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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):
January 2, 1997
CRA HOLDINGS INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-5599 54-0698116
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(State or other (Commission (I.R.S. Employer
jurisdiction) File Number) Identification No.)
2016 North Pitcher Street, Kalamazoo, Michigan 49007
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (616) 343-6121
Great Dane Holdings Inc.
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(Former name and former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On January 2, 1997, all of the assets of each of Great
Dane Trailers, Inc. ("GDT"), a Georgia corporation and a wholly-owned
direct subsidiary of the Registrant, Great Dane Trailers Tennessee,
Inc. ("GDTT"), a Tennessee corporation and a wholly-owned indirect
subsidiary of the Registrant, and Great Dane Los Angeles, Inc.
("GDLA"), a Georgia corporation and a wholly-owned indirect subsidiary
of the Registrant, engaged in the business of designing, manufacturing
and distributing a full line of truck trailers and intermodal
containers and chassis, was purchased by Great Dane Limited
Partnership, pursuant to the Asset Purchase Agreement attached hereto
as Exhibit 2.1 (the "Asset Purchase Agreement"). As consideration
therefor, GDT, GDTT and GDLA received $240,180,123.13, net of
transaction expenses. GDT received 97% of such consideration, GDTT
received 2% of such consideration and GDLA received 1% of such
consideration. The amount of such cash consideration is subject to
adjustment pursuant to the Asset Purchase Agreement.
ITEM 5. OTHER EVENTS
On January 6, 1997, the Registrant changed its name from Great
Dane Holdings Inc. to CRA Holdings Inc.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) None
(b) Financial statements required pursuant to this item and
the requirements of the Securities and Exchange Act of 1934 will be
filed by amendment to this form within sixty days after the date on
which this form must be filed as permitted by Item 7(b)(2) of Form 8-K.
(c) List of Exhibits
Exhibit 2.1. Asset Purchase Agreement dated December 20, 1996
by and between Great Dane Trailers, Inc., Great Dane Trailers
Tennessee, Inc., Great Dane Trailers Los Angeles, Inc., Great
Dane Holdings, Inc. and Great Dane Limited Partnership. The
Exhibits and the Disclosure Schedule to this document have not
been filed herewith; Registrant agrees to furnish
supplementally such Exhibits and Disclosure Schedule to the
Securities and Exchange Commission upon its request.
Exhibit 2.2. Asset Purchase Agreement Amendment dated as of
December 31, 1996 to the Asset Purchase Agreement attached
hereto as Exhibit 2.1. The Exhibits to this document have
not been filed herewith; Registrant agrees to furnish
supplementally such Exhibits to the Securities and Exchange
Commission upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CRA HOLDINGS INC.
Date: January 15, 1997 By: /s/ Scott C. Dunn
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Name: Scott C. Dunn
Title: Vice President
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EXHIBIT INDEX
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EXHIBIT PAGE
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Exhibit 2.1. Asset Purchase Agreement dated December 20,
1996 by and between Great Dane Trailers, Inc.,
Great Dane Trailers Tennessee, Inc., Great Dane
Trailers Los Angeles, Inc., Great Dane
Holdings, Inc. and Great Dane Limited
Partnership. The Exhibits and the Disclosure
Schedule to this document have not been filed
herewith; Registrant agrees to furnish
supplementally such Exhibits and Disclosure
Schedule to the Securities and Exchange
Commission upon its request.
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Exhibit 2.2 Asset Purchase Agreement Amendment dated as of
December 31, 1996 to the Asset Purchase
Agreement attached hereto as Exhibit 2.1.
The Exhibits to this document have not been
filed herewith; Registrant agrees to furnish
supplementally such Exhibits to the Securities
and Exchange Commission upon its request.
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ASSET PURCHASE AGREEMENT
BY AND AMONG
GREAT DANE TRAILERS, INC.,
GREAT DANE TRAILERS TENNESSEE, INC., and
GREAT DANE LOS ANGELES, INC.,
THE SELLERS,
GREAT DANE HOLDINGS INC.,
THE PARENT,
AND
GREAT DANE LIMITED PARTNERSHIP,
THE BUYER
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TABLE OF CONTENTS
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ARTICLE 1. TERMS OF PURCHASE AND SALE....................... 1
1.1. Sale of the Purchased Assets.............................. 1
1.2. The Closing............................................... 1
1.3. Purchase Price and Payment................................ 2
1.4. Other Closing Documents................................... 2
1.5. Purchase Price Adjustment................................. 5
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLERS........ 8
2.1. Organization.............................................. 9
2.2. Financial Statements...................................... 9
2.3. Absence of Certain Changes or Events...................... 10
2.4. Title to Purchased Assets................................. 11
2.5. Intellectual Property..................................... 11
2.6. Commitments............................................... 12
2.7. Litigation................................................ 13
2.8. Compliance with Laws...................................... 14
2.9. Corporate Power and Authority; No Conflicts............... 14
2.11. Consents.................................................. 16
2.12. Taxes..................................................... 17
2.13. Subsidiaries.............................................. 17
2.14. Accounts Receivable....................................... 18
2.15. Inventory................................................. 18
2.16. Real Property; Leases..................................... 18
2.17. Environmental Matters..................................... 21
2.18. Products; Product Warranty................................ 23
2.19. Undisclosed Liabilities................................... 23
2.20. Insurance................................................. 24
2.21. Labor Relations........................................... 24
2.22. Full Disclosure........................................... 24
2.23. Disclaimer................................................ 25
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER.......... 25
3.1. Organization.............................................. 25
3.2. Power and Authority; No Conflicts......................... 25
3.3. Consents.................................................. 26
3.4. Availability of Funds..................................... 26
3.5. Litigation................................................ 26
3.6. Financial Condition....................................... 26
ARTICLE 4. COVENANTS OF SELLERS............................. 27
4.1. Cooperation............................................... 27
4.2. Conduct of Business....................................... 27
4.3. Access.................................................... 29
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4.4. Further Assurances........................................ 29
4.5. Acquisition Proposals..................................... 30
4.6. Advice of Changes......................................... 30
4.7. Nondisclosure............................................. 30
4.8. Covenant Not to Compete................................... 31
4.9. Removal of Certain Liens.................................. 32
4.10. Insurance................................................. 32
4.11. Certain Provisions Relating to Consents................... 32
4.12. Sums Received in Respect of Business...................... 33
4.13. Name...................................................... 33
4.14. Transfer of Parent Equipment.............................. 33
4.15. Transfer of Certain Intangible Property................... 33
ARTICLE 5. COVENANTS OF BUYER............................... 33
5.1. Cooperation by Buyer...................................... 34
5.2. Books and Records; Personnel.............................. 34
5.3. Further Assurances........................................ 35
5.4. Solvency.................................................. 35
5.5. Bulk Transfer Laws........................................ 35
5.6. Indiana Responsible Property Transfer Law................. 35
ARTICLE 6. TAX MATTERS COVENANTS............................ 36
6.1. Allocation of Purchase Price.............................. 36
6.2. Cooperation............................................... 37
ARTICLE 7. CONDITIONS TO BUYER'S OBLIGATIONS................ 37
7.1. No Prohibition............................................ 37
ARTICLE 8. CONDITIONS TO SELLERS' OBLIGATIONS............... 37
8.1. No Prohibition............................................ 38
ARTICLE 9. EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS.... 38
9.1. Definitions............................................... 38
9.2. Employment................................................ 40
9.3. Collective Bargaining Agreement........................... 41
9.4. Employee Benefit Plans.................................... 41
9.5. Incentive Compensation Plans.............................. 41
9.6. Pension Contributions..................................... 41
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ARTICLE 10. TERMINATION PRIOR TO CLOSING..................... 42
10.1. Termination............................................... 42
10.2. Effect of Termination..................................... 42
ARTICLE 11. MISCELLANEOUS.................................... 42
11.1. Survival.................................................. 42
11.2. Indemnification........................................... 43
11.3. Interpretive Provisions................................... 47
11.4. Entire Agreement.......................................... 47
11.5. Successors and Assigns.................................... 47
11.6. Headings.................................................. 48
11.7. Modification and Waiver................................... 48
11.8. Broker's Fees............................................. 48
11.9. Expenses.................................................. 48
11.10. Notices................................................... 49
11.11. Governing Law............................................. 50
11.12. Public Announcements...................................... 50
11.13. Counterparts.............................................. 50
11.14. Certain Definitions....................................... 51
11.15. No Third Party Beneficiaries. ............................ 61
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EXHIBITS
Exhibit 1.1(b) - Form of Assignment and Assumption Agreement
Exhibit 1.3 - Allocation of Purchase Price
Exhibit 1.4 - Additional Closing Documents of Sellers
Exhibit 1.4(a)(ix) - Form of Confidentiality, Non-Competition and
Cooperation Agreements
Exhibit 1.4(a)(x) - Forms of Sellers' Counsel Opinions
Exhibit 1.4(b) - Additional Closing Documents of Parent
Exhibit 1.4(c)(v) - Form of Buyer's Counsel Opinion
Exhibit 1.4(c)(vi) - Additional Closing Documents of Buyer
Exhibit 1.5(a) - Projected Closing Balance Sheet and Projected Closing
Adjusted Net Worth Statement
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Page
Exhibit 2.2(a)(ii) - Interim Balance Sheet and Interim Adjusted Net Worth
Statement
Exhibit 2.16 - Form of letter agreement regarding title and survey
matters
Exhibit 2.16(c) - Required Title Insurance Policies, Endorsements and
Surveys
Exhibit 4.10 - Letter agreement regarding rights under insurance
policies
Exhibit 4.11(a) - Required Consents
Exhibit 9.4 - Employee Benefit Plans
Exhibit 11.3(a) - Designated Seller Officers
Exhibit 11.3(b) - Designated Buyer Officers
Exhibit 11.14-1 - Form of Escrow Agreement
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ASSET PURCHASE AGREEMENT
This Agreement, made and entered into this ___ day of
December, 1996, by and between GREAT DANE TRAILERS, INC., a Georgia corporation
("Trailers"), and its wholly owned subsidiaries, GREAT DANE TRAILERS TENNESSEE,
INC., a Tennessee corporation, and GREAT DANE LOS ANGELES, INC., a Georgia
corporation (Trailers and its subsidiaries are referred to collectively herein
as "Sellers" and each as a "Seller"), GREAT DANE HOLDINGS INC., a Delaware
corporation ("Parent"), and GREAT DANE LIMITED PARTNERSHIP, a Delaware limited
partnership ("Buyer"). Sellers, Parent and Buyer are referred to collectively
herein as the "Parties".
W I T N E S S E T H:
WHEREAS, Buyer desires to purchase from Sellers, and Sellers
desire to sell to Buyer, substantially all of the assets of the Business,
subject to certain liabilities, all on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements, and upon the terms and
subject to the conditions hereinafter set forth, the Parties do hereby agree as
follows (Section 11.14 hereof sets forth the definitions of capitalized terms
used herein, or references the Sections in which such terms are defined).
ARTICLE 1.
TERMS OF PURCHASE AND SALE
1.1. Sale of the Purchased Assets. On the Closing Date and
subject to the terms and conditions of this Agreement:
(a) Buyer will purchase from each Seller, and each
Seller will sell, transfer, assign, convey and deliver to Buyer, or any
permitted assignee under Section 11.5, all of such Sellers' right, title and
interest in and to the Purchased Assets; and
(b) Buyer will assume and become responsible for all
of the Assumed Liabilities, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit 1.1(b) to be executed and delivered by
Buyer on the Closing Date (the "Assignment and Assumption Agreement".
1.2. The Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Sonnenschein Nath &
Rosenthal, 1221 Avenue of the Americas, 24th floor, New York, New York 10020,
commencing at 9:00 a.m., New York City time, on January 2, 1997 (but shall be
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effective as of 12:01 a.m. on January 1, 1997), or at such other time or place
or on such other date as may be mutually agreed to by the Parties in writing,
subject to the requirements of Article 10 hereof (the "Closing Date").
1.3. Purchase Price and Payment. The aggregate purchase price
to be paid by Buyer for the purchase of the Purchased Assets and the assumption
of the Assumed Liabilities (the "Purchase Price") shall initially be
$240,673,000, to be allocated among and paid to Sellers as set forth on Exhibit
1.3, and subject to adjustment pursuant to Section 1.5. Payment of the Purchase
Price (as adjusted pursuant to Section 1.5(a)), less the Escrow Amount, shall be
in U.S. dollars, and shall be made no later than 12:00 noon, New York City time,
on the Closing Date, by wire transfer or delivery of other immediately available
funds to one account of each Seller at a bank specified at least two (2)
business days in advance in writing by Sellers (the "Designated Accounts"). The
Escrow Amount shall be delivered by the Buyer to the Escrow Agent and placed in
the Escrow Account no later than 12:00 noon, New York City time, on the Closing
Date by wire transfer or delivery of other immediately available funds.
1.4. Other Closing Documents. On the Closing Date, provided
all conditions set forth in Article 8 shall have been satisfied:
(a) Sellers shall deliver, or cause to be delivered,
to Buyer, the following items:
(i) Duly executed bills of sale and such
other executed assignments or certificates of title (including, without
limitation, the Assignment and Assumption Agreement), each dated the Closing
Date, as are reasonably necessary to transfer to Buyer all of each Seller's
right, title and interest in, to and under the Purchased Assets, free and clear
of all Encumbrances other than Permitted Exceptions.
(ii) Title to the Owned Real Property by
recordable special warranty deeds and Sellers' leasehold interest in and to the
Leased Real Property by assignments and assumptions of leases.
(iii) Documentation including termination
statements, releases, and payoff letters sufficient to release all Encumbrances
on Purchased Assets which secure Excluded Liabilities.
(iv) The owner's policies and leasehold
policies of Title Insurance and Surveys required to be delivered at Closing
pursuant to Section 2.16(c).
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(v) A certificate that each Seller is not a
foreign person within the meaning of Section 1445 of the Code, which certificate
shall set forth all information required by, and otherwise be executed in
accordance with, Treasury Regulation Section 1.1445-2(b).
(vi) Duly executed assignments for all
Intellectual Property and evidence of change of name of each Seller.
(vii) Certificates of the Secretary or an
Assistant Secretary of each Seller, dated the Closing Date: (i) as to the
incumbency and signatures of the officers or representatives of such Seller
executing this Agreement and each of the Ancillary Documents and any other
certificate or other document to be delivered pursuant hereto or thereto,
together with evidence of the incumbency of such Secretary or Assistant
Secretary; and (ii) certifying attached resolutions of the Board of Directors
and shareholders of such Seller, which authorize and approve the execution and
delivery of this Agreement and each of the Ancillary Documents to which such
Seller is a party and the consummation of the transactions contemplated hereby
and thereby.
(viii) The Escrow Agreement, duly executed
by each of Sellers and the Escrow Agent.
(ix) Confidentiality, non-competition and
cooperation agreements executed by each of the current shareholders of Parent in
substantially the form of Exhibit 1.4(a)(ix) hereto, together with assignments
to Buyer of Parent's rights thereunder, to the extent such agreements relate to
the Business, in the form set forth in Exhibit 1.4(a)(ix).
(x) Opinions of Hunter, Maclean, Exley &
Dunn, P.C. and Sonnenschein Nath & Rosenthal, dated the Closing Date, in
substantially the form of Exhibit 1.4(a)(x) hereto.
(xi) All of the additional closing documents
contemplated hereby or referred to on Exhibit 1.4(a).
(xii) True, complete and correct copies of
the agreements described in Section 2.6(f) and 4.7(b) of this Agreement together
with an assignment to Buyer of all rights of Sellers and Parent thereunder.
(xiii) An assignment to Buyer of all of the
rights of the purchaser under the Parent Stock Purchase Agreement to
indemnification by the sellers thereunder, to the extent such indemnification
relates to the Business, the Purchased Assets or the Assumed Liabilities.
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(b) Parent shall deliver to Buyer all of the closing
documents referred to on Exhibit 1.4(b).
(c) Buyer shall deliver, or cause to be delivered, to
Sellers, the following items:
(i) The Assignment and Assumption Agreement,
duly executed by Buyer and dated the Closing Date.
(ii) The Escrow Agreement, duly executed by
Buyer and the Escrow Agent.
(iii) Certificates of the Secretary or an
Assistant Secretary of the general partner of Buyer, dated the Closing Date: (i)
as to the incumbency and signatures of the officers or representatives of the
general partner of Buyer executing this Agreement and each of the Ancillary
Documents and any other certificate or other document to be delivered pursuant
hereto or thereto, together with evidence of the incumbency of such Secretary or
Assistant Secretary; and (ii) certifying attached resolutions of the Board of
Directors and shareholders of the general partner of Buyer, which authorize and
approve the execution and delivery of this Agreement and each of the Ancillary
Documents to which Buyer is a party and the consummation of the transactions
contemplated hereby and thereby.
(iv) An opinion of Gould & Ratner, dated the
Closing Date, in substantially the form of Exhibit 1.4(c)(v) hereto.
(v) All of the additional documents referred
to on Exhibit 1.4(c)(vi).
1.5. Purchase Price Adjustment.
(a) Attached hereto as Exhibit 1.5(a) is a projected
balance sheet of Trailers and its subsidiaries as of the close of business on
December 19, 1996 (the "Projected Closing Balance Sheet") containing good faith
projections by Sellers' management of the assets and liabilities of Sellers as
of such date, together with a schedule (the "Projected Closing Adjusted Net
Worth Statement") specifically setting forth Sellers' projected Adjusted Net
Worth, and the adjustments made to compute such amount, as of the close of
business on December 19, 1996 (the "Projected Closing Adjusted Net Worth"), and
a representation by the Sellers' chief financial officer that (i) the Projected
Closing Balance Sheet was prepared on a basis consistent with the accounting
principles, practices, policies and procedures, and the classifications and
methods, utilized in preparing the Interim Balance Sheet (except that the
amounts shown therein are projected), and (ii) the Projected Closing
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Adjusted Net Worth Statement was prepared on a basis consistent with the
accounting principles, practices, policies and procedures, and the
classifications and methods, utilized in preparing the Interim Adjusted Net
Worth Statement (including, without limitation, valuation of inventories on a
first-in-first-out basis and elimination from the Projected Closing Balance
Sheet of the Excluded Assets and Excluded Liabilities, and the Parent Equipment
and GDI Property). If the Projected Closing Adjusted Net Worth is less than the
Interim Adjusted Net Worth, then the Purchase Price to be paid at the Closing
shall be decreased by an amount which is equal to the difference between the
Interim Adjusted Net Worth and the Projected Closing Adjusted Net Worth. If the
Projected Closing Adjusted Net Worth is greater than the Interim Adjusted Net
Worth, then the Purchase Price to be paid at the Closing shall be increased by
an amount which is equal to the difference between the Projected Closing
Adjusted Net Worth and the Interim Adjusted Net Worth.
(b) Sellers shall prepare and deliver to Buyer, and
Buyer and Sellers shall cooperate to engage Ernst & Young, LLP, or another
nationally-recognized independent accounting firm mutually satisfactory to
Sellers and Buyer (the "Accountants") to audit, the consolidated balance sheet
of Sellers as of close of business on the December 31, 1996 (the "Closing Date
Balance Sheet") within sixty (60) days after the Closing Date. The Closing Date
Balance Sheet shall:
(i) be prepared in accordance with GAAP
applied on a basis consistent with the same accounting principles, methods,
policies, practices and procedures applied in, and using classifications
consistent with those used in, the preparation of the Interim Balance Sheet, and
in accordance with the terms of this Agreement;
(ii) be audited by the Accountants in
accordance with generally accepted auditing standards;
(iii) include a schedule (the "Closing
Adjusted Net Worth Statement") specifically setting forth the Closing Adjusted
Net Worth and the adjustments made to compute such amount, which schedule and
adjustments shall be prepared on a basis consistent with the accounting
principles, practices, policies and procedures, and the classifications and
methods, utilized in preparing the Interim Adjusted Net Worth Statement
(including, without limitation, valuation of inventories on a first-in-first-out
basis and elimination from the Closing Date Balance Sheet of the Excluded Assets
and Excluded Liabilities, and the Parent Equipment and GDI Property); and
(iv) include an opinion of the Accountants
to the effect of Sections 1.5(b)(i), 1.5(b)(ii) and 1.5(b)(iii)
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above.
(c) Sellers' employees shall take physical
inventories of Sellers in connection with the preparation of the Closing Date
Balance Sheet, to the extent reasonably practicable. Arthur Andersen, L.L.P., at
the request of Buyer and at Buyer's expense, shall be entitled to observe the
taking of physical inventories of Sellers in connection with the preparation of
the Closing Date Balance Sheet, and to inspect all work papers, schedules and
other supporting materials relating to, the preparation of the Closing Date
Balance Sheet and computation of the Closing Adjusted Net Worth, and to consult
with the Accountants regarding the methods used to prepare the Closing Date
Balance Sheet and computation of the Closing Adjusted Net Worth. The
Accountants' fees and expenses in connection with the work performed by the
Accountants pursuant to this Section shall be accrued as an expense on the
Closing Date Balance Sheet, except for the fees and expenses of the Accountants
in connection with the taking of physical inventories or in connection with any
other procedures requested by Buyer which have not generally been performed in
connection with the preparation or audit of Sellers' prior year-end financial
statements.
(d) The Closing Adjusted Net Worth as set forth on
the Closing Adjusted Net Worth Statement shall become final, conclusive and
binding on the Parties unless Sellers or Buyer gives written notice to the other
of its disagreement with respect to any matter contained therein ("Objection
Notice") within thirty (30) days after the receipt thereof. An Objection Notice
shall specify in reasonable detail the nature of any disagreement and a proposal
with respect to the Closing Adjusted Net Worth. The other Party may within ten
(10) days after receipt of the other Party's Objection Notice also deliver an
Objection Notice (if not already delivered), which shall contain a proposal with
respect to the Closing Adjusted Net Worth; or, if such other Party shall not
deliver an Objection Notice, it shall be deemed for the purposes hereof to have
proposed the amount therefor set forth in the Closing Adjusted Net Worth
Statement. For a period of thirty (30) days after the delivery of any Objection
Notice, Sellers and Buyer shall attempt to resolve in writing all of their
differences with respect to each matter specified in any Objection Notice, in
which case any such resolution shall be final, conclusive and binding on Sellers
and Buyer. If Buyer and Sellers cannot resolve all such disputes within such
thirty-day period, the matters in dispute shall be submitted to Arthur Andersen,
L.L.P. or another nationally-recognized independent accounting firm mutually
satisfactory to Buyer and Sellers (the "Arbiter"). Promptly, but not later than
thirty (30) days after submission of the dispute to the Arbiter, the Arbiter
will determine (based solely on presentations by Sellers and Buyer to the
Arbiter and not by independent review)
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only those items in dispute and will render a report as to its resolution of
such items and the resulting calculation of the Closing Adjusted Net Worth. In
resolving any disputed item, the Arbiter may not assign a value to such item
greater than the greatest value for such item claimed by either party or less
than the lowest value for such item claimed by either party. For purposes of the
Arbiter's calculation of the Closing Adjusted Net Worth, the amounts to be
included will be the appropriate amounts from the Closing Date Balance Sheet as
to items that are not in dispute, and the amounts determined by the Arbiter, as
to items that are submitted for resolution by the Arbiter. Buyer and Sellers
shall cooperate with the Arbiter in making its determination and such
determination shall be final, conclusive and binding upon Buyer and Sellers;
provided, however, that the amount of the Closing Adjusted Net Worth determined
by the Arbiter shall in no event be greater than that proposed (or deemed
proposed) by Sellers or less than that proposed (or deemed proposed) by Buyer.
The fees and expenses of the Arbiter incurred in connection with the services
rendered pursuant to this Section 1.5(d) shall be borne by Sellers and Buyer in
proportion to the respective amounts by which the amounts of the Closing
Adjusted Net Worth proposed or deemed proposed by them shall differ from the
Closing Adjusted Net Worth as determined by the Arbiter. (For example, if the
amount of the Closing Adjusted Net Worth proposed by Sellers were $70,000,000,
the amount thereof proposed by Buyer were $60,000,000, and the amount thereof
determined by the Arbiter were $66,000,000, then the Arbiter's fees and expenses
would be paid 40% by Sellers and 60% by Buyer.)
(e) The term "Final Adjusted Net Worth" shall mean:
(i) if neither Sellers nor Buyer timely
delivers an Objection Notice, the Closing Adjusted Net Worth as set forth in the
Closing Adjusted Net Worth Statement; or
(ii) if Sellers or Buyer timely delivers an
Objection Notice, the amount determined pursuant to Section 1.5(d) above.
(f) Within five (5) days after determination of the
Final Adjusted Net Worth:
(i) if the Projected Closing Adjusted Net
Worth exceeds the Final Adjusted Net Worth, then (x) Sellers and Buyer shall
direct the Escrow Agent to pay to Buyer, out of the funds held in the Escrow
Account, an amount equal to the lesser of such excess or the Escrow Amount, and
(y) if the amount of such excess is greater than the Escrow Amount, then Sellers
shall pay to Buyer in immediately available funds the amount by which
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such excess exceeds the Escrow Amount; or
(ii) Buyer shall pay Sellers by wire
transfer of immediately available funds the amount, if any, by which the Final
Adjusted Net Worth exceeds the Projected Closing Adjusted Net Worth.
Any payment by Sellers or Buyer required by this subsection (f) shall bear
interest at the prime rate (as published in the Wall Street Journal) per annum
from the Closing Date to, but not including, the date of payment to Buyer or
Sellers, as the case may be.
(g) Upon determination of the Final Adjusted Net
Worth and payment of the amount, if any, required to be paid to Sellers or Buyer
(as the case may be) under the provisions of Section 1.5(f), Sellers shall be
entitled to receive all funds remaining in the Escrow Account, including
interest, net of expenses, and Sellers and Buyer shall immediately direct the
Escrow Agent to make such payment to Sellers.
(h) The undersigned, Capital Resource Associates,
hereby guarantees the payment in full by Sellers to Buyer when due of the
amount, if any, which shall be payable by Sellers pursuant to Section
1.5(f)(i)(y) hereof.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers jointly and severally represent and warrant to Buyer
as follows:
2.1. Organization. Each Seller is a corporation duly
organized, validly existing and in good standing under laws of the jurisdiction
of its incorporation and has all requisite corporate power and authority to own
its properties and carry on its business as it is now being conducted. Each
Seller is duly qualified to do business and is in good standing as a foreign
corporation in all jurisdictions where the nature of the property owned or
leased by it, or the nature of the business conducted by it, makes such
qualification necessary and the absence of such qualification would have a
material adverse effect on the business or financial condition of all of Sellers
taken as a whole (a "Material Adverse Effect"). True and complete copies of the
charter and by-laws, and all amendments thereto, which are in full force and
effect on the date hereof, of each Seller have previously been delivered or made
available to Buyer. The disclosure schedule delivered by Sellers to Buyer in
connection herewith (the "Disclosure Schedule") sets forth the directors and
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officers of each Seller.
2.2. Financial Statements.
(a) Sellers have delivered to Buyer each of the
following financial statements (collectively, the "Financial Statements"),
copies of which are included in the Disclosure Schedule:
(i) audited consolidated balance sheets and
statements of operations, shareholders' equity (deficit) and cash flows as of
and for the fiscal years ended December 31, 1991, 1992, 1993, 1994 and 1995 for
Trailers and its subsidiaries; and
(ii) the unaudited consolidated balance
sheet (the "Interim Balance Sheet") and statements of operations, shareholders'
equity and cash flows (collectively, the "Interim Financial Statements") as of
and for the six months ended June 30, 1996 for Trailers and its subsidiaries,
including a schedule (the "Interim Adjusted Net Worth Statement") specifically
setting forth the Interim Adjusted Net Worth and the adjustments made to compute
such amount (the Interim Balance Sheet and the Interim Adjusted Net Worth
Statement are attached hereto as Exhibit 2.2(a)(ii)).
(b) The Financial Statements (including the notes
thereto) have been prepared in accordance with GAAP applied on a consistent
basis (except as may be indicated on the notes thereto) throughout the periods
covered thereby and present fairly, the consolidated financial position, the
results of operations, retained earnings and cash flows of Trailers and its
subsidiaries as at each of the dates and for each of the periods covered
thereby, except that the Interim Financial Statements do not reflect normal
year-end audit adjustments and lack footnotes and other presentation items. The
Interim Adjusted Net Worth Statement has been prepared on a basis consistent
with the accounting principles, practices, policies and procedures, and the
classifications and methods, utilized in the preparation of the Interim Balance
Sheet, except for valuation of inventories on a first-in-first-out basis and
elimination of the Excluded Assets and Excluded Liabilities.
2.3. Absence of Certain Changes or Events. Except as set forth
in the Disclosure Schedule, the Interim Financial Statements or the SEC Reports,
or as permitted or contemplated by this Agreement, since June 30, 1996, Sellers
have conducted the Business only in the Ordinary Course of Business, and without
limiting the generality of the foregoing, no Seller has:
(a) suffered any material shortage of materials or
supplies, or any material damage, destruction or casualty loss
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(not covered by insurance) to its physical properties;
(b) suffered any Material Adverse Effect;
(c) increased the rate or terms of compensation
payable or to become payable to its directors, officers or key employees or
increased the rate or terms of any Business Benefit Plan covering any of its
directors, officers or key employees, except in each case increases occurring in
the Ordinary Course of Business (including normal periodic performance reviews
and related compensation and benefit increases) or as required by any
pre-existing Commitment;
(d) mortgaged, pledged or subjected to any other
Encumbrance any of its material properties or assets, tangible or intangible,
other than Permitted Exceptions;
(e) made any material capital expenditures or
acquired or disposed of any material assets or properties, or entered into any
agreement or other arrangement for such acquisition or disposition, except
acquisitions and dispositions in the Ordinary Course of Business;
(f) forgiven or canceled any material debts or
claims, or waived any material rights, except in the Ordinary Course of
Business;
(g) been the target of any actual or threatened
strikes, work stoppages, other labor disputes or organizing activity;
(h) changed in any material respect its accounting
practices, policies or principles, or changed its depreciation or amortization
policies or rates adopted by it other than changes required by changes in GAAP;
(i) entered into any employment agreement lasting
longer than one year or providing for annual compensation in excess of $50,000,
or collective bargaining agreement or adopted any Business Benefit Plan;
(j) entered into or terminated any material
Commitment, license or other instrument, except in the Ordinary Course of
Business;
(k) committed to do any of the foregoing.
2.4. Title to Purchased Assets. (a) Sellers have good and
marketable title to all of the Purchased Assets, free and clear of all
Encumbrances, except
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(i) as set forth in the Disclosure Schedule
or the SEC Reports, and
(ii) for Permitted Exceptions.
(b) On the Closing Date, Sellers will have good and
marketable title to all of the Purchased Assets, free and clear of all
Encumbrances, except for Permitted Exceptions.
2.5. Intellectual Property.
(a) The Disclosure Schedule sets forth a list, as of
the date hereof, of all material United States and foreign patents, trademarks,
tradenames, copyrights, and registrations and applications therefor (such items,
together with all inventions, improvements, customer lists, brand names, labels
or other trade rights and pending applications therefor, service marks, trade
dress, logos, rights in computer software, and all rights granted or retained in
licenses under any of the foregoing, and all other intellectual property and
know-how used in connection with the Business, including, but not limited to,
confidential, secret and/or proprietary information, all technical information,
inventions, designs and patents, whether or not patentable, which are used by
Sellers in, and material to, the Business, being hereinafter referred to as the
"Intellectual Property").
(b) Except as set forth in the Disclosure Schedule or
the SEC Reports, to Sellers' knowledge, Sellers own or possess adequate licenses
or other valid rights to use all of the material Intellectual Property, free and
clear of any Encumbrance (except Permitted Exceptions).
(c) Except as set forth in the Disclosure Schedule,
to Sellers' knowledge, no Seller has interfered with, infringed upon,
misappropriated, or violated any material patent, copyright, tradename,
trademark or other intellectual property right of any third party in any
material respect, and no Seller has knowledge of any basis for, nor has received
any charge, complaint, claim, demand, or notice alleging, any such interference,
infringement, misappropriation, or violation. To the knowledge of Sellers, no
third party has interfered with, infringed upon, misappropriated, or violated
any material Intellectual Property of any Seller in any material respect.
(d) The Disclosure Schedule identifies each material
item of Intellectual Property that any third party owns and that any Seller uses
pursuant to a license, sublicense, agreement, or permission. Sellers have
delivered or made available to Buyer correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to
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date).
2.6. Commitments. The Disclosure Schedule sets forth a list,
as of the date hereof, of each of the following written or oral agreements,
arrangements or commitments (including any and all amendments thereto) to which
any Seller is a party or by which any Seller is bound (collectively, the
"Commitments"):
(a) any agreement (or group of related agreements)
for the lease of personal property to or from any Person providing for lease
payments in excess of $100,000 per annum in any one case (other than leases
entered into in connection with purchase orders from customers);
(b) any agreement (or group of related agreements)
for the purchase or sale of raw materials, commodities, supplies, or other
personal property, or for the furnishing or receipt of services used in the
conduct of the business of the Seller, the performance of which will extend over
a period of more than one year or involve consideration in excess of $100,000 in
any one case;
(c) any agreement (or group of related agreements)
for the fiscal year 1995 for the sale of Products, which involves the sale of
more than 100 trailers;
(d) any agreement concerning a partnership or joint
venture;
(e) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation or under which it has
imposed an Encumbrance on any of its assets, tangible or intangible, in excess
of $100,000 in any one case;
(f) any material agreement concerning confidentiality
or noncompetition (excluding confidentiality agreements with any and all
prospective purchasers of Sellers or any of their past or present Subsidiaries
or any of their respective assets, as to which no disclosure is made);
(g) any material sales agency or distributorship
agreements;
(h) any material brokerage and finder's agreements;
(i) agreements and commitments for capital
expenditures in excess of $100,000 for any single project which have not been
included in the budgets provided to Buyer;
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(j) any material employment, consulting, severance or
agency agreement;
(k) any agreement under which any Seller has advanced
or loaned any amount to any of its directors, officers and employees outside of
the Ordinary Course of Business; and
(l) other agreements, arrangements or commitments
which are material to the business or financial condition of the Sellers.
Sellers have previously delivered or made available to Buyer a
correct and complete copy of each such written Commitment. Except as set forth
in the Disclosure Schedule or the SEC Reports, no Seller is in default under any
of the Commitments, which default has or could reasonably be expected to have a
Material Adverse Effect
2.7. Litigation. Except as set forth in the Disclosure
Schedule or the SEC Reports, there is no action, counterclaim, suit, hearing,
investigation or proceeding of, in or before any court, governmental authority
or administrative agency of any federal, state, local or foreign jurisdiction or
before any arbitrator ("Litigation") pending or, to Sellers' knowledge,
threatened against any Seller, or to which any of them is a party,
(a) with respect to which there is a reasonable
likelihood of a determination which would have a Material Adverse Effect, or
(b) which seeks to enjoin or obtain damages in
respect of the consummation of the transactions contemplated hereby.
Except as set forth in the Disclosure Schedule or the SEC Reports, no Seller is
subject to or in default under any outstanding orders, rulings, injunctions,
judgments, charges or decrees which would have a Material Adverse Effect.
2.8. Compliance with Laws. Except as set forth in the
Disclosure Schedule or the SEC Reports, to Sellers' knowledge, and except for
Environmental, Health and Safety Laws, Sellers are in compliance with all
applicable laws, rules and regulations of federal, state, local and foreign
governments (and all agencies thereof), except where the failure to comply would
not have a Material Adverse Effect. To Sellers' knowledge, Sellers have all
material governmental permits, licenses and authorizations (collectively, the
"Permits") necessary for the conduct of Sellers' Business as presently
conducted, except where the absence thereof would not individually or in the
aggregate have a
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Material Adverse Effect. Except as set forth in the Disclosure Schedule or the
SEC Reports, all material Permits are in full force and effect and there is no
Litigation pending or, to Sellers' knowledge, threatened, seeking the
revocation, cancellation or suspension or any adverse modification, of any such
material Permits, with respect to which there is a reasonable likelihood of a
determination which would have a Material Adverse Effect.
2.9. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by Sellers of this Agreement and the
consummation by Sellers of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Sellers and Parent.
This Agreement has been duly and validly executed and delivered by Sellers and
constitutes the valid and binding obligation of each Seller, enforceable against
each such Seller in accordance with its terms. The execution, delivery and
performance by Sellers of this Agreement and the consummation by Sellers of the
transactions contemplated hereby will not, with or without the giving of notice
or the lapse of time, or both:
(a) violate any provision of law, rule or regulation
to which any Seller is subject;
(b) violate any order, judgment or decree applicable
to any Seller;
(c) violate any provision of the Certificate of
Incorporation or the By-laws of any Seller; or
(d) result in any breach of or constitute a default
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on any of the
properties or assets of any Seller pursuant to any, note, bond, mortgage,
indenture, contract, agreement, lease, Permit, franchise or other instrument or
obligation to which any Seller is a party or by which any Seller or any of their
respective properties is bound or affected; except, in each case, for (i)
violations, breaches or defaults which in the aggregate would not materially
hinder or impair the consummation of the transactions contemplated hereby or
which would not have a Material Adverse Effect, and (ii) violations, breaches or
defaults resulting from the failure to obtain any consent not required under
this Agreement to be obtained at or prior to Closing.
2.10. Employee Benefit Plans.
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(a) The Disclosure Schedule lists all Business
Benefit Plans. With respect to each Business Benefit Plan, true and complete
copies of the following have previously been delivered or made available to
Buyer or will be delivered to Buyer within ten days after the date of this
Agreement:
(i) the written plan document for any
Business Benefit Plan or a written description thereof for any Business Benefit
Plan not in writing;
(ii) any related summary plan description;
(iii) the most recent determination letter,
if any, received from the IRS regarding such plan;
(iv) any pending applications, filings or
notices with respect thereto with the IRS, PBGC or the Department of Labor;
(v) the latest financial statements and
annual reports for such plan and related trusts or funding vehicles, policies or
contracts as of the end of the most recent plan year with respect to which the
filing date for such information has passed; and
(vi) all trust agreements and insurance
contracts and all agreements with third party administrators, actuaries,
investment managers, consultants and other independent contractors that relate
to any Business Benefit Plan.
(b) Except as set forth on the Disclosure Schedule or
the SEC Reports:
(i) to Sellers' knowledge, no event has
occurred or circumstances exist that could reasonably be expected to give rise
to disqualification or loss of tax exempt status of any Business Benefit Plan or
trust intended to qualify under Section 401(a) of the Code;
(ii) the Business Benefit Plans have been
maintained in material compliance with their terms and in material compliance
with applicable law;
(iii) with respect to each Business Benefit
Plan subject to the minimum funding requirements of Section 412 of the Code, all
required contributions for all plan years ending prior to the Closing Date have
been made to the Business Benefit Plans;
(iv) except as set forth in the Disclosure
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Schedule, no Seller has any liability under ERISA or the Code with respect to
any Benefit Plan or Multiemployer Plan maintained or contributed to by an ERISA
Affiliate or Sellers;
(v) no reportable event (as defined in
Section 4043 of ERISA and the regulations thereunder) has occurred within the
last five (5) years other than reportable events with respect to which notice
has been waived by the PBGC;
(vi) other than claims for benefits
submitted by participants or beneficiaries, no claim against, or legal
proceeding involving any Business Benefit Plan is pending or to Sellers'
knowledge threatened, other than claims which individually or in the aggregate
would not have a Material Adverse Effect; and
(vii) Sellers are in material compliance
with the provisions of Section 601 of ERISA and Section 4980B of the Code.
2.11. Consents. Except as set forth in the Disclosure Schedule
or the SEC Reports, no consent, approval or authorization of, or exemption by,
or filing with, any governmental authority is required in connection with the
execution, delivery and performance by Sellers of this Agreement or the taking
of any other action contemplated hereby, excluding, however, consents,
approvals, authorizations, exemptions and filings, if any, which Buyer is
required to obtain or make or instances where the failure to obtain such
consents, approvals or authorizations, or to make such filings or notifications,
would not have a Material Adverse Effect.
2.12. Taxes.
(a) Except as set forth on the Disclosure Schedule,
each Seller and any combined, consolidated, unitary or affiliated group of which
any Seller is or has been a member prior to the Closing Date: (x) has paid all
Taxes required to be paid on or prior to the Closing Date (including, without
limitation, payments of estimated Taxes) for which Sellers could be held liable,
except for Taxes which are being contested in good faith and by appropriate
proceedings and which are described on the Disclosure Schedule; and (y) has
accurately and timely filed (or timely filed an extension for), all Tax Returns,
required to be filed on or before the Closing Date.
(b) The Disclosure Schedule sets forth all federal,
state, local and foreign Income Tax Returns filed with respect to Sellers for
taxable periods ended on or after December 31, 1993, indicates those Income Tax
Returns that have been audited, and indicates those Income Tax Returns that
currently
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are the subject of audit. Sellers have delivered or made available to Buyer
correct and complete copies of all federal Income Tax Returns of Sellers.
(c) Each Seller has withheld and paid all Taxes
required to be withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other Person.
2.13. Subsidiaries.
(a) Other than Sellers, there are no entities with
respect to which any Seller either:
(i) owns on the date hereof and will own on
the Closing Date, either directly or indirectly, outstanding capital stock (or
other ownership interests), other than securities constituting Excluded Assets,
or
(ii) has the power to vote or direct the
voting of sufficient securities to elect a majority of the directors thereof.
(b) There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require any Seller to sell,
transfer, or otherwise dispose of any capital stock or assets of any Seller.
There are no voting trusts, proxies, or other agreements or understandings with
respect to the voting of any capital stock of any Seller. No Seller owns any
interest in or controls any corporation, partnership, trust, or other business
association which is not a Subsidiary.
2.14. Accounts Receivable. Except as reserved against on or
set forth in the Interim Financial Statements, or as set forth in the Disclosure
Schedule or the SEC Reports, all accounts receivable relating to the Business
reflected on the Interim Financial Statements and all accounts receivable
relating to the Business arising subsequent thereto have arisen in the Ordinary
Course of Business of Sellers.
2.15. Inventory. Except as reserved against on or set forth in
the Interim Financial Statements, or as set forth in the Disclosure Schedule or
the SEC Reports, the materials, supplies and work-in-process included in the
inventory of Sellers as set forth on the Interim Balance Sheet, and all
inventory of the Seller arising since the date of the Interim Financial
Statements, were acquired in the Ordinary Course of Business and are valued as
set forth in the Disclosure Schedule or the Interim Financial Statements.
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2.16. Real Property; Leases.
(a) The Disclosure Schedule sets forth all real
property that Sellers own (collectively, the "Owned Real Property"). With
respect to each such Owned Real Property, except as set forth in the Disclosure
Schedule or the documents referenced therein:
(i) the identified owner has good and
marketable title to the parcel of Owned Real Property, free and clear of any
Encumbrances, except for the Permitted Exceptions and liens or encumbrances of a
definite or ascertainable amount which shall be removed at Closing;
(ii) Sellers agree that at Closing Sellers
will deliver to Buyer a recordable special warranty deed for each of the parcel
of Owned Real Property, subject only to the Permitted Exceptions;
(iii) there are no leases, subleases,
licenses, concessions, or other agreements granting to any party or parties
thereto the right of use or occupancy of any portion of any Owned Real Property;
and
(iv) Except as set forth in Section 2.4,
Seller hereby specifically disclaims any warranty, guaranty or representation,
oral or written, past, present or future, of, as to, or concerning (1) the
nature and condition of the Owned Real Property, including, but not by way of
limitation, the water, soil, geology, flora and fauna, and the suitability
thereof, and of the Owned Real Property for any and all activities and uses
which Buyer and its Affiliates may elect to conduct thereon, or any improvements
which Buyer and its Affiliates may elect to construct thereon, income to be
derived therefrom or expenses to be incurred with respect thereto, or any
obligations or any other matter or thing relating to or affecting the same; (2)
the manner of construction and condition and state of repair or lack of repair
of any improvements located thereon; (3) the nature and extent of any easement,
right-of-way, lease, possession, lien, encumbrance, license, reservation,
condition or otherwise; (4) the presence or absence of any environmentally
threatened species or wetlands; (5) the presence or absence of any
environmentally hazardous substance or material; and the compliance of the Owned
Real Property, with any laws, rules or ordinances, or regulations of any
government or any body; (6) geological conditions, including, without
limitation, subsidence, subsurface conditions, water table, underground water
reservoirs, limitations regarding the withdrawal of water and faulting; (7)
whether or not and the extent to which the Owned Real Property or any portion
thereof is affected by any stream
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(surface or underground), body of water, flood prone area, flood plain, floodway
or special flood hazard; (8) drainage; (9) soil conditions, including the
existence of instability, past soil repairs, soil additions or conditions of
soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring; (10) zoning to which the Owned Real Property or any portion
thereof may be subject; (11) the availability of any utilities to the Owned Real
Property or any portion thereof, including without limitation, water, sewage,
gas and electric. EXCEPT AS SET FORTH IN SECTION 2.4, IN CONNECTION WITH THE
CONVEYANCE OF THE OWNED REAL PROPERTY AS PROVIDED FOR HEREIN, SELLER HAS NOT
MADE AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES OR COVENANTS OF ANY KIND
OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE QUALITY
OR CONDITION OF THE OWNED REAL PROPERTY, THE SUITABILITY OF THE OWNED REAL
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER AND ITS AFFILIATES MAY
CONDUCT THEREON, COMPLIANCE BY THE OWNED REAL PROPERTY WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY, OR THE
HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE OWNED
REAL PROPERTY. Except as set forth in Section 2.4, Buyer and its Affiliate
agrees to accept the Owned Real Property at Closing with the Owned Real Property
being in its present "AS IS" condition WITH ALL FAULTS.
(b) The Disclosure Schedule sets forth all real
property leased or subleased to any Seller ("Leased Property"). Sellers have
delivered or made available to Buyer correct and complete (in all material
respects) copies of the leases and subleases for each Leased Property, including
any amendments or modifications thereto ("Lease" or "Leases"). With respect to
each such Lease, except as set forth in the Disclosure Schedule or the SEC
Reports, to the knowledge of Sellers:
(i) each of such Leases is in full force and
effect without further modification or amendment from the form delivered;
(ii) each Lease constitutes the legal, valid
and binding obligation of Sellers and, to the best knowledge of Sellers, the
other respective parties thereto;
(iii) there is no Litigation pending or
threatened; and
(iv) none of Sellers have assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in
the leasehold or subleasehold.
(v) no Seller is in material default
thereunder, and no event has occurred which, with the giving of
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notice or with the passage of time or both, would constitute a material default
thereunder.
(c) Title Policies and Surveys. Prior to the Closing
Date, Sellers, at their sole cost and expense, shall deliver to Buyer
preliminary title commitments ("Title Commitments"), and documents of record for
the Owned Real Property and the Leased Properties described on Exhibit 2.16(c)
attached hereto and made a part hereof ("Material Leased Properties"). The Title
Commitments will be issued in each case by Chicago Title Insurance Company (the
"Title Insurance Company"), cover title to each parcel of Owned Real Property
and Material Leased Properties, commit to the issuance of an American Land Title
Association Owner's title insurance policy or leasehold title insurance policy,
as the case may be, showing fee simple title or leasehold interest (as the case
may be) in Sellers subject to the title exceptions set forth therein.
Additionally, to the extent specified on Exhibit 2.16(c), prior to the Closing
Date, Sellers, at their sole cost and expense, shall deliver to Buyer current
surveys (the "Surveys"), each dated not earlier than October 1, 1996, prepared
by a surveyor, engineer or surveying or engineering firm licensed in the state
or states in which the surveyed property is located in accordance with the
Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys adopted by
the American Land Title Association and the American Congress on Surveying and
Mapping in 1986 or 1992 and each Survey shall, prior to Closing, be certified to
the Title Insurance Company, Buyer, any mortgagee of Buyer and such other
parties as Buyer may designate, and all be in form sufficient to induce the
Title Insurance Company to issue the title policies and endorsements required
herein and will contain an ALTA certification. At the Closing, Sellers, at their
sole cost and expense, shall deliver to Buyer marked copies of Owner's Policies
of Title Insurance covering the Owned Real Property and Leasehold Policies with
respect to the Material Leased Properties (collectively, the "Title Insurance
Property"), in the amounts specified on Exhibit 2.16(c) and insuring Buyer's
indefeasible fee simple title or leasehold interest, as the case may be, to the
Title Insurance Property, subject only to the Permitted Exceptions (the "Title
Policies"). The Owner's Policies of Title Insurance shall be issued on the 1970
Form B ALTA Owner's or Leasehold Extended Coverage Policy of Title Insurance
(or, in any state in which such form is not available, the applicable equivalent
form). Sellers shall also deliver to Buyer at Closing, at Seller's sole cost and
expense, endorsements to such Title Policies covering, if available, zoning,
extended coverage, and survey coverage and restrictions. Buyer shall have the
right, at its sole cost and expense, to obtain lender's policies of title
insurance covering all of the Title Insurance Property. Buyer shall be
responsible for any additional costs incurred in connection with the issuance of
such lender's policies of title
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insurance. The provisions of this Section 2.16(c) and Section 1.4(a)(iv) hereof
shall further be subject to the terms of a letter agreement to be entered into
among Buyer and Sellers contemporaneously with the execution of this Agreement,
in the form of Exhibit 2.16 hereto.
(d) Eminent Domain. To Sellers' knowledge, there is
no pending or threatened condemnation of any part of the Owned Real Property or
the Leased Property, if any, by any governmental authority.
(e) Foreign Investments. No Seller is a "foreign
person" within the meaning of Section 1445 of the Code.
2.17. Environmental Matters. Except as set forth in the
Disclosure Schedule or the SEC Reports, matters disclosed in the Phase I
Environmental Assessments by Clayton Environmental Consultants (which Phase I
Assessments are listed in the Disclosure Schedule), or as reflected on the
Interim Financial Statements:
(a) Each Seller, to its knowledge:
(i) has complied in all material respects
with the Environmental, Health and Safety Laws, except for such noncompliance as
would not result in a Material Adverse Effect; and
(ii) has obtained all material Permits which
are required under the Environmental, Health and Safety Laws for its operation
and each such entity has been in substantial compliance in all material respects
with all terms and conditions of such Permits, except for such noncompliance as
would not result in a Material Adverse Effect;
(b) No Hazardous Materials have been Released by any
Seller or any other person on or from any property owned by any Seller or on or
from any property at or to which any Seller disposed of Hazardous Materials,
which property is required by the Environmental, Health and Safety Laws to be
remediated by or at the expense of Sellers, except for Releases that would not
result in a Material Adverse Effect;
(c) No Seller has received, during the last five (5)
years, written notice of any alleged violation of or liability under any
Environmental, Health and Safety Laws in connection with real property owned or
operated by Sellers or in connection with any property at or to which any Seller
disposed of Hazardous Materials;
(d) No Seller has material liability, whether
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contingent or otherwise, under any Environmental Health and Safety Law with
respect to its current or former subsidiaries' operations or properties, except
such liabilities as would not result in a Material Adverse Effect;
(e) There are no administrative, civil or criminal
writs, injunctions, decrees, orders, or judgments outstanding, or any
administrative, civil or criminal actions, suits, proceedings or investigations
pending or, to Sellers' knowledge, threatened, relating to compliance with or
liability under any Environmental Health and Safety Law affecting any Seller
which matters could reasonably be expected to have a Material Adverse Effect;
and
(f) There are no underground storage tanks on, or
asbestos containing materials on or in the improvements or fixtures located on,
the Owned Real Property or the Leased Property, except for such items as would
not result in a Material Adverse Effect.
2.18. Products; Product Warranty.
(a) Sellers have delivered or made available to Buyer
their catalogues which set forth the general types of products currently
manufactured, produced, assembled, sold or marketed by Sellers (the "Products").
Except (i) as reserved against on or as set forth in the Interim Financial
Statements or (ii) as set forth in the Disclosure Schedule or the SEC Reports or
(ii) in the applicable Commitments, substantially all of the Products comply in
all material respects with the specifications provided in, and the warranties
under, the applicable Commitments for the sale of the Products, except where the
failure to conform would not individually or in the aggregate result in a
Material Adverse Effect. The Disclosure Schedule includes copies of the standard
product warranty policies of Sellers relating to the Products, as well as any
negotiated warranties. The reserves for warranty claims relating to the Products
reflected on the books and records of Sellers and the Financial Statements are
adequate to cover known and reasonably anticipated claims.
(b) Except as disclosed in the Disclosure Schedule or
the SEC Reports, to Sellers' knowledge:
(i) there is no Litigation or investigation
of a civil, criminal or administrative nature by or before any governmental
agency against or involving any Product which is pending or, to Sellers'
knowledge threatened, resulting from an alleged defect in design, manufacture,
materials or workmanship of any Product manufactured, produced, distributed or
sold by or on behalf of Sellers, which Litigation or investigation is reasonably
likely (after taking into account any applicable insurance coverage) to have a
Material Adverse Effect;
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(ii) there currently is not, nor is there
under consideration or investigation by Sellers, any Recall conducted by or on
behalf of Sellers concerning any Products manufactured, produced, distributed or
sold by or on behalf of Sellers or any Recalls conducted by or on behalf of any
entity as a result of any alleged defect in any Product supplied by Sellers or
their predecessors, which Recall is reasonably likely to have a Material Adverse
Effect.
2.19. Undisclosed Liabilities. To Sellers' knowledge, except
as reflected in the Financial Statements or elsewhere in the Disclosure Schedule
(or in any of the documents listed in the Disclosure Schedule) or the SEC
Reports, and except for liabilities as to which no disclosure is required
pursuant to this Article 2 (as for example because the making of the
representation and warranty is disclaimed, or because the liability involves an
amount which is less than the threshold above which disclosure is required or
because it is not an Assumed Liability), no Seller has any material debts,
liabilities or obligations of any nature (whether known or unknown, absolute or
contingent) except any debts, liabilities or obligations incurred after the date
of the Interim Balance Sheet in the Ordinary Course of Business, and except
debts, liabilities and obligations which would not (after taking into account
any applicable insurance coverage) have a Material Adverse Effect.
2.20. Insurance.
(a) The Disclosure Schedule contains a list, as of
the date hereof, of all insurance policies currently maintained by or for the
benefit of Sellers (the "Insurance Policies"). Sellers have made available to
Buyer copies complete and correct in all material respects of all of the
Insurance Policies together with all riders and other written amendments
thereto. The Insurance Policies are in full force and effect, and all premiums
due thereon have, to date, been paid.
(b) Except as set forth in the Disclosure Schedule or
the SEC Reports, no Seller has received written notice from any insurance
carrier threatening a suspension, revocation, modification or cancellation of
any insurance policy or a material increase in any premium in connection
therewith.
2.21. Labor Relations. Except as set forth on the Disclosure
Schedule:
(a) there is no collective bargaining agreement or
other labor contract covering employees of any Seller;
(b) no such collective bargaining agreement or other
labor contract is scheduled to expire prior to the Closing
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Date;
(c) to Sellers' knowledge, no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of any Seller or for any similar purpose; and
(d) there is no pending or (to Sellers' knowledge)
threatened strike, work stoppage, material unfair labor practice claim, or other
material labor dispute against or affecting any Seller or their respective
employees.
2.22. Full Disclosure. To the knowledge of Sellers, no
representation or warranty of Sellers contained in this Agreement and no
certificate to be delivered to Buyer by Sellers pursuant to this Agreement
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein, in light of
the circumstances under which they were made, not misleading, and there is no
fact which Sellers have not disclosed to Buyer in writing which Sellers
presently believe has or will have a Material Adverse Effect or a material
adverse effect on the ability of Sellers to perform this Agreement.
2.23. Disclaimer. EXCEPT AS SET FORTH IN THIS ARTICLE 2 AND IN
SECTION 11.8, SELLERS MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
AND THE ASSETS AND BUSINESS OF SELLERS BEING SOLD TO BUYER AT THE CLOSING ARE TO
BE CONVEYED HEREUNDER "AS IS WHERE IS" ON THE CLOSING DATE, AND IN THEIR THEN
PRESENT CONDITION, AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. IN ANY
EVENT, EXCEPT AS SET FORTH IN THIS ARTICLE 2, SELLERS MAKE NO WARRANTY OF
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY,
WITH RESPECT TO ANY OF THE TANGIBLE ASSETS BEING SO SOLD, OR AS TO THE CONDITION
OR WORKMANSHIP THEREOF OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR
PATENT.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers as follows:
3.1. Organization. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has all requisite partnership power and
authority to carry on its business as it is now being conducted, and to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
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3.2. Power and Authority; No Conflicts. The execution,
delivery and performance by Buyer of this Agreement and the consummation by
Buyer of the transactions contemplated hereby have been duly authorized by all
necessary partnership action on the part of Buyer and its general partner. This
Agreement has been duly and validly executed and delivered by Buyer and
constitutes the valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms. The execution, delivery and performance by Buyer
of this Agreement and the consummation by Buyer of the transactions contemplated
hereby will not, with or without the giving of notice or the lapse of time, or
both:
(a) violate any provision of any agreement, law, rule
or regulation to which Buyer is subject;
(b) violate any order, judgment or decree applicable
to Buyer;
(c) violate any provision of the Certificate of
Limited Partnership or the Partnership Agreement of Buyer; or
(d) result in any breach of or constitute a default
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Encumbrance on any of the
properties or assets of Buyer pursuant to any, note, bond, mortgage, indenture,
contract, agreement, lease, Permit, franchise or other instrument or obligation
to which Buyer is a party or by which Buyer or any of its properties is bound or
affected; except, in each case, for violations which in the aggregate would not
materially hinder or impair the consummation of the transactions contemplated
hereby.
3.3. Consents. No consent, approval or authorization of, or
exemption by, or filing with, any governmental authority (and in particular,
without limiting the generality of the foregoing, no filing under the HSR Act)
is required in connection with the execution, delivery and performance by Buyer
of this Agreement, or the taking of any other action contemplated hereby,
excluding, however, consents, approvals, authorizations, exemptions and filings,
if any, which Sellers are required to obtain or make or instances where the
failure to obtain such consents, approvals or authorizations, or to make such
filings or notifications, would not, either individually or in the aggregate,
prevent Buyer from performing its obligations under this Agreement.
3.4. Availability of Funds. Buyer will have available on the
Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
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3.5. Litigation. There is no Litigation pending or, to Buyer's
knowledge, threatened against Buyer or any of its Affiliates:
(a) with respect to which there is a reasonable
likelihood of a determination which would have a material adverse effect on the
ability of Buyer to perform its obligations under this Agreement; or
(b) which seeks to enjoin or obtain damages in
respect of the consummation of the transactions contemplated hereby. Neither
Buyer nor any of its Affiliates is subject to any outstanding orders, rulings,
judgments or decrees which would have a material adverse effect on the ability
of Buyer to perform its obligations under this Agreement.
3.6. Financial Condition. (a) Buyer represents and warrants
that, immediately after giving effect to the transactions contemplated herein to
occur on the Closing Date, Buyer will have a net worth, determined in accordance
with GAAP, of not less than $50,000,000 (assuming that that the Purchased Assets
and Assumed Liabilities are substantially as represented on the Closing Date
Balance Sheet).
(b) Buyer does not have a regularly prepared balance
sheet and on the Closing Date will not have a regularly prepared balance sheet.
The total assets of Buyer's Ultimate Parent Entity (as defined in regulations
promulgated under the Hart-Scott-Rodino Act), other than cash that will be used
either as consideration in the acquisition of the Purchased Assets from Sellers
or for expenses incidental to the acquisition, are and on the Closing Date will
be less than $10,000,000. No single Person, directly or indirectly, holds or on
the Closing Date will hold 50 percent or more of the voting securities of
Buyer's Ultimate Parent Entity, and no single Person has or at the time of
closing will have the contractual power to designate 50 percent or more of the
directors of Buyer's Ultimate Parent Entity.
ARTICLE 4.
COVENANTS OF SELLERS
Sellers hereby covenant and agree with Buyer as follows:
4.1. Cooperation. From the date hereof and prior to the
Closing, Sellers and Parent will use reasonable efforts to secure all necessary
consents, approvals, authorizations, exemptions and waivers from third parties,
and make all necessary
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filings, in each case to the extent required by Section 4.11. Thereafter,
Sellers and Parent will use reasonable efforts to cooperate with Buyer to secure
all necessary consents, approvals, authorizations, exemptions and waivers from
third parties, and to make any other required submissions, notifications and
filings with respect to this Agreement required under the Securities Act,
Exchange Act and the rules and regulations thereunder, and any other applicable
law, including, without limitation, any other federal or state securities laws,
in each case as shall be required in order to enable the consummation of the
transactions contemplated hereby, and will otherwise use its reasonable efforts
to cooperate with Buyer to cause the consummation of such transactions in
accordance with the terms and conditions hereof.
4.2. Conduct of Business. Except as may be otherwise
contemplated by this Agreement or the Parent Stock Purchase Agreement
(including, without limitation, the financing transactions contemplated
thereby), or required by any of the documents listed in the Disclosure Schedule,
or except as Buyer may otherwise consent to in writing from the date hereof and
prior to the Closing:
(a) Sellers will:
(i) in all material respects, operate only
in the Ordinary Course of Business;
(ii) use reasonable efforts to preserve
intact their business organization;
(iii) maintain their properties, machinery
and equipment in sufficient operating condition and repair to enable them to
operate the Business in all material respects in the manner in which the
Business is currently operated, except for damages by reason of fire, flood,
earthquake or other acts of God;
(iv) continue all material existing
Insurance Policies (or comparable insurance) of or relating to Sellers in full
force and effect; and
(v) use reasonable efforts to preserve their
relationships with their material lenders, agents, suppliers, customers,
licensors and licensees and others having material business relationships with
Sellers such that their business will not be materially impaired.
(b) Sellers will not:
(i) take or omit to take any action, the
effect of which would reasonably be expected to cause any of the
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representations or warranties set forth in Article 2 to be inaccurate as of the
Closing Date, or cause any Seller to become insolvent;
(ii) amend their respective certificates of
incorporation or By-laws or other organizational documents or change the
accounting methods or practices followed by Sellers, except as may be required
by changes in GAAP;
(iii) license, sell, transfer, lease, pledge
or otherwise dispose of or encumber any of the tangible or intangible assets of
Sellers, except in each case in the Ordinary Course of Business;
(iv) incur any indebtedness for borrowed
money or guarantee any such indebtedness or guarantee, endorse or otherwise
become responsible for the obligations of others, or make loans or advances
other than in the Ordinary Course of Business;
(v) enter into any transaction between
Sellers on the one hand and Parent or any other Affiliate of Parent, or any
director, officer or employee of Sellers, on the other hand;
(vi) enter into any material contract or
agreement or any amendment to, or release any third party from its obligations
under, any material contract, agreement or instrument, except in the Ordinary
Course of Business; grant or pay any increases in salary or benefits (other than
regularly scheduled increases in the Ordinary Course of Business); or adopt or
amend any collective bargaining agreement, or Business Benefit Plans;
(vii) make any capital expenditure in excess
of $50,000 in any one case and $200,000 in the aggregate, except for capital
expenditures included in budgets heretofore presented to Buyer; or
(viii) authorize any of the foregoing, or
enter into any contract, agreement, commitment or arrangement to do any of the
foregoing.
4.3. Access. From the date hereof and prior to the Closing,
Sellers shall provide Buyer with such information as Buyer may from time to time
reasonably request with respect to Sellers and the transactions contemplated by
this Agreement, and shall provide Buyer and its representatives reasonable
access during regular business hours and upon reasonable notice to the
properties (including, without limitation, plants, equipment and inventories),
books and records of Sellers, as Buyer may from
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time to time reasonably request; provided that Sellers shall not be obligated to
provide, Buyer with any information relating to trade secrets (including,
without limitation, cost and pricing information or marketing arrangements) or
which would violate any law, rule or regulation or term of any Commitment, or if
the provision thereof would adversely affect the ability of Sellers or any of
its Affiliates to assert attorney-client, attorney work product or other similar
privilege. Any disclosure whatsoever during such investigation by Buyer shall
not constitute an enlargement of or additional representations or warranties of
Sellers beyond those specifically set forth in this Agreement. All such
information and access shall be subject to the terms and conditions of the
letter agreement dated June 10, 1996 (the "Confidentiality Agreement").
4.4. Further Assurances. At any time or from time to time
after the Closing, Sellers shall, at the request of Buyer, execute and deliver
any further instruments or documents and take all such further action, as Buyer
may reasonably request in order to:
(a) vest in Buyer good and marketable title to and
possession of the Purchased Assets;
(b) otherwise evidence the consummation of the
transactions contemplated hereby.
4.5. Acquisition Proposals. From the date hereof until the
termination of this Agreement or the Closing Date, whichever first occurs,
Sellers and Parent will not, directly or indirectly:
(a) take any action to solicit or initiate any offer
or indication of interest from any Person with respect to any Acquisition
Proposal (defined below); or
(b) engage in negotiations with, enter into any
agreements relating to an Acquisition Proposal with any Person that may be
considering making or has made, an Acquisition Proposal.
"Acquisition Proposal" means any proposal for a merger or other business
combination involving any Seller, or the acquisition of any equity interest in,
or a substantial portion of the assets of, any Seller, other than the
transactions contemplated by this Agreement. Sellers and Parent shall promptly
notify Buyer of receipt of an Acquisition Proposal.
4.6. Advice of Changes. Sellers shall promptly advise Buyer in
writing of any event occurring after the date hereof which would render any
representation or warranty of Sellers
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contained in this Agreement untrue or inaccurate, if made on or as of the date
of such event or as of the Closing Date.
4.7. Nondisclosure.
(a) From and after the date hereof, Sellers and
Parent will not directly or indirectly use, divulge, furnish or make accessible
to any person any proprietary, material non-public, confidential or secret
information regarding the Business (including, without limitation, customer
lists, supplier lists and pricing and marketing arrangements with customers or
suppliers) except in the Ordinary Course of Business, and Sellers and Parent
will before and after Closing preserve such proprietary, confidential or secret
aspects of the Business.
(b) At Closing, Sellers shall deliver to Buyer a list
of all confidentiality agreements entered into between Sellers (or its
Affiliates, including Parent) and any third party, in the period from January 1,
1996 through the date of this Agreement, pursuant to which confidential or
proprietary information relating to the Business was provided to a third party.
After the Closing Date, upon the reasonable request of Buyer, Sellers shall, and
shall cause their Affiliates:
(i) to cooperate with Buyer, at Buyer's
request, in enforcing the terms of such confidentiality agreements; and
(ii) to the extent any of such
confidentiality agreements are assignable by Sellers or the Affiliates
thereunder, assign, or cause its Affiliates to assign, all of Sellers' or such
Affiliates' rights thereunder to Buyer.
4.8. Covenant Not to Compete.
(a) For a period of two (2) years from and after the
Closing Date, Sellers and Parent will not, and Sellers and Parent will cause
each of their subsidiaries to not, engage in the United States or Canada
directly or indirectly in any business that Sellers conduct as of the Closing
Date; excluding, however, the ownership by Sellers and Parent or any of their
subsidiaries, directly or indirectly, of not more than five percent (5%) of the
ownership interests of any publicly traded corporation engaged in such business.
(b) Sellers and Parent will not, and Sellers and
Parent will cause each of their subsidiaries to not, without the prior written
consent of Buyer, for a period of two (2) years from the Closing Date, solicit
for hire, or assist any third party in the solicitation for hire of, any of the
persons listed as a "Key Employee" in the Disclosure Schedule.
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(c) Sellers and Parent agree that a violation of
Section 4.8(a) or 4.8(b) will cause irreparable injury to Buyer, and Buyer will
be entitled, in addition to any other rights and remedies it may have at law or
in equity, to an injunction enjoining and restraining Sellers, Parent and their
subsidiaries from doing or continuing to do any such act and any other
violations or threatened violations of Sections 4.8(a) or 4.8(b) hereof.
(d) Sellers and Parent acknowledge and agree that the
covenants set forth in this Section 4.8 are reasonable and valid in geographical
and temporal scope and in all other respects. In the event that, notwithstanding
the first sentence of this paragraph 4.8(d), any of the provisions of this
Section 4.8 relating to the geographic or temporal scope of the covenants
contained therein or the nature of the business restricted thereby shall be
declared by a court of competent jurisdiction to exceed the maximum
restrictiveness such court deems enforceable, such provision shall be deemed to
be replaced herein by the maximum restriction deemed enforceable by such court.
4.9. Removal of Certain Liens. Sellers and Parent shall cause
to be timely paid and discharged or otherwise satisfied and eliminated any
security interests and liens on Purchased Assets which secure the payment of
Excluded Liabilities. Sellers or Parent shall timely pay and discharge or
otherwise cause to be satisfied and eliminated in full all Excluded Liabilities
to the extent that (i) such Excluded Liabilities constitute Encumbrances on the
Purchased Assets (except for such Encumbrances that constitute Permitted
Exceptions) or (ii) failure to pay or discharge such Excluded Liabilities shall
subject Buyer to any liability, including, without limitation, Taxes that are
Excluded Liabilities.
4.10. Insurance. Subsequent to the Closing, Parent, Sellers,
and their Affiliates shall not surrender their rights under any policies of
insurance which were in effect at the time immediately prior to the Closing Date
in respect of risks and losses arising out of events or occurrences occurring
prior to the Closing Date in the course or as a result of the conduct of the
Business ("Prior Occurrences"); provided, however, that nothing herein shall be
deemed to require Parent or Sellers to maintain any insurance with respect to
events or occurrences occurring after the Closing Date. Parent and Sellers shall
cause Buyer to be designated as loss payee under such policies with respect to
the Prior Occurrences, and shall assign to Buyer, or designate Buyer as their
agent with respect to, all claims and other rights to enforce or assure
insurance coverage under such policies with respect to Prior Occurrences, all as
set forth in a letter agreement substantially in the form set forth in Exhibit
4.10 hereof, which shall be duly executed and delivered by Parent
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and Buyer on the Closing Date. Buyer shall promptly reimburse Sellers and Parent
for any amounts paid by Parent or Sellers after the Closing Date in respect of
retrospective adjustments in premiums on such insurance policies to the extent
such adjustments relate to Prior Occurrences or claims in respect thereof; and
Buyer shall be entitled to any refunds of premiums.
4.11. Certain Provisions Relating to Consents.
(a) Sellers will use reasonable efforts to obtain, at
their expense, and Buyer will use its reasonable cooperative efforts (including
furnishing financial information on a confidential basis, where required) prior
to and after the Closing Date to assist Sellers in obtaining, all third party
consents that are required in connection with the transactions contemplated by
this Agreement (including, without limitation, consents of landlords and other
parties to the assignments of Leases and Commitments to Buyer contemplated
hereby) and that are listed on Exhibit 4.11(a) (collectively, the "Required
Consents"). All reasonable costs and expenses incurred in connection with
obtaining Required Consents shall be paid by Sellers. To the extent such
consents are not obtained by Closing, Sellers shall use reasonable cooperative
efforts to continue to assist Buyer in obtaining such consents after Closing and
shall pay the reasonable costs and expenses thereof. Buyer shall not (i) make
any payment or give any other consideration to any third party to induce the
giving of any Required Consent without the prior written consent of Sellers or
(ii) take any action which would interfere with the obtaining of any Required
Consent or would increase the cost of obtaining or of failing to obtain any
Required Consent.
4.12. Sums Received in Respect of Business. Sellers or Parent
shall pay or cause to be paid over to Buyer, promptly after the receipt thereof
after the Closing Date, all sums received in respect or on account of the
Purchased Assets other than the Purchase Price and other amounts paid to Sellers
by Buyer or the Escrow Agent pursuant to this Agreement.
4.13. Name. From and after the Closing Date and consistent
with the terms hereof, Buyer shall possess, to the exclusion of Parent and
Sellers and their Affiliates, all rights to the use of the Intellectual
Property, and each Seller, Parent and Great Dane International, Inc. shall as
promptly as practicable following the Closing Date change its name to a name
which does not contain either "Great" or "Dane" or any word confusingly similar
with either of such words.
4.14. Transfer of Parent Equipment. Prior to the Closing Date,
Parent shall sell and transfer to Trailers for fair value the Parent Equipment
and the leases relating thereto shall
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be terminated.
4.15. Transfer of Certain Intangible Property. Prior to the
Closing Date, Parent shall cause Great Dane International, Inc. to transfer to
Trailers for fair value all of Great Dane International, Inc.'s Intangible
Property used in the Business (the "GDI Property").
ARTICLE 5.
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Sellers as follows:
5.1. Cooperation by Buyer. From the date hereof and prior to
the Closing, Buyer will cooperate with Sellers to use reasonable efforts to
secure all necessary consents, approvals, authorizations, exemptions and waivers
from third parties (to the extent required by Section 4.11 hereof), and make all
necessary filings and thereafter make any other required submissions,
notifications and filings with respect to this Agreement required under the
Exchange Act and the rules and regulations thereunder, and any other applicable
law, including, without limitation, any other federal or state securities laws,
in each case as shall be required in order to enable the consummation of the
transactions contemplated hereby, and will otherwise use its reasonable efforts
to cause the consummation of such transactions in accordance with the terms and
conditions hereof.
5.2. Books and Records; Personnel.
(a) For a period of seven (7) years from the Closing
Date, Buyer shall not dispose of or destroy any of the books and records of
Sellers relating to periods prior to the Closing ("Books and Records") without
first offering (subject to Section 4.7(a) hereof) to turn over possession
thereof to Sellers and Parent by written notice to Sellers and Parent at least
ninety (90) days prior to the proposed date of such disposition or destruction.
Buyer shall at all times maintain the Books and Records in the United States.
(b) For a period of seven (7) years from the Closing
Date (or such longer period as may be required by law), subject to Section
4.7(a) hereof, Buyer shall allow Sellers and Parent and their respective agents
access to all Books and Records relating to the Excluded Assets or Excluded
Liabilities, or relating to the performance by the Parties hereto of any of
their covenants or agreements hereunder to be performed after the Closing Date,
during normal working hours at Buyer's principal
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place of business or at any location where any Books and Records are stored (or,
if stored in a warehouse or similar facility, at any office location of Buyer),
and Sellers and Parent shall have the right, at their own expense, to make
copies of any Books and Records; provided, however, that any such access or
copying shall be had or done in such a manner so as not to interfere with the
normal conduct of the Business or Buyer's business.
(c) Subject to Section 4.7(a) hereof, Buyer shall
make available to Sellers and Parent upon written request:
(i) copies of any Books and Records;
(ii) Buyer's personnel to assist Sellers and
Parent in locating and obtaining any Books and Records; and
(iii) any of Buyer's personnel whose
assistance or participation is reasonably required by Sellers or any of its
Affiliates in anticipation of, or preparation for, existing or future
Litigation, tax returns or other matters in which Sellers, Parent or any of
their Affiliates are involved.
Sellers shall reimburse Buyer for the reasonable out-of-pocket expenses incurred
by Buyer in performing the covenants contained in this Section 5.2(c).
5.3. Further Assurances. At any time or from time to time
after the Closing, Buyer shall, at the request of Sellers, execute and deliver
any further instruments or documents and take all such further action as Sellers
may reasonably request in order to evidence the consummation of the transactions
contemplated hereby.
5.4. Solvency. The Buyer shall be solvent on the Closing Date
immediately before and immediately after giving effect to the consummation of
the transactions contemplated hereby.
5.5. Bulk Transfer Laws. Buyer hereby waives compliance by
Sellers with the provisions of any so-called bulk transfer laws of any
jurisdiction in connection with the sale of the Business to the Buyer; provided,
however, that Sellers shall continue to be and remain liable for all Excluded
Liabilities, including, without limitation, Taxes that are Excluded Liabilities.
5.6. Indiana Responsible Property Transfer Law. Buyer hereby
waives the thirty day deadline for delivery of any disclosure document that may
be required pursuant to the Indiana Responsible Property Transfer Law. Buyer is
aware of the purpose and intent of the disclosure document. Buyer agrees to
obtain
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from any mortgagee, or other transferee (as defined in the Transfer Law) in
connection with the transactions contemplated by this Agreement, a like written
waiver of such thirty day deadline.
ARTICLE 6.
TAX MATTERS COVENANTS
6.1. Allocation of Purchase Price.
(a) As soon as reasonably practicable following the
Closing (but not later than one hundred twenty (120) days after the Closing
Date), Buyer shall prepare and deliver to Sellers a schedule which shall set
forth the allocation of the Purchase Price and the Assumed Liabilities among the
Purchased Assets. Such allocation shall be based on an appraisal performed by
Arthur Andersen L.L.P. or another nationally-recognized independent accounting
firm mutually satisfactory to Sellers and Buyer. Subject to the requirements of
any applicable Tax law, all Tax Returns filed by Buyer and Sellers shall be
prepared consistently with such allocation. Notwithstanding the foregoing, Buyer
and Sellers shall, on or before the Closing Date, agree on the portion of the
Purchase Price which shall be allocated to each parcel of Owned Real Property.
With respect to any Owned Real Property, the allocation shall be made at least
twenty (20) days before the Closing Date or otherwise in sufficient time before
the Closing Date to allow for preclearance notification or other applicable
clearance procedures under applicable law.
(b) In the event of any Purchase Price adjustment
pursuant to Section 1.5 hereof, Buyer and Sellers agree to adjust such
allocation to reflect such Purchase Price adjustment and, subject to the
requirements of any applicable Tax laws, to file consistently any Tax Returns
required as a result of such Purchase Price adjustment. If no such agreement is
reached within thirty (30) days (or such later date as is mutually agreed upon
by both parties), the matter or matters in dispute shall be submitted to the
appraiser selected by Buyer under Section 6.1(a) above. The decision of such
appraiser as to the allocation of the Purchase Price adjustment shall be final,
conclusive and binding upon Buyer and Sellers.
(c) After the Closing Date, Buyer shall prepare, in
consultation with Sellers or Sellers' accountants, those statements or forms
(including Form 8594) required by Section 1060 of the Code and the regulations
promulgated thereunder. Such statements or forms shall be prepared consistently
with the allocation under this Section 6.1. Such statements or forms
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shall be filed by the parties with their respective federal income Tax Returns
as required by Section 1060 of the Code and the regulations promulgated
thereunder and each party shall provide the other party with a copy of such
statement or form as filed.
(d) The fees and expenses of the appraiser shall be
borne one-half by Sellers and one-half by Buyer.
6.2. Cooperation. (a) Subject to Section 4.7(a), after the
Closing Date, Buyer and its Affiliates and Sellers and their Affiliates shall
make available to the other, as reasonably requested, and to the appropriate tax
authorities, all information, records and documents relating to the tax
liabilities or potential tax liabilities of Sellers for all periods prior to the
Closing Date and Sellers shall preserve all such information, records and
documents until the expiration of any applicable statute of limitations or
extension thereof.
(b) Within 60 days after the final determination of
Final Adjusted Net Worth, Buyer shall furnish to Parent tax return information
packages for the tax year ended December 31, 1996, prepared from and in
accordance with the books and records of Sellers for such year, in the form
previously prepared by Sellers for Parent for prior tax years and containing
such information as is required to enable Parent and Sellers to prepare and file
federal, state and local Income Tax returns for the tax year ended December 31,
1996 to the extent that such tax returns are required to reflect the income,
gains, losses, deductions, assets and liabilities of Sellers as of December 31,
1996 and for the year then ended. Buyer shall also from time to time furnish
such further information in its possession with respect to the assets and
operations of the Business during such period as may be reasonably requested by
Parent or Sellers in connection with the preparation of all Federal, state,
local or foreign Income Tax Returns of Parent and Sellers for such period.
ARTICLE 7.
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to close hereunder shall be subject
to the satisfaction (or waiver) on or prior to the Closing Date of the following
condition:
7.1. No Prohibition. No order of any court or administrative
agency shall be in effect which prohibits Buyer from consummating the
transactions contemplated hereby.
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ARTICLE 8.
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of Sellers to close hereunder shall be subject
to the satisfaction (or waiver) on or prior to the Closing Date of the following
condition:
8.1. No Prohibition. No order of any court or administrative
agency shall be in effect which prohibits Sellers from consummating the
transactions contemplated hereby.
ARTICLE 9.
EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
9.1. Definitions.
(a) The term "Business Benefit Plan" shall mean a
Benefit Plan maintained and contributed to by Sellers for the benefit of the
Employees.
(b) The term "Employees" shall mean all Current
Employees, former employees and retired employees of the Business (including,
without limitation, any former employee who has reemployments rights under
Sellers' employment policies or under any agreement, contract, statute, law,
rule or regulation), and the term "Employee" shall mean any of the Employees.
(c) The term "Current Employees" shall mean all
employees of the Business actively at work on the day immediately prior to the
Closing Date and only those employees who are not actively at work on the day
immediately prior to the Closing Date but who are on approved leave of absence
for jury duty, Family and Medical Leave Act (but only to the extent they have
reemployment rights which are guaranteed under applicable law), vacation or
military duty.
(d) The term "Excluded Employee" shall mean David R.
Markin, Allan R. Tessler, Martin L. Solomon, Wilmer J. Thomas, Jr., Jay H.
Harris, Marlan R. Smith, Kevin J. Hanley, Marcia A. Koestner, Paulette Kendler
and John M. Hewson, III.
(e) The term "Transferred Employees" shall mean the
Current Employees who accept and commence employment with Buyer.
(f) The term "Benefit Plans" shall mean
(i) each and all "employee benefit plans,"
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as defined in Section 3(3) of ERISA, maintained or contributed to by the
entities in question or in which the entities in question participates or
participated and which provides benefits to their Employees; and
(ii) whether or not an "employee benefit
plan" as so defined, each and all pensions, supplemental pension, accidental
death and dismemberment, life and health insurance and benefits (including
medical, dental, vision and hospitalization), short and long-term disability,
savings bonus, deferred compensation, incentive compensation, holiday, vacation,
severance pay, salary continuation, sick pay, sick leave, tuition reimbursement,
service award, company car, scholarship, relocation, patent award, fringe
benefit and other employee benefit arrangements, plans, contracts (excluding
individual employment or consulting contracts), policies or practices of
providing employee or executive compensation or benefits to one or more
Employees.
(g) The term "Multiemployer Plan" means a
"multiemployer plan" as such term is defined in Section 3(37) or Section
4001(a)(3) of ERISA.
(h) The term "ERISA Affiliate" shall mean with
respect to Sellers, any other Person that, together with Sellers, would be
treated as a single employer under Section 414 of the Code.
(i) The term "Union Contract" shall mean the
collective bargaining agreement listed on the Disclosure Schedule.
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9.2. Employment.
(a) Buyer shall offer to employ, effective as of the
Closing Date, on the terms and conditions set forth in Section 9.2(b) hereof,
all Current Employees who are not Excluded Employees. Sellers shall deliver to
Buyer, at least ten (10) days prior to the Closing, a schedule designating all
then Current Employees other than Excluded Employees. In reliance on Buyer's
agreement to offer to employ as of the Closing Date all of the Current Employees
other than Excluded Employees, Sellers have not given WARN Act notifications to
any of the Business facilities. At Closing, Sellers shall provide Buyer with the
name and date of termination of each Employee of Sellers whose employment at a
single site of employment, as defined for purposes of the WARN Act, was
terminated within the ninety (90) day period prior to Closing, but only with
respect to sites at which more than fifteen (15) employees were terminated
within such period. Buyer will have sole responsibility for any obligations or
liabilities to the Employees under the WARN Act to the extent WARN Act
thresholds are exceeded as a result of actions taken by Buyer after Closing for
all locations and agrees to hold Sellers harmless for same. Buyer's
indemnification of Sellers in this regard specifically includes, but is not
limited to, any claim by Current Employees under the WARN Act for back pay,
front pay, benefits, or compensatory or punitive damages, any claim by any
governmental unit for penalties regarding any issue of prior notification (or
any lack thereof) of any plant closing or mass layoff, as well as Sellers'
defense costs, including reasonable attorneys' fees, in defending any such
claims.
(b) The terms and conditions of the Transferred
Employees' employment by Buyer shall be upon substantially the same terms and
conditions as such Employees' employment with Sellers; provided that Buyer
retains the right in its sole and exclusive discretion to amend or modify any
such terms and conditions and to terminate any Transferred Employee's employment
with Buyer at any time after the Closing Date; provided further, that with
respect to Employees covered by the Union Contract, such terms and conditions
shall be the terms and conditions set forth in such agreement, except as
otherwise negotiated between Buyer and the union which is a party to such
agreement. Buyer shall be required to provide all Business Benefit Plans except
as otherwise set forth in Exhibit 9.4. Upon request of Buyer, Sellers shall
provide Buyer reasonable access to and obtain copies of data (including computer
data) regarding the dates of hire, compensation, job description and other terms
and conditions of employment of Employees and, subject to applicable law, such
other personnel records as Buyer may reasonably request. Sellers hereby
authorize Buyer to enter into discussions with and to advise any of the
Employees concerning the terms of
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any future employment of such individuals by Buyer and will permit Buyer
reasonable access to Employees for such purpose.
(c) Buyer shall recognize any reemployment rights of
former hourly production Employees and other Employees under Sellers' current
employment policies or the Union Contract, or under any other agreement,
contract, statute, law, rule or regulation.
9.3. Collective Bargaining Agreement. At Closing, Buyer shall
assume the Union Contract until its scheduled expiration date.
9.4. Employee Benefit Plans. Effective on the Closing Date,
Buyer shall assume, adopt and continue all Business Benefit Plans except as set
forth in Exhibit 9.4, and all related trust agreements, and shall assume and be
solely responsible for any and all obligations thereunder, including, without
limitation, all obligations under Section 601 of ERISA or Section 4980B of the
Code to Employees who have a qualifying event on or prior to the Closing Date,
and all accrued benefits of all Employees who are or were covered under the
Business Benefit Plans, but excluding any obligations which are an Excluded
Liability. Any insurance contract funding the Business Benefit Plans and any
contracts with third party administrators, investment managers and other
independent contractors relating to the operation of the Plans shall, at Buyer's
option, be assigned to Buyer or to the trustees of a trust established by Buyer
to fund the plan. Notwithstanding the foregoing, Buyer reserves the right to
modify, amend, suspend or terminate any such Employee Benefit Plan at any time
and from time to time after the Closing Date. Notwithstanding anything to the
contrary contained in this Agreement, Buyer shall assume and be solely
responsible for any and all obligations and liabilities relating to
post-retirement medical or life insurance benefits for Employees excluding in
each case Excluded Employees.
9.5. Incentive Compensation Plans. The Closing Date Balance
Sheet shall include a liability of not less than $1,600,000 for management
employees' incentive compensation. Buyer shall determine and pay such amount to
the Current Employees under the incentive compensation plan for management and
sales employees for the 1996 calendar year in accordance with the terms of the
plans and on a basis consistent with past practice.
9.6. Pension Contributions. Buyer shall reimburse Sellers on
the Closing Date for the amount of all contributions, if any, which Sellers are
required by the PBGC to make prior to the Closing Date to the Retirement Plan
for Great Dane Trailers, Inc. and the Great Dane Trailers Tennessee, Inc.
Bargaining Unit
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Employees Retirement Plan, except to the extent, if any, that such contributions
would increase the amount of Closing Adjusted Net Worth. Sellers shall give
written notice to Buyer at least 3 business days prior to making any such
contribution.
ARTICLE 10.
TERMINATION PRIOR TO CLOSING
10.1. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) By the mutual written consent of Buyer and
Sellers;
(b) By Sellers or Buyer in writing if the Closing
shall not have occurred on or before January 31, 1997; or
(c) By Sellers or Buyer in writing if there shall be
any judgment, injunction, order or decree (including, without limitation, under
the Securities Act or the Exchange Act) enjoining Buyer or any Seller from
consummating the transactions contemplated hereby and such judgment, injunction,
order or decree shall become final and nonappealable.
10.2. Effect of Termination. Termination of this Agreement
pursuant to this Article 10 shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 11.8, 11.9, 11.11 and
11.12; provided, however, that termination pursuant to Section 10.1(b) by reason
of a breach by Buyer or Sellers of their respective representations, warranties
or covenants shall not relieve them from liability to any other Party hereto.
ARTICLE 11.
MISCELLANEOUS
11.1. Survival. All representations and warranties made in
this Agreement or in any agreement, certificate or other document executed in
connection herewith (an "Ancillary Document") shall expire as of the Closing;
provided, however, that the representations and warranties made in Section 2.4
hereof shall survive the Closing until the first anniversary of the Closing
Date, and shall thereupon expire along with any right to indemnification for
breach thereof. Anything set forth in this Section 11.1 to the contrary
notwithstanding, to the extent a written notice asserting a claim for breach of
any representation or warranty under Section 2.4 shall have been given prior to
the expiration date with respect to such
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representation or warranty to the Party which made such representation or
warranty or on whose behalf such representation or warranty was made, the right
to indemnification hereunder for such breach of such representation and warranty
shall survive, to the extent of such claim only, until such claim is resolved,
whether or not the amount of the Losses resulting from such breach has been
finally determined.
11.2. Indemnification.
(a) If and only if the Closing shall occur, Sellers
and (solely with respect to Sections 4.7, 4.8, 4.9, 4.10, 4.12 and 4.13) Parent
shall indemnify, defend, and save harmless (as set forth herein) Buyer and its
Affiliates and hold each of them harmless from and against all Losses which are
incurred or suffered by any of them by reason of:
(i) the breach of any of the representations
or warranties set forth in Section 2.4; provided that Buyer and its Affiliates
shall in no event be entitled to recover any Losses in respect of any claim for
breach of the representations and warranties set forth in Section 2.4 until the
amount of all such Losses exceeds, in the aggregate, $300,000 (the
"Deductible"), in which event the entire amount of Losses which Buyer and its
Affiliates shall be entitled to recover in respect of such claims less the
Deductible shall be recoverable; and
(ii) the failure of Sellers or (solely with
respect to Sections 4.7, 4.8, 4.9, 4.10, 4.12 and 4.13) Parent to timely perform
or comply with any of the covenants or agreements contained in Sections 4.4,
4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 11.8 or 11.9 or in any Ancillary Document
relating to any of such Sections, or to obtain any Required Consent; provided
that Sellers shall be liable hereunder for indemnification with respect to
Losses incurred by reason of breaches or violations of their obligations to
obtain Required Consents only to the extent that the aggregate amount of Losses
incurred in connection with all such breaches and violations shall exceed
$150,000.
(b) Buyer and its Affiliates shall not be entitled to
any recovery with respect to a claim for breach of the provisions of Section 2.4
unless a claim for indemnification is made in accordance with Sections 11.1 and
11.2(d)(i) within the time period for survival set forth in Section 11.1.
(c) If and only if the Closing shall occur, Buyer
shall indemnify Sellers and their Affiliates and hold each of them harmless from
and against all Losses which are incurred or suffered by any of them by reason
of:
(i) the failure by Buyer to perform or
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comply with any of the covenants or agreements contained herein or in any
Ancillary Document to be performed or complied with by Buyer after the Closing;
(ii) any claim made by any Employee with
respect to any Assumed Liability, or by reason of any termination of employment
or other action taken by Buyer after the Closing Date (other than any such
termination or other action with respect to any Excluded Employee);
(iii) the ownership by the Buyer of the
Business or the Purchased Assets, or the operation of the Business, after the
Closing; or
(iv) arising out of, in connection with or
with respect to the Assumed Liabilities;
provided that the liability of Buyer under this Section 11.2(c) for
indemnification with respect to any Assumed Liability or claim shall be reduced
by the amount of any insurance proceeds paid to Sellers or Parent with respect
thereto, except to the extent that such proceeds shall be paid over to Buyer as
loss payee, assignee or otherwise.
(d) (i) In the event that any Party shall incur or
suffer any Losses, or upon receipt by any Party of notice of a claim or
threatened claim by a third party, in respect of which indemnification may be
sought by such Party pursuant to the provisions of this Section 11.2, the party
seeking to be indemnified hereunder (the "Indemnitee") shall assert a claim for
indemnification by written notice (a "Notice") to the party from whom
indemnification is sought (the "Indemnitor") stating the nature and basis of
such claim, and accompanied by any documentation required by this Section 11.2.
In the case of Losses arising by reason of any third party claim, the Notice
shall be given within thirty (30) days of the filing or other written assertion
of such claim against the Indemnitee, but the failure of the Indemnitee to give
the Notice within such time period shall not prohibit recovery hereunder except
to the extent that the Indemnitor is prejudiced thereby. In the case of a claim
being made by reason of a third party claim, the Notice shall be accompanied by
a copy of the written claim of the third party claimant; and in the case of a
claim other than one made by reason of a third party claim, the Losses claimed
shall have been actually incurred at or prior to the date of the Notice and
shall be described in reasonable detail in the Notice.
(ii) The Indemnitee shall provide to the
Indemnitor on request all information and documentation reasonably necessary to
support and verify any Losses which the Indemnitee believes give rise to a claim
for indemnification
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hereunder and shall give the Indemnitor and its counsel reasonable access to all
books, records and personnel in the possession or under the control of the
Indemnitee which would have bearing on such claim.
(iii) In the case of third party claims for
which indemnification is sought, the Indemnitor shall have the option to assume
the defense and conduct any proceedings or negotiations in connection therewith.
If the Indemnitor timely assumes the defense of such claim as hereinafter
provided, the Indemnitor shall: (x) take all other steps to settle or defend any
such claim (provided that the Indemnitor shall not settle any such claim without
the consent of the Indemnitee (which consent shall not be unreasonably withheld
except that the Indemnitee may withhold consent in its sole discretion if such
settlement does not include a written, unconditional release by the claimant(s)
of all liability of the Indemnitee with respect to such claim)); and (y) employ
counsel to contest any such claim or liability. In any event, the Indemnitee
shall be entitled to participate at its own expense and by its own counsel in
any proceedings relating to any third party claim. The Indemnitor shall, within
forty-five (45) days of receipt of the Notice, notify the Indemnitee of its
intention to assume the defense of such claim. Until the Indemnitee has received
notice of the Indemnitor's election whether to defend any claim, the Indemnitee
shall take reasonable steps to defend such claim; provided, however, the
Indemnitee may not settle such claim unless the claim requires a response within
forty-five (45) days of the Indemnitor's receipt of the Notice, in which case
Indemnitee may unilaterally settle the claim; provided, further, the Indemnitee
may not unilaterally settle such claim if the Indemnitor has assumed the defense
at least two (2) days before a response is due. If the Indemnitor shall decline
to assume the defense of any such claim, or shall fail to notify the Indemnitee,
within forty-five (45) days after receipt of the Notice of the Indemnitor's
election to defend such claim, the Indemnitee shall defend against such claim,
and the Indemnitee may settle such claim without the consent of the Indemnitor.
The expenses of all proceedings, contests or lawsuits in respect of such claims
shall be borne by the Indemnitor responsible pursuant hereto to indemnify the
Indemnitee in respect of the third party claim. Regardless of which Party shall
assume the defense of the claim, the Parties agree to cooperate fully with one
another in connection therewith.
(e) (i) If (and to the extent) the Indemnitor is
responsible pursuant hereto to indemnify the Indemnitee in respect of the third
party claim, then within ten (10) days after receipt from Indemnitee of evidence
of payment by the Indemnitee of Losses to a third party, the Indemnitor shall
pay to the Indemnitee the amount of such Losses.
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(ii) In the event that any Losses incurred
by the Indemnitee do not involve payment by the Indemnitee of a third party
claim, then, if (and to the extent) the Indemnitor is responsible pursuant
hereto to indemnify the Indemnitee against such Losses, the Indemnitor shall
within ten (10) days after agreement on the amount of Losses or the occurrence
of a final non-appealable determination of such amount pay to the Indemnitee the
amount of such Losses.
(f) Following the Closing, the indemnification
provided in this Section 11.2 shall be the sole and exclusive remedy of the
parties hereto in the event of the occurrences set forth in Section 11.2(a) or
(b) hereof or otherwise arising under or in connection with this Agreement or
the Ancillary Documents, and Buyer, Sellers, Parent and their respective
Affiliates shall have no other claim or rights to recovery or recourse
whatsoever under any legal or equitable theory (except for fraud) against the
other parties hereto or their Affiliates for such matters or any other matters
whatsoever arising in connection herewith. Buyer and its Affiliates hereby waive
any right to seek contribution or other recovery from Sellers or Parent that
Buyer may ever have under 42 U.S.C. Sections 9607 and 9613(f) of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601 et seq.), as amended ("CERCLA"), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 et seq.), the Clean Water Act (33
U.S.C. Section 1251 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C.
Sections 11001 et seq.), the Safe Drinking Water Act (42 U.S.C. Sections 300f et
seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601 et
seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section
136 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651 et
seq.), any other Environmental, Health or Safety Laws, the rules and regulations
promulgated under any thereof, and any provisions of common law providing for
any remedy or right of recovery with respect to any Hazardous Materials or
Environmental, Health or Safety Laws, as these laws, rules, regulations and
provisions were in the past or are currently in effect, or may now or in the
future be enacted or be in effect. Buyer on its own behalf and on behalf of its
Affiliates hereby further irrevocably and unconditionally releases Sellers and
Parent from any and all claims, demands, and causes of action that Buyer may
after Closing ever have against Sellers for recovery under CERCLA or under any
other Environmental, Health or Safety Laws.
(g) In no event shall an Indemnitor be liable for
loss of profits or consequential or punitive damages with respect to which such
Indemnitor is providing indemnification hereunder, whether or not the Closing
occurs. In no event shall an
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Indemnitor be required to indemnify or have any further obligations to any other
Party with respect of any matters other than the matters expressly set forth
herein and solely to the extent and as set forth herein.
(h) Notwithstanding anything in this Agreement to the
contrary, neither Parent nor the Sellers or any of their Affiliates shall be
responsible for any liability or obligation as a result of the Buyer's, or the
Business' failure to comply with applicable law after the Closing even if the
Business is owned or operated after the Closing in the manner owned or operated
prior to Closing.
(i) Anything set forth herein to the contrary
notwithstanding, the indemnification obligations set forth herein shall be
effective if, and only if, the Closing shall occur.
11.3. Interpretive Provisions. Whenever used in this
Agreement, unless expressly stated otherwise, "to Sellers' knowledge" or "to the
knowledge of Sellers" (or words of like import) shall mean to the actual
knowledge of those officers and directors of Sellers or Parent who are listed in
Exhibit 11.3(a), each of whom has reviewed this Agreement or prior drafts
hereof, which knowledge is obtained in their respective capacities as such or in
the course of their review of this Agreement or drafts hereof (provided that no
knowledge shall be imputed to any Seller by reason of the knowledge of any
person who was a stockholder of Parent prior to the date of consummation of the
transactions contemplated by the Parent Stock Purchase Agreement with respect to
any representation, warranty or statement made on or as of any date which is
later than the date of such consummation), and "to Buyer's knowledge" or "to the
knowledge of Buyer" (or words of like import) shall mean the actual knowledge of
Buyer and the persons listed on Exhibit 11.3(b).
11.4. Entire Agreement. This Agreement (including the
Disclosure Schedule and all Exhibits hereto) and the Confidentiality Agreement
constitute the sole understanding of the Parties with respect to the subject
matter hereof.
11.5. Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the Parties hereto; provided, however, that this
Agreement may not be assigned by Buyer without the prior written consent of
Sellers, which consent shall not be unreasonably withheld, except that Buyer
may, at its election, (i) assign this Agreement to any Affiliate or Affiliates
so long as (a) the representations and warranties of Buyer made herein are
equally true of such assignee to the extent applicable and (b) such assignment
does not have any adverse consequences to Sellers or any of their Affiliates
(including,
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without limitation, any adverse tax consequences or any adverse effect on the
ability of Buyer to consummate (or timely consummate) the transactions
contemplated hereby), but no such assignment of this Agreement or any of the
rights or obligations hereunder shall relieve Buyer of its obligations under
this Agreement and (ii) assign this Agreement in connection with a sale of all
or a substantial portion of the Business. Such assignee shall execute a
counterpart of this Agreement agreeing to be bound by the provisions hereof as
"Buyer," and agreeing to be jointly and severally liable with the assignor and
any other assignee for all of the obligations of the assignor hereunder.
11.6. Headings. The headings of the Articles, Sections and
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
hereof.
11.7. Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Agreement may be waived in writing
at any time by the Party which is entitled to the benefits of such waived terms
or provisions. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any Party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
11.8. Broker's Fees. Each of the Parties hereto (i) represents
and warrants that it has not taken and will not take any action that would cause
the other Party hereto to have any obligation or liability to any person for a
finder's or broker's fee, and (ii) agrees to indemnify the other party hereto
for breach of the foregoing representation and warranty, whether or not the
Closing occurs.
11.9. Expenses. Except as otherwise provided herein, Sellers
and Buyer shall each pay all costs and expenses incurred by it or on its behalf
in connection with this Agreement and the transactions contemplated hereby,
including, without limiting the generality of the foregoing, fees and expenses
of its own financial consultants, accountants and counsel. Any Transfer Taxes
shall be borne one-half (1/2) by Sellers and one-half (1/2) by Buyer. Sellers
shall timely prepare and timely file all Tax Returns with respect to any such
Transfer Taxes. At the Closing, Buyer shall remit to Sellers such properly
completed resale exemption certificates and other similar certificates or
instruments as are necessary to claim available exemptions from the payment of
Transfer Taxes. Buyer shall cooperate with Sellers in preparing such forms and
will execute and deliver such
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affidavits and forms as are reasonably requested by Sellers.
11.10. Notices. Any notice, request, instruction or other
document to be given hereunder by any Party hereto to any other party shall be
in writing and shall be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by electronic facsimile transmission with a
confirmation of delivery, cable, telegram, telex or other standard forms of
written telecommunications, by overnight courier or by registered or certified
mail, postage prepaid,
if to Sellers or Parent, to:
Great Dane Holdings Inc.
2016 N. Pitcher Street
Kalamazoo, Michigan 49007
Attention: President
Telephone: (616) 343-6121
Telecopy: (616) 343-1660
with a copy to:
The Stamford Capital Group, Inc.
1266 Main Street, 6th floor
Stamford, CT 06902
Attention: President
Telephone: (203) 425-2070
Telecopy: (203) 425-2079
and a copy to:
Sonnenschein Nath & Rosenthal
1221 Avenue of the Americas, 24th Floor
New York, NY 10020
Attention: Philip A. Haber, Esq.
Telephone: (212) 768-6700
Telecopy: (212) 391-1247
if to Buyer to:
c/o CC Industries, Inc.
222 North LaSalle Street
Suite 800
Chicago, Illinois 60601
Attention: William H. Crown
Telecopy: (312) 984-1490
Telephone: (312) 855-4000
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with a copy to:
Gould & Ratner
222 North LaSalle Street
Suite 800
Chicago, Illinois 60601
Attention: David M. Rubin
Telecopy: (312) 236-3241
Telephone: (312) 236-3003
or at such other address for a party as shall be specified by like notice.
11.11. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York applicable to
agreements made and to be performed wholly within such jurisdiction. Each of the
parties hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of New York and of the United
States of America, in each case located in County of New York, for any
Litigation arising out of or relating to this Agreement and the transactions
contemplated hereby (and agrees not to commence any Litigation relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address set forth
in Section 11.10 herein shall be effective service of process for any Litigation
brought against it in any such court. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of America,
in each case located in County of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such Litigation brought in any such court has been brought in an
inconvenient forum.
11.12. Public Announcements. No Seller or Buyer shall make any
public statements, including, without limitation, any press releases, with
respect to this Agreement and the transactions contemplated hereby without the
prior written consent of the other party (which consent shall not be
unreasonably withheld) except as may be required by the Securities Act, the
Exchange Act, state or foreign securities laws or any other applicable law. If a
public statement is required to be made in accordance herewith, the Parties
shall consult with each other in advance as to the contents and timing thereof.
11.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be
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deemed to be an original and all of which shall constitute the same instrument.
11.14. Certain Definitions. The following terms shall have the
meanings set forth below for purposes of this Agreement.
"Accountants" is defined in Section 1.5(b).
"Acquisition Proposal" is defined in Section 4.5.
"Adjusted Net Worth" means, as of the relevant date, the
excess of all assets of the Business (excluding the Parent Equipment and the GDI
Property) over all liabilities of the Business, in each case as reflected on the
Interim Balance Sheet, the Projected Closing Balance Sheet or the Closing Date
Balance Sheet, as the case may be, but excluding in each case the Excluded
Assets and the Excluded Liabilities, and except that inventories shall be valued
on a first-in-first-out basis.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act.
"Ancillary Document" is defined in Section 11.1.
"Assumed Liabilities" means all liabilities and obligations of
Sellers relating to the operation of the Business prior to Closing, including,
without limitation, (i) obligations and liabilities under Leases, Commitments
and other leases, agreements, contracts and commitments of Sellers existing on
the Closing Date (including, without limitation, the Union Contract), including
all amendments and modifications thereof to such date, (ii) accounts payable and
other accrued liabilities of Sellers as of the Closing Date, (iii) obligations
and liabilities under all Business Benefit Plans maintained for the benefit of
Employees, and related trusts, (iv) any and all obligations and liabilities
relating to post-retirement medical or life insurance benefits for Employees
other than Excluded Employees, (v) obligations and liabilities of Sellers in
respect of Permits, (vi) Taxes, and (vii) obligations of Sellers in respect of
uncleared checks and overdrafts on checking accounts; provided, however, that
notwithstanding the foregoing, the Assumed Liabilities shall not include any
Excluded Liabilities.
"Books and Records" is defined in Section 5.2(a).
"Business" means only the business conducted by Sellers in the
geographic areas in which they operate, which consists of the design,
manufacture and distribution of a full line of truck trailers (including vans,
reefers and platform trailers) and intermodal containers and chassis, the
manufacture and sale of aftermarket parts and accessories, sales of used
trailers, and
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retail services (including repair and maintenance), and activities related or
incidental to any of the foregoing.
"Business Benefit Plans" is defined in Section 9.1(f).
"Buyer" is defined in the Recitals.
"CERCLA" means, the Comprehensive Environmental Resource,
Compensation and Liability Act (codified in scattered sections of 26 U.S.C., 33
U.S.C., 42 U.S.C. and 42 U.S.C. Section 9601 et seq.).
"Closing" is defined in Section 1.2.
"Closing Adjusted Net Worth" means the Adjusted Net Worth as
of December 31, 1996 excluding, however, the book value of the Parent Equipment
and the GDI Property on the books of Trailers.
"Closing Adjusted Net Worth Statement" is defined in Section
1.5(b)(iii).
"Closing Date" is defined in Section 1.2.
"Closing Date Balance Sheet" is defined in Section 1.5(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitments" is defined in Section 2.6.
"Confidentiality Agreement" is defined in Section 4.3.
"Designated Accounts" is defined in Section 1.3.
"Disclosure Schedule" is defined in Section 2.1.
"Employees" is defined in Section 9.1(b).
"Encumbrances" means any mortgages, pledges, liens, charges,
security interests, imperfections of title or other encumbrances.
"Environmental, Health and Safety Laws" means all federal,
state and local laws, rules and regulations relating to occupational health and
safety, hazardous substances, and environmental matters applicable to Sellers
and/or their business and facilities (whether or not owned by them). Such laws
and regulations include but are not limited to the Resource Conversation and
Recovery Act, 42 U.S.C. Section 6901 et seq., as
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amended; CERCLA; the Toxic Substances Control Act, 15 U.S.C.
Section 2061 et seq., as amended; the Clean Water Act, 33 U.S.C. Section 1251
et seq., as amended; the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
as amended.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Account" means the escrow established by Sellers and
Buyer pursuant to the Escrow Agreement.
"Escrow Agent" means Marine Midland Bank.
"Escrow Agreement" means the Escrow Agreement to be entered
into on the Closing Date among Sellers, Buyer and the Escrow Agent, in
substantially the form attached as Exhibit 11.14-1 hereto.
"Escrow Amount" means $2,000,000.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" means: (i) the Designated Accounts (which
shall not be operating accounts of any of Sellers and shall not contain any
funds of Sellers other than the consideration paid pursuant to this Agreement);
(ii) the consideration paid pursuant to this Agreement; (iii) marketable or
other securities not arising out of or related to the Business; (iv) deferred
Income Tax assets and any rights of Sellers or any of their Affiliates to any
refund of Income Taxes or corporate franchise Taxes; (v) debt issuance expense;
(vi) Stock; (vii) all insurance policies of Sellers or Parent pertaining to the
Business and (except as provided in Section 4.10) all rights of Sellers or
Parent of every nature and description under or arising out of such insurance
policies, (other than refunds of premiums), other than insurance policies and
rights thereunder that are used to provide benefits under Business Benefit
Plans; (viii) the minute books, stock transfer books and corporate seal of each
of Sellers; (ix) any rights of Sellers under any intercompany accounts among the
Sellers or between the Sellers and their other Affiliates; and (x) any rights of
Sellers under this Agreement, any Ancillary Document or any other agreement
between Sellers and Buyer.
"Excluded Liabilities" means the following liabilities of
Sellers: (i) principal of, interest on, and other amounts and obligations
relating to debt of Sellers to Bank of America, NT&SA or its Affiliates and
other bank or institutional lenders (excluding obligations of Sellers in respect
of uncleared checks and overdrafts on checking accounts); (ii) any liability or
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obligation of Sellers to any their Affiliates relating to any intercompany
account, Excluded Asset, tax sharing agreement, or otherwise, or arising out of
the transfer to Sellers of the Parent Equipment or the GDI Property; (iii) any
liability or obligation (whether assessed or unassessed) of Sellers with respect
to (A) Income Taxes, whether payable by Sellers or by another member of any
consolidated group for Federal Income Tax or state unitary Income Tax purposes
in which any of Sellers are included, and corporate franchise Taxes of Sellers,
(B) any Taxes in connection with the consummation of the transactions
contemplated hereby (including any Income Taxes arising as a result of the
transfer by Sellers to Buyer of the Purchased Assets), (C) any Taxes under any
Tax sharing agreements, (D) any Income Taxes of any Person which Seller has
assumed or becomes liable for as a transferee or successor, by contract, or
otherwise, and (E) deferred Income Tax credits; (iv) all obligations to any
Excluded Employee including, without limitation, contractual and By-law
indemnification obligations to any such Person and obligations under Business
Benefit Plans other than Business Benefit Plans described in Section 3(2) of
ERISA (including, without limitation, all Business Benefit Plans that are
defined benefit pension plans, defined contribution retirement plans, and
supplemental retirement plans; (v) obligations to Current Employees arising
under the Severance Program for Salaried Employees (HR Policy # 19.0) solely by
reason of the consummation of the sale of assets contemplated by this Agreement;
(vi) obligations of Sellers for payment of bonuses under Parent's Special Bonus
Plan dated October 11, 1996; (vii) obligations and liabilities of Sellers or
Parent under any agreements concerning confidentiality with prospective
purchasers of the Sellers or of any of their past or present Subsidiaries or
their respective assets; (viii) all obligations of Sellers under this Agreement,
any Ancillary Document or any other agreement between Sellers and Buyer; and
(ix) all obligations of Sellers in respect of fees, costs, broker's commissions,
expenses and Transfer Taxes arising out of or in connection with this Agreement,
the Ancillary Documents or the transactions hereby or thereby contemplated.
"Final Adjusted Net Worth" is defined in Section 1.5(e).
"Financial Statements" is defined in Section 2.2.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"GDI Property" is defined in Section 4.15.
"Hazardous Materials" means each and every element, compound,
chemical mixture, contaminant, pollutant, material,
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waste or other substance which is defined, determined or identified as hazardous
or toxic under any Environmental Health and Safety Law or the Release of which
is prohibited under any Environmental Health and Safety Law. Without limiting
the generality of the foregoing, the term will include:
(a) "hazardous substances" as defined in CERCLA,
SARA, or Title III of the Superfund Amendments and Reauthorization Act, each as
amended to date, and regulations promulgated thereunder;
(b) "hazardous waste" as defined in RCRA and
regulations promulgated thereunder;
(c) "hazardous materials" as defined in the HMTA, as
amended to date, and regulations promulgated thereunder; and
(d) "chemical substance or mixture" as defined in the
TSCA, as amended to date, and regulations promulgated thereunder.
(e) petroleum products, petrochemicals and asbestos,
whether or not included in the foregoing.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Income Tax" means any federal, state, local, or foreign
income tax, including any interest, penalty, or addition thereto, whether
disputed or not.
"Income Tax Returns" means any return, declaration, report,
claim for refund, or information return or statement relating to Income Taxes,
including any schedule or attachment.
"Indemnitee" is defined in Section 11.2(d)(i).
"Indemnitor" is defined in Section 11.2(d)(i).
"Insurance Policies" is defined in Section 2.18.
"Intellectual Property" is defined in Section 2.5.
"Interim Adjusted Net Worth" shall mean the Adjusted Net Worth
as of the date of the Interim Balance Sheet, as set forth in Exhibit 2.2(a)(ii),
in the amount of $139,534,000.
"Interim Adjusted Net Worth Statement" is defined in Section
2.2(a)(ii).
"Interim Balance Sheet" is defined in Section
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2.2(a)(ii).
"Interim Financial Statements" is defined in Section
2.2(a)(ii).
"IRS" means the United States Internal Revenue Service.
"Leased Property" is defined in Section 2.16(b).
"Leases" is defined in section 2.16(b).
"Litigation" is defined in Section 2.7.
"Losses" shall mean any and all losses, damages, liabilities,
obligations, judgments, amounts paid in settlement and reasonable costs and
expenses of any kind, including, without limitation, reasonable attorney's fees
and expenses, but excluding loss of profits and any consequential, special or
punitive damages.
"Material Adverse Effect" is defined in Section 2.1.
"Multiemployer Plan" is defined in Section 9.1(g).
"Notice" is defined in Section 11.2(d)(i).
"Ordinary Course of Business" means the ordinary course of
business of Sellers consistent with past custom and practice.
"Owned Real Property" is defined in Section 2.16(a).
"Parent" means Great Dane Holdings Inc., a Delaware
corporation.
"Parent Stock Purchase Agreement" means the Stock Purchase
Agreement dated December 19, 1996 by and among The David R. Markin Charitable
Remainder Unitrust #1, The David R. Markin Charitable Remainder Unitrust #2,
Allan R. Tessler Charitable Remainder Unitrust #1, Allan R. Tessler Charitable
Remainder Unitrust #2, Martin L. Solomon, Martin L. Solomon 1996 Charitable
Remainder Unitrust, The Douglas Trust, and Jay H. Harris, as sellers, GDH
Acquisition Corp., as buyer, Capital Resource Associates, as guarantor and the
Parent.
"Parent Equipment" means the equipment owned by Parent and
leased to Sellers for use in the Business at Sellers' Brazil, Indiana, facility,
as further described in the Disclosure Schedule.
"Parties" is defined in the Recitals.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" is defined in Section 2.8.
"Permitted Exceptions" means (i) with respect to the Owned
Real Property and the Material Leased Properties, (a) easements, restrictions
and Encumbrances (other than Encumbrances securing Excluded Liabilities) which
do not affect materially and adversely the current use or occupancy of the
property subject thereto, and (b) with respect to any property, easements and
Encumbrances which are insured over under a Title Policy issued with respect to
such property on or prior to the Closing Date; and (ii) with respect to all
other real and personal property included in the Purchased Assets, (a)
mechanics', materialmen's or other similar Encumbrances incurred in the Ordinary
Course of Business in respect of liabilities incurred in the Ordinary Course of
Business and accrued or otherwise reflected as a liability on the books and
records of Sellers if and to the extent required to be so accrued or otherwise
reflected in accordance with GAAP, (b) Encumbrances arising under conditional
sales contracts and equipment leases with third parties entered into in the
Ordinary Course of Business and accrued or otherwise reflected as a liability on
the books and records of Sellers if and to the extent required to be so accrued
or otherwise reflected in accordance with GAAP, (c) Encumbrances for Taxes not
yet due and payable or due but not delinquent or being contested in good faith
by appropriate proceedings, (d) easements, covenants and other restrictions of
record or disclosed in the Disclosure Schedule (other than Encumbrances securing
Excluded Liabilities), and (e) other easements, restrictions and Encumbrances
(other than Encumbrances securing Excluded Liabilities) which do not affect
materially and adversely the current use or occupancy of the property subject
thereto.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Products" is defined in Section 2.18(a).
"Projected Closing Adjusted Net Worth" means shall mean the
projected Adjusted Net Worth as of December 19, 1996, as shown on the Projected
Closing Adjusted Net Worth Statement, in the amount of $139,479,000.
"Projected Closing Adjusted Net Worth Statement" is defined in
Section 1.5(a).
"Projected Closing Balance Sheet" is defined in Section
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1.5(a).
"Purchase Price" is defined in Section 1.3.
"Purchased Assets" refers to all the business, properties,
assets, goodwill, rights and claims of whatever kind and nature, real or
personal, tangible or intangible, known or unknown, actual or contingent and
wherever situated, which are owned by Sellers and used in, held for use by, or
related to the Business, including Sellers' rights under leases of what would
otherwise be Purchased Assets, but excluding all Excluded Assets, as the same
may exist on the Closing Date reflecting operation of the Business in the
ordinary course, including, without limitation, the following:
(a) all cash (other than consideration paid pursuant
to this Agreement), certificates of deposit, other bank deposits (other than the
Designated Accounts), and other cash equivalents;
(b) all Owned Real Property, improvements, fixtures
and all other appurtenances thereto and rights in respect thereof;
(c) all inventories, machinery, equipment, test
equipment, computers, vehicles, furniture, office materials and other tangible
personal property, including the items listed in the Disclosure Schedule;
(d) all accounts receivable and notes receivable and
other claims for money or other obligations due to Sellers arising out of the
Business;
(e) all of the Intellectual Property, including,
without limitation, the GDI Property;
(f) all right, title and interest in, to and under
all Commitments;
(g) all books and records of the Business (including
such books and records as are contained in computerized storage media),
including books and records related to inventory, purchasing, accounting, sales,
research, engineering, manufacturing, maintenance, repairs, marketing, banking
(other than records relating to the Designated Accounts), Intellectual Property,
shipping records, personnel files for Transferred Employees and all files,
customer and supplier lists, records, literature and correspondence;
(h) to the extent legally assignable, all Permits;
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(i) to the extent any of the following relate to any
Assumed Liability or any of the Purchased Assets: claims, deposits, prepayments,
prepaid assets, refunds, causes of action, rights of recovery, rights of setoff
and rights of recoupment of Sellers as of the Closing Date;
(j) any other tangible assets of Sellers which are
used primarily in the Business and which are of a nature not customarily
reflected in the books and records of a business, such as assets which have been
written off for accounting purposes but which are still used by or of value to
the Business;
(k) all goodwill associated with the Business;
(l) all of the Parent Equipment;
(m) all insurance contracts, third party
administrators' contracts, investment advisor contracts and independent
contractors' contracts relating to the operation of the Business Benefit Plans
assumed by Buyer; and
(n) all assets under Business benefit Plans
maintained for the benefit of Employees;
but excluding in the case of each of the foregoing all items which are Excluded
Assets.
"Recall" means any product recall initiated pursuant to
regulations of the United States National Highway Traffic Safety Administration.
"Release" means any spilling, leaking, seeping, pouring,
emitting, emptying, discharging, injecting, storing, escaping, leaching,
dumping, burying, abandoning, or disposing into the environment.
"Required Consents" is defined in Section 4.11(a).
"SEC Reports" means the Annual Reports on Form 10-K of the
Parent for each of the fiscal years ended December 31, 1993, 1994 and 1995
(excluding exhibits thereto), and the Quarterly Reports on Form 10-Q of the
Parent for each of the fiscal quarters ended March 31, June 30 and September 30,
1996 (excluding exhibits thereto), in each case as filed with the Securities and
Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Sellers" is defined in the Recitals.
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"Stock" means the issued and outstanding stock of Sellers and
any other entity which has been a member of any combined, consolidated, unitary
or affiliated group.
"Subsidiaries" means Great Dane Trailers Tennessee, Inc., a
Tennessee corporation, and Great Dane Los Angeles, Inc., a Georgia corporation,
and "Subsidiary" means each of them.
"Surveys" is defined in Section 2.16(c).
"Taxes" means any and all taxes (including without limitation
franchise, alternative, unitary, alternative minimum, minimum franchise, value
added, ad valorem, income, receipts, capital, excise, sales, use, leasing, fuel,
excess profits, turnover, occupational, property (personal and real, tangible
and intangible), transfer, recording and stamp taxes, levies, imposts, duties,
charges, assessments, or withholdings of any nature whatsoever, general or
special, ordinary or extraordinary, and any transaction privilege or similar
taxes) imposed by or on behalf of any governmental authority including without
limitation the United States, any state, county, municipality or foreign
government, together with any and all penalties, fines, additions to tax and
interest thereon.
"Tax Returns" shall mean any return, declaration, report, or
information return or statement or other form relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Title Insurance Company" is defined in Section 2.16(c).
"Title Policies" is defined in Section 2.16(c).
"Transfer Taxes" mean all sales, recording, transfer, use or
other similar taxes or fees (other than gains and Income Taxes) imposed as a
result of the consummation of the transactions contemplated hereby.
"WARN Act" means Worker Adjustment and Retraining Notification
Act of 1988, as amended.
11.15. No Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as in any manner creating, any rights
enforceable by any person not a party to this Agreement. Without limiting the
generality of the foregoing, no provision of this Agreement shall create any
third party beneficiary rights in any Employee or former Employee (including any
beneficiary or dependent thereof) of Sellers in respect of continued employment
(or resumed employment) or any other matters, and no provision of this Agreement
shall create
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any such rights in any such persons in respect of any benefits that may be
provided, directly or indirectly, under any Business Benefit Plan.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
GREAT DANE HOLDINGS INC.
By:
------------------------------
Name:
Title:
GREAT DANE TRAILERS, INC.
By:
------------------------------
Name:
Title:
GREAT DANE TRAILERS TENNESSEE, INC.
By:
------------------------------
Name:
Title:
GREAT DANE LOS ANGELES, INC.
By:
------------------------------
Name:
Title:
GREAT DANE LIMITED PARTNERSHIP
By: DANE ACQUISITION CORP.,
Its General Partner
By:
------------------------------
Name:
Title:
ACCEPTED AND AGREED SOLELY FOR
PURPOSES OF SECTION 1.5(h):
CAPITAL RESOURCE ASSOCIATES
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<PAGE> 67
By: EQ CORPORATION,
Managing General Partner
By:
------------------------------
Name:
Title:
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<PAGE> 1
ASSET PURCHASE AGREEMENT AMENDMENT
AMENDMENT, dated as of December 31, 1996 (this "Amendment"),
to Asset Purchase Agreement, dated as of December 20, 1996 (the "Asset Purchase
Agreement"), each by and between GREAT DANE TRAILERS, INC., a Georgia
corporation ("Trailers"), and its wholly owned subsidiaries, GREAT DANE TRAILERS
TENNESSEE, INC., a Tennessee corporation, and GREAT DANE LOS ANGELES, INC., a
Georgia corporation (Trailers and its subsidiaries are referred to collectively
herein as "Sellers" and each as a "Seller"), GREAT DANE HOLDINGS INC., a
Delaware corporation ("Parent"), and GREAT DANE LIMITED PARTNERSHIP, a Delaware
limited partnership ("Buyer"). Sellers, Parent and Buyer are referred to
collectively herein as the "Parties." Other capitalized terms used in this
Amendment without definition shall have the meanings ascribed thereto in the
Asset Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Parties desire to amend certain terms in the
Asset Purchase Agreement as hereinafter set forth;
NOW, THEREFORE, the Parties do hereby agree as follows:
Section 1 -- AMENDMENTS
Section 1.1 Amendment to Section 1.5. Section 1.5(a) of the
Asset Purchase Agreement is amended by deleting the two references to the date
"December 19, 1996" in the first sentence thereof and inserting references to
the date "December 31, 1996" in lieu thereof.
Section 1.2 Amendment to Section 11.14. Section 11.14 of the
Asset Purchase Agreement is amended by deleting the amount "$2,000,000" in the
definition for the term "Escrow Amount" in said Section and inserting the amount
"$500,000" in lieu thereof.
Section 1.3 Amendment to Exhibit 1.5(a). Exhibit 1.5(a) to the
Asset Purchase Agreement is deleted and replaced by the Exhibit 1.5(a) which is
attached to this Amendment.
Section 2 -- MISCELLANEOUS
Section 2.1 Headings. The headings of the Articles, Sections
and paragraphs of this Amendment are inserted for convenience only and shall not
be deemed to constitute part of this Amendment or to affect the construction
hereof.
<PAGE> 2
Section 2.2 Governing Law. This Amendment shall be construed
in accordance with and governed by the laws of the State of New York applicable
to agreements made and to be performed wholly within such jurisdiction. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in County of New York, for any
Litigation arising out of or relating to this Amendment and the transactions
contemplated hereby (and agrees not to commence any Litigation relating thereto
except in such courts), and further agrees that service of any process, summons,
notice or document by U.S. registered mail to its respective address set forth
in Section 11.10 of the Asset Purchase Agreement shall be effective service of
process for any Litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or the
United States of America, in each case located in County of New York, and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such Litigation brought in any such court has been
brought in an inconvenient forum.
Section 2.3 Counterparts. This Amendment may be executed in
one or more counterparts, each of which shall for all purposes be deemed to be
an original and all of which shall constitute the same instrument.
Section 2.4 Effect of Amendment. Except as specifically
provided herein, this Amendment does not in any way amend, modify or impair the
terms, conditions and other provisions of the Asset Purchase Agreement, or the
obligations of the Parties thereunder, and all terms, conditions and other
provisions of the Asset Purchase Agreement shall remain in full force and effect
except to the extent specifically amended pursuant to the provisions of this
Amendment.
[The remainder of this page intentionally left blank.]
2
<PAGE> 3
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed on its behalf as of the date first above written.
GREAT DANE HOLDINGS INC.
By:
-----------------------
Name:
Title:
GREAT DANE TRAILERS, INC.
By:
-----------------------
Name:
Title:
GREAT DANE TRAILERS TENNESSEE, INC.
By:
-----------------------
Name:
Title:
GREAT DANE LOS ANGELES, INC.
By:
-----------------------
Name:
Title:
GREAT DANE LIMITED PARTNERSHIP
By: DANE ACQUISITION CORP.,
Its General Partner
By:
-----------------------
Name:
Title:
3
<PAGE> 4
ACCEPTED AND AGREED :
CAPITAL RESOURCE ASSOCIATES
By: EQ CORPORATION,
Managing General Partner
By:
-------------------------
Name:
Title:
4
