, with respect
to any claim by a party hereto against the other party hereto which arises out
of breach of any of the representations, warranties, covenants or agreements of
the Seller or a Buyer herein, the indemnification remedy set forth in this
Article IX shall be the sole and exclusive remedy of the parties with respect
thereto.
(f) In connection with any Direct Claim brought by one party
against the other party to enforce this Agreement, to the extent that a party
prevails in prosecuting or defending such Direct Claim such party shall be
entitled to be reimbursed by the other party for all reasonably and proximately
incurred out-of-pocket costs, expenses and attorneys' fees incurred by it in
respect of matters on which it prevailed and all costs and expenses incurred in
connection therewith by the non-prevailing party as to matters on which it did
not prevail shall not be included within and shall be excluded from any Damages
incurred by such non-prevailing party.
(g) Neither party shall have any obligation to indemnify the other
party in respect of any Third Party Claim asserted by any person who is not an
Independent Party.
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(h) If a party has knowledge of an Indemnification Claim at the
Closing Time, such party shall be deemed to have waived such Indemnification
Claim and the other party shall have no liability therefor.
(i) All Damages shall be computed net of (i) Tax benefits actually
realized therefrom to a party, and (ii) the amount of any insurance benefits
actually collected or collectible with respect thereto which reduces the
Damages that would otherwise be sustained, each party covenanting to pursue
such tax benefits and insurance coverage in good faith.
(j) An Indemnitor may not assert any offset or similar right in
respect of its obligations under this Agreement based upon any actual or
alleged breach of any representation, warranty or covenant contained in this
Agreement or any other actual or alleged liability or obligation of the
Indemnitee to the Indemnitor; provided, however, that the inability to assert
any offset or similar right pursuant to this sentence will not of itself result
in a waiver of any such actual or alleged breach of this Agreement, which may,
subject to this Article IX, be asserted pursuant to this Article IX.
(k) Except for any Environmental Claim, to the extent that the
physical condition of any Purchased Asset is not in compliance with Applicable
Law at the Closing Time such physical condition shall not be an Excluded
Liability; provided that nothing in Section 9.04(k) shall in any way limit
Seller's right to make an Indemnification Claim under Section 9.02(a) with
respect to such physical condition.
SECTION 9.05 PROCEDURE FOR THIRD PARTY CLAIMS. The rights and
obligations of the Indemnitee and Indemnitor with respect to Indemnification
Claims arising out of a Third Party Claim shall be subject to the following
conditions:
(a) If a party receives notice of the assertion of any Third Party
Claim in respect of which it intends to make an Indemnification Claim, the
Indemnitee shall promptly provide written notice (an "Indemnification Notice")
of such assertion to the Indemnitor; provided that failure of the Indemnitee to
give the Indemnitor prompt notice as provided herein shall not relieve the
Indemnitor of any of its obligations hereunder except to the extent the
Indemnitor is prejudiced by such failure. The Indemnification Notice shall
describe in reasonable detail the nature of the Third Party Claim, the basis
for an Indemnification Claim and shall be
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accompanied by copies of papers and documents which have been served upon the
Indemnitee and such other documents and information as may be appropriate to an
understanding of such Third Party Claim and the liability of the Indemnitor to
indemnify the Indemnitee hereunder. Except as required by law, the Indemnitee
shall not answer or take any other action in respect of such Third Party Claim
which may prejudice the defense thereof unless and until Indemnitor has been
given the opportunity to assume the defense thereof under this Section 9.05 and
refused to do so. If Indemnitee takes any such action which does prejudice the
defense of any such Third Party Claim then Indemnitee shall be liable to
Indemnitor to the extent of such prejudice.
(b) Upon receipt of an Indemnification Notice, the Indemnitor
shall have the right but not the obligation to promptly assume and take
exclusive control of the defense, negotiation and/or settlement of such Third
Party Claim. The assumption of the defense by Indemnitor of a Third Party
Claim shall not prejudice the right of the Indemnitor to recover Damages from
the Indemnitee with respect thereto. If a party is defending, negotiating or
settling a Third Party Claim for which the other party may be liable, then
such party shall at all times do so in good faith as if it were ultimately
liable for all Damages resulting therefrom and shall not settle such Third
Party Claim except on terms which are commercially reasonable measured in the
context of the matter settled and not in respect of any other consideration of
the settling party.
(c) If the Indemnitor does not, within twenty days after receipt
of an Indemnification Notice, take over the defense of such Third Party Claim
then the parties agree that the Indemnitee may join the Indemnitor in any
action, claim or proceeding brought by the third party asserting such Third
Party Claim as to which any right of indemnity created by this Agreement would
or might apply, for the purpose of enforcing any right of indemnity granted to
such Indemnified Party pursuant to this Agreement.
(d) If the Indemnitor has assumed the defense of a Third Party
Claim then the Indemnitee shall not compromise or settle such Third Party
Claim; provided, however, that the Indemnitee shall have the right to settle at
its sole cost and expense any Third Party Claim at any time if the Indemnitee
waives its right to recover any Damages therefor from the Indemnitor.
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(e) The party controlling the defense of a Third Party Claim shall
keep the Indemnitee or Indemnitor, as the case may be, reasonably informed at
all stages of the defense of such Third Party Claim. The party not controlling
the defense of any such Third Party Claim shall have the right, at its sole
cost and expense, to participate in, but not control, the defense of any such
Third Party Claim. Each party shall reasonably cooperate with the other in the
defense, negotiation and/or settlement of any such Third Party Claim. In
connection with any defense of a Third Party Claim undertaken by the
Indemnitor, the Indemnitee shall provide Indemnitor, its counsel, accountants
and other representatives with reasonable access to relevant properties,
contracts, books and records and make available such personnel of the
Indemnitee as the Indemnitor may reasonably request.
(f) If either party receives an offer to settle such Third Party
Claim, it shall promptly present such offer to the other party. If the
Indemnitor is willing to accept and perform all of the terms of such settlement
offer and the Indemnitee refuses to accept such settlement offer; then (1) the
Indemnitor's liability to the Indemnitee hereunder with respect to such Third
Party Claim shall not exceed the amount of money and the performance
obligations proposed to be paid pursuant to such settlement offer, and, (2) if
the Indemnitor has assumed the defense of such Third Party Claim, then the
Indemnitor may, if it so elects, tender the defense thereof to the Indemnitee
by paying to Indemnitee the amount of money proposed to be paid in such
settlement offer and irrevocably accepting any non-monetary performance
obligations, in which case the Indemnitor shall have no further liability to
the Indemnitee hereunder with respect to such Third Party Claim and the
Indemnitee shall have sole responsibility for the future defense of such Third
Party Claim and for any and all liabilities, damages, claims, costs, and
expenses (including attorneys' fees) resulting therefrom.
SECTION 9.06 PROCEDURE FOR DIRECT CLAIMS. The rights and
obligations of Indemnitee and Indemnitors with respect to Indemnification
Claims resulting from or arising out of Direct Claims shall be subject to the
following conditions: A party having an Indemnification Claim resulting from
or arising out of a Direct Claim shall give prompt written notice to Indemnitor
(an "Indemnification Notice") specifying in reasonable detail each provision of
this Agreement under which the Indemnification Claim is made and the nature and
amount of the Indemnification Claim asserted; provided that failure of the
Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its
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obligations hereunder except to the extent the Indemnitor is prejudiced by such
failure. If the Indemnitor, within 30 days after the receipt of notice by
Indemnitee, shall not give written notice to Indemnitee accepting in its
entirety such Indemnification Claim, such Indemnification Claim shall be deemed
rejected by the Indemnitor and the parties may pursue such remedies as are
provided for by this Agreement.
SECTION 9.07 ENVIRONMENTAL CLAIMS. All Environmental Claims shall
be subject to the provisions of Section 9.05 and shall, in addition, also be
subject to the following:
(a) Seller shall have the right to control any negotiations with
any Independent Party or Governmental Authority regarding any investigation,
remediation or monitoring of any Environmental Condition (collectively, a
"Response") including, without limitation, the manner and extent to which any
Response is implemented, and any Response shall be conducted under its
exclusive direction and its sole cost and expense; provided that Cambridge
shall have the right, at its expense, to participate in any such negotiations
and Landlord shall keep Cambridge reasonably informed regarding any such
negotiations.
(b) Cambridge shall use its reasonable good faith efforts to
cooperate with Seller in all matters relating to any Seller Response. Seller
shall reimburse Cambridge for its reasonable out-of-pocket expenses incurred in
providing such cooperation. During the course of any Seller Response, Cambridge
shall and hereby does, grant to Seller, its agents, employees, contractors and
consultants, all access to the Shelbyville, Shadeland and Rushville Facilities
as is reasonably necessary to perform any Seller Response. Such access shall
include use of utilities at Seller's expense and reasonable office, parking and
storage space.
(c) Cambridge shall allow Seller to conduct sampling and to
install, operate and maintain any remediation and monitoring devices at, on or
under the Shadeland, Shelbyville or Rushville Facility, including, but not
limited to, soil removal equipment, monitoring wells and groundwater recovery
and treatment systems, that are required by any Governmental Authority or that
Seller reasonably determines are necessary to perform Seller's Response;
provided that such actions shall not unreasonably disrupt Cambridge operations.
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(d) Seller shall implement any required Response in a manner which
does not unreasonably interfere with Cambridge's operations.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. EXPENSES. Except as otherwise provided in this
Agreement, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such cost or expense.
SECTION 10.02. BULK TRANSFER LAWS. Notwithstanding any other
provision of this Agreement, the Buyer hereby waives compliance by the Seller
with the provisions of any so-called bulk transfer law of any jurisdiction in
connection with the transactions contemplated hereby. Seller hereby
indemnifies and agrees to hold Buyer harmless from and against any and all
liabilities, losses, damages, costs and expenses, including reasonable counsel
fees, reasonably and proximately incurred or sustained by Buyer due to such
non-compliance.
SECTION 10.03. ASSIGNMENT. No party hereto shall transfer or
assign, or grant or permit to exist any lien on, this Agreement or any of its
rights or obligations hereunder (by operation of law or otherwise) without the
prior written consent of the other party hereto (which consent may be withheld
in such other party's sole discretion), and any such purported transfer or
assignment without such consent shall be void and of no force of effect.
SECTION 10.04. SEVERABILITY. If any provision of this Agreement or
the application of any such provision is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or invalidate or render
unenforceable such provision in any other jurisdiction. In the event that any
provision of this Agreement shall be finally determined by a court of competent
jurisdiction to be unenforceable such court shall have jurisdiction to reform
this Agreement so that it is enforceable to the maximum extent permitted by law
and the parties shall abide by such court's
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determination.
SECTION 10.05. AMENDMENT AND WAIVER. No amendment to this Agreement
shall be effective unless it shall be in writing and signed by each party
thereto. Any failure of a party to comply with any obligation, covenant,
agreement or condition contained in this Agreement may be waived by the party
entitled to the benefits thereof only by a written instrument duly executed and
delivered by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance.
SECTION 10.06. PARTIES IN INTEREST; LIMITATION ON RIGHTS OF OTHERS.
This Agreement shall be binding upon and inure to the benefit of the parties
thereto and their permitted assigns. Nothing in this Agreement, whether
express or implied, shall give or be construed to give any person (other than
the parties thereto and their permitted assigns) any legal or equitable right,
remedy or claim under or in respect of this Agreement, unless such person is
expressly stated in this Agreement to be entitled to any such right, remedy or
claim.
SECTION 10.07. COUNTERPARTS; EFFECTIVENESS. This Agreement (a) may
be executed by the parties thereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same contract and (b) shall not become
effective until one or more counterparts have been executed by each party
thereto and delivered to the other parties thereto.
SECTION 10.08 ENTIRE AGREEMENT. This Agreement together with any
exhibits, schedules, appendices and attachments thereto, constitute the entire
agreement of the parties with respect to the subject matter thereof and
supersede all prior written and oral agreements and understandings with respect
to such subject matter including, without limitation, the Letter of Intent
between Seller and Buyer dated February 9, 1996 and the Confidentiality
Agreement between Seller and Buyer dated November 9, 1995.
SECTION 10.09. GOVERNING LAW. This Agreement shall in all respects
be governed by and construed in accordance with the internal laws of the State
of Ohio
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applicable to agreements made and to be performed entirely within such State,
without regard to the conflict of laws principles of such State.
SECTION 10.10. NOTICES. All notices and other communications to be
given to any party under this Agreement shall be in writing and any notice
shall be deemed given when delivered by hand, courier or overnight delivery
service or three days after being mailed by certified or registered mail,
return receipt requested, with appropriate postage prepaid, or when received in
the form of a telegram or facsimile, and shall be directed to the address or
facsimile number of such party specified below (or at such other address or
facsimile number as such party shall designate by like notice):
(a) If to a Buyer: Cambridge Industries, Inc.
555 Horace Brown Drive
Madison Heights, MI 48071
Attn: Chairman of the Board
With a copy to: Jaffe, Raitt, Heuer & Weiss
One Woodward, Suite 2400
Detroit, MI 48226
Attn: Robin Krueger
(b) If to the Seller: GenCorp Inc.
175 Ghent Road
Fairlawn, Ohio 44333
Attn: Chief Financial Officer
SECTION 10.11. INTERPRETATION. It is acknowledged by the parties
that this Agreement has undergone several drafts with the negotiated
suggestions of
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each and, therefore, no presumptions shall arise favoring either party by
virtue of the authorship of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
<TABLE>
<CAPTION>
CAMBRIDGE INDUSTRIES, INC. GENCORP INC.
<S> <C>
By: By:
---------------------------------------- ---------------------------------------
Name: R. P. Mika Name: D. M. Steuert
-------------------------------------- -------------------------------------
Title: Vice President Title: Senior Vice President
------------------------------------- ------------------------------------
and Chief Financial Officer
------------------------------------
CAMBRIDGE INDUSTRIES HOLDINGS, INC.
By:
----------------------------------------
Name: R. P. Mika
--------------------------------------
Title: Vice President
-------------------------------------
</TABLE>
rpdagr.exe
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<PAGE> 60
EXHIBIT A
DEFINITIONS
-----------
As used in the Asset Purchase Agreement dated as of March 1, 1996,
between Seller and Buyer (the "Asset Purchase Agreement"), each term set forth
below shall have the specified meaning:
"ACCOUNTING FIRM" means the Cleveland, Ohio office of Arthur Andersen.
"ACTUAL NON-TOOLING ACCOUNTS RECEIVABLE AMOUNT" means the difference
between (a) the Actual Total Accounts Receivable Amount and (b) the aggregate
amount of all receivables attributable to customer tooling included within the
Actual Total Accounts Receivable Amount.
"ACTUAL TRADE ACCOUNTS PAYABLE AMOUNT" means the aggregate amount as
of the Closing Time of the following Working Capital Items which are
Attributable to the RPD Business: 604.
"ACTUAL TOTAL ACCOUNTS RECEIVABLE AMOUNT" means the sum as of the
Closing Time, of the following Working Capital Items which are Attributable to
the RPD Business: 412, 414, 417, 421, and 422.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such other Person.
"ANTITRUST LAWS" means all U.S. Federal and state, and any foreign,
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or restraint
of trade.
"APPLICABLE LAW" means, with respect to any Person, any federal, state
or local statute, law, rule, regulation or ordinance now or hereafter in effect
of any Governmental Authority which is applicable to such Person.
"ATTRIBUTABLE TO THE RPD BUSINESS", when used with respect to assets
and properties, shall mean assets and properties used, or held for use by
Seller primarily
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in connection with the RPD Business but is meant to exclude assets and
properties used or held for use by Seller primarily in any business other than
the RPD Business or used or held for use generally in the RPD Business as well
as in other businesses or activities of Seller.
"BUYER DISCLOSURE SCHEDULE" means that certain schedule identified as
such and delivered by Buyer to Seller pursuant to the Asset Purchase Agreement.
"CTC" means the Seller's Corporate Technology Center.
"CLOSING LIABILITY LIST" means the items set forth on Exhibit H.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"DAMAGES" means any and all damages, judgments, orders, assessments,
interest, penalties, fines, settlement payments, losses, costs and expenses
which are reasonably and proximately incurred (including, without limitation,
reasonable legal, consulting and laboratory fees and out-of-pocket expenses
incurred in connection with investigating, defending, negotiating and/or
settling any Third Party Claim) provided, however, the following shall not be
included within and shall be excluded from Damages: (i) any investigation and
defense costs and expenses incurred by an Indemnitee prior to giving of an
Indemnification Notice under Sections 9.05 or 9.06 or after the defense of a
Third Party Claim has been assumed by the Indemnitor (excepting out-of-pocket
preliminary investigation costs reasonably incurred by an Indemnitee in
determining whether it has a right to make an Indemnification Claim against an
Indemnitor) and (ii) any internal employee and administrative costs and
expenses.
"DIRECT CLAIM" shall mean a claim under Section 9.06 by a party
against the other party to enforce this Agreement.
"DOLLARS" or "$" means United States dollars.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EMPLOYEES" means the persons listed at Section 3.10 of the Seller
Disclosure Schedule.
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<PAGE> 62
"ENVIRONMENTAL CLAIM" means a Third Party Claim by a Governmental
Authority or an Independent Party under the Environmental Laws in respect of
the investigation, remediation or monitoring of Hazardous Materials which were
present at the Closing Time in the ground water, surface water or surficial or
subsurface soil of the Shelbyville Facility, Rushville Facility or Shadeland
Facility.
"ENVIRONMENTAL CONDITION" means Hazardous Materials which were
present at the Closing Time in the ground water or surficial or subsurface soil
of the Shelbyville Facility, Rushville Facility or Shadeland Facility.
"ENVIRONMENTAL LAWS" means all federal, state, and local statutes,
laws, regulations, ordinances, and common law, concerning pollution or
protection of the environment, (including but not limited to, the Clean Air
Act, 42 U.S.C. Section 7401 et seq., the Clean Water Act, 33 U.S.C. Section
1251 et seq., the Resource Conservation Recovery Act ("RCRA"), 42 U.S.C.
Section 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., and the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq.,) which are
currently in existence or any other federal, state and local statutes, laws,
regulations, ordinances or common laws which currently govern: (i) the cleanup,
remediation, and/or remedy of contamination in or threat of contamination to
the environment; (ii) the emission, discharge or release of Hazardous Materials
into the environment; or (iii) the use, generation, transport, treatment,
storage, disposal, recycling, handling or recovery of solid waste or Hazardous
Materials. For purposes of this Agreement the term "environment" means: (i)
surface water and groundwater, (ii) surface and subsurface soil, and (iii) air.
"ENVIRONMENTAL REPORTS" shall mean the reports of Clayton
Environmental Consultants with respect to environmental matters of the RPD
Business and items listed on Exhibit D.
"FARMINGTON HILLS FACILITY" means the land, building and improvements
of Seller located at 34975 West Twelve Mile Road, Farmington Hills, Michigan.
"FARMINGTON HILLS RPD EQUIPMENT" means the items identified on Exhibit
E.
"GENCORP ACCOUNTING PRINCIPLES" means the accounting principles
attached hereto as Exhibit F.
"GOVERNMENTAL AUTHORITY" means the United States of America, any State
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thereof, or any court, department, or agency of the United States of America,
any State thereof, or political subdivision of any of them.
"GUARDS UNION AGREEMENT" means the Collective Bargaining Agreement
(including all side letters) and the Agreement for Pension and Insurance
Benefits, each effective as of September 1, 1995 and between GenCorp and the
International Union, United Plant Guard Workers of America and its Local 40.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"HAZARDOUS MATERIALS" shall mean any material or substance: (i) which
is defined as a "hazardous substance", "pollutant" or "contaminant" pursuant to
CERCLA and amendments thereto and regulations promulgated thereunder as in
effect at the Closing Time; (ii) which is defined as a "hazardous waste"
pursuant to RCRA and amendments thereto and regulations promulgated thereunder
as in effect at the Closing Time; (iii) containing polychlorinated biphenyls
(PCBs); (iv) which is radioactive; (v) the presence of which requires
investigation or remediation under any applicable federal, state or local
statute, regulation or ordinance; (vi) which is a petroleum product or
fractions thereof; (vii) asbestos containing materials, and (viii) which is
defined as a "hazardous waste", "hazardous substance", "pollutant" or
"contaminant" under any applicable federal state or local state, regulation or
ordinance or regulated as such by any applicable federal, state or local
Governmental Authority.
"IRS" means the United States Internal Revenue Service.
"IUE UNION AGREEMENT" means the Collective Bargaining Agreement
(including all side letters) and Agreement for Pension and Insurance Benefits,
each effective as of July 1, 1995 and between Seller and the International
Union of Electrical Workers and its Local 420.
"INDEMNITEE" shall mean the party making an Indemnification Claim.
"INDEMNITOR" shall mean the party against whom an Indemnification
Claim is made.
"INDEMNIFICATION CLAIM" shall mean a claim of a Buyer under Section
9.02 or a claim of a Seller under Section 9.03.
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<PAGE> 64
"INDEPENDENT PARTY" means as to any party, any corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, Governmental Authority or other legal entity of any kind
which is not an Affiliate of it.
"INTELLECTUAL PROPERTY" means rights under or to patents and patent
applications; trademarks and trademark applications and registrations; trade
names; service marks; service names, copyrights and copyright applications and
registrations; and trade secrets, designs, drawings, patterns, specifications,
formulas, technology, inventions, processes and know-how of a scientific or
technical nature.
"IONIA FACILITY" means the land, buildings and improvements owned by
Seller located at 119 South Dexter Street, Ionia, Michigan.
"IONIA LEASE" means the Lease Agreement, dated the date hereof,
between Seller and Cambridge.
"IONIA LEASED FACILITY" means the land, buildings and improvements
leased to Cambridge under the Ionia Lease.
"KNOWLEDGE", "KNOWLEDGE", "KNOWN TO" or words of similar import mean,
with respect to Seller, the actual knowledge of the following persons: Marv
Isles, Chris Conley, Jack Bonsky, Mike Steuert, Tim Sand, Sam Hughes, Jack
Bailey, Mike Kilpinen, Randy Lachowski, Jim Preece and Paul Leidal.
"MARION FACILITY" means the land, buildings and improvements located
at 1700 Factory Avenue, Marion, Indiana 46952.
"MARION RPD EQUIPMENT" means the items identified on Exhibit G
excluding items which have been sold, transferred or disposed of in the
ordinary course prior to Closing Time.
"OFFERING SIDE LETTER" means that certain letter agreement relating to
the preparation and filing of a registration statement with the U.S. Securities
and Exchange Commission with respect to the offer and sale of notes or bonds of
Cambridge Industries Holdings, Inc.
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"PATENTS" means the patents and patent applications identified at
Section 3.4 of the Seller Disclosure Schedule.
"PERMITTED LIENS" means any and all: (1) Liens for Taxes or
assessments that are due but not yet delinquent; (2) Liens disclosed on the
Closing Net Assets Statement; (3) materialmen's, mechanic's, repairmen's,
contractors', operators' or other similar Liens or charges incidental to
construction, maintenance or operation of the Facilities; (4) the terms and
conditions of and any legal or equitable Liens deemed to exist by reason of
undertakings or covenants in any of the leases, agreements, orders and
instruments included within the Purchased Assets; (5) rights reserved to or
vested by law or regulation in any Governmental Authority to control or
regulate the RPD Business, including, without limitation, zoning ordinances,
building codes, Environmental Laws and rights of eminent domain; and (6)
easements, rights-of-way, imperfections of title, covenants, undertakings,
restrictions, conditions or limitations of record in respect of the Shelbyville
Real Property.
"PERSON" means an individual, corporation, partnership, association,
trust, estate, Governmental Authority or other entity but excluding the
parties.
"RPD BUSINESS" means the business conducted through Seller's
Reinforced Plastics Division of manufacturing and selling compression molded
sheet mold compound for automobile and truck applications provided that (i)
such business does not include any operations, assets, rights, contracts and
business of the Farmington Hills Facility except to the extent pertaining
exclusively to Seller's Reinforced Plastics Division, (ii) such business does
not include any operations, assets, rights, contracts or business of CTC, (iii)
such business does not include any operations, assets, rights, contracts or
business at the Ionia Facility excepting the operations conducted from the
Ionia Leased Facility and the equipment in the Ionia Leased Facility being sold
to Cambridge pursuant to this Agreement, (iv) such business does not include
any operations, assets, rights, contracts or business of the Marion Facility,
excepting the Marion RPD Equipment, and (v) such business does not include any
operations, assets, rights, contracts or business which Seller will own or
operate after the Closing.
"RPD FACILITIES" means, collectively, the Shelbyville Facility,
Shadeland Facility, Rushville Facility and the Ionia Leased Facility.
"RPD INTELLECTUAL PROPERTY' means the Patents and the Trademarks and
any other Intellectual Property that is owned by Seller to the extent such
Intellectual
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Property is useful solely and exclusively for the RPD Business but excludes,
without limitation, any Intellectual Property relating to any in- mold coating
or adhesive composition and/or the application of any such composition to a
substrate and/or a substrate coated with any such composition.
"RUSHVILLE FACILITY" means the land, buildings or improvements leased
by Seller located at 1350 Commerce Drive, Rushville, Indiana.
"RUSHVILLE LEASE" means the Industrial Lease dated as of June 15, 1994
between Rushville Manufacturing Mall Land Trust #101 and GenCorp Inc.
"SELLER DISCLOSURE SCHEDULE" means that certain schedule identified as
such and delivered by Seller to Buyer pursuant to the Asset Purchase Agreement.
"SHADELAND FACILITY" means the land, buildings and improvements leased
by Seller located at 2402 Shadeland Avenue, Indianapolis, Indiana 46219.
"SHADELAND LEASE" means the Industrial Lease entered into on February
1, 1994 between National Life Insurance Company and GenCorp Inc. and Amendment
No. 1 to Lease Agreement dated January 31, 1995.
"SHELBYVILLE FACILITY" means the land, building and improvements owned
by Seller located at 501 Northridge Drive, Shelbyville, Indiana.
"SUBORDINATED NOTE" means the promissory note of Parent of even date
herewith in the principal amount of $13,750,000 issued pursuant to the
Subordinated Note Credit Agreement.
"SUBORDINATED NOTE CREDIT AGREEMENT" means the Agreement entered into
between Seller and Cambridge of even date herewith pursuant to which the
Subordinated Note is issued.
"TAXES" means all income, franchise, excise, real and personal
property, sales, use, value-added, payroll, withholding, social security and
other taxes and assessments imposed by any Governmental Authority, together
with all interest, penalties and additions imposed with respect to such
amounts.
"THIRD PARTY CLAIM" shall mean as to any party to this Agreement the
assertion or commencement against it of any claim, demand, suit or action or
any
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legal, administrative, governmental or other proceeding by any Governmental
Authority or any other person or entity which is an Independent Party.
"TITLE MATTERS" means (1) Seller's title to or ownership of all or any
interest in the Shelbyville Real Property or (2) any defect, restriction,
covenant, easement, encroachment or encumbrance with respect to the Shelbyville
Real Property.
"UNION CONTRACT" means the IUE Union Agreement and the Guards Union
Agreement.
"WORKING CAPITAL ITEMS" means the items described on Exhibit B.
61
<PAGE> 1
Execution Copy
EXHIBIT B
ASSET PURCHASE AGREEMENT
DATED FEBRUARY 14, 1996
BETWEEN
BTR ANTIVIBRATION SYSTEMS, INC.
AND
GENCORP INC.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Article I - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Article II - Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01 Purchase and Sale . . . . . . . . . . . . . . . . . . . . 2
Section 2.02 Excluded Assets . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03 Assumption of Liabilities . . . . . . . . . . . . . . . . 6
Section 2.04 Excluded Liabilities . . . . . . . . . . . . . . . . . . 7
Section 2.05 Consents to Assignment . . . . . . . . . . . . . . . . . 9
Section 2.06 Purchase Price; Payment . . . . . . . . . . . . . . . . . 9
Section 2.07 Purchase Price Adjustment . . . . . . . . . . . . . . . . 10
Section 2.08 Allocation of Purchase Price . . . . . . . . . . . . . . 14
Section 2.09 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 14
Article III - Representations and Warranties of the Seller . . . . . . . . . . . . . . . . 17
Section 3.01 Organization and Existence . . . . . . . . . . . . . . . 17
Section 3.02 Corporate Authorization . . . . . . . . . . . . . . . . . 17
Section 3.03 Authorization . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.04 Non-contravention . . . . . . . . . . . . . . . . . . . . 18
Section 3.05 Absence of Certain Changes . . . . . . . . . . . . . . . 18
Section 3.06 Properties . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.08 Material Contracts . . . . . . . . . . . . . . . . . . . 20
Section 3.09 Compliance with Laws . . . . . . . . . . . . . . . . . . 22
Section 3.10 Permits . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.11 Labor and Employment Matters . . . . . . . . . . . . . . 22
Section 3.12 Intellectual Property . . . . . . . . . . . . . . . . . . 23
Section 3.13 Fees and Commissions . . . . . . . . . . . . . . . . . . 24
Section 3.14 Central Services . . . . . . . . . . . . . . . . . . . . 24
Section 3.15 Henniges . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.16 Financial . . . . . . . . . . . . . . . . . . . . . . . . 24
Article IV - Representations and Warranties of the Buyer . . . . . . . . . . . . . . . . . 24
Section 4.01 Organization and Existence . . . . . . . . . . . . . . . 25
Section 4.02 Corporate Authorization . . . . . . . . . . . . . . . . . 25
Section 4.03 Authorization . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.04 Non-contravention . . . . . . . . . . . . . . . . . . . . 26
Section 4.05 Fees and Commission . . . . . . . . . . . . . . . . . . . 26
Section 4.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.07 Inspections; Limitation of Seller's
Warranties . . . . . . . . . . . . . . . . . . . . . . . 26
Article V - Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.01 Further Conveyances . . . . . . . . . . . . . . . . . . . 27
Section 5.02 Non-Competition Covenant . . . . . . . . . . . . . . . . 27
Section 5.03 Closing Statement . . . . . . . . . . . . . . . . . . . . 29
Article VI - Covenants of the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.01 GenCorp Name . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.02 Vacation of Shared Facility . . . . . . . . . . . . . . . 30
Section 6.03 Non-Solicitation of Employees . . . . . . . . . . . . . . 30
Section 6.04 Henniges . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.05 NIST . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.06 Letters of Credit . . . . . . . . . . . . . . . . . . . . 30
Article VII - Covenants of Both Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.01 Public Announcements . . . . . . . . . . . . . . . . . . 31
Section 7.02 Administration of Accounts . . . . . . . . . . . . . . . 31
Section 7.03 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . 31
Section 7.04 Access to Former Business Records . . . . . . . . . . . . 31
Section 7.05 Access to Former Employees . . . . . . . . . . . . . . . 32
Section 7.06 Customer Initiated Product Replacement
Program . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Article VIII - Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.01 Salaried Employees . . . . . . . . . . . . . . . . . . . 33
Section 8.02 Union Employees . . . . . . . . . . . . . . . . . . . . . 39
Section 8.03 No Third Party Claims . . . . . . . . . . . . . . . . . . 40
Section 8.04 Workers Compensation . . . . . . . . . . . . . . . . . . 40
Article IX - Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 9.01 Environmental Matters . . . . . . . . . . . . . . . . . . 40
Section 9.02 Investigation Limitation . . . . . . . . . . . . . . . . 41
Section 9.03 Liability for Environmental Conditions . . . . . . . . . 41
Section 9.04 Environmental Claims . . . . . . . . . . . . . . . . . . 43
Section 9.05 Groundwater Testing . . . . . . . . . . . . . . . . . . . 45
Article X - Survival; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 10.01 Survival of Representations, Warranties . . . . . . . . . 46
Section 10.02 Seller's Agreement to Indemnify . . . . . . . . . . . . . 46
Section 10.03 Buyer's Agreement to Indemnify . . . . . . . . . . . . . 46
Section 10.04 Indemnification Limits; Exclusive Remedy . . . . . . . . 47
Section 10.05 Procedure for Third Party Claims . . . . . . . . . . . . 49
Section 10.06 Procedure for Direct Claims . . . . . . . . . . . . . . . 51
Article XI - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.01 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.02 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . 51
Section 11.03 Assignment . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.04 Severability . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.05 Amendment and Waiver . . . . . . . . . . . . . . . . . . 52
Section 11.06 Parties in Interest; Limitation on Rights of Others . . 53
Section 11.07 Counterparts; Effectiveness . . . . . . . . . . . . . . . 53
Section 11.08 Entire Agreement . . . . . . . . . . . . . . . . . . . . 53
Section 11.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 11.11 Interpretation . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
iii
<PAGE> 5
Exhibit A - Definitions
Exhibit B - Excluded Assets
Exhibit C - Assumed Liabilities
Exhibit D - Excluded Liabilities
Exhibit E - August Working Capital Statement
Exhibit F - Income Statements
Exhibit G - Groundwater Testing
Exhibit H - Estimated Closing Net Assets Statement
Exhibit I - GenCorp Accounting Principles
Exhibit J - Liens
Exhibit K - Wabash VC Equipment
Exhibit L - Working Capital Items
Exhibit M - D&E VC Equipment and Farmington Hills VC Equipment
iv
<PAGE> 6
Execution Copy
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") dated February
14,1996, between BTR ANTIVIBRATON SYSTEMS, INC., an Indiana corporation (the
"Buyer") and GENCORP INC., an Ohio corporation (the "Seller").
WHEREAS, the Seller, among other things, conducts a business through
its Vibration Control Division which designs, develops, manufactures and sells
vibration control components for automobile and truck applications and certain
products for the marine and agricultural industries; and
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Buyer desires to purchase from the Seller and Seller desires to
sell to Buyer substantially all of the assets associated with such business,
and the Seller desires to transfer to the Buyer, and the Buyer has agreed to
assume, certain liabilities associated with such business.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements herein set forth, the
parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. DEFINITIONS. Defined terms used in this Agreement have
the meanings ascribed to them by definition in this Agreement or in Exhibit A.
<PAGE> 7
ARTICLE II
PURCHASE AND SALE
-----------------
SECTION 2.01. PURCHASE AND SALE. Upon the terms and subject to the
conditions of this Agreement, Buyer hereby purchases from Seller and Seller
hereby sells, transfers, assigns and delivers to the Buyer, all of its right,
title and interest in and to the assets and properties of Seller which are
Attributable to the VC Business, wherever located, whether tangible or
intangible, real or personal, whether owned directly or indirectly, other than
the Excluded Assets (all the assets and properties to be transferred to the
Buyer by Seller pursuant to this Agreement are referred to collectively herein
as the "Purchased Assets"). Without limiting the foregoing, the Purchased
Assets include all of Seller's right, title and interest in, to and under the
following (except as otherwise specified herein and other than those which are
Excluded Assets):
(a) all real property owned by Seller which is Attributable to the
VC Business, together with all buildings, fixtures and improvements erected
thereon and appurtenances thereto (collectively, the "Owned Real Property")
including, without limitation, the Logansport Facility and the Peru Facility;
(b) all real property leased by Seller which is Attributable to
the VC Business (the "Leased Real Property") including, without limitation, the
Ft. Wayne Facility;
(c) (i) all machinery, equipment, tooling, dies, furniture,
office equipment, communications equipment, vehicles, spare and replacement
parts and other similar tangible personal property Attributable to the VC
Business (collectively, the "Equipment") including, without limitation, and all
such property used or held for use by Seller at the Logansport Facility and
Peru Facility, and (ii) the Wabash VC Equipment, the D&E VC Equipment and the
Farmington Hills VC Equipment;
(d) (i) all raw materials, work-in-process, finished goods,
supplies, spare parts, samples and stores Attributable to the VC Business
(collectively, the "Inventory") including, without limitation, all such items
used or held for use by
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Seller at the Logansport Facility and Peru Facility, and (ii) the Wabash VC
Inventory;
(e) all contracts, agreements, options, personal property leases,
licenses, sales and purchase orders, commitments and other instruments of any
kind, whether written or oral, to which Seller is a party and which are
Attributable to the VC Business (collectively, the "Contracts");
(f) all quotations, bids and proposals made or received by Seller
and Attributable to the VC Business (collectively, "Bids");
(g) all accounts receivable, receivables and advances of Seller,
together with any unpaid interest or fees accrued thereon or other amounts due
with respect thereto which are Attributable to the VC Business;
(h) all petty cash of Seller located at the Logansport Facility
and Peru Facility ("Petty Cash");
(i) all rights, claims, credits, causes of action, rights of set
off, indemnity rights, defenses and warranty and other claims of Seller against
third parties which are Attributable to the VC Business, whether accrued to or
to accrue, including, without limitation, claims under or pursuant to all
warranties, representations and guarantees made by suppliers, manufacturers,
contractors and other third parties and under the Patents;
(j) all prepaid charges and expenses of Seller Attributable to the
VC Business and usable by Buyer;
(k) all licenses, permits, approvals, certificates, consents,
orders or other authorizations issued or granted to Seller by any Governmental
Authority and Attributable to the VC Business (the "Permits");
(l) originals or copies of all books, records, files, books of
account, invoices, engineering information, sales and promotional literature,
manuals, sales and purchase correspondence, lists of suppliers and customers,
personnel and employment records of Transferred Employees, and accounting,
marketing, engineering and manufacturing documentation, whether in hard copy or
computer
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format, to the extent Attributable to the VC Business.
(m) subject to rights of the Government pursuant to the NIST
Contract and the rights held by third parties that have been licensed by the
Seller prior to the Closing Date, the VC Intellectual Property and that portion
of any composite mark Attributable to the VC Business which does not
incorporate the name GenCorp;
(n) the JV Shares and the following bank accounts (the "JV
Accounts"): GKK Automotive Co. Ltd., National Bank of Detroit accounts Nos.
77619 and 8557-53 and GT Automotive Co., Ltd., National Bank of Detroit account
Nos. 77883 and 7119-53; and
(o) any other asset reflected on the Closing Net Assets Statement.
SECTION 2.02. EXCLUDED ASSETS. The Buyer expressly understands and
agrees that the following assets, properties and rights (the "Excluded Assets")
are excluded from, and shall not be counted among, the Purchased Assets:
(a) all of the Seller's cash, negotiable securities, letters of
credit, bonds and cash equivalents (whether or not Attributable to the VC
Business), except for the Petty Cash and any other cash, negotiable securities,
letters of credit, bonds and cash equivalents reflected on the Closing Net
Assets Statement;
(b) all Intellectual Property which is not VC Intellectual
Property;
(c) (i) Henniges and all assets, properties, rights, contracts and
business of Henniges, (ii) the Farmington Hills Facility, (iii) the Wabash
Facility, (iv) the D&E Facility, (v) the CTC Facility, (vi) the AMPE Facility,
and (vii) all machinery, tooling, dies, equipment, furniture, office equipment,
communications equipment, vehicles, spare and replacement parts and other
similar tangible personal property and all raw materials, work-in-process,
finished goods, supplies, spare parts, samples and stores used or held for use
at the Farmington Hills Facility, D&E Facility, Wabash Facility, CTC Facility
or the AMPE Facility except for the D&E VC Equipment, the Farmington Hills VC
Equipment, the Wabash VC Equipment and the Wabash VC Inventory;
(d) The names and trademarks "GenCorp", and "GenCorp Automotive"
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and related trademarks, corporate names, and trade names incorporating
"GenCorp", and all stylized logos incorporating the name "GenCorp" excluding
that portion of any composite mark Attributable to the VC Business which does
not incorporate the name GenCorp;
(e) All rights, claims, credits, causes of action, rights of set
off, indemnity rights, defenses and warranty and other claims against third
parties, whether accrued or to accrue, to the extent relating to any Excluded
Assets or to any Excluded Liabilities;
(f) All deposits, prepaid charges and advance payments to the
extent relating to other Excluded Assets or to any Excluded Liabilities;
(g) All rights or claims to Tax refunds and all Tax benefits;
(h) All policies of insurance and claims and rights under such
policies of insurance;
(i) Any item described in Section 2.01(k) which is privileged,
copies of any of the items described in 2.01(k) and all books and records
pertaining to Seller's employee benefit plans;
(j) All employee benefit plans and any assets of any such plans;
(k) All bank checks, bank accounts, safety deposit boxes, lock
boxes and agreements with banks and other financial institutions except the JV
Accounts;
(l) Any assets, rights, properties, contracts and business of
Seller other than the Purchased Assets;
(m) All of Seller's rights under this Agreement and any other
agreement or instrument delivered by Seller in connection herewith;
(n) The assets and properties which are identified on Exhibit B.
; provided, however, that no item described in (a) through (n) above shall be
an Excluded Asset (and shall be a Purchased Asset) to the extent such assets
are
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reflected on the Closing Net Assets Statement.
SECTION 2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject
to the conditions of this Agreement, the Buyer hereby assumes and becomes
directly and solely responsible for the payment, performance and discharge of
the following (collectively, the "Assumed Liabilities):
(a) All liabilities and obligations reflected on the Closing Net
Assets Statement;
(b) Any liability of Seller for unpaid amounts for charges
incurred, goods received, or services rendered to the VC Business by an
Independent Party in the ordinary course prior to the Closing Time, provided
that the GenCorp Accounting Principles do not require such amounts to be
reflected on the Closing Net Assets Statement;
(c) Subject to the right or reimbursement provided for in Section
7.06, all liabilities and obligations arising out of or resulting from any
claim to accept return of, provide refunds for, or to repair, replace, recall
or service any VC Business product produced by Seller before the Closing or by
Buyer after the Closing;
(d) All liabilities and obligations arising out of or resulting
from any injury to person or damage to property resulting from VC Business
products produced or any VC Business services performed by Buyer after the
Closing Time;
(e) All liabilities and obligations arising under or resulting
from the performance of or any nonperformance under any Contract or Bid to the
extent occurring after the Closing Time;
(f) All liabilities and obligations arising under or resulting
from the compliance with or any noncompliance under any Permit to the extent
occurring after the Closing Time;
(g) All liabilities and obligations arising out of or resulting
from violation of any Applicable Law in the conduct of the VC Business by Buyer
to the extent occurring after the Closing Time including, without limitation,
any violation of an Environmental Law other a than liability or obligation that
arises from a Continued
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Wabash Operation;
(h) All liabilities and obligations arising out of or resulting
from any infringement or other misappropriation of the Intellectual Property
rights of third parties in the conduct of the VC Business by Buyer to the
extent occurring after the Closing;
(i) The liabilities and obligations assumed by Buyer pursuant to
Article VIII;
(j) To the extent not covered in Sections 2.03(a) through (i) and
except as otherwise provided in this Agreement, any liability or obligation of
Buyer arising out of or resulting from acts, omissions, events, occurrences, or
transactions of whatsoever type or nature, to the extent arising out of or
resulting from (i) the ownership, use or possession of the Purchased Assets by
Buyer after the Closing Time or (ii) the conduct of the VC Business by Buyer
after the Closing Time; and
(k) The matters set forth on Exhibit C.
SECTION 2.04. EXCLUDED LIABILITIES. Except for the Assumed
Liabilities and as elsewhere provided in this Agreement: (i) the Buyer does not
hereby assume, and shall not as a result of the transactions contemplated
hereby at any time hereafter become liable for, any liability or obligation of
Seller of any nature whatsoever, whether accrued, liquidated, unliquidated,
known, unknown or otherwise (collectively, the "Excluded Liabilities"), and
(ii) without limiting (i), the Excluded Liabilities include the following
liabilities and obligations:
(a) All liabilities and obligations arising out of or resulting
from any injury to person or damage to property resulting from VC Business
products produced and sold or any VC Business services performed by Seller
prior to the Closing Time;
(b) All liabilities and obligations of Seller arising under or
resulting from performance of or any nonperformance under any Contract or Bid
to the extent occurring prior to the Closing Time;
(c) All liabilities and obligations of Seller arising under or
resulting from any compliance with or any noncompliance under any Permit to
the extent occurring
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prior to the Closing Time;
(d) All liabilities and obligations arising out of or resulting
from any violation of any Applicable Law by Seller in the conduct of the VC
Business to the extent occurring prior to the Closing Time including, without
limitation, any violation of an Environmental Law;
(e) All liabilities and obligations arising out of or resulting
from infringement or other misappropriation of the Intellectual Property rights
of third parties in the conduct by Seller of the VC Business to the extent
occurring prior to the Closing Time;
(f) To the extent not covered in Sections 2.04(a) through (e) and
except as otherwise provided in this Agreement, any liability or obligation of
Seller arising out or resulting from acts, omissions, events, occurrences, or
transactions of whatsoever type or nature, to the extent arising out of or
resulting from (i) the ownership, use or possession by Seller of the Purchased
Assets prior to the Closing Time or (ii) the conduct of the VC Business by
Seller prior to the Closing Time including, without limitation any liability of
Seller under Applicable Law;
(g) Any and all liabilities of any nature whatsoever relating to
Seller's employee benefit plans;
(h) The matters set forth on Exhibit D; and
(i) Any and all liability of whatsoever nature to any Governmental
Authority or Independent Party (including, without limitation, any liability
arising under Applicable Law) resulting from: (x) any and all Wabash
Environmental Conditions at the Wabash Facility existing at or before the
Closing Time, or (y) any Wabash Environmental Condition which arises at the
Wabash Facility after the Closing Time or any Wabash Environmental Condition
migrating through soil or groundwater from the Wabash Facility to the extent,
in either case, resulting from: (a) Seller's activities or inactivities at the
Wabash Facility or (b) Buyer continuing Seller's activities or inactivities in
the Wabash Facility (excluding accidental occurrences and out of the ordinary
activities and inactivities) in connection with the operation in the Wabash
Facility of the VC Business after the Closing Time provided
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<PAGE> 14
that such activities and inactivities of Buyer are conducted consistent with
the manner in which Seller conducted such activities or inactivities
immediately prior to the Closing Time (such activities and inactivities so
conducted "Continued Wabash Operations").
SECTION 2.05. CONSENTS TO ASSIGNMENT. The following shall apply to
all Contracts and Permits:
(a) Anything in this Agreement to the contrary notwithstanding,
this Agreement shall not constitute an assignment or agreement to assign any
Contract, Bid or any Permit (or any rights thereunder) if an attempted
assignment thereof, without the consent waiver, confirmation, novation or
approval (a "Consent") of a third party thereto, would constitute a breach or
other contravention thereof, be ineffective with respect to any party thereto
or in any way adversely affect the rights of the Buyer or the Seller
thereunder.
(b) With respect to any such Contract, Bid or Permit, after the
Closing, the Seller and the Buyer will use reasonable good faith efforts to
obtain as expeditiously as possible the Consent of the other parties to such
item for the assignment thereof to the Buyer or, alternatively, written
confirmation from such parties reasonably satisfactory in form and substance to
the Buyer and the Seller that such Consent is not required; provided, however,
that Seller will not be obligated to pay any consideration therefor or to incur
any other obligation in connection therewith.
(c) To the extent that any such Consent is not obtained, Seller
shall, to the extent it may lawfully and without breach do so, use reasonable
efforts to: (i) cooperate with Buyer in any reasonable arrangement intended to
provide to Buyer the benefits of any such Contract, Bid or Permit and (ii) upon
Buyer's reasonable request enforce for the benefit of Buyer, any rights of
Seller arising from any such Contract, Bid or Permit; provided, however, in
using such reasonable efforts Seller shall not be obligated to pay any
consideration or incur any other obligation.
(d) Notwithstanding the absence of any such Consents from and
after the Closing, Buyer shall perform all obligations under such Contracts,
Bids and Permits on behalf of Seller.
SECTION 2.06. PURCHASE PRICE; PAYMENT.
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(a) For purposes of this Agreement, the term "Purchase Price"
means:
(i) Eighty Million Dollars ($80,000,000);
(ii) plus or minus the amount of the Adjustment;
(iii) minus Two Million Eight Hundred Eighty-Five Thousand
Dollars ($2,885,000) (the "S&P Amount").
(b) At the Closing Buyer shall pay to Seller by wire transfer the
sum of Eighty Million Dollars ($80,000,000) and, when finally determined in
accordance with Section 2.07, Buyer shall pay to Seller or Seller shall pay to
Buyer, as the case may be, the amount of the Adjustment.
(c) All payments hereunder shall be made by delivery to the payee
as follows:
(i) Payments under this Agreement in excess of $10,000
shall be made by wire transfer (in immediately available funds) to the account
designated by the payee.
(ii) In all other cases, the party obligated to make a
payment under this Agreement will do so by delivering to the payee a bank
cashier's check (in immediately available funds) payable to the order of the
payee.
SECTION 2.07. PURCHASE PRICE ADJUSTMENT. The Adjustment will be
determined as follows:
(a) Buyer acknowledges that Seller delivered to Buyer on January
30, 1996 a statement of the Working Capital Items for the VC Business as of
August 30, 1995 which statement is attached hereto as Exhibit E (the "August
Working Capital Statement"). The "Base Line Working Capital Amount" is the
amount of the Working Capital Items on the August Working Capital Statement
which are current assets minus the amount of the Working Capital Items on the
Baseline Balance Sheet which are current liabilities and equals Sixteen
Million Four Hundred Thousand Dollars ($16,400,000). Buyer has been given the
opportunity to review the accounting practices and specific calculations used
to prepare the August Working
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Capital Statement and has had access to all data, schedules and work papers
used by Seller in preparing the August Working Capital Statement. Buyer has
proposed certain adjustments to the August Working Capital Statement which have
not been agreed to by Seller and which are described in the draft Ernst & Young
letter dated February 13, 1996 (the "E&Y Letter").
(b) As promptly as possible, but in any event within twenty (20)
days following the Closing Time, Seller shall prepare and deliver to Buyer the
August Working Capital Statement adjusted to reflect the changes in the book
value or book amount of the Working Capital Items stated thereon occurring
between the date of the August Working Capital Statement and the Closing Time
(the "Closing Working Capital Statement"). Buyer shall give Seller access to
the data necessary to prepare the Closing Working Capital Statement and
provide Seller with the reasonable assistance of Buyer's employees in
connection therewith. Representatives of Buyer shall have the right to
participate with representatives of Seller in the process of preparing the
Closing Working Capital Statement and shall have access to all data, schedules
and work papers used by Seller in preparing the Closing Working Capital
Statement.
(c) The Closing Working Capital Statement shall become final and
binding upon Buyer unless on or before the forty-fifth (45th) day after Buyer's
receipt of the Closing Working Capital Statement Buyer shall deliver to Seller
a written notice of its objection to the amount of any Working Capital Item on
the Closing Working Capital Statement, together with proposed changes thereto
and the reasons for such changes; provided, however, that the only objection to
the Closing Working Capital Statement which Buyer may make is whether the
Closing Working Capital Statement accurately reflects, in accordance with the
GenCorp Accounting Principles used to prepare the August Working Capital
Statement, the book value or book amount of the Working Capital Items included
thereon. Buyer may not object to any other matter pertaining to the August
Working Capital Statement (other than matters described in the E&Y Letter) or
Closing Working Capital Statement. All matters on which no notice of objection
is given shall be deemed final and binding. In no event may Buyer submit a
notice of objection which suggests a change in the Closing Working Capital
Statement of less than $100,000 in the aggregate.
(d) If Buyer issues a notice of objection, Seller and Buyer shall
meet and attempt to resolve the dispute within fifteen (15) days following
Buyer's notice of
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objection. If the parties resolve all or some of the matters in dispute within
such fifteen (15) day period then the parties shall prepare and sign an Adjusted
Closing Working Capital Statement reflecting such agreement which shall be
deemed final and binding. As to matters which remain in dispute after such
fifteen (15) day period ("Unresolved Matters"), the Closing Working Capital
Statement shall be deemed final unless Buyer shall within ten (10) days after
the end of such fifteen (15) day period request that the Closing Working Capital
Statement be reviewed by the Accounting Firm.
(e) Buyer shall give notice of its request for review by the
Accounting Firm to Seller in writing and shall within ten (10) days after such
notice submit a written statement of its position to the Accounting Firm and to
Seller. Seller may within ten (10) days of the Buyer submitting its written
statement to the Accounting Firm respond to such written statement with its own
written statement. The Accounting Firm shall consider both written statements
as it performs its duties. The authority of the Accounting Firm in reviewing
the Closing Working Capital Statement shall be limited to determining whether,
as to the Working Capital Items included within the Unresolved Matters, the
Closing Working Capital Statement accurately reflects, in accordance with the
GenCorp Accounting Principles used to prepare the August Working Capital
Statement, the book value or book amount of such Working Capital Items. The
Accounting Firm shall not have the authority to review or make a determination
with respect to any matter except the Working Capital Items included within the
Unresolved Matters, it being understood that the Accounting Firm shall not be
retained to conduct its own independent audit or review, but rather shall be
retained only to resolve specific differences between Seller and Buyer within
the range of such difference and consistent with the GenCorp Accounting
Principles. Either party or the Accounting Firm may request that each of the
parties present oral arguments to the Accounting Firm in the presence of the
other party at any time prior to the Accounting Firm's resolution of the
Unresolved Matters. The parties shall require the Accounting Firm to complete
its review not later than the thirtieth (30th) day following the submission of
the matter to the Accounting Firm. Buyer and Seller shall bear the fees and
expenses of review by the Accounting Firm in the same proportion as the ratio
of each parties' position is to the final determination by the Accounting Firm,
as determined by the Accounting Firm, whose determination shall be final and
binding on the parties.
(f) The Accounting Firm shall prepare a report of any adjustments to such
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Working Capital Items it deems necessary so that such Working Capital Items are
reflected on the Closing Working Capital Statement in accordance with the
GenCorp Accounting Principles. Such report shall contain an explanation of any
such adjustment and a description of why such GenCorp Accounting Principles
required such adjustment. Promptly after its completion, the Accounting Firm
shall provide such report to Seller and Buyer. Seller shall incorporate all
such adjustments into the Closing Working Capital Statement within fifteen (15)
days after receipt of such adjustments, which shall thereupon become the
Adjusted Closing Working Capital Statement and which shall be final and binding
upon Buyer and Seller.
(g) The "Closing Working Capital Amount" is the book value of the
Working Capital Items which are current assets on the Closing Working Capital
Statement or Adjusted Closing Working Capital Statement, as the case may be,
minus the book amount of the Working Capital Items which are current
liabilities as shown on the Closing Working Capital Statement or the Adjusted
Closing Working Capital Statement, as the case may be. Within ten (10) days
after the date the Closing Working Capital Statement or the Adjusted Closing
Working Capital Statement becomes final in accordance with this Section 2.07
(such tenth day being referred to herein as the "Settlement Date"), Seller
shall pay to Buyer the amount, if any, by which the Closing Working Capital
Amount is less than the Base Line Working Capital Amount or Buyer shall pay to
Seller the amount, if any, by which the Closing Working Capital Amount is more
than the Base Line Working Capital Amount, together with, in either case,
interest from the Closing Time on the amount paid under this Section 2.07(g)
calculated at an annual rate equal to the prime rate as publicly announced by
Citibank, N.A., New York, New York as of the Closing Time (any amount so paid
under this Section 2.07(h) the "Adjustment"). In addition, Seller shall pay to
Buyer at the time the Adjustment is paid the S&P Amount.
(h) Upon the Closing Working Capital Statement (if there are no
adjustments) or the Adjusted Closing Working Capital Statement (if there are
adjustments) becoming final Seller shall adjust the Closing Net Assets
Statement delivered to Buyer prior to the Closing by incorporating into it such
final Closing Working Capital Statement or Adjusted Working Capital Statement
and the resulting adjusted Closing Net Assets Statement shall be deemed to be
the Closing Net Assets Statement for all purposes under this Agreement.
Notwithstanding Section 3.16, Buyer shall not have a right to make any
Indemnification Claim under Section 3.16
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in respect of any matter which is determined or deemed determined under this
Section 2.07.
SECTION 2.08. ALLOCATION OF PURCHASE PRICE. Not later than ninety
(90) days after the Closing, the Buyer shall provide to the Seller proposed
statements prepared by Ernst & Young (the "Allocation Statements") allocating,
in accordance with generally accepted appraisal techniques, the total of the
Purchase Price and the book amount of the Assumed Liabilities pursuant to this
Agreement, to the different items of Purchased Assets and to the Seller's
obligations hereunder. Such allocation shall be conclusive and binding on the
parties unless there is no substantial authority under the IRC for such
allocation. Any costs or expenses incurred by the Buyer in connection with
such Allocation Statements (including appraisal fees) shall be borne by the
Buyer. The Buyer and the Seller respectively agree to file all income,
franchise and other Tax returns, and execute such other documents as may be
required by any Governmental Authority, in a manner consistent with the
Allocation Statements. The Buyer shall prepare the Form 8594 under Section 1060
of the Code relating to this transaction based on the Allocation Statements and
deliver such Form to the Seller within 60 days after finalization of the
Allocation Statements as provided above. The Buyer and the Seller respectively
agree to file such Form with each relevant taxing authority, and to refrain
from taking any position inconsistent with such Form or Allocation Statements
with any taxing authority unless otherwise required by Applicable Law. Buyer
shall adjust consistent with this Section 2.08 and deliver to Seller revised
Allocation Statements, if necessary, based upon the final Closing Net Assets
Statement, and such revised valuation, if any, shall supersede for all purposes
the original Allocation Statements.
SECTION 2.09. CLOSING.
(a) CLOSING. The closing (the "Closing") of the purchase and sale
of the Purchased Assets and the assumption of the Assumed Liabilities hereunder
shall take place simultaneously with the execution and delivery of this
Agreement at the offices of Seller, 175 Ghent Road, Fairlawn, Ohio 44333-3300
and shall be deemed to have occurred for all purposes under this Agreement as
of 11:00 p.m. the date hereof (such time the "Closing Time").
(b) CLOSING DELIVERIES.
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(i) DELIVERIES BY BUYER. At the Closing, Buyer shall
deliver to Seller the following:
(A) By wire transfer in immediately available
funds the sum of Eighty Million Dollars ($80,000,000);
(B) A copy of resolutions of the Board of
Directors of Buyer, certified by its Secretary or an Assistant Secretary,
authorizing the negotiation, execution, delivery and performance of this
Agreement and all related agreements, documents and certificates;
(C) An opinion of Peter M. Kent, Esq., Assistant
General Counsel to Buyer, dated the date hereof;
(D) A Supply Agreement dated the date hereof
covering the supply of compound to Buyer by Seller (the "Supply Agreement");
(E) A Lease from Seller to Buyer of portions of
the Wabash Facility dated the date hereof (the "Wabash Lease");
(F) A License and Technical Services Agreement
between Buyer and Seller dated the date hereof (the "License and Technical
Services Agreement");
(G) The Novation Agreements;
(H) Such other documents and certificates
required to be executed and/or delivered by Buyer at the Closing in accordance
with the terms of this Agreement;
(I) A guaranty (the "Guaranty") of BTR Dunlop,
Inc..
(ii) DELIVERIES BY SELLER. At the Closing, Seller shall
deliver to Buyer the following:
(A) Special warranty deeds with respect to the
Owned Real Property; provided, however, any and all warranties, expressed or
implied, from the
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use of the words "grant" or "convey" in the deeds are hereby disclaimed and
excluded.
(B) Such bills of sale, stock powers, assignments
and other instruments of transfer, assignment and conveyance as may be
reasonably necessary to convey, transfer and assign to Buyer all of Seller's
right, title and interest in and to the Purchased Assets other then the Owned
Real Property;
(C) A copy of resolutions of the Board of
Directors of Seller, certified by its Secretary or an Assistant Secretary,
authorizing the negotiation, execution, delivery and performance of this
Agreement and all related agreements, documents and certificates;
(D) An opinion of C. R. Ennis, as counsel to
Seller, dated the date hereof,
(E) The Supply Agreement;
(F) The Wabash Agreement;
(G) The License and Technical Services Agreement;
(H) Certificates evidencing the JV shares;
(I) The Novation Agreements;
(J) The Estimated Closing Net Assets Statement;
(K) Such other documents and certificates
required to be executed and/or delivered by Seller at the Closing in accordance
with the terms of this Agreement; and
(L) A schedule of fixed assets at the Logansport
Facility and Peru Facility which are included in the Purchased Assets, by
location.
ARTICLE III
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REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as otherwise set forth on the Disclosure Schedule, Seller
hereby represents and warrants to Buyer as follows as of the date hereof:
SECTION 3.01. ORGANIZATION AND EXISTENCE. Seller and each JV Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Ohio and has all corporate power and authority to own
and operate its properties and to carry on its business as now conducted.
Seller and each JV Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the nature of
its activities makes such qualification necessary to carry on its business as
now conducted.
SECTION 3.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Seller of this Agreement and each other agreement or
instrument executed and delivered or to be executed and delivered by the Seller
pursuant to this Agreement and the consummation by the Seller of the
transactions contemplated hereby and thereby are within Seller's corporate
powers and have been duly authorized by all necessary corporate action on the
part of the Seller. This Agreement constitutes, and each other agreement or
instrument executed and delivered or to be executed and delivered by the Seller
pursuant to this Agreement constitutes or will constitute, a legal, valid and
binding obligation of Seller enforceable against the Seller in accordance with
its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally, including the effect of
statutory and other laws regarding fraudulent conveyances and preferential
transfers and subject to the limitations imposed by general equitable
principles (regardless whether such enforceability is considered in a
proceeding at law or in equity). Seller is not a foreign entity pursuant to
the terms and conditions of the Foreign Investment in Real Property Act of
1980.
SECTION 3.03. AUTHORIZATION. Except as set forth in Section 3.03 of
the Disclosure Schedule, the execution, delivery and performance by the Seller
of this Agreement require no action by, consent or approval of, or filing with,
any Governmental Authority other than:
(a) compliance with any applicable requirements of any Antitrust Laws
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(including the HSR Act); and
(b) any actions, consents, approvals or filings otherwise
expressly referred to in this Agreement or the Disclosure Schedule.
SECTION 3.04. NON-CONTRAVENTION. Except as set forth in Section 3.04
of the Disclosure Schedule, the execution, delivery and performance by the
Seller of this Agreement and the consummation of the transactions contemplated
hereby, do not and will not:
(a) conflict with the Articles of Incorporation or Code of
Regulations of the Seller;
(b) assuming compliance with the matters referred to in Section
3.03 conflict with or constitute a violation of any provision of any Applicable
Law binding upon or applicable to the VC Business; or
(c) require the consent of the other party to or issuing
Governmental Authority of any Scheduled Contract or any Scheduled Permit.
SECTION 3.05. ABSENCE OF CERTAIN CHANGES. Except as set forth in
Section 3.05 of the Disclosure Schedule, since August 30, 1995, the VC
Business has been conducted in the ordinary course consistent with past
practice, and there has not been:
(a) any event, occurrence, development or change in the VC
Business that has had a Material Adverse Effect, other than those resulting
from changes, whether actual or prospective, in general conditions applicable
to the industries in which the VC Business is involved or in general economic
conditions;
(b) any material damage, destruction or other casualty loss
affecting the VC Business; or
(c) any material change by the Seller in its accounting
principles, methods or practices as applied to the VC Business or in the manner
the VC Business keeps its books and records including, without limitation, any
acceleration of receivables, delay of payables or changes in inventory
management in anticipation of the
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transactions contemplated hereby.
SECTION 3.06. PROPERTIES.
(a) The Seller owns all of the Purchased Assets reflected on the
Closing Net Assets Statement free and clear of all liens and encumbrances
except for: (i) Permitted Liens, (ii) liens and encumbrances to secure the
payment of liabilities reflected on the Closing Net Assets Statement and (iii)
Title Matters not known to Seller in respect of the Owned Real Property. All
of the tangible personal property owned by Seller and located at the Facilities
is included in the Purchased Assets.
(b) Section 3.06(b) of the Disclosure Schedule sets forth a true
and complete list of all real property owned by the Seller that is Attributable
to the VC Business.
(c) Except for the Excluded Assets, the Contracts, Bids and
Permits described in Section 2.05(a) and as set forth in Section 3.06(c) of the
Disclosure Schedule, the Purchased Assets, together with the Intellectual
Property rights to be licensed to Buyer and the services to be provided to
Buyer pursuant to the License and Technical Assistance Agreement or Technical
Services Agreement, constitute or provide Buyer with access to (subject to the
terms of such Agreements), all of the real property, tangible personal property
and Intellectual Property used or held for use by Seller in the operation of
the VC Business immediately prior to the Closing.
SECTION 3.07. LITIGATION. Except as disclosed in Section 3.07 of
the Disclosure Schedule:
(a) there are no actions, suits, proceedings, or notices of
violation or requests for information under CERCLA, by any Governmental
Authority or any other Person (collectively, "Proceedings") pending or, to the
knowledge of Seller, threatened against Seller in respect of the VC Business;
(b) there are no existing orders, judgments or decrees (other than
those of general application) of any Governmental Authority adversely affecting
the VC Business; and
(c) there are no actions, suits or proceedings by any Governmental
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Authority or any other Person pending or, to the knowledge of Seller,
threatened against Seller which are reasonably likely to adversely effect
Seller's ability to perform its obligations hereunder or which seek to enjoin
the transactions contemplated by this Agreement.
SECTION 3.08. MATERIAL CONTRACTS.
(a) Section 3.08(a) of the Disclosure Schedule identifies by date
and the parties thereto the following (collectively, the "Scheduled
Contracts"):
(i) each executory agreement between the Seller and any
customer of the VC Business for a dollar volume of purchases of products or
services from the VC Business which (together with all prior purchases under
such agreement) is reasonably expected to exceed $500,000;
(ii) each executory agreement between the Seller and any
supplier of products or services to the VC Business for a dollar volume of
sales to the VC Business which (together with all prior sales under such
agreement) is reasonably expected to exceed $50,000;
(iii) any executory contract or commitment of the VC
Business (other than those referred to in (i), (ii), (iv), (v), (vi), (vii),
(viii) of this Section 3.08(a)), written or oral, that involves a prospective
commitment of more than $500,000 or which is not terminable without material
penalty within twelve (12) months following the Closing;
(iv) all sale, distribution, commission, marketing, or
similar agreements of Seller relating to the VC Business providing for the
marketing and/or sale of the products or services of the VC Business which are
not terminable without material penalty to the Seller or the Buyer upon ninety
days or less notice to the other party thereto;
(v) all partnership, joint venture or other similar
contracts, arrangements or agreements relating to the VC Business as a result
of which Seller owns, directly or indirectly, an equity interest (whether as a
limited or general partner, as a shareholder or otherwise);
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(vi) all material leases of tangible personal property for
the VC Business;
(vii) all leases of real property for the VC Business; and
(viii) all employment, severance pay, stay bonus retention,
or termination pay agreements (collectively, the "Employment Agreements")
between the Seller and any employee of the VC Business.
(b) Section 3.08(b) of the Disclosure Schedule identifies by date
and the parties thereto the following:
(i) each bid by Seller to any customer of the VC Business
which, if accepted, would reasonably be expected to result in a dollar volume
of sales of products or services from the VC Business in excess of $500,000;
(ii) a complete description of all express product
warranties, return policies and other credit and sales policies of the VC
business that cover any period after the Closing Date.
(c) Except as disclosed in Section 3.08(c) of the Disclosure
Schedule, each Scheduled Contract is a legal, valid and binding obligation of
the Seller and, to the Seller's knowledge, each other party thereto,
enforceable against the Seller and, to the Seller's knowledge, each such other
party thereto in accordance with its terms (except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally,
including the effect of statutory and other laws regarding fraudulent
conveyances and preferential transfers, and subject to the limitations imposed
by general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity), and neither the Seller nor, to
the Seller's knowledge, any other party thereto is in material default or has
failed to perform any material obligation thereunder.
(d) Except as disclosed in Section 3.08(d) of the Disclosure
Schedule, to the knowledge of Seller, since August 30, 1995 no supplier to the
VC Business listed on Section 3.08(a)(ii) to the Disclosure Schedule has (i)
declined to continue to act as such, (ii) indicated any present or future
intention to cease to do so, or (iii)
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materially changed the form of its arrangements with the VC Business.
(e) Except as disclosed in Section 3.08(e) of the Disclosure
Schedule, to the knowledge of Seller (i) there is no outstanding material
disputes with respect to the VC Business with any VC Business customer listed
on Section 3.08(a)(i) to the Disclosure Schedule, and (ii) there is no pending
threat by any such customer pursuant to which it is reasonable to believe that
any such customer may not continue to do business with the VC Business or may
materially change its arrangements with the VC Business.
(f) Seller has provided Buyer with true and complete copies of all
Scheduled Contracts.
SECTION 3.09. COMPLIANCE WITH LAWS. To the knowledge of Seller,
except as set forth in Section 3.09 of the Disclosure Schedule, the operation
of the VC Business as presently conducted by Seller and the present condition
of the Purchased Assets does not violate, in any material respect, any
Applicable Law.
SECTION 3.10. PERMITS.
(a) Section 3.10(a) of the Disclosure Schedule lists all material
license, permits and authorizations issued by a Governmental Authority which
are used or held for use by Seller with respect to the VC business (the
"Scheduled Permits").
(b) Except as set forth in Section 3.10(b) of the Disclosure
Schedule, each Scheduled Permit is valid and in full force and effect.
(c) There is no pending, or to the knowledge of Seller, threatened
proceeding by any Governmental Authority to cancel, modify or fail to renew any
Scheduled Permit.
SECTION 3.11. LABOR AND EMPLOYMENT MATTERS.
(a) Section 3.11(a) of the Disclosure Schedule lists all employees
of the VC Business to be transferred to Buyer (the "Employees").
(b) Section 3.11(b) of the Disclosure Schedule lists each "employee
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pension benefit plan", as such term is defined in Section 3(2) of ERISA, each
"employee welfare benefit plan", as such term is defined in Section 3(1) of
ERISA, and each compensation, vacation, insurance, disability, severance, or
other plan providing employee benefits maintained by the Seller in which any
employees of the VC Business participate (collectively, the "Plans").
(c) Except as set forth in Section 3.11(c) of the Disclosure
Schedule: (i) there is no labor strike, slowdown or stoppage pending or, to
Seller's knowledge, threatened by employees of the VC Business; (ii) to
Seller's knowledge no union representation question or other union
organizational activity that would be subject to the National Labor Relations
Act (29 U.S.C. Sections 151 et seq.) exists respecting any employees of the VC
Business; (iii) no grievance or arbitration proceeding arising out of or under
any collective bargaining agreement applicable to the VC Business is pending or
to the knowledge of Seller, threatened; (iv) no collective bargaining agreement
exists respecting employees of the VC Business which is binding on the Seller.
SECTION 3.12. INTELLECTUAL PROPERTY.
(a) Except as set forth in Section 3.12 of the Disclosure
Schedule:
(i) The patents and patent applications identified on
Schedule 3.12(a)(i) (the "Patents") constitute all patents and patent
applications owned by Seller which are solely and exclusively useful in the VC
Business;
(ii) The trademarks and trademark registration
applications identified on Schedule 3.12(a)(ii) (the "Trademarks") constitute
all registered trademarks and trademark registration applications owned by
Seller which are solely and exclusively useful in the VC Business;
(iii) There are no registered copyrights or copyright
registration applications owned by Seller which are solely and exclusively
useful in the VC Business;
(b) Except as set forth in Section 3.12 of the Disclosure
Schedule, the Seller has not, during the three years preceding the date of this
Agreement, been a party to any action, claim or proceeding, that involved a
claim by any Person that
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the conduct of the VC Business by Seller infringes on the Intellectual Property
rights of any Person.
(c) To the knowledge of Seller, no Person is infringing on the VC
Intellectual Property and the use by Seller of the VC Intellectual Property
does not infringe upon the Intellectual Property rights of any other Person.
SECTION 3.13. FEES AND COMMISSIONS. No agent, broker, investment
banker, person or firm acting on behalf of under the authority of Seller is or
will be entitled to any broker's, finder's or investment banker's fees or any
other commission or similar fee directly or indirectly in connection with the
transactions contemplated hereby, and no such fees are or will be chargeable to
or for the account of Buyer nor have or will any such fees be paid or payable
out of or in any manner constitute a lien or charge against the Purchased
Assets.
SECTION 3.14. CENTRAL SERVICES. Set forth in Section 3.14 of the
Disclosure Schedule, is each facility of Seller that will not be included in
the Purchased Assets that provides goods, services or support to the VC
Business, together with a brief description of the type of such goods, services
or support.
SECTION 3.15. HENNIGES. Seller has no present intention to invest
in the expansion of the vibration control business of Henniges to an extent
greater than it intends to invest in the expansion of its other businesses.
SECTION 3.16. FINANCIAL. The income statements for Seller's
Vibration Control Division which are attached as Exhibit F have been prepared in
conformity with the GenCorp Accounting Principles and fairly present the
results of operations of Seller's Vibration Control Division for the periods
then ended in accordance with the GenCorp Accounting Principles.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Except as set forth on the Disclosure Schedule, the Buyer hereby
represents and warrants to the Seller as follows as of the date hereof:
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SECTION 4.01. ORGANIZATION AND EXISTENCE. The Buyer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Indiana and has all corporate power and authority to own
and operate its properties and to carry on its business as now conducted. The
Buyer is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the nature of its activities makes such
qualification necessary to carry on its business as now conducted, except for
those jurisdictions where the failure to be so qualified has not had, and may
not reasonably be expected to have, a Material Adverse Effect.
SECTION 4.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Buyer of this Agreement each other agreement or instrument
executed and delivered or to be executed and delivered by the Buyer pursuant to
this Agreement and the consummation by the Buyer of the transactions
contemplated hereby and thereby are within the corporate powers of the Buyer,
and have been duly authorized by all necessary corporate action on the part of
the Buyer. This Agreement constitutes, and each other agreement or instrument
executed and delivered or to be executed and delivered by the Buyer pursuant to
this Agreement constitutes or will constitute, a legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, including the effect of statutory and
other laws regarding fraudulent conveyances and preferential transfers and
subject to the limitations imposed by general equitable principles (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).
SECTION 4.03. AUTHORIZATION. The execution, delivery and performance
by the Buyer of this Agreement require no action by, consent or approval of, or
filing with, any Governmental Authority other than:
(a) compliance with any applicable requirements of any Antitrust
Laws (including the HSR Act); and
(b) any actions, consents, approvals or filings otherwise
expressly referred to in this Agreement (including the Disclosure Schedule).
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SECTION 4.04. NON-CONTRAVENTION. The execution, delivery and
performance by the Buyer of this Agreement and the consummation of the
transactions contemplated hereby and thereby, do not and will not:
(a) contravene or conflict with the Articles of Incorporation and
Code of Regulations of the Buyer;
(b) assuming compliance with the matters referred to in Section
4.03 contravene or conflict with or constitute a violation of any provision of
any Applicable Law binding upon or applicable to the its business.
SECTION 4.05. FEES AND COMMISSION. No agent, broker, investment
banker, person or firm acting on behalf of under the authority of Buyer is or
will be entitled to any broker's, finder's or investment banker's fees or any
other commission or similar fee directly or indirectly in connection with the
transactions contemplated hereby and no such fees are or will be chargeable to
or for the account of Buyer.
SECTION 4.06. LITIGATION. There are no actions, suits or proceedings
by any Governmental authority or any other Person pending or, to the knowledge
of Buyer, threatened against Buyer which are reasonably likely to adversely
effect Buyer's ability to perform its obligations hereunder or which seek to
enjoin the transactions contemplated by this Agreement.
SECTION 4.07. INSPECTIONS; LIMITATION OF SELLER'S WARRANTIES. The
Buyer is an informed and sophisticated participant in the transactions
contemplated by this Agreement and has undertaken such investigation, and has
been provided with and has evaluated such documents and information, as it has
deemed necessary in connection with the execution, delivery and performance of
this Agreement. The Buyer acknowledges that, except for the representations
and warranties expressly set forth herein, neither Seller nor any Affiliate of
Seller makes any, and does hereby disclaim all, representations or warranties,
express or implied, including, without limitation, any warranty of
merchantability or fitness for a particular purpose and except for the
representations and warranties expressly set forth herein the Purchased Assets
are being transferred to Buyer "as is" and "with all faults". In furtherance
of the foregoing, and not in limitation thereof, the Buyer acknowledges that no
representation or warranty, express or implied, has been made by the Seller
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or any of its Affiliates, with respect to: (i) any information provided to the
Buyer pursuant to the Confidentiality Agreement or (ii) any financial
projection or forecast delivered to the Buyer with respect to the revenues or
profitability which may arise from the operation of the VC Business after the
Closing Date. With respect to any projection or forecast delivered by or on
behalf of the Seller to the Buyer, the Buyer acknowledges that (i) there are
uncertainties inherent in attempting to make such projections and forecasts and
(ii) it is familiar with such uncertainties.
ARTICLE V
COVENANTS OF THE SELLER
The Seller agrees that:
SECTION 5.01. FURTHER CONVEYANCES. After the Closing, Seller will
execute and deliver to Buyer (or cause to be executed and delivered to Buyer),
such additional instruments of conveyance, and Seller shall take such other and
further actions as Buyer may reasonably request and which are ordinarily
provided by a seller, more completely to sell, transfer, and assign to Buyer
and vest in Buyer such title to the Purchased Assets as is provided for in this
Agreement.
SECTION 5.02. NON-COMPETITION COVENANT.
(a) NON-COMPETE. Except as contemplated by this Agreement and the
other agreements entered into in connection herewith, for a period of three
(3) years after the Closing Date neither Seller nor any Affiliate of Seller
will directly or indirectly through any other person or entity engage, whether
as an owner, partner, agent, consultant, or shareholder, in any Competitive
Business, provided, however, nothing in this Section 5.02(a) shall preclude
Seller or any Affiliate of Seller from: (i) continuing to own and operate
Henniges, including, without limitation, the vibration control business of
Henniges or (ii) engaging in the business of supplying any goods or services to
any person which is engaged in a Competitive Business if such goods or services
do not pertain to products which are competitive with the products of the VC
Business as of the date hereof, or (iii) engaging in the business of supplying
adhesives, coatings and specialty chemicals to any person engaged in a
Competitive Business (except to the extent that engaging in such business puts
Buyer at a
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substantial competitive disadvantage in respect of the vibration control
business) or (iv) acquiring any entity or business which includes operations
which engage in a Competitive Business representing not more than 20% of sales
of such entity or business so long as Seller divests such Competitive Business
within two (2) years after the date of such acquisition.
(b) NON-SOLICITATION OF EMPLOYEES. Seller shall not, for a period
of three years after the Closing Date, directly or indirectly or through any
Affiliate, employ any person who, during such period is in the employ of Buyer,
or attempt to induce any person who is, during such period in the employ of the
Buyer, to leave the employ of Buyer.
(c) CONFIDENTIALITY. After the Closing Seller shall, with respect
to the VC Intellectual Property, use the same efforts to protect such
information from disclosure to third parties as it uses to protect its own
confidential and proprietary information and in no event less than reasonable
care. The next preceding sentence shall not apply to information which becomes
generally known to the public through no violation of this Section 5.02(c) by
Seller or the disclosure of which is required by a court of competent
jurisdiction or by law.
(d) REMEDIES. It is mutually recognized and agreed that the
business being acquired by Buyer hereunder is conducted throughout the United
States and Canada and that the geographical scope, the periods of restriction
and other restraints imposed by Section 5.02(a) are fair and reasonable and
required for the protection of Buyer and a significant inducement for the Buyer
to enter into this Agreement and the transactions contemplated hereby. It is
further recognized and agreed that irreparable injury may result to Buyer, its
business and properties in the event of a breach of Section 5.02(a) by Seller
or any Affiliate of Seller the amount or extent of damages for which may be
difficult to ascertain and therefore, that any remedy at law for any breach by
any of them of this covenant may be inadequate. Accordingly, without prejudice
to the rights of Buyer to also seek such damages or other remedies available to
it under this Agreement, Buyer shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages if Buyer is
otherwise entitled to such injunctive relief by reason of any such breach.
SECTION 5.03. CLOSING STATEMENT. Within twenty (20) days following the
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Closing Time, Seller shall prepare and deliver to Buyer the Closing Net Assets
Statement.
SECTION 5.04. GRIEVANCES. Seller is retaining all liability for
outstanding grievances under the Union Contracts. Seller shall, at its sole
cost and expense, use its good faith efforts to settle all such grievances in a
manner that does not unreasonably prejudice Buyer. As used herein,
unreasonable prejudice to Buyer would be a settlement that materially increases
Buyer's future costs because of changes in work practices or otherwise, or
otherwise would not have been made by a reasonable employer in all the
circumstances. Buyer shall be deemed not to be unreasonably prejudiced if a
settlement provides that the grievance is withdrawn without "precedent or
prejudice". Buyer shall have the right to participate in, but not control, the
settlement efforts and Seller shall keep Buyer reasonably informed thereof.
All amounts paid to settle the grievances and all amounts awarded by any court,
tribunal, arbitrator or other body having jurisdiction shall be for the sole
account of Seller.
ARTICLE VI
COVENANTS OF THE BUYER
The Buyer agrees that:
SECTION 6.01. GENCORP NAME. Buyer will discontinue the use of, and
delete, paint over or otherwise strike or remove from any Purchased Assets any
names, logos and designs which identify GenCorp as promptly as reasonably
practical after the Closing, provided that Buyer may utilize without further
obligation to compensate Seller the "GenCorp" name in connection with supplies,
labels, stationery, catalogs, molds, dies and inventory included in the
Purchased Assets, subject to the following terms and conditions:
(a) All stationery, forms, labels, product literature, invoices,
purchase orders and other documents and supplies included in the Purchased
Assets may be used by Buyer for a period of six (6) months following the
Closing Date or until the supply is exhausted, whichever shall first occur;
providing, however that within thirty (30) days after the Closing Date, Buyer
shall display on each such document,
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or accompany each such document with another document which conspicuously
indicates Buyer and not Seller is the contracting party or the producer,
provider, or manufacturer of any item referred to therein.
(b) All product inventory included in the Purchased Assets may be
sold or otherwise disposed of by Buyer following the Closing Time without
remarking.
(c) All tooling, molds and dies included in the Purchased Assets
which produce products displaying the "GenCorp" name and all products produced
using such tooling, molds or dies, may be used and produced until such time as
such tooling, molds and dies are exhausted.
SECTION 6.02. VACATION OF SHARED FACILITY. Buyer will, within
sixty (60) days after the Closing, vacate the D&E Facility and the Farmington
Hills Facility and remove all Purchased Assets from the D&E Facility, the
Farmington Hills Facility and Seller's Marion, Indiana Facility. Buyer will
promptly restore and repair, at its sole expense, any damage done by the Buyer
in vacating such facilities and removing such Purchased Assets.
SECTION 6.03. NON-SOLICITATION OF EMPLOYEES. Buyer shall not, for
a period of three years after the Closing Date, directly or indirectly or
through any Affiliate, employ any person who, during such period is in the
employ of Seller, or attempt to induce any person who is, during such period in
the employ of the Seller, to leave the employ of Seller.
SECTION 6.04. HENNIGES. Buyer will not enforce any rights under
any of the VC Intellectual Property (exclusive of any trademarks or trade names
included therein) against Henniges or any customer of Henniges with respect to
the manufacture, use, and/or sale of any products by Henniges and will cause
any purchaser, assignee or transferee of any rights under the VC Intellectual
Property to agree not to enforce any right under any of the VC Intellectual
Property (exclusive of any trademarks or trade names included therein) against
Henniges or any customer of Henniges with respect to any such manufacture, use,
and/or sale.
SECTION 6.05. NIST. Buyer will not transfer any Intellectual
Property in violation of the NIST Agreement (as defined in the License
Agreement).
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SECTION 6.06. LETTERS OF CREDIT. Promptly after demand by Seller,
Buyer shall pay to Seller any amounts which are drawn down after the Closing
Time on any of the following outstanding Society International Letters of
Credit for items purchased for the VC Business: 196/89214; 195/89019;
195/89108; or 196/89156.
ARTICLE VII
COVENANTS OF BOTH PARTIES
The parties agree that:
SECTION 7.01. PUBLIC ANNOUNCEMENTS. The parties agree that, until
twenty-four hours after the Closing, they will consult with each other before
issuing any press release or making any public statement with respect to this
Agreement or the transactions contemplated hereby.
SECTION 7.02. ADMINISTRATION OF ACCOUNTS.
(a) All payments and reimbursements made in the ordinary course by
any third party in the name of or to the Seller in connection with or arising
out of the Purchased Assets or the Assumed Liabilities, received after the
Closing Date shall be held by the Seller in trust for the benefit of the Buyer
and, immediately upon receipt by the Seller of any such payment or
reimbursement, the Seller shall pay over to the Buyer the amount of such
payment or reimbursement without right of set-off.
(b) All payments and reimbursements made in the ordinary course by
any third party in the name of or to the Buyer in connection with or arising
out of Excluded Assets or the Excluded Liabilities, received after the Closing
Date shall be held by the Buyer in trust for the benefit of the Seller and,
immediately upon receipt by the Buyer of any such payment or reimbursement, the
Buyer shall pay over to the Seller the amount of such payment or reimbursement
without right of set-off.
SECTION 7.03. TRANSFER TAXES. All transfer, documentary, sales, and
other similar Taxes ("Transfer Taxes") incurred in connection with this
Agreement and
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the transactions contemplated hereby shall be paid equally by the Buyer and the
Seller. The Seller and the Buyer shall cooperate in timely making all
filings, returns, reports and forms as may be required to comply with the
provisions of such Transfer Tax laws.
SECTION 7.04. ACCESS TO FORMER BUSINESS RECORDS. For a period of
seven (7) years after the Closing Time, or until any audits of Seller's tax
returns relating to periods prior to or including the Closing Date are
completed, whichever occurs later, Buyer will retain all business records
constituting part of the Purchased Assets. During such period, Buyer will
afford duly authorized representatives of Seller free and full access to all of
such records and will permit such representatives, at Seller's expense, to make
abstracts from, or to take copies of any of such records, or to obtain
temporary possession of any thereof as may be reasonably required by Seller.
For a like period, Seller will retain all business records related to the VC
Business which constitutes part of the Excluded Assets. During such period,
GenCorp will afford duly authorized representatives of Buyer free and full
access to all of such records and will permit such representatives, at Buyer's
expense, to make abstracts from, or to take copies of any of such records, or
to obtain temporary possession of any thereof as may be reasonably required by
Buyer.
SECTION 7.05. ACCESS TO FORMER EMPLOYEES. After the Closing, each of
Buyer and Seller will cooperate with the other, and cause its employees to
cooperate with the other, in furnishing information, evidence, testimony, and
other assistance as may be reasonably requested by the other party in
connection with any action, proceeding, or investigation by a third party
relating to the VC Business. The party requesting such assistance will pay or
reimburse the other party for all reasonable out of pocket expenses incurred by
the party providing such assistance in connection therewith, including, without
limitation, all travel, lodging, and meal expenses.
SECTION 7.06. CUSTOMER INITIATED PRODUCT REPLACEMENT PROGRAM. If a
customer initiated repair or replacement program caused by a failure or
potential failure of a VC Business product manufactured or sold by Seller
results in an out-of-pocket cost to Buyer greater than $50,000 then: (i) if
such costs are attributable to a legal obligation assumed by Buyer then Buyer
shall be entitled to be promptly reimbursed by Seller for 80% of the amount of
such out-of-pocket costs (including the first $50,000), or (ii) if such costs
were incurred to avoid a reasonable likelihood of a serious fracture to a
customer relationship in connection with such failure then
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Buyer shall be entitled to be promptly reimbursed by Seller for 50% of the
amount of such out-of-pocket costs (including the first $50,000). Seller's
reimbursement obligations under this Section 7.06 are conditioned upon: (w)
Buyer giving Seller prompt notification at the time it becomes aware that it
may have a claim for such reimbursement, (x) Buyer providing Seller with such
information regarding such problem as Seller may reasonably request (y) Buyer
permitting Seller to participate in, but not control, the resolution of any
such problem and (z) the out-of-pocket costs incurred by Buyer as a result of
such program being commercially reasonable in the context of such program and
not in respect of any other consideration of Buyer.
ARTICLE VIII
EMPLOYEE MATTERS
----------------
SECTION 8.01. SALARIED EMPLOYEES. The following shall apply with
respect to all Employees who are not covered by a Union Contract (the "Salaried
Employees"):
(a) OFFERS OF EMPLOYMENT. Prior to the Closing, Buyer will make
offers of employment to all Salaried Employees (including Salaried Employees on
medical, education, military, personal, family or other leave but excluding any
Salaried Employees who at the Closing Time are on long term disability)
providing as follows: (i) Terms and conditions of employment, including wages
and benefits (including, without limitation, the benefits described in this
Section 8.01) which are substantially comparable to the terms and conditions on
which such Salaried Employees were employed by Seller immediately prior to the
Closing; and (ii) Credit for service recognized by GenCorp as of the Closing
under GenCorp's employee benefit plans prior to the Closing for all purposes
(including, without limitation, eligibility, vesting and benefit accrual)
under Buyer's compensation, retirement, welfare, and other benefit plans,
programs, and practices. The benefits described in the BTR Benefits
Connections Handbook delivered to Seller on the date hereof shall be deemed to
be substantially comparable to the benefits provided by Seller immediately
prior to the Closing. Buyer shall make such an offer of employment to any
Salaried Employee who, at the Closing Time, is on long term
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disability but who, within two years after the Closing Time, is released by his
or her physician to return to active employment and who, promptly after such
release, gives written notice to Buyer of his or her desire to return to work.
(b) EMPLOYMENT.
(i) As of the Closing, all Salaried Employees who have
accepted Buyer's offers of employment pursuant to Section 8.01(a) (the
"Transferred Salaried Employees") will be employed by Buyer on the terms and
conditions set forth in such offers (with the effect that no period of
unemployment shall have occurred with respect to any such Transferred Salaried
Employees) and the employment by Seller of all Salaried Employees will
terminate for all purposes effective as of the Closing Time.
(ii) Nothing in this Section 8.01 shall create any
obligation on the part of Buyer to continue the employment of any such Employee
for any definite period following the Closing or shall prevent Buyer from
changing the terms or conditions of employment, including employee benefit
plans, at any time following the Closing.
(c) SALARIED PENSION PLAN. Seller currently maintains the
"Pension Plan for Salaried Employees of GenCorp Inc. and Certain Subsidiary
Companies" (the "Salaried Pension Plan") which provides certain retirement
benefits to eligible salaried employees of GenCorp, including eligible
Transferred Salaried Employees. With respect to the Salaried Pension Plan the
following shall apply:
(i) Buyer will not become a sponsor of the Salaried
Pension Plan and no assets of the Salaried Pension Plan will be transferred to
Buyer or any plan or trust maintained by Buyer.
(ii) Effective as of the Closing, Buyer will establish a
defined benefit pension plan which provides substantially similar benefits as
the Salaried Pension Plan except that the pension benefit payable to a
Transferred Salaried Employee under such Buyer defined pension benefit plan may
be reduced by an amount equal to the Salaried Pension Plan pension benefit such
Employee would receive if such Salaried Pension Plan pension benefit were
commenced concurrently with the payment of such Employee's benefit under such
defined benefit plan established by
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Buyer.
(iii) Effective as of the Closing, all Salaried Employees
will cease to accrue service credit, any benefits or any other right or
entitlement under the Salaried Pension Plan.
(iv) Effective as of the Closing, Seller will amend the
Salaried Pension Plan to provide that:
(A) With respect to any Transferred Salaried
Employee who as of the Closing Time has attained age 45 and completed
10 years of Vesting Service,
(1) Solely for the purpose of
determining such Transferred Salaried Employee's eligibility
for an Early Retirement Pension and/or a temporary
Supplemental Pension, the period of employment with Buyer
subsequent to the Closing and prior to the Transferred
Salaried Employee's Pension Commencement Date (a) shall be
included in Vesting Service and (b) shall be deemed to be
employment with GenCorp when determining such Transferred
Salaried Employee's attained age upon his Termination of
Employment Date; and
(2) The amount of a Transferred Salaried
Employee's temporary Supplemental Pension, where applicable,
shall be determined by multiplying the applicable amount set
forth in the schedule for his attained age and years of
Vesting Service (as determined above) by a fraction, the
numerator of which is the Transferred Salaried Employee's
actual years of Vesting Service with Seller and the
denominator is the Transferred Salaried Employee's years of
Vesting Service as determined above; and
(B) With respect to any other Transferred
Salaried Employee, employment with Buyer subsequent to the Closing
shall be included in Vesting Service solely for the purpose of
determining such Transferred Salaried Employee's eligibility for a
Deferred Vested Pension.
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Except as provided in this Section 8.01(c)(iv), all Transferred Salaried
Employees will cease to accrue service credit, any benefits or any other right
or entitlement under the Salaried Pension Plan. This amendment shall not cause
any Transferred Salaried Employee to become eligible to participate in the
GenCorp Retiree Medical Plan.
(d) SAVINGS PLAN. Seller currently maintains the "GenCorp
Retirement Savings Plan" (the "Savings Plan") which provides certain
tax-advantaged savings opportunities for eligible employees, including eligible
Transferred Salaried Employees. With respect to the Savings Plan, the
following will apply:
(i) Buyer will not become a sponsor of the Savings Plan
and no assets of the Savings Plan will be transferred to Buyer or any plan or
trust maintained by Buyer.
(ii) Effective within 90 days after the Closing, Buyer
will establish or otherwise make available to Transferred Salaried Employees
who are participants in the Savings Plan as of the Closing a savings plan
qualified under Section 401(k) of the Internal Revenue Code of 1986.
(e) MEDICAL PLANS. Seller currently maintains the "GenCorp Medical
Plan" and the "GenCorp Dental Plan" (collectively, the "Medical Plans")
providing medical and dental benefits for eligible active employees of
GenCorp and their respective eligible dependents, including eligible
Transferred Salaried Employees. With respect to the medical and dental
benefits for Transferred Salaried Employees, the following will apply:
(i) Effective as of the Closing, the Transferred Salaried
Employees and eligible dependents will cease to be covered by the Medical Plans
and neither GenCorp nor any of the Medical Plans will be responsible for
medical or dental charges or expenses incurred by or in respect of such
Transferred Salaried Employees or eligible dependents after the Closing.
(ii) Seller will be responsible for medical and dental
charges or expenses incurred by or in respect of such Transferred Employees or
Eligible Dependents for services rendered prior to the Closing.
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(iii) Effective as of the Closing, the Transferred Salaried
Employees and their eligible dependents will be eligible to participate in the
employee medical and dental plans established and maintained by Buyer and Buyer
or such plans will be responsible for medical and dental charges or expenses
incurred by or in respect of such Transferred Salaried Employees and eligible
dependents after the Closing as provided in such plans.
(iv) Effective as of the Closing, Buyer will waive or
cause the medical and dental plans described in Section 8.01(e)(iii) to waive
any pre-existing condition exclusions applicable to the Transferred Salaried
Employees and their eligible dependents that may exist under the employee
medical and dental plans established and maintained by Buyer.
(v) Effective as of the Closing, Buyer will provide the
Transferred Salaried Employees with equitable credit under the medical plans
described in Section 8.01(e)(iii) for any amounts previously paid by such
Transferred Salaried Employees under the Medical Plans as deductibles or
co-payments during the plan year in which the Closing occurs.
(f) RETIREE MEDICAL PLAN. Seller currently maintains the
"GenCorp Retiree Medical Plan" (the "Retiree Medical Plan") providing medical
benefits for eligible retired employees of GenCorp and their respective
eligible dependents. With respect to the medical benefits for current and
future retirees, the following will apply:
(i) Buyer will have no obligation to provide retiree
medical benefits to any current retiree or eligible dependent of a current
retiree.
(ii) Buyer's benefits to be offered to Transferred
Salaried Employees do not include a retiree medical plan.
(iii) Effective as of the Closing, no Transferred Salaried
Employee who is not eligible as of the Closing to participate in the Retiree
Medical Plan will become eligible to participate in the Retiree Medical Plan.
(g) RETIREE LIFE INSURANCE PLANS. Seller currently maintains an
employee life insurance benefit plan for eligible retired employees of GenCorp
and their eligible dependents (the "Retiree Life Insurance Plans"). With
respect to the Retiree
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Life Insurance Plans, the following will apply:
(i) Buyer will have no obligation to provide retiree life
insurance benefits to any current retiree or eligible dependent of a current
retiree.
(ii) Buyer's benefits to be offered to Transferred
Salaried Employees do not include a retiree life insurance plan.
(h) LIFE INSURANCE PLANS. Seller currently maintains employee
life insurance benefit plans for eligible active employees of GenCorp,
including eligible Transferred Salaried Employees (the "Active Employee Life
Insurance Plans"). With respect to the Active Employee Life Insurance Plans,
the following will apply:
(i) Effective as of the Closing, the Salaried Employees
will cease to be covered by the Active Employee Life Insurance Plans.
(ii) Effective as of the Closing the Transferred Salaried
Employees will become covered under employee life insurance plans established
and maintained by Buyer.
(iii) Buyer will waive or cause such Buyer life
insurance plans to waive any pre-existing condition exclusions applicable to
such Transferred Salaried Employees that may exist under the employee life
insurance plans established and maintained by Buyer.
(i) LONG TERM AND SHORT TERM DISABILITY PLANS. Seller currently
maintains employee long term disability and short term disability plans for
eligible employees of GenCorp, including eligible Transferred Salaried
Employees. With respect to such plans:
(i) Effective as of the Closing the Transferred Salaried
Employees will cease to be covered by such long term disability and short term
disability plans and will become covered under employee long term disability
and short term disability plans established and maintained by Buyer.
(ii) Buyer will waive or cause such Buyer disability plans
to waive any pre-existing condition exclusions applicable to such Transferred
Salaried
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Employees that may exist under the employee long term disability and short
term disability plans established and maintained by Buyer.
(j) VACATION BENEFITS. Seller currently maintains a vacation plan
for eligible employees of GenCorp including eligible Transferred Salaried
Employees. With respect to such vacation plan after the Closing, Buyer shall
pay each Transferred Salaried Employee for any vacation accrued but unused
under Seller's vacation plan prior to the Closing when such vacation is taken.
(k) SEPARATION PLAN. Seller currently maintains the "GenCorp
Involuntary Separation Pay Plan" (the "Separation Plan") providing certain
separation pay and other benefits for eligible employees of GenCorp, including
the eligible Transferred Salaried Employees, whose employment is terminated
involuntarily under certain circumstances. Effective as of the Closing,
Transferred Salaried Employees will cease to be eligible for benefits under the
Separation Plan and Seller will have no obligation to make any payment or
provide any benefits under the Separation Plan to Transferred Salaried
Employees after the Closing. If Buyer terminates the employment of any
Transferred Salaried Employee for any reason other than "for cause", as defined
in the Separation Plan, within twelve (12) months after the Closing, then Buyer
will provide such terminated Transferred Salaried Employee with separation pay
and benefits at least equivalent economically to the separation pay and
benefits that would have been payable to such Transferred Salaried Employee
under the Separation Plan if such Transferred Employee had been terminated by
Seller as of the Closing.
SECTION 8.02. UNION EMPLOYEES.
(a) At the Closing, Buyer, Seller and each of the Unions will
execute and deliver the Union Novation Agreements pursuant to which Buyer will
become the employer under each Union Agreement and GenCorp will be released
from its obligations under each Union Agreement.
(b) Seller will amend the Non-Contributory Pension Plan of GenCorp
Inc. ("Plan") to provide that, with respect to a participant in the Plan who
becomes employed by the Buyer pursuant to a Union Novation Agreement, (A) years
of service with the Buyer subsequent to the Closing and prior to the
participant's filing of an application for benefits under the Plan shall be
included in Credited Service
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for purposes of determining such participant's eligibility for (i) a vested
pension, (ii) a Regular Early Retirement pension or (iii) a Special Early
Retirement pension; and (B) the amount of a participant's temporary "bridge"
benefit under Section 3.4(b) of the Plan, where applicable, shall be determined
by multiplying the applicable amount set forth in the schedule for his attained
age and years of Credited Service (as determined above) by a fraction, the
numerator of which is the participant's actual years of Credited Service with
Seller and the denominator is the participant's years of Credited Service as
determined above.
SECTION 8.03. NO THIRD-PARTY CLAIMS. No Transferred Salaried
Employee nor any spouse, former spouse or beneficiary under any of the Plans,
or under any plan from time to time established by the Buyer for the benefit of
the Transferred Salaried Employees, shall be entitled to assert any claim based
on any of the provisions of this Agreement (including but not limited to this
Article VIII) against either party to this Agreement (or any of its
Affiliates).
SECTION 8.04. WORKERS COMPENSATION. Notwithstanding Sections 2.03 and
2.04, Seller shall be liable for any workers' compensation claim relating to an
occurrence prior to Closing and Buyer shall be liable for any workers'
compensation claim relating to an occurrence after Closing. If a workers'
compensation claim arises in connection with a "continuing" occurrence before
and after the Closing, the liability of Buyer and Seller for such claim shall
be determined by Applicable Law or in the absence of such Applicable Law on an
equitable basis.
ARTICLE IX
ENVIRONMENTAL MATTERS
---------------------
SECTION 9.01 ENVIRONMENTAL MATTERS. Seller, with the participation
of Buyer, has performed certain limited soil investigations (the "Environmental
Investigation") of the Facilities regarding contamination by certain hazardous
substances. The scope and results of these investigations are set forth in a
report issued by ATEC Associates, Inc. dated February 5, 1996 with respect to
the Logansport Facility (ATEC Project # 21-07-95-01002) and a report issued by
ATEC Associates, Inc. dated February 5, 1996 with respect to the Peru Facility
(ATEC Project # 21-07-95-01002) (the "Environmental Reports").
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SECTION 9.02 INVESTIGATION LIMITATION.
(a) After the Closing Buyer will not do any investigation or
testing at the Facilities for purposes of determining whether there exists an
Environmental Condition at a Facility or take any other action to solicit,
promote, or encourage the making of any Environmental Claim or which is
otherwise reasonably likely to result in an Environmental Claim being made;
provided that, subject to Section 9.02(b), nothing in this sentence shall be
deemed to preclude Buyer from (i) taking such actions in respect of the
Facilities which are required by Applicable Law, (ii) operating, renovating,
constructing or otherwise similarly dealing with a Facility for purposes other
than determining whether an Environmental Condition exists at such Facility, or
(iii) engaging in such testing as may be required by a bona fide potential
Buyer or lessee of a Facility provided that such potential Buyer or lessee is,
as to Buyer, an Independent Party.
(b) If Buyer believes that Applicable Law requires it to take any
action which may result in an Environmental Claim for which Seller may be
responsible, then Buyer will give Seller reasonable advance written notice of
Buyer's intent to take such action and will cooperate with Seller in taking
reasonable steps necessary or appropriate to minimize the scope of any
Environmental Claim which may result from such action; provided, however, that
an inadvertent failure of Buyer to provide Seller with such notice shall not
relieve Seller of any liability hereunder except to the extent Seller is
prejudiced by such failure. Seller shall reimburse Buyer for reasonable
out-of-pocket expenses incurred by Buyer in providing such cooperation. Buyer
represents to Seller that it has no present intention to report to any
Governmental Authority any existing Environmental Condition at a Facility or
perform additional environmental testing at a Facility for the sole purpose of
determining whether an Environmental Condition exists at such Facility.
SECTION 9.03 LIABILITY FOR ENVIRONMENTAL CONDITIONS.
Notwithstanding Sections 2.03 and 2.04:
(a) Seller retains any and all liability for all Environmental
Conditions in existence at the Closing Time and, subject to Sections 9.04 and
10, shall defend, indemnify and hold harmless Buyer from and against any
Environmental Claim
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which: (i) results from an Environmental Condition existing prior to the
Closing Time and (ii) is brought within twenty (20) years after the Closing
Time.
(b) Notwithstanding anything contained in Section 9.03(a) Buyer
shall:
(i) Defend, indemnify and hold harmless Seller from and
against any Environmental Claim which: (A) results from an Environmental
Condition which existed prior to the Closing Time and (B) is brought more than
twenty (20) years after the Closing Time;
(ii) Defend, indemnify and hold harmless Seller from and
against any Environmental Claim which results from an Environmental Condition
which comes into existence after the Closing Time;
(iii) Pay to Seller 15% of the aggregate amount of
Environmental Costs incurred by Seller as a result of an Environmental Claim
described in Section 9.03(a);
(iv) Pay to Seller such portion of any Environmental Costs
incurred by Seller as a result of an Environmental Claim described in Section
9.02(a) which Seller establishes are attributable solely to post Closing
changes to the Applicable Law in effect at the Closing Time; and
(v) Pay all Environmental Costs incurred by Buyer which
were not required to be incurred as a result of an Environmental Claim; except
to the extent Buyer establishes that an Environmental Law required it to incur
incremental out-of-pocket Environmental Costs in connection with any activity
permitted under Section 9.02(a).
(c) Buyer and Seller agree that, as between them, the remedies set
forth in this Article IX with respect to any Environmental Costs incurred in
respect of an Environmental Condition or any Environmental Claim are sole and
exclusive and each of Buyer and Seller waives any claim it may now or hereafter
have in respect of any Environmental Costs incurred in respect of an
Environmental Condition or any Environmental Claim whether at common law or
under any existing or hereinafter enacted Federal, state or local law, statute,
ordinance, code, rule, or regulation, including, without limitation, any
Environmental Law.
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(d) If and to the extent as a result of an Environmental Claim a
party incurs Environmental Costs which have been allocated to the other party
under this Section 9.03 then the party incurring such Environmental Costs may
submit an invoice not more often than once every 30 days to the other party for
the other party's share of such Environmental Costs. Such invoice shall be
accompanied by reasonable documentation evidencing all Environmental Costs
incurred with respect to the matter for which the invoice is being submitted.
The party receiving such invoice shall pay such invoice within thirty (30) days
after receipt except with respect to any amount of Environmental Costs the
allocation of which is being contested in good faith.
SECTION 9.04. ENVIRONMENTAL CLAIMS. All Environmental Claims shall be
subject to the provisions of Article X hereof and any Environmental Claim being
defended by Seller shall also be subject to the following:
(a) Seller shall have the right to control any negotiations with
any Independent Party or Governmental Authority regarding any investigation,
remediation or monitoring of any Environmental Condition (collectively, a
"Response") at a Facility including, without limitation, the manner and extent
to which any Response is implemented, and any Response shall be conducted under
Seller's exclusive direction; provided that Buyer shall have the right, at its
expense, to participate in any such negotiations and Seller shall keep Buyer
reasonably informed regarding any such negotiations.
(b) Seller's Response obligations with respect to an Environmental
Claim shall terminate upon the receipt of notice from all Governmental
Authorities asserting jurisdiction with respect to the Environmental Claim
that they will not require, or that they will not undertake any further action
with respect to the Environmental Condition in question, provided, however,
that any such termination of Response obligations shall not limit Seller's
Response obligations in respect of any subsequent Environmental Claim based on
matters which were the subject of any prior Environmental Claim for which
Seller is responsible.
(c) Buyer shall use its reasonable good faith efforts to cooperate
with Seller in all matters relating to any Seller Response. Seller shall
reimburse Buyer for its reasonable out-of-pocket expenses incurred in providing
such cooperation. Subject
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to Section 9.04(e), during the course of any Seller Response, Buyer shall and
hereby does, grant to Seller, its agents, employees, contractors and
consultants, all access to the Facilities necessary to perform any Seller
Response. Such access shall include use of utilities at Seller's expense and
reasonable office, parking and storage space. Seller shall, pursuant to
Section 10, defend Buyer from any and all claims, demands, actions or cause of
action by an Independent Party ("Action") which result or arise out of any act
or omission of Seller, its employees, agents, contractors, invitees in
performing Response activities at a Facility and indemnify and hold Buyer
harmless from all damages, liabilities, losses, costs, judgments, orders,
assessments, interest, penalties, fines, settlement payments, costs and
expenses (including, without limitation, attorneys fees and other investigation
costs and expenses) imposed upon or incurred by Buyer as a result of any such
Action.
(d) Subject to Section 9.04(e), Buyer shall allow Seller to
install, operate and maintain any remediation and monitoring devices at, on or
under the Facilities, including, but not limited to, soil removal equipment,
monitoring wells and groundwater recovery and treatment systems, that are
required by any Governmental Authority or that Seller determines, in its sole
discretion, are necessary to perform Seller's Response.
(e) To the extent practicable and reasonably cost effective,
Seller shall negotiate for and implement any required Response in a manner
which does not materially interfere with Buyer's operations at a Facility;
provided that Seller shall have the right, to implement a required Response
even though such Response may materially interfere with Buyer's operation of a
Facility. If and to the extent such Response does materially interfere with
Buyer's operations at a Facility then Seller shall pay to Buyer the following:
(i) All reasonable out-of-pocket costs and expenses
reasonably incurred by Buyer which are attributable to such interference; and
(ii) Such profits which Buyer reasonably would have made
on sales of products which, but for such interference, would have been produced
at such Facility.
(f) If Seller determines, in its sole discretion that, to conduct
the required Response, it will be necessary to permanently close a Facility
then Seller shall pay
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to Buyer the following:
(i) The cost of purchasing a facility which is comparable
(the "Comparable Facility") in terms of location, size, age and condition
(excluding Environmental Conditions in existence at the Closing Time) to the
Facility which was closed, less any proceeds from the sale of such Facility;
(ii) All out-of-pocket costs and expenses reasonably
incurred by Buyer which are attributable to the closure of such Facility and
the relocation to the Comparable Facility; and
(iii) Such profits which Buyer reasonably would have made
on sales of products which, but for such closure, would have been made at the
Facility between the time such Facility is closed and the time that the
Comparable Facility could reasonably be expected to commence operations, but in
no event profits greater than could reasonably be attributed to one year of
production at the closed Facility.
(g) Notwithstanding anything contained in this Agreement, the
obligations of Buyer to make payments to Seller under Sections 9.04(e) and (f)
shall be Buyer's sole and exclusive remedy in respect of any interference with
Buyer's operations at a Facility resulting from a Seller Response or any
permanent closure of a Facility directed by Seller in connection with any
Seller Response. Any savings which inure to the benefit of Buyer as a result
of any such interference or closure shall be set off against any amounts which
Seller is obligated to pay Buyer under Sections 9.04(e) or (f). In connection
with any Response activities to be performed by Seller, Buyer should take such
reasonable actions as are required by Seller and shall otherwise cooperate with
Seller to mitigate any cost and losses which Buyer may incur.
SECTION 9.05. GROUNDWATER TESTING. Promptly after the Closing
Time, Seller will obtain and test groundwater samples from the Logansport
Facility in accordance with the work plan attached hereto as Exhibit G (the
"Groundwater Test"). Seller will report the results of the Groundwater Test to
appropriate Governmental Authority to the extent Seller determines in good
faith that such reporting is required by Applicable Law. Buyer shall use its
reasonable good faith efforts to cooperate with Seller in all matters relating
to the Groundwater Testing and hereby does, grant to Seller, its agents,
employees, contractors and consultants,
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all access to the Facilities reasonably necessary to perform any Groundwater
Testing. Such access shall include use of utilities at Seller's expense and
reasonable office, parking and storage space. In connection with such sampling
and testing, Buyer shall allow Seller to install, operate and maintain any
monitoring devices at, on or under the Facilities, including, but not limited
to monitoring wells. If, as a result of the Groundwater Test, an Environmental
Claim is made such Environmental Claim shall be subject to Section 9.04 and any
Environmental Costs resulting from such Environmental Claim shall be subject to
the allocation provided for in Section 9.03.
ARTICLE X
SURVIVAL; INDEMNIFICATION
-------------------------
SECTION 10.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The representations and warranties set forth in Articles III
and IV shall survive the Closing for the period ending 540 days after the
Closing Time. Upon the expiration of such period all representations and
warranties shall expire and terminate and there shall be no liability or
obligation whatsoever in respect thereof whether such liability has accrued
prior to or will accrue after expiration of such period unless the party
seeking such indemnification shall make its claim therefor on or prior to the
date on which the relevant representation or warranty shall expire.
(b) The representations and warranties referred to in Section
10.01(a) are, to the extent and so long as they survive the Closing, referred
to as the "Surviving Representations".
SECTION 10.02. SELLER'S AGREEMENT TO INDEMNIFY. Subject always to
Sections 10.04, 10.05 and 10.06, the Seller shall indemnify and hold harmless
the Buyer (and in respect of (c) defend) in respect of any and all Damages
incurred by Buyer as a result of the following:
(a) any inaccuracy or misrepresentation in or breach of any
Surviving Representation made by the Seller in this Agreement;
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(b) any breach or failure to perform by the Seller after the
Closing Time of any of its covenants contained in this Agreement; or
(c) any Third Party Claim against Buyer resulting from the failure
of Seller to perform, pay or discharge any Excluded Liability.
SECTION 10.03. BUYER'S AGREEMENT TO INDEMNIFY. Subject always to
Sections 10.04, 10.05 and 10.06, the Buyer shall indemnify and hold harmless
the Seller (and in respect of (c) defend) in respect of any and all Damages
incurred by Seller as a result of the following:
(a) any inaccuracy or misrepresentation in or breach of any
Surviving Representation made by the Buyer in this Agreement;
(b) any breach or failure to perform by the Buyer after the
Closing Time of any of its covenants contained in this Agreement; or
(c) a Third Party Claim against Seller resulting from the failure
of Buyer to perform, pay or discharge any Assumed Liability.
SECTION 10.04. INDEMNIFICATION LIMITS; EXCLUSIVE REMEDY.
Notwithstanding any other provisions of this Agreement:
(a) Neither party to this Agreement shall be entitled to
indemnification pursuant to this Article X for any Damages under Sections
10.02(a) or 10.03(a), unless and to the extent (y) Damages incurred with
respect to a given instance exceed Eighty Thousand Dollars ($80,000) and (z)
the amount by which Damages for all such instances in excess of such amount
exceed Eight Hundred Thousand Dollars ($800,000).
(b) Neither party to this Agreement shall be entitled to
indemnification pursuant to this Article X for any Damages under Sections
10.02(a) or 10.03(a), unless the party seeking such indemnification shall make
its claim therefor on or prior to the date on which the relevant representation
or warranty shall expire pursuant to Section 10.01.
(c) In no event will either party be liable to the other party
under Sections
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10.02(a) or 10.03(a) for any Damages or any portion of any Damages in excess
of Eighty Million Dollars ($80,000,000) in the aggregate.
(d) Each party hereto acknowledges and agrees that, after the
Closing Date, with respect to any claim by a party hereto against the other
party hereto which arises out of breach of any of the representations,
warranties, covenants or agreements of the Seller or the Buyer herein, the
transactions contemplated hereby or any of the subject matter hereof, the
indemnification remedy set forth in this Article X shall be the sole and
exclusive remedy of the parties with respect thereto and each party covenants
not to, directly or indirectly, institute or prosecute or aid in the
prosecution of any claim, demand, cause of action, suit or other proceeding
against the other party with respect thereto except pursuant to this Article X;
provided, however, nothing set forth in this Section 10.04(d) shall be deemed
to prohibit or limit either party's right at any time to seek injunctive relief
for the failure of the other party to perform any covenant or agreement
contained herein.
(e) In connection with any Direct Claim brought by one party
against the other party to enforce this Agreement, to the extent that a party
prevails in prosecuting or defending such Direct Claim such party shall be
entitled to be reimbursed by the other party for all reasonably and proximately
incurred out-of-pocket costs, expenses and attorneys' fees incurred by it in
respect of matters on which it prevailed and all costs and expenses incurred in
connection therewith by the non-prevailing party as to matters on which it did
not prevail shall not be included within and shall be excluded from any Damages
incurred by such non-prevailing party.
(f) Neither party shall have any obligation to indemnify the other
party in respect of any Third Party Claim asserted by any person who is not an
Independent Party.
(g) If a party has knowledge of an Indemnification Claim at the
Closing Time, such party shall be deemed to have waived such Indemnification
Claim and the other party shall have no liability therefor.
(h) All Damages shall be computed net of (i) Tax benefits actually
realized or realizable resulting therefrom to a party, and (ii) the amount of
any insurance benefits actually collected or collectible with respect thereto
which reduces the
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Damages that would otherwise be sustained, each party covenanting to pursue
such tax benefits and insurance coverage in good faith.
(i) An Indemnitor may not assert any offset or similar right in
respect of its obligations under this Agreement based upon any actual or
alleged breach of any representation, warranty or covenant contained in this
Agreement or any other actual or alleged liability or obligation of the
Indemnitee to the Indemnitor; provided, however, that the inability to assert
any offset or similar right pursuant to this sentence will not of itself result
in a waiver of any such actual or alleged breach of this Agreement, which may,
subject to this Article X, be asserted pursuant to this Article X.
SECTION 10.05. PROCEDURE FOR THIRD PARTY CLAIMS. The rights and
obligations of the Indemnitee and Indemnitor with respect to Indemnification
Claims arising out of a Third Party Claim shall be subject to the following
conditions:
(a) If a party receives notice of the assertion of any Third Party
Claim in respect of which it intends to make an Indemnification Claim, the
Indemnitee shall promptly provide written notice (an "Indemnification Notice")
of such assertion to the Indemnitor; provided that failure of the Indemnitee to
give the Indemnitor prompt notice as provided herein shall not relieve the
Indemnitor of any of its obligations hereunder except to the extent the
Indemnitor is prejudiced by such failure. The Indemnification Notice shall
describe in reasonable detail the nature of the Third Party Claim, the basis
for an Indemnification Claim and shall be accompanied by copies of papers and
documents which have been served upon the Indemnitee and such other documents
and information as may be appropriate to an understanding of such Third Party
Claim and the liability of the Indemnitor to indemnify the Indemnitee
hereunder. Except as required by law, the Indemnitee shall not take any action
which may prejudice the defense of such Third Party Claim unless and until
Indemnitor has been given the opportunity to assume the defense thereof under
this Section 10.05 and refused to do so. If Indemnitee takes any such action
which does prejudice the defense of such Third Party Claim then Indemnitee
shall be liable to Indemnitor to the extent of such prejudice.
(b) Upon receipt of an Indemnification Notice, the Indemnitor
shall have the right but not the obligation to promptly assume and take
exclusive control of the defense, negotiation and/or settlement of such Third
Party Claim; provided that the
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assumption of such defense by Indemnitor of a Third Party Claim shall not
prejudice any right of the Indemnitor to recover Damages from the Indemnitee to
the extent of any Indemnitee liability in respect of such Third Party Claim.
(c) If the Indemnitor does not, within thirty days after receipt
of an Indemnification Notice, take over the defense of such Third Party Claim
then the parties agree that the Indemnitee may join the Indemnitor in any
action, claim or proceeding brought by the third party asserting such Third
Party Claim as to which any right of indemnity created by this Agreement would
or might apply, for the purpose of enforcing any right of indemnity granted to
such Indemnified Party pursuant to this Agreement.
(d) If the Indemnitor has assumed the defense of a Third Party
Claim then the Indemnitee shall not compromise or settle such Third Party
Claim; provided, however, that the Indemnitee shall have the right to settle at
its sole cost and expense any Third Party Claim at any time if the Indemnitee
waives its right to recover any Damages therefor from the Indemnitor.
(e) If a party is defending, negotiating or settling a Third
Party Claim for which the other party may be liable, then such party shall at
all times do so in good faith as if it were ultimately liable for all Damages
resulting therefrom and shall not settle such Third Party Claim except on terms
which are commercially reasonable measured in the context of the matter settled
and not in respect of any other consideration of the settling party. The party
controlling the defense of a Third Party Claim shall keep the Indemnitee or
Indemnitor, as the case may be, reasonably informed at all stages of the
defense of such Third Party Claim. The party not controlling the defense of
any such Third Party Claim shall have the right, at its sole cost and expense,
to participate in, but not control, the defense of any such Third Party Claim.
Each party shall reasonably cooperate with the other in the defense,
negotiation and/or settlement of any such Third Party Claim. In connection with
any defense of a Third Party Claim undertaken by the Indemnitor, the Indemnitee
shall provide Indemnitor, its counsel, accountants and other representatives
with reasonable access to relevant properties, contracts, books and records and
make available such personnel of the Indemnitee as the Indemnitor may
reasonably request.
(f) If either party receives an offer to settle such Third Party
Claim, it
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shall promptly present such offer to the other party. If the Indemnitor is
willing to accept and perform all of the terms of such settlement offer and the
Indemnitee refuses to accept such settlement offer; THEN (1) the Indemnitor's
liability to the Indemnitee hereunder with respect to such Third Party Claim
shall not exceed the amount of money and the performance obligations proposed
to be paid pursuant to such settlement offer, and, (2) if the Indemnitor has
assumed the defense of such Third Party Claim, then the Indemnitor may, if it
so elects, tender the defense thereof to the Indemnitee by paying to Indemnitee
the amount of money proposed to be paid in such settlement offer and
irrevocably accepting any non-monetary performance obligations, in which case
the Indemnitor shall have no further liability to the Indemnitee hereunder with
respect to such Third Party Claim and the Indemnitee shall have sole
responsibility for the future defense of such Third Party Claim and for any and
all liabilities, damages, claims, costs, and expenses (including attorneys'
fees) resulting therefrom.
SECTION 10.06. PROCEDURE FOR DIRECT CLAIMS. The rights and
obligations of Indemnitee and Indemnitors with respect to Indemnification
Claims resulting from or arising out of Direct Claims shall be subject to the
following conditions: A party having an Indemnification Claim resulting from
or arising out of a Direct Claim shall give prompt written notice to Indemnitor
(an "Indemnification Notice") specifying in reasonable detail each provision of
this Agreement under which the Indemnification Claim is made and the nature and
amount of the Indemnification Claim asserted; provided that failure of the
Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder except to the extent
the Indemnitor is prejudiced by such failure. If the Indemnitor, within 30
days after the receipt of notice by Indemnitee, shall not give written notice
to Indemnitee accepting in its entirety such Indemnification Claim, such
Indemnification Claim shall be deemed rejected by the Indemnitor and the
parties may pursue such remedies as are provided for by this Agreement.
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.01. EXPENSES. Except as otherwise provided in this
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Agreement, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such cost or expense.
SECTION 11.02. BULK TRANSFER LAWS. Notwithstanding any other
provision of this Agreement, the Buyer hereby waives compliance by the Seller
with the provisions of any so-called bulk transfer law of any jurisdiction in
connection with the transactions contemplated hereby. Seller hereby
indemnifies and agrees to hold Buyer harmless from and against any and all
liabilities, losses, damages, costs and expenses, including reasonable counsel
fees, reasonably and proximately incurred or sustained by Buyer due to such
non-compliance.
SECTION 11.03. ASSIGNMENT. Except as provided in this Section 11.03,
no party hereto shall transfer or assign, or grant or permit to exist any lien
on, this Agreement or any of its rights or obligations hereunder (by operation
of law or otherwise) without the prior written consent of the other party
hereto (which consent may be withheld in such other party's sole discretion),
and any such purported transfer or assignment without such consent shall be
void and of no force or effect. Either party may assign all but not less then
all of its rights under this Agreement to any Affiliate of it provided that:
(i) prior to any such assignment such Affiliate undertakes in a writing
reasonably satisfactory to the other party, to perform all of the assigning
party's obligations hereunder; (ii) no assignment shall relieve the assigning
party of any of its liabilities or obligations hereunder, and (iii) in the case
of a proposed assignment by Buyer or any Affiliate of Buyer, the proposed
assignee is the owner of all or substantially all of the Purchased Assets and
the Guaranty is made applicable to the performance by such Affiliate of this
Agreement. If Buyer or any Affiliate to which Buyer's rights hereunder are
assigned pursuant to this Section 11.03 ceases to be an Affiliate of BTR plc, a
United Kingdom company, then Buyer's rights hereunder and any rights so
assigned shall automatically terminate and be of no further force or effect.
SECTION 11.04. SEVERABILITY. If any provision of this Agreement or
the application of any such provision is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or invalidate or render
unenforceable such provision in any other jurisdiction. In the event that any
provision of this Agreement shall be finally determined by a court of competent
jurisdiction to be unenforceable such
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court shall have jurisdiction to reform this Agreement so that it is
enforceable to the maximum extent permitted by law and the parties shall abide
by such court's determination.
SECTION 11.05. AMENDMENT AND WAIVER. No amendment to this Agreement
shall be effective unless it shall be in writing and signed by each party
thereto. Any failure of a party to comply with any obligation, covenant,
agreement or condition contained in this Agreement may be waived by the party
entitled to the benefits thereof only by a written instrument duly executed and
delivered by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure of compliance.
SECTION 11.06. PARTIES IN INTEREST; LIMITATION ON RIGHTS OF OTHERS.
This Agreement shall be binding upon and inure to the benefit of the parties
thereto and their permitted assigns. Nothing in this Agreement, whether
express or implied, shall give or be construed to give any person (other than
the parties thereto and their permitted assigns) any legal or equitable right,
remedy or claim under or in respect of this Agreement, unless such person is
expressly stated in this Agreement to be entitled to any such right, remedy or
claim.
SECTION 11.07. COUNTERPARTS; EFFECTIVENESS. This Agreement (a) may
be executed by the parties thereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same contract and (b) shall not become
effective until one or more counterparts have been executed by each party
thereto and delivered to the other parties thereto.
SECTION 11.08. ENTIRE AGREEMENT. This Agreement together with any
exhibits, schedules, appendices and attachments thereto, constitute the entire
agreement of the parties with respect to the subject matter thereof and
supersede all prior written and oral agreements and understandings with respect
to such subject matter including, without limitation, the Letter of Intent
between Seller and BTR Dunlop, Inc., dated December 21, 1995.
SECTION 11.09. GOVERNING LAW. This Agreement shall in all respects be
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governed by and construed in accordance with the internal laws of the State of
Ohio applicable to agreements made and to be performed entirely within such
State, without regard to the conflict of laws principles of such State.
SECTION 11.10. NOTICES. All notices and other communications to be
given to any party under this Agreement shall be in writing and any notice
shall be deemed given when delivered by hand, courier or overnight delivery
service or three days after being mailed by certified or registered mail,
return receipt requested, with appropriate postage prepaid, or when received in
the form of a telegram or facsimile, and shall be directed to the address or
facsimile number of such party specified below (or at such other address or
facsimile number as such party shall designate by like notice):
(a) If to the Buyer: BTR Antivibration Systems, Inc.
910 E Whitcomb
Madison Heights, MI 48071-0729
Attn: David Miles
With a copy to: BTR Inc.
333 Ludlow Street
Stamford, CT 06902
Attn: Peter M. Kent
(b) If to the Seller: GenCorp Inc.
175 Ghent Road
Fairlawn, Ohio 44333
Attn: Chief Financial Officer
SECTION 11.11. INTERPRETATION. It is acknowledged by the parties
that this Agreement has undergone several drafts with the negotiated
suggestions of
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each and, therefore, no presumptions shall arise favoring either party by
virtue of the authorship of any provision of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
BTR ANTIVIBRATION GENCORP INC.
SYSTEMS, INC.
By:____________________________ By:________________________________
Name:__________________________ Name: D. M. Steuert
Title:_________________________ Title: Senior Vice President
& Chief Financial Officer
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EXHIBIT A
DEFINITIONS
-----------
As used in the Asset Purchase Agreement dated as of February 14, 1996
between GenCorp Inc. and BTR Antivibration Systems, Inc. (the "Asset Purchase
Agreement"), each term set forth below shall have the specified meaning:
"AMPE" means Seller's Advanced Materials Process Engineering Center.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such other Person.
"APPLICABLE LAW" means, with respect to any Person, any federal, state
or local statute, law, rule, regulation or ordinance now or hereafter in effect
of any Governmental Authority which is applicable to such Person.
"ATTRIBUTABLE TO THE VC BUSINESS", when used with respect to assets
and properties, shall mean assets and properties used, or held for use by
Seller primarily in connection with the VC Business but is meant to exclude
assets and properties used or held for use by Seller primarily in any business
other than the VC Business or used or held for use generally in the VC Business
as well as in other businesses or activities of Seller.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York, are authorized or required by
law to close.
"CTC" means the Seller's Corporate Technology Center.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"ESTIMATED CLOSING NET ASSETS STATEMENT" means the statement prepared
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by Seller of the estimated book value of the Purchased Assets and estimated
book amount of the Assumed Liabilities as of the Closing Time, a copy of which
is attached hereto as Exhibit H.
"CLOSING NET ASSETS STATEMENT" means the Estimated Closing Net Assets
Statement, adjusted to reflect final depreciation through the Closing Time,
accruals for fixed asset purchases made but not received prior to the Closing
Time and, with respect to Seller's shareholders equity in the JV Shares, such
adjustments as are necessary to reflect minority shareholders' income.
"COMPETITIVE BUSINESS" means the activity of designing, manufacturing,
or selling in the United States or Canada products competitive with the
products of the VC Business as of the Closing Time.
"D&E FACILITY" means the land, building and improvements known as the
Design & Engineering Center and located at One General Street, Wabash, Indiana
46992.
"D&E VC EQUIPMENT" means the items identified on Exhibit M.
"DAMAGES" means any and all reasonably and proximately incurred
liabilities, obligations, damages, judgments, orders, assessments, interest,
penalties, fines, settlement payments, losses, costs and expenses (including,
without limitation, reasonable legal fees and out-of-pocket expenses incurred
in connection with investigating, defending, negotiating and/or settling any
Third Party Claim); provided, however, that (except in the case of common law
fraud) the following shall not be included within and shall be excluded from
Damages: (i) any consequential damages (including, without limitation, lost
profits and lost savings) except to the extent that any such consequential
damages result directly from facts actually known by the party against whom a
claim is made; (ii) punitive damages and exemplary damages; (iii) any
investigation and defense costs and expenses incurred by an Indemnitee prior to
giving of an Indemnification Notice under Sections 10.05 or 10.06 or after the
defense of a Third Party Claim has been assumed by the Indemnitor, and; (iv)
any internal employee and administrative costs and expenses.
"DIRECT CLAIM" shall mean a claim asserted under Section 10.06 by a party
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against the other party to enforce this Agreement.
"DISCLOSURE SCHEDULE" means that certain schedule identified as such and
delivered by the Seller to the Buyer pursuant to the Asset Purchase Agreement.
"DOLLARS" or "$" means United States dollars.
"ENVIRONMENTAL CLAIM" means a Third Party Claim by Governmental
Authority or an Independent Party under the Environmental Laws in respect of
the investigation, remediation or monitoring of an Environmental Condition.
"ENVIRONMENTAL CONDITION" means a Hazardous Material which (a) is in,
or under the soil, groundwater or surface water of a Facility or has migrated
therefrom or (b) has been released in or on the land, or any building,
structure or other improvement of a Facility to the extent of such release.
"ENVIRONMENTAL COSTS" means all out-of-pocket costs incurred in
investigating, remediating, and monitoring an Environmental Condition and all
out-of-pocket costs incurred in investigating or defending a Governmental
Authority demand for investigating, remediating or monitoring an Environmental
Condition.
"ENVIRONMENTAL LAWS" means all applicable federal, state and local
laws, statutes, ordinances, codes, rules and regulations now or hereafter in
effect relating to emissions, discharges, and releases of Hazardous Materials
into land, soil, ambient air, water, and atmosphere, and/or the generation,
treatment, storage, transportation, disposal and remediation of Hazardous
Materials, including, without limitation, the following Federal laws and all
rules and regulations thereunder: (1) The Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section Section 9601-9675; (2) The
Resource Recovery and Conservation Act, 42 U.S.C. Section Section 6901-6992k;
(3) The Clean Air Act, 42 U.S.C. Section Section 7401-7471; (4) The Clean Water
Act, 33 U.S.C. Section Section 1251-1387; (5) The Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801-1812; (6) The Toxic Substances
Control Act, 15 U.S.C. Section 2601-2692; and (7) The Emergency Planning &
Community Right-to-Know Act, 42 U.S.C. Section Section 11001-11050.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"FT. WAYNE FACILITY" means the property leased by Seller located at
Suite 140, 6920 Point Inverness Way, Ft Wayne, Indiana.
"FACILITIES" means, collectively, the Logansport Facility and the Peru
Facility.
"GENCORP ACCOUNTING PRINCIPLES" means the accounting principles
described on Exhibit I.
"GOVERNMENTAL AUTHORITY" means the United States of America, any State
thereof, or any court, department, or agency of the United States of America,
any State thereof, or political subdivision of any of them or any court,
department, or agency of such political subdivision.
"HAZARDOUS MATERIALS" means the following: (1) "Hazardous
Substances," under Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act; (2) "Hazardous Air Pollutants" under
Section 112(b) of the Clean Air Act; (3) "Imminently hazardous chemical
substances" under Section 7 of the Toxic Substances Control Act; and (4)
"Hazardous Waste" under Section 1004(5) of the Solid Waste Disposal Act or
under Section 6903(5) of the Resource Recovery and Conservation Act; (5)
"Hazardous Materials" as defined in the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801-1812, (6) "Toxic Substances" as defined in the Toxic
Substance Control Act, 15 U.S.C. Section 2601-2692 and (7) all substances,
pollutants, wastes, materials, chemicals and mixtures regulated under any
Environmental Laws of Indiana or any political subdivision thereof or under any
Environmental Laws of any other applicable state or political subdivision
thereof; but the term Hazardous Materials excludes, asbestos, radon gas and
lead based paint.
"HENNIGES" means GenCorp GmbH, GenCorp Beteiligungs GmbH, HENNIGES
Elastomer- und Kunststofftechnik Verwaltungs, GmbH, HENNIGES Elastomer- und
Kunststofftechnik GmbH & Co. KG and Henniges Elastomers Ireland GmbH.
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"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"INDEMNITEE" shall mean the party making an Indemnification Claim.
"INDEMNITOR" shall mean the party against whom an Indemnification
Claim is made.
"INDEMNIFICATION CLAIM" shall mean a claim of Buyer under Section
10.02 or a claim of Seller under Section 10.03.
"INDEPENDENT PARTY" means as to any party: (i) any individual not
employed by it or any of its Affiliates, and (ii) any corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, Governmental Authority or other legal entity of any kind which is not
an Affiliate of it.
"INTELLECTUAL PROPERTY" means rights under or to patents and patent
applications; trademarks and trademark applications and registrations; trade
names; service marks; service names, copyrights and copyright applications and
registrations; and trade secrets, designs, drawings, patterns, specifications,
formulas, technology, inventions, processes and know-how of a scientific or
technical nature.
"IRC" means the Internal Revenue Code of 1986, as amended.
"IRS" means the United States Internal Revenue Service.
"JV SHARES" means 60 Common Shares, without par value of GT Automotive
Co., Ltd., an Ohio corporation and 450 Common Shares, without par value, of GKK
Automotive Co., Ltd., an Ohio corporation (each a "JV Company").
"KNOWLEDGE", "KNOWLEDGE", "KNOWN TO" or words of similar import mean
for purposes of Seller's representations and warranties (but shall not be so
limited for purposes of the definition of Damages), the actual knowledge of the
following persons: Thomas Arndt, Greg Finch, Richard Fradette, Sandra Henning,
Bob
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Carper and John Nemec.
"LOGANSPORT FACILITY" means the land, building and improvements
located at One General Street, Logansport, Indiana.
"MATERIAL ADVERSE EFFECT" means a change in, or effect on, the
operations, financial condition, results of operations, assets, or liabilities
of the VC Business that results in a material adverse effect on, or a material
adverse change in, the Purchased Assets taken as a whole, or a material adverse
effect on the VC Business taken as a whole.
"PERMITTED LIENS" means any and all: (1) Liens for Taxes or
assessments that are due but not yet delinquent; (2) Liens disclosed on the
Closing Net Assets Statement; (3) materialmen's, mechanic's, repairmen's,
contractors', operators' or other similar Liens or charges incidental to
construction, maintenance or operation of the Facilities; (4) the terms and
conditions of and any legal or equitable Liens deemed to exist by reason of
undertakings or covenants in any of the leases, agreements, orders and
instruments included within the Purchased Assets; (5) rights reserved to or
vested by law or regulation in any Governmental Authority to control or
regulate the VC Business, including, without limitation, zoning ordinances,
building codes, Environmental Laws and rights of eminent domain; (6) easements,
rights-of-way, imperfections of title, covenants, undertakings, restrictions,
conditions or limitations of record in respect of the Owned Real Property; (7)
any matter in respect of the Owned Real Property that would be disclosed by an
accurate survey or inspection; and (8) Liens listed on Exhibit J.
"PERSON" means an individual, corporation, partnership, association,
trust, estate, Governmental Authority or other entity but excluding the
parties.
"PERU FACILITY" means the land, buildings or improvements located at
100 North E, U.S. Highway 31, Peru, Indiana.
"SHARED FACILITIES" means the D&E Facility, Wabash Facility and
Farmington Hills Facility.
"TAXES" means all income, franchise, excise, real and personal
property,
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sales, use, value-added, payroll, withholding, social security and other taxes
and assessments imposed by any Governmental Authority, together with all
interest, penalties and additions imposed with respect to such amounts.
"THIRD PARTY CLAIM" means as to any party to this Agreement the
assertion or commencement against it of any claim, demand, suit or action or
any legal, administrative, governmental or other proceeding by any Governmental
Authority or any other person or entity which is an Independent Party.
"TITLE MATTERS" means (1) Seller's title to or ownership of all or any
interest in the Owned Real Property or (2) any defect, restriction, covenant,
easement, encroachment or encumbrance with respect to the Owned Real Property.
"UNION NOVATION AGREEMENTS" means the Peru USWA Novation Agreement,
the Logansport Teamsters Novation Agreement, the Logansport USWA Novation
Agreement, the Wabash USWA Amendment Agreement and the Wabash Teamsters
Amendment Agreement, each dated the date hereof and between Buyer, Seller and
the applicable Union.
"VC BUSINESS" means the business conducted through Seller's Vibration
Control Division of designing, developing, manufacturing and selling vibration
control components for automobile and truck applications and producing
agricultural and marine products provided that (i) with respect to any Shared
Facility such business includes only those operations, assets, rights,
contracts and business which pertain exclusively to Seller's Vibration Control
Division, (ii) such business does not include Henniges or any of the
operations, assets, contracts, rights or business of Henniges, (iii) such
business does not include any operations, assets, rights, contracts or business
of CTC or AMPE, and (iv) such business does not include the operations, assets,
contracts, rights or business at the Wabash Facility which will be owned by
Seller after the Closing.
"VC INTELLECTUAL PROPERTY" means the Patents, the Trademarks and the
Copyrights and any other Intellectual Property that is owned by Seller and
useful solely and exclusively for the VC Business but excludes any NIST
Invention.
"WABASH ENVIRONMENTAL CONDITION" means a Hazardous Material which (a)
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is in, or under the soil, groundwater or surface water of the Wabash Facility
or (b) has been released in or on the land, or any building, structure or other
improvement of the Wabash Facility to the extent of such release.
"WABASH FACILITY" means the land, buildings and improvements located
at One General Street, Wabash, Indiana 46992.
"WABASH VC EQUIPMENT" means the items identified on Exhibit K.
"WABASH VC INVENTORY" means all inventory used or held for use at the
Wabash Facility for the VC Business, excluding compounding inventory and crib
inventory not Attributable to the VC Business.
"WORKING CAPITAL ITEMS" means the items described on Exhibit L.
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