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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):
December 17, 1996
GREAT DANE 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
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N/A
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(Former name and former address, if changed since last report)
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT
(a) On December 17, 1996, David R. Markin transferred 16.2% of the
outstanding capital stock of the Registrant to The David R. Markin Charitable
Remainder Unitrust #1 and transferred 16.2% of the outstanding stock of the
Registrant to The David R. Markin Charitable Remainder Unitrust #2. On December
17, 1996, Allan R. Tessler transferred 8.573% of the outstanding capital stock
of the Registrant to The Allan R. Tessler Charitable Remainder Unitrust #1 and
transferred 8.573% of the outstanding capital stock of the Registrant to The
Allan R. Tessler Charitable Remainder Unitrust #2. To the knowledge of the
Registrant, the respective trustees of these trusts are the shareholders who
previously owned the transferred shares in their individual capacities. Such
transfers of an aggregate of 49.546% of the voting stock of the Registrant may
be deemed a change of control of Registrant.
On December 20, 1996, GDH Acquisition Corp., a Delaware corporation formed
for the purpose of acquiring the Registrant and wholly-owned by Capital Resource
Associates, a Nevada general partnership, purchased all of the outstanding
capital stock (being all of the voting securities) of the Registrant from The
Douglas Trust, Martin L. Solomon, The Martin L. Solomon 1996 Charitable
Remainder Unitrust, The David R. Markin Charitable Remainder Unitrust #1, The
David R. Markin Charitable Remainder Unitrust #2, Allan R. Tessler, The Allan R.
Tessler Charitable Remainder Unitrust #1, The Allan R. Tessler Charitable
Remainder Unitrust #2, and Jay H. Harris. The consideration used by GDH
Acquisition Corp. was $330,486,290. The source of the consideration was notes
(the "Notes") of GDH Acquisition Corp. in the aggregate principal amount of
$40,250,000 issued to the former stockholders of the Registrant and a loan (the
"Loan") to GDH Acquisition Corp. in the amount of $290,236,290 from Bank of
America National Trust & Savings Association. The proceeds of the Loan were used
to pay $70,668,330 in cash to the shareholders of the Registrant in
consideration (together with the Notes) for all of the outstanding stock of the
Registrant, to pay transaction expenses relating to the acquisition of
Registrant, to repay certain debt and other obligations of Registrant and its
subsidiaries and to provide a portion of the money necessary to redeem the
outstanding 12 3/4% Senior Subordinated Debentures due 2001 of the Registrant
(the "2001 Debentures") and the outstanding Subordinated Discount Debentures due
January 1, 2006 of the Registrant (the "2006 Debentures") as more fully set
forth in Item 5. The amount of the cash consideration paid to the former
shareholders of the Registrant is subject to adjustment based on revisions to
statements as of December 20, 1996 of the cash of the Registrant and its
subsidiaries and of net assets of certain subsidiaries of the Registrant.
The Loan matures on January 17, 1997. $2,000,000 of the Loan was due and
payable on December 23, 1996 and $240,000,000 of the Loan is due and payable on
January 2, 1997. Any net proceeds derived from the sale of securities of the
Registrant or its subsidiaries,borrowing by the Registrant or its subsidiaries,
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disposition of assets of the Registrant or its subsidiaries and insurance
proceeds in respect of any casualty with respect to assets of the Registrant or
its subsidiaries must be applied to prepay the Loan to the extent such net
proceeds exceeds an aggregate of $175,287,303, the aggregate amount of the
principal amount outstanding of the 2001 Debentures and the 2006 Debentures. The
Loan bears interest at a rate equal to the higher of the Federal Funds Rate plus
1.25% and the reference rate announced by Bank of America National Trust &
Savings Association plus 0.75%. The Loan is now secured by a lien on all of the
assets and outstanding capital stock of the Registrant and each of its
subsidiaries. The Loan is guaranteed by Capital Resource Associates, a Nevada
general partnership and the sole shareholder of the Registrant, by the partners
of Capital Resource Associates and by the subsidiaries of the Registrant.
On December 20, 1996, GDH Acquisition Corp. was merged with and into the
Registrant, with the Registrant being the surviving company. As a result the
Registrant succeeded to all of the rights and obligations of GDH Acquisition
Corp., including, without limitation, the rights and obligations of GDH
Acquisition Corp. with respect to the Loan, and the owner of all of the
outstanding capital stock of GDH Acquisition Corp., Capital Resource Associates,
a Nevada general partnership, became and currently is the owner of all of the
outstanding capital stock (being all the voting securities) of the Registrant.
(b) All of the outstanding stock of the Registrant has been pledged to
Bank of America National Trust & Savings Association to secure the Loan. In the
event of a default with respect to the Loan, Bank of America National Trust &
Savings Association may foreclose on all of the outstanding stock of the
Registrant.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) All of the stock and substantially all of the assets of each
subsidiary of the Registrant has been pledged to Bank of America National Trust
& Savings Association to secure the Loan. In the event of a default with respect
to the Loan, Bank of America National Trust & Savings Association may foreclose
on all of the outstanding stock of the Registrant.
(b) On December 23, 1996, all of the outstanding capital stock of South
Charleston Stamping & Manufacturing Company, a West Virginia corporation and a
wholly-owned indirect subsidiary of the Registrant engaged in the business of
manufacturing sheet metal stampings for automotive components and sub-assemblies
for sale to North American original equipment manufacturers, was purchased by
Mayflower Acquisition Corporation, pursuant to the Amended Stock Purchase
Agreement attached hereto as Exhibit 2.1 (the "Amended Stock Purchase
Agreement"). As consideration therefor, SCSM Holdings, Inc., a Delaware
corporation and a wholly-owned direct subsidiary of the Registrant, received
$139,817,379 in cash, which was part of the funds used to fund the trust
accounts referred to in Item 5. The amount of such cash consideration is subject
to
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adjustment pursuant to the Amended Stock Purchase Agreement.
ITEM 5. OTHER EVENTS
(a) The Registrant expects to be able to refinance such portion of the
Loan as shall not have been repaid prior to its scheduled maturity. All of the
outstanding stock of the Registrant has been pledged to Bank of America National
Trust & Savings Association to secure the Loan. In the event of an event of
default with respect to the Loan, Bank of America National Trust & Savings
Association may foreclose on all of the outstanding stock of the Registrant.
The Loan is guaranteed by, in addition to subsidiaries of the Registrant,
Capital Resource Associates and the partners thereof.
(b) On December 20, 1996 notice of redemption was given with respect to
the 2001 Debentures and on December 27, 1996 notice of redemption was given with
respect to the 2006 Debentures. Pursuant to such notices of redemption, the 2001
Debentures are to be redeemed on January 21, 1997, and the 2006 Debentures are
to be redeemed on January 27, 1997. An amount of cash sufficient to redeem all
of the 2001 Debentures, including all accrued and unpaid interest thereon to
January 21, 1997 has been deposited in a trust account with Marine Midland Bank,
as trustee for the benefit of the holders of the 2001 Debentures to effect the
redemption thereof. An amount of cash sufficient to redeem all of the 2006
Debentures, including all accrued and unpaid interest thereon to January 21,
1997 has been deposited in a trust account with Marine Midland Bank, as trustee
for the benefit of the holders of the 2006 Debentures to effect the redemption
thereof. Provision is being made for deposit in a trust account with Marine
Midland Bank, as trustee for the benefit of the holders of the 2006 Debentures
of the amount of interest that will accrue on the 2006 Debentures for the period
of January 21, 1997 to January 27, 1997. Bank of America National Trust &
Savings Association has acknowledged that it has no interest in the funds
deposited in the aforementioned trust accounts.
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. Amended Stock Purchase Agreement dated as of November
7, 1996, among South Charleston Stamping & Manufacturing
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Company, SCSM Holdings, Inc., The Mayflower Corporation Plc, and Mayflower
Acquisition Corporation. The Exhibits, Schedule and the Disclosure
Schedule to this document have not been filed herewith; Registrant
agrees to furnish supplementally such Exhibits, Schedule and Disclosure
Schedule to the Securities and Exchange Commission upon its request.
Exhibit 2.2. Technical Amendment No. 1 dated as of December
18, 1996 to the Amended Stock Purchase Agreement attached hereto as
Exhibit 2.1.
Exhibit 99.1 Notice of Redemption of the 2001 Debentures.
Exhibit 99.2 Notice of Redemption of the 2006 Debentures.
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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.
GREAT DANE HOLDINGS INC.
Date: January 2, 1997 By: /s/ Scott C. Dunn
Name: Scott C. Dunn
Title: Vice President
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EXHIBIT INDEX
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Exhibit 2.1. Amended Stock Purchase Agreement dated as of
November 7, 1996, among South Charleston
Stamping & Manufacturing Company, SCSM
Holdings, Inc., The Mayflower Corporation Plc,
and Mayflower Acquisition Corporation. The
Exhibits, Schedule and the Disclosure Schedule
to this document have not been filed herewith;
Registrant agrees to furnish supplementally
such Exhibits, Schedule and Disclosure Schedule
to the Securities and Exchange Commission upon its
request.
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Exhibit 2.2. Technical Amendment No. 1 dated as of December
18, 1996 to the Amended Stock Purchase
Agreement attached hereto as Exhibit 2.1.
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Exhibit 99.1 Notice of Redemption of the 2001 Debentures.
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Exhibit 99.2 Notice of Redemption of the 2006 Debentures.
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EXHIBIT II
AMENDED STOCK PURCHASE AGREEMENT
BY AND AMONG
SCSM HOLDINGS, INC.,
SOUTH CHARLESTON STAMPING & MANUFACTURING COMPANY,
MAYFLOWER ACQUISITION CORPORATION,
AND
THE MAYFLOWER CORPORATION PLC
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TABLE OF CONTENTS
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ARTICLE I TERMS OF PURCHASE AND SALE.............................1
1.1 Sale of the Stock......................................1
1.2 The Closing............................................2
1.3 Purchase Price and Payment.............................2
1.4 Retained Indebtedness..................................2
1.5 Purchase Price Adjustment..............................3
1.6 Rent and Real Property Taxes...........................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE
COMPANY................................................6
2.1 Capitalization; Stock..................................6
2.2 Organization...........................................6
2.3 Financial Statements...................................7
2.4 Absence of Certain Changes or Events...................7
2.5 Title to Assets........................................9
2.6 Patents, Trademarks, Etc...............................9
2.7 Commitments...........................................10
2.8 Litigation............................................11
2.9 Compliance with Laws..................................11
2.10 Corporate Power and Authority; No Conflicts...........12
2.11 Employee Benefit Plans................................12
2.12 Consents..............................................15
2.13 Taxes.................................................16
2.14 Subsidiaries..........................................17
2.15 Real Property; Leases.................................17
2.16 Environmental Matters.................................17
2.17 Undisclosed Liabilities...............................19
2.18 Insurance.............................................19
2.19 Labor Relations.......................................19
2.20 Product Warranties; Consignments......................20
2.21 Inventory.............................................20
2.22 Accounts Receivable...................................20
2.23 Non-Foreign Status....................................20
2.24 ELIC Settlement Agreement.............................21
2.25 Disclaimer............................................21
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER..........21
3.1 Title.................................................21
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3.2 Litigation.............................................21
3.3 Power and Authority; No Conflict.......................21
3.4 Consents...............................................22
3.5 Disclaimer.............................................22
3.6 Value of GDT; Value of Kalamazoo.......................22
3.7 PBGC...................................................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER AND
MAYFLOWER .............................................22
4.1 Organization...........................................23
4.2 Corporate Power and Authority; No Conflicts............23
4.3 Consents...............................................23
4.4 Availability of Funds..................................24
4.5 Litigation.............................................24
4.6 Purchase for Investment................................24
4.7 Solvency of the Buyer..................................24
4.8 Knowledge of the Buyer and Mayflower of the Seller
and the Company and Their Business.....................25
ARTICLE V COVENANTS OF THE COMPANY AND THE SELLER................25
5.1 Cooperation............................................25
5.2 Conduct of Business....................................25
5.3 Access.................................................27
5.4 Further Assurances.....................................28
5.5 Acquisition Proposals..................................28
5.6 Advice of Changes......................................28
5.7 Certain Events.........................................29
5.8 Additional Documents...................................29
5.9 Documents to be Delivered by the Seller and the
Company on the Date Hereof.............................30
5.10 Waiver of Rights Upon the Closing......................31
5.11 Certain Employees......................................31
ARTICLE VI COVENANTS OF THE BUYER AND MAYFLOWER...................31
6.1 Cooperation by the Buyer...............................31
6.2 Books and Records; Personnel...........................32
6.3 Advice of Changes......................................33
6.4 Liabilities............................................33
6.5 Shareholder Approval...................................34
6.6 Further Assurances.....................................34
6.7 Solvency...............................................34
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6.8 Additional Documents, Agreements or Instruments...................................34
6.9 Documents to be Delivered by Mayflower and the Buyer
Simultaneously Herewith...........................................................35
6.10 Waiver of Rights Upon the Closing.................................................35
6.11 Corporate Name....................................................................36
ARTICLE VII ADDITIONAL COVENANTS..............................................................36
7.1 Income and Franchise Taxes........................................................36
ARTICLE VIII CONDITIONS TO THE BUYER'S OBLIGATIONS.............................................39
8.1 Representations, Warranties and Covenants of the Seller and the
Company...........................................................................39
8.2 No Prohibition....................................................................39
8.3 Shareholder Approval..............................................................39
8.4 Governmental Consents.............................................................40
ARTICLE IX CONDITIONS TO THE SELLER'S OBLIGATIONS............................................40
9.1 Representations, Warranties and Covenants of the Buyer............................40
9.2 No Prohibition....................................................................40
9.3 Shareholder Approval..............................................................40
9.4 Governmental Consents.............................................................40
9.5 General Release...................................................................41
ARTICLE X EMPLOYMENT AND EMPLOYEE BENEFITS
ARRANGEMENTS......................................................................41
10.1 Definitions.......................................................................41
10.2 Special Payments..................................................................42
10.3 Employment Pension Benefit Plans..................................................42
10.4 Benefit Plans.....................................................................44
10.5 WARN Act..........................................................................45
10.6 Indemnity.........................................................................45
10.7 No Rights to Continuing Employment................................................45
ARTICLE XI TERMINATION PRIOR TO CLOSING......................................................45
11.1 Termination.......................................................................45
11.2 Effect of Termination.............................................................46
ARTICLE XII MISCELLANEOUS.....................................................................46
12.1 Indemnification...................................................................46
12.2 Interpretive Provisions...........................................................47
12.3 Entire Agreement..................................................................47
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12.4 Successors and Assigns..............................47
12.5 Headings............................................48
12.6 Modification and Waiver.............................48
12.7 Broker's Fees.......................................48
12.8 Expenses............................................48
12.9 Notices.............................................49
12.10 Governing Law.......................................52
12.11 Public Announcements................................52
12.12 Counterparts........................................52
12.13 Certain Definitions.................................53
12.14 No Third Party Beneficiaries........................62
12.15 Severability........................................63
12.16 Effectiveness.......................................63
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EXHIBITS
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Exhibit 1.7 List of the Guaranties by Seller
Exhibit 5.8(c) Form of Legal Opinion of Counsel
Exhibit 5.8(d) Form of FIRPTA Certificate
Exhibit 5.9(a) Form of Escrow Agreement
Exhibit 5.9(b) Form of Indemnification Agreement
Exhibit 5.9(c) Form of Insurance Claim Letter Agreement
Exhibit 5.9(d) Form of Transition Services Agreement
Exhibit 5.9(e) Form of Records Letter Agreement
Exhibit 5.11 Certain Employees
Exhibit 6.8(a) Form of Legal Opinion of Walter, Conston, Alexander &
Green, P.C.
Exhibit 6.8(b) Form of Legal Opinion of Nabarro Nathanson
Exhibit 9.5 Form of General Release
Exhibit 12.2(a)(i) Seller's Knowledge and Company's Knowledge
Exhibit 12.2(a)(ii) Buyer's and Mayflower's Knowledge
SCHEDULES
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Schedule 1.5(a) Initial Statement of Net Assets as of August 31, 1996
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AMENDED STOCK PURCHASE AGREEMENT
This Amended Stock Purchase Agreement (this "Agreement"), made
and entered into as of this 7th day of November, 1996, by and among SCSM
Holdings, Inc., a Delaware corporation (the "Seller"), South Charleston Stamping
& Manufacturing Company, a West Virginia corporation (the "Company"), Mayflower
Acquisition Corporation, a Delaware corporation (the "Buyer"), and The Mayflower
Corporation Plc, a corporation organized under the laws of England
("Mayflower"). The Seller, the Company, the Buyer and Mayflower are referred to
collectively herein as the "Parties."
W I T N E S S E T H:
WHEREAS, the Seller owns all 1,000 shares of the issued and
outstanding common stock, par value $1.00 per share (the "Stock"), of the
Company; and
WHEREAS, the Seller desires to sell to the Buyer, and the
Buyer desires to buy from the Seller, all of the Stock.
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 12.13 hereof sets forth the definitions of capitalized terms
used herein, or references the Sections in which such terms are defined):
ARTICLE I
TERMS OF PURCHASE AND SALE
1.1 Sale of the Stock.
(a) On the Closing Date and subject to the terms and
conditions of this Agreement, the Seller shall sell, assign and deliver to the
Buyer, and the Buyer shall purchase from the Seller, the Stock, for the
Aggregate Purchase Price set forth in Section 1.3 below.
(b) At the Closing, the Seller shall deliver to the Buyer
certificates representing the Stock, duly endorsed in blank for transfer or
accompanied by duly executed stock powers assigning the Stock in blank, against
the payment of the Aggregate Purchase Price therefor in accordance with the
terms of Section 1.3 hereof. The Buyer shall, and Mayflower shall cause the
Buyer to, bear the cost of any documentary, stamp, sales, excise, transfer or
other similar taxes payable (other than income taxes payable by the Seller and
other than deconsolidating adjustments and taxes resulting therefrom including,
without limitation,
<PAGE> 8
adjustments in respect of inventory, intercompany transactions and excess loss
accounts, resulting from termination of Company as a member of GDHI's
consolidated group and other than with respect to the transactions contemplated
by Section 7.1(e)) in respect of the sale of the Stock all of which will be paid
by the Seller.
1.2 The Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Sonnenschein, Nath &
Rosenthal commencing at 9:00 a.m., New York City time, on December 19, 1996 (the
"Closing Date").
1.3 Purchase Price and Payment. The aggregate purchase price
(the "Aggregate Purchase Price") to be paid by the Buyer, or to the extent not
paid by the Buyer, by Mayflower, for the Stock, shall consist of One Hundred
Sixty-Three Million ($163,000,000), in United States Dollars, (the "Initial
Purchase Price"), and Two Million ($2.0 million), in United States Dollars (the
"Escrow Amount"); provided, however, that the Initial Purchase Price is subject
to adjustment as set forth in Section 1.5 hereof. 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 and shall be paid to the Seller
on the Escrow Termination Date subject to and in accordance with the terms of
the Indemnification Agreement and the Escrow Agreement. An amount equal to the
difference between the Initial Purchase Price and the Assumed Debt shall be paid
by the Buyer 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 the account
of the Seller at a bank or banks specified in advance in writing by the Seller.
1.4 Retained Indebtedness. (a) The outstanding balance of the
Assumed Debt was $28,664,688 as of September 30, 1996. Prior to or
simultaneously with the Closing, all intercompany balances between or among the
Company, the Seller and any Other Entity shall have been canceled, and the
Company shall have been completely discharged from any indebtedness to any third
party (other than pursuant to, under, with respect to, or in connection with the
Assumed Debt) and shall have no further obligations under the Loan Agreement
(and all liens thereunder shall have been released).
(b) The Company shall deliver a statement to the Buyer and
Mayflower, no later than two days prior to the Closing Date, setting forth the
anticipated balance of the Assumed Debt on the Closing Date.
AMENDED AGREEMENT PAGE 2
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1.5 Purchase Price Adjustment.
(a) (i) Three (3) business days prior to the Closing Date, the
Seller shall cause the Company's management to deliver to the Seller and the
Buyer a statement (the "Pre-Closing Statement") setting forth the Company's
management's estimate of the Company's Net Assets as of the close of business,
Eastern Standard Time on December 4, 1996 (the "Estimated Net Assets"), together
with a representation by the Company's management that the Pre-Closing Statement
has been prepared consistent with past accounting practices, policies and
procedures with consistent classifications and estimation methods utilized by
the Company's management in the preparation of the August 31, 1996 Statement of
Net Assets (the "Initial Statement"), a copy of which is attached hereto as
Schedule 1.5(a); provided, however, that the Pre-Closing Statement shall not
reflect any liability or reserve for any cost or expense (including, without
limitation, Liabilities or Taxes) for which the Seller is responsible pursuant
to the terms of this Agreement. If the Estimated Net Assets are less than
forty-one million and twelve thousand dollars ($41,012,000) (the "Initial Net
Assets"), then the Initial Purchase Price to be paid at the Closing shall be
decreased by an amount which is the difference between the Initial Net Assets
and the Estimated Net Assets (the "Reduced Purchase Price"). If the Estimated
Net Assets are greater than the Initial Net Assets, then the Initial Purchase
Price to be paid at the Closing shall be increased by an amount which is the
difference between the Estimated Net Assets and the Initial Net Assets (the
"Increased Purchase Price").
(ii) Within thirty (30) days after the Closing Date, the Buyer
shall (and Mayflower shall cause the Buyer to) cause the Company's management to
prepare and deliver to the Seller and the Buyer a statement setting forth the
Company's Net Assets (the "Closing Net Assets") as of the close of business on
the date immediately prior to the Closing Date (the "Closing Statement of Net
Assets"), together with a representation by the Company's management that the
Closing Statement of Net Assets has been prepared consistent with past
accounting practices, policies and procedures with consistent classifications
utilized by the Company's management in the preparation of the Initial Statement
and the Pre-Closing Statement; provided, however, that the Closing Statement of
Net Assets shall not reflect any liability or reserve for any cost or expense
(including, without limitation, Liabilities or Taxes) for which the Seller is
responsible pursuant to the terms of this Agreement.
(iii) As used herein, the term "Company's Net Assets" shall be
computed in a manner consistent with Schedule 1.5(a). The Company's Net Assets
set forth in the Closing Statement of Net Assets shall be determined using the
same accounting methods, policies, practices and procedures, with consistent
classification, and estimation methods, as used by the Company's management in
the preparation of the Initial Statement.
(b) The Seller and its representatives shall have sixty (60)
days to review the Closing Statement of Net Assets and, in addition to the
Buyer's and Mayflower's obligations
AMENDED AGREEMENT PAGE 3
<PAGE> 10
under Section 6.2 of this Agreement, during such sixty (60) day period the
Seller may, at its sole option and cost, retain an accounting firm of its
choosing to prepare an audit of the Closing Statement of Net Assets. Upon
reasonable notice to the Buyer, the Seller, its representatives and agent's
(including, without limitation, the accountants employed by the Seller) shall
have full access to the Books and Records and management of the Company, without
charge to the Seller and any work papers, schedules or sheets used in the
preparation of the Closing Statement of Net Assets. The Closing Statement of Net
Assets shall become final, conclusive and binding upon the parties on the
sixtieth (60th) day following delivery thereof, unless the Seller shall have
given written notice to the Buyer of its disagreement with the Closing Statement
of Net Assets (the "Notice of Disagreement") at any time prior to such date. Any
Notice of Disagreement shall specify the nature of any disagreement so asserted.
If a Notice of Disagreement is received by the Buyer in a timely manner, then
the Closing Statement of Net Assets (as revised in accordance with the terms
hereof) shall become final and binding upon the Seller, the Buyer and Mayflower
upon the earlier of (i) the date the Seller and the Buyer agree in writing upon
all of the amounts to be set forth in the Closing Statement of Net Assets and
(ii) the date on which the Arbitrator (as hereinafter defined) has provided its
written report pursuant to Section 1.5(c) hereof relating to any dispute.
(c) During the sixty (60) day period following the Seller's
delivery of a Notice of Disagreement to the Buyer, the Seller and the Buyer
shall (and Mayflower shall cause the Buyer to) seek in good faith to resolve in
writing any disagreements in respect of matters set forth in the Notice of
Disagreement. Upon the expiration of such sixty (60) day period, the Seller and
the Buyer shall jointly select a nationally recognized, independent public
accounting firm (the "Arbitrator") and shall submit to the Arbitrator the
Closing Statement of Net Assets and the Notice of Disagreement for review and
evaluation. If the Seller and the Buyer cannot agree on the selection of the
independent public accounting firm to act as Arbitrator, they shall jointly
request the American Arbitration Association to appoint such a firm and such
appointment shall be conclusive and binding. Within thirty (30) days of the
submission to the Arbitrator, the Arbitrator shall make a written determination,
based solely on presentations by the Buyer and the Seller, and not by
independent review, only those issues in dispute and shall render a report as to
the dispute and the resulting computation. In the event of disagreements
relating to differences between generally accepted accounting principles and the
accounting practices, policies and procedures with consistent classifications
and estimation methods utilized by the Company's management to prepare the
Closing Statement of Net Assets, the latter shall be followed. The fees and
expenses of the Arbitrator incurred in connection with services rendered
pursuant to this Section 1.5(c) shall be borne by the Seller and the Buyer in
proportion to the award granted each of them by the Arbitrator. For example, if
the dispute relates to $100,000 and the Arbitrator awards $60,000 to party A and
$40,000 to party B, then the Arbitrator's fees and expenses shall be apportioned
as follows: B shall pay 60% and A shall pay 40% of such fees and expenses.
AMENDED AGREEMENT PAGE 4
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(d) Whether any dispute is resolved by agreement among the
Buyer and the Seller or by the Arbitrator, changes to the Closing Statement of
Net Assets shall be made thereunder but only for items as to which the Seller
has taken exception hereunder and such revised Closing Statement of Net Assets
shall be considered final, binding and conclusive.
(e) When the Closing Statement of Net Assets becomes final,
binding and conclusive in accordance herewith and if the Closing Net Assets are
less than the Estimated Net Assets, then the Increased Purchase Price or the
Reduced Purchase Price, as the case may be, shall be decreased by the sum of (i)
the difference between the Estimated Net Assets and the Closing Net Assets (the
"Reduction Adjustment"), plus (ii) interest accrued on the Reduction Adjustment
from the Closing Date and to, but not including, the date on which the Reduction
Adjustment is paid, at the prime rate (as published in the Wall Street Journal),
plus (2%), as it exists from time to time during such period (the "Purchase
Price Reduction"). Within two (2) business days from the date upon which the
Closing Statement of Net Assets becomes final, conclusive, binding and
non-appealable (as set forth herein) the Seller shall pay, by wire transfer of
immediately available funds, the amount of the Purchase Price Reduction to the
Company.
(f) When the Closing Statement of Net Assets becomes final,
binding and conclusive in accordance herewith and if the Closing Net Assets are
more than the amount of the Estimated Net Assets, then the Increased Purchase
Price or the Reduced Purchase Price, as the case may be, shall be increased by
the sum of (i) the difference between the Closing Net Assets and the Estimated
Net Assets (the "Increase Adjustment"), plus (ii) interest accrued on the
Increase Adjustment from the Closing Date and to, but not including, the date on
which the Increase Adjustment is paid, at the prime rate (as published in the
Wall Street Journal), plus (2%), as it exists from time to time during such
period (the "Purchase Price Increase"). Within two (2) business days from the
date upon which the Closing Statement of Net Assets becomes final, conclusive,
binding and non-appealable (as set forth herein) the Company, the Buyer or
Mayflower (or, to the extent not paid by the Buyer or the Company, Mayflower)
shall pay, by wire transfer of immediately available funds, the amount of the
Purchase Price Increase to the Seller.
(g) At the Closing, the Company shall provide a statement
setting forth all transactions under the Loan Agreement and the intercompany
account and any increase or decrease, as the case may be, with respect to (i)
any borrowings under the Loan Agreement and (ii) the intercompany account, in
each case incurred in the Ordinary Course of Business from the close of
business, E.S.T., on December 4, 1996, through and including the Closing Date
(the "Interim Period"). At the Closing, the Buyer shall pay to the Seller any
increase, the Seller shall pay to the Buyer any decrease, in the borrowings
under Loan Agreement and the intercompany account for the Interim Period as set
forth in the Statement. All such payments shall be made by wire transfer or
delivery of other immediately available funds to the account of the Buyer or the
Seller, as the case may be.
AMENDED AGREEMENT PAGE 5
<PAGE> 12
1.6 Rent and Real Property Taxes. At the Closing, the Buyer shall pay
(and, to the extent the Buyer does not pay, Mayflower shall pay) its apportioned
share, as of 11:59 p.m. (Eastern Standard Time) of the day preceding the Closing
Date, of the rent and real property taxes paid by the Company under the SCSM
Property Lease for the month in which the Closing occurs.
1.7 Guaranties by Seller. It shall not be a violation of this Agreement
for the Seller, or any Affiliate thereof to terminate any guarantee of any
obligation of the Company (each a "Seller Guarantee"), concurrently with the
Closing with the concurrence of the beneficiary of the guarantee. Attached
hereto as Exhibit 1.7 is a list of all Seller Guaranties. Mayflower hereby
indemnifies and holds Seller harmless from any and all losses arising from or in
connection with any Seller Guarantee and any and all expenses relating thereto
for occurrences subsequent to the Closing Date with regard to such guarantees as
may remain in effect subsequent to the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as set forth in the Disclosure Schedule or the SEC
Reports (in each case, including, without limitation, the documents referenced
therein) or (ii) (except with respect to the representations and warranties set
forth in Section 2.13 hereof) as may occur as a result of the sale, spinoff,
contribution, assignment, transfer, dividend or other disposition of the Other
Assets, the Company represents and warrants to the Buyer and Mayflower as
follows:
2.1 Capitalization; Stock. The authorized capital stock of the
Company consists of 1,000 shares of common stock, par value $1.00 per share and
5,000,000 of preferred stock, par value $10.00 per share, of which 4,500,000 are
designated as Series A Preferred, of which 1,000 shares of common stock, par
value $1.00 per share are outstanding. All of the shares comprising the Stock
are duly authorized, validly issued, fully paid and non-assessable. There are no
outstanding or authorized securities convertible into, exchangeable for, or
carrying the right to acquire equity securities of the Company, or
subscriptions, warrants, options, rights or other arrangements or commitments
obligating the Company to issue or dispose of any of its equity securities or
any ownership interest therein. There are no preemptive rights in respect of the
capital stock of the Company.
2.2 Organization. The Company 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 carry on
its business as it is now being conducted. The Company is duly qualified to do
business and is in good standing as a foreign corporation
AMENDED AGREEMENT PAGE 6
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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, assets, results of operations or financial condition of the
Company (a "Material Adverse Effect"). True and complete copies of the charter
and by-laws, which are in full force and effect on the date hereof, of the
Company have previously been delivered or made available to the Buyer. The
amended disclosure schedule delivered by the Company to the Buyer in connection
herewith (the "Disclosure Schedule") sets forth the directors and officers of
the Company.
2.3 Financial Statements. The Company has delivered to the
Buyer each of the following financial statements (collectively, the "Financial
Statements"), copies of which are included in the Disclosure Schedule:
(a) audited 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 (the "SCSM Annual
Statements") (December 31, 1995 being the "Most Recent Fiscal Year End") for the
Company;
(b) unaudited balance sheet and statement of operations,
shareholders' equity and cash flow as of and for the nine months ended September
30, 1996 for the Company (the "Most Recent SCSM Financial Statements" and,
together with the SCSM Annual Statements, the "SCSM Financial Statements"); and
(c) audited consolidated balance sheet and statement of
operations, shareholders' equity and cash flow for the Company as and for
December 31, 1995 (the "Most Recent Company Financial Statements").
The SCSM Financial Statements and the Most Recent Company Financial Statements
(including the notes thereto) have been prepared in accordance with GAAP, which
has been applied on a consistent basis (except as may be indicated on the notes
thereto) throughout the periods covered thereby, and present fairly, in all
material respects, the financial position, the results of operations, retained
earnings and cash flows of the Company as at each of the dates and for each of
the periods covered thereby; provided, however, that the Most Recent SCSM
Financial Statements are subject to normal year-end adjustments and lack
footnotes and other presentation items.
2.4 Absence of Certain Changes or Events. Except (i) as set
forth in the Disclosure Schedule, the Most Recent Financial Statements, or the
SEC Reports filed prior to the date of this Agreement (in each case, including,
without limitation, the documents referenced therein), or (ii) as may occur as a
result of or in connection with any transaction with respect to the sale,
spinoff, dividend, transfer, assignment, contribution or other disposition (or
the
AMENDED AGREEMENT PAGE 7
<PAGE> 14
contemplated sale, spinoff, dividend, transfer, assignment, contribution or
other disposition), no later than the Closing Date, of the Other Assets or (iii)
as permitted or contemplated by this Agreement, since the Most Recent Fiscal
Year End, the Company has not:
(a) suffered any damage, destruction or casualty loss (not
covered by insurance) to its physical properties which individually or in the
aggregate has had a Material Adverse Effect;
(b) incurred or discharged any obligation or liability or
entered into any other transaction which exceed $100,000 in any one case except
in the Ordinary Course of Business;
(c) suffered any material adverse change in its business,
assets, results of operations or financial condition which is not a result of
general economic conditions;
(d) increased, decreased or otherwise modified or committed to
increase, decrease or modify the rate or terms of compensation payable or to
become payable to its directors, officers, employees, or independent contractors
or increased the rate or terms of any Business Benefit Plan covering any of its
directors, officers, employees, or independent contractors except in each case
increases occurring in the Ordinary Course of Business in accordance with its
customary practices (including normal periodic performance reviews and related
compensation and benefit increases) or as required by any pre-existing
Commitment; or adopted, extended the coverage of, or otherwise modified or
committed to adopt, extend the coverage of or otherwise modify the terms of any
severance, change in control or bonus retention program;
(e) mortgaged, pledged or subjected to any other Encumbrance
any of its properties or assets, tangible or intangible, other than Permitted
Exceptions;
(f) acquired or disposed of any 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 or which do not exceed $100,000 in any one case individually or in the
aggregate have a Material Adverse Effect;
(g) forgiven or canceled any debts or claims, or waived any
rights, except in the Ordinary Course of Business and except for forgivnesses,
cancellations and waivers which do not exceed $100,000 in any one case;
(h) suffered any strikes, work stoppages or other labor
disputes that individually or in the aggregate have had a Material Adverse
Effect;
AMENDED AGREEMENT PAGE 8
<PAGE> 15
(i) 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 which do not individually or in the
aggregate have a Material Adverse Effect or changes required by changes in GAAP;
(j) granted any rights, licenses or similar agreements or
arrangements permitting the use of any Patent and Trademark Rights or entered
into any licensing or distributorship agreements other than in the Ordinary
Course of Business or as do not individually or in the aggregate have a Material
Adverse Effect;
(k) entered into any employment agreement, collective
bargaining agreement or Business Benefit Plan other than those which have been
set forth in the Disclosure Schedule and which do not individually or in the
aggregate have a Material Adverse Effect;
(l) (i) redeemed, purchased or otherwise acquired any of the
Company's securities, or (ii) issued, pledged or sold the shares of capital
stock of the Company, or any securities convertible into or exchangeable for or
conferring the right to purchase capital stock of the Company;
(m) suffered any loss of any employees, significant suppliers
or significant customers; or
(n) amended its Certificate of Incorporation or by-laws.
2.5 Title to Assets. Except for the Other Assets, at the
Closing the Company will have, good and marketable title to all of the assets
and properties used by it or shown on the Most Recent SCSM Balance Sheet, or
acquired after the date thereof (except for assets and properties sold, consumed
or otherwise disposed of in the Ordinary Course of Business since the date of
the Most Recent SCSM Balance Sheet) and which are material to the business or
financial condition of the Company, free and clear of all Encumbrances, except
(A) as set forth in the Disclosure Schedule or the SEC Reports filed prior to
the date of this Agreement (in each case, including, without limitation, the
documents referenced therein), (B) liens for taxes not yet due and payable or
due but not delinquent or being contested in good faith by appropriate
proceedings and (C) Encumbrances which individually or in the aggregate do not
have a Material Adverse Effect (the matters set forth in the foregoing clauses
(A), (B) and (C) being referred to herein as the "Permitted Exceptions").
2.6 Patents, Trademarks, Etc. The Company does not own any
United States or foreign registered patents, trademarks or tradenames (the
"Trademarks"), copyrights, or has pending any applications therefor
(collectively, "Patent and Trademark Rights"). Except as set forth in the
Disclosure Schedule or the SEC Reports filed prior to the date of this Agreement
AMENDED AGREEMENT PAGE 9
<PAGE> 16
(in each case, including, without limitation, the documents referenced therein),
to Company's knowledge, the Company has not interfered with, infringed upon,
misappropriated, or violated any material patent, copyright, tradename or
trademark right of any third party in any material respect, and the Company has
not received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation. No third party has
the legal right to prevent the Company from using all of the know-how and trade
secrets necessary to operate the machinery and equipment employed in the
Company's business.
2.7 Commitments. The Disclosure Schedule sets forth a list, as
of the date hereof, of each of the following categories of written or oral
agreements, arrangements or commitments (including any and all amendments
thereto) to which the Company is a party or by which the Company 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;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, components, commodities, supplies, products,
or other personal property, or for the furnishing or receipt of services used in
the conduct of the business of the Company, 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 concerning a partnership or joint venture;
(d) 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;
(e) any material agreement concerning confidentiality or
noncompetition (excluding agreements with any and all prospective purchasers of
the Company or any of its past or present subsidiaries or any of their
respective assets, as to which no disclosure is made) provided, however, that,
except as set forth in the Disclosure Schedule, the Company represents and
warrants that such agreements do not contain any non-competition,
confidentiality or other restrictions on the Company's ability to conduct its
business;
(f) any material sales agency or distributorship agreements;
(g) any material brokerage and finder's agreements;
AMENDED AGREEMENT PAGE 10
<PAGE> 17
(h) 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 the Buyer;
(i) any material (written or oral, formal or informal)
employment, consulting, severance or agency agreement or arrangement;
(j) any agreement under which it has advanced or loaned any
amount to any of its directors, officers and employees outside of the Ordinary
Course of Business;
(k) any material agreement (other than purchase orders) for
the sale and supply of parts or components produced by the Company, which
provides for the payment of an aggregate purchase price in excess of $100,000
within any 12 month period;
(l) other agreements, arrangements or commitments which are
material to the business or financial condition of the Company.
The Company has previously delivered or made available to the Buyer a correct
and complete copy of each such written Commitment. Except as set forth in the
Disclosure Schedule or the SEC Reports filed prior to the date of this Agreement
(in each case, including, without limitation, the documents referenced therein),
the Company is not in default, nor, to the Company's knowledge, is there any
event which with the passage of time would constitute a default, under any of
the Commitments, which default has or may have a Material Adverse Effect
(defined solely for the purpose of this provision as causing damage to the
business of the Company in excess of $500,000 in any one case).
2.8 Litigation. Except as set forth in the Disclosure Schedule
or the SEC Reports filed prior to the date of this Agreement (in each case,
including, without limitation, the documents referenced therein), 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 the Company's knowledge, threatened against the
Company, or to which it is a party, (i) with respect to which there is a
reasonable likelihood of a determination which would have a Material Adverse
Effect or (ii) 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 filed prior to the date of this Agreement
(in each case, including, without limitation, any documents referenced therein),
the Company is not subject to any outstanding orders, rulings, injunctions,
judgments, charges or decrees that have a Material Adverse Effect.
2.9 Compliance with Laws. Except as set forth in the
Disclosure Schedule or the SEC Reports filed prior to the date of this Agreement
(in each case, including, without
AMENDED AGREEMENT PAGE 11
<PAGE> 18
limitation, the documents referenced therein), to the Company's knowledge, the
Company is in compliance with all applicable laws, rules, regulations, notices,
and orders of federal, state, local and foreign governments (and all agencies
thereof) currently in effect, and all judgments from courts having competent
jurisdiction over them, except, in each case, where the failure to comply
therewith does not have a Material Adverse Effect. Except as set forth in the
Disclosure Schedule or the SEC Reports filed prior to the date of this Agreement
(in each case, including, without limitation, the documents referred therein),
the Company has all governmental permits, licenses and authorizations
(collectively, the "Permits") necessary or required for the conduct of its
business as presently conducted, except where the absence thereof does not
individually or in the aggregate have a Material Adverse Effect. Except as set
forth in the Disclosure Schedule or the SEC Reports filed prior to the date of
this Agreement (in each case, including, without limitation, the documents
referred therein), there is no Litigation pending or, to the Company's
knowledge, threatened, seeking the revocation, cancellation or suspension or any
adverse modification, of any such Permits with respect to which there is a
reasonable likelihood of a determination which would cause a loss in excess of
$100,000 in any one case.
2.10 Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company.
This Agreement has been duly and validly executed and delivered by the Company
and constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby will not, with or without the giving of
notice or the lapse of time, or both, (i) violate any provision of law, rule or
regulation to which the Company is subject, (ii) violate any order, judgment or
decree applicable to the Company, (iii) violate any provision of the Certificate
of Incorporation or the By-laws of the Company, or (iv) 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 the Company pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, Permit, franchise
or other instrument or obligation to which the Company is a party or by which
the Company or any of its properties is bound or affected; except, in each case,
for 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.
2.11 Employee Benefit Plans.
(a) The Disclosure Schedule lists all Business Benefit Plans.
True and complete copies thereof, where in writing, have previously been
delivered or made available to the Buyer, including, without limitation:
AMENDED AGREEMENT PAGE 12
<PAGE> 19
(i) any related summary plan description including,
where there is no written document evidencing a Business Benefit Plan,
an accurate written description of the material terms of such Business
Benefit Plan.
(ii) the most recent determination letter, if any,
received from the IRS regarding such plan;
(iii) any pending applications, filings or notices with
respect thereto with or from the IRS, the PBGC, or the Department of
Labor;
(iv) 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;
(v) the most recent annual actuarial valuation, if
any, prepared for each Business Benefit Plan; and
(vi) each trust agreement or other funding or
financing agreement relating to each Business Benefit Plan.
(b) With respect to each of the Business Benefit Plans
intended to qualify under Section 401(a) of the Code, except as set forth on the
Disclosure Schedule, (i) a favorable determination letter has been issued by the
IRS and since the date of such determination letter, to the Company's knowledge,
there has been no action taken or omitted to be taken, nor has any event
occurred or failed to occur, which could reasonably be expected to cause the
loss of qualification of such Business Benefit Plan under Section 401(a) of the
Code where such action or failure to act or occurrence or nonoccurrence of such
event would have a Material Adverse Effect, and (ii) there have been no
prohibited transactions (within the meaning of Section 406 of ERISA or Section
4975 of the Code) for which no exemption exists under Section 408 of ERISA or
Section 4975 of the Code and for which there is any liability or civil penalty
assessed or, to the knowledge of the Company assessable, pursuant to Section
502(i) of ERISA or taxes imposed, or to the knowledge of the Company which could
be imposed, under Section 4975 of the Code which would have a Material Adverse
Effect.
(c) Except as set forth in the Disclosure Schedule, each
Business Benefit Plan has been maintained in material compliance with its terms
and all provisions of applicable law.
(d) 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.
AMENDED AGREEMENT PAGE 13
<PAGE> 20
(e) Except for the National Industrial Group Pension Plan and
except as set forth in the Disclosure Schedule, neither the Company nor in the
past five years any Code Affiliate has participated in or contributed to any
Multiemployer Plan nor do any of them have any other liability, including any
potential withdrawal liability, with respect to any Multiemployer Plan, and none
of them has incurred any current or potential withdrawal liability as a result
of a complete or partial withdrawal (or potential partial withdrawal) from any
Multiemployer Plan. Except as set forth in the Disclosure Schedule or in the SEC
Reports (in each case, including, without limitation, the documents referenced
therein):
(i) no "reportable event," within the meaning of
Section 4043 of ERISA, has occurred within the last 5 years with
respect to any Business Benefit Plan, which is subject to Title IV of
ERISA, other than reportable events with respect to which notice has
been waived by the PBGC; and
(ii) no claims are pending or, to the knowledge of the
Company, threatened, with respect to any Business Benefit Plan other
than claims for benefits in the ordinary course of plan operation and
other than claims which, individually or in the aggregate, would not
have a Material Adverse Effect.
(f) The Company has no liability with respect to, or has any
obligation to provide, health or life insurance or other welfare benefits with
respect to Employees, or current or former independent contractors or their
dependents, who have terminated employment with or ceased to provide services
for the Company, other than as required by COBRA.
(g) The Company has made all required contributions and paid
all applicable premiums to or with respect to the Business Benefit Plans of the
Company, as and when due and the Financial Statements reflect proper accruals
for all contributions and premium payments required to be made with respect to
such Business Benefit Plans through the Closing Date.
(h) Except as set forth in the Disclosure Schedule, the
Company has no obligation under any Business Benefit Plan or otherwise to
provide severance benefits or other benefit entitlements upon termination of
employment of Employees or the cessation of services of independent contractors.
(i) Except as set forth in the Disclosure Schedule, any and
all Business Benefit Plans of the Company may be amended prospectively or
terminated by the Company on or after the Closing Date without violating the
terms of such Business Benefit Plan, and without penalty or any liability in
excess of the amount shown in the Financial Statements.
(j) The Company has all requisite power and authority to take
such actions as are required by the Company under Article X hereof with respect
to the Business Benefit
AMENDED AGREEMENT PAGE 14
<PAGE> 21
Plans, including, without limitation, assigning all of the rights and
obligations of the Company with respect to any Business Benefit Plan to a Code
Affiliate, or paying accrued benefits at or prior to the Closing in full
satisfaction of the liabilities of the Company under such Business Benefit Plan,
as the case may be.
(k) Except as set forth in the Disclosure Schedule, each
Business Benefit Plan maintained or contributed to by the Company which is a
health plan, long-term disability plan, accident plan or death benefits plan is
fully insured by an insurance company with respect to which the Company has no
knowledge that it is not licensed or authorized to do business in its state of
operation.
(l) Prior to the Closing Date, Seller shall provide Mayflower
with a true and complete Schedule setting forth (i) the names and positions of
all then current Employees of the Company and individual independent contractors
and their status (active, on layoff, disabled, or on other leave of absence) of
each, (ii) the total annual compensation payable to each such Employee and
independent contractor, including salary bonuses and any compensation pursuant
to any other arrangement, (iii) perquisites provided to such Employees and
independent contractors, and (iv) insurance policies on the lives of Employees
who are officers, the premiums of which are paid by the Company. Except as set
forth in the Disclosure Schedule, as of the Closing Date there is no outstanding
indebtedness for services performed for the Company or vacation or other benefit
owed to any Employee or individual independent contractor.
(m) Seller has not made and shall not make or permit to be
made any representation to any person entitled to a Special Bonus Plan Payment
inconsistent with the terms of the Special Bonus Plan and the first sentence of
Section 10.2 and shall not represent or permit to be represented to any such
person that such Special Bonus Plan Payment shall be made by the Company. The
Special Bonus Plan maintained by the Seller, a copy of which has been previously
provided or made available to the Buyer or its counsel, and the first sentence
of Section 10.2 accurately reflect all material terms of Special Bonus Plan
Payments to be made by the Seller and its Affiliates in connection with the
transactions contemplated hereby.
2.12 Consents. Except as set forth in the Disclosure Schedule,
no consent, approval or authorization of, or exemption by, or filing with, any
governmental authority (other than applicable requirements, if any, pursuant to
the HSR Act and the Exchange Act, is required in connection with the execution,
delivery and performance by the Company of this Agreement or the taking of any
other action contemplated hereby, excluding, however, consents, approvals,
authorizations, exemptions and filings, if any, which the Buyer or Mayflower 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, either individually or in the
AMENDED AGREEMENT PAGE 15
<PAGE> 22
aggregate, prevent the Company from performing its obligations under this
Agreement and would not have a Material Adverse Effect.
2.13 Taxes. (a) Except as set forth in the Disclosure
Schedule:
(i) The Company, and any combined, consolidated,
unitary or affiliated group of which the Company 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 the Company could be held
liable; and (y) has accurately and timely filed (or timely filed an
extension for), all federal, state, local, and foreign tax returns,
reports, and forms with respect to such Taxes required to be filed by
them on or before the Closing Date.
(ii) There is no material dispute or claim, or any
action, suit, proceeding, audit or investigation concerning any
liability for Taxes of the Company either (x) claimed or raised by any
authority in writing or (y) as to which the Company has knowledge based
upon personal contact with any agent of such authority. Except as set
forth in the Disclosure Schedule or the SEC Reports filed prior to the
date hereof (including, without limitation, the documents referenced
therein), there are no deficiencies for any Taxes and none has been
asserted or assessed in writing for which the Seller or the Company
could be liable, which remain unpaid or unsettled.
(iii) Neither the Seller nor the Company has waived any
statute of limitations in respect of Income Taxes or agreed to any
extension of time with respect to an Income Tax assessment or
deficiency.
(iv) (x) The Company has not filed a consent under
Code Section 341(f) concerning collapsible corporations; (y) the
Company has not made any material payments, is obligated to make any
material payments, or is a party to any agreement that under certain
circumstances could obligate it to make any material payments that will
not be deductible under Code Section 280G and (z) the Company will not
have any liability on or after the Closing Date pursuant to any tax
allocation or sharing agreement.
(b) The Disclosure Schedule sets forth all federal, state,
local and foreign Income Tax Returns filed with respect to the Company for
taxable periods ended on or after January 1, 1993, indicates those Income Tax
Returns that have been audited, and indicates those Income Tax Returns that
currently are the subject of audit. The Company has delivered or made available
to the Buyer correct and complete copies of all federal Income Tax Returns,
examination reports, and statements of deficiencies assessed against, or agreed
to by the Company since January 1, 1989.
AMENDED AGREEMENT PAGE 16
<PAGE> 23
2.14 Subsidiaries. There are no entities with respect to which
the Company either (a) will own on the Closing Date, either directly or
indirectly, the outstanding common stock (or other ownership interests having
voting power) of or (b) will have the power on the Closing Date to vote or
direct the voting of sufficient securities to elect a majority of the directors
thereof. Immediately prior to or at the Closing, the Company will not control
any corporation, partnership, trust, or other business association.
2.15 Real Property; Leases.
(a) The Company owns no Real Property.
(b) The Disclosure Schedule sets forth all real property under
which the Company is a tenant and which is material to its business or
operations ("Leased Property"). The Company has delivered or made available to
the Buyer correct and complete copies of the leases and subleases, including all
amendments thereof and modifications thereto through the date hereof (the
"Leases") for each Leased Property. With respect to each such material lease and
sublease set forth in the Disclosure Schedule, except as set forth in Disclosure
Schedule:
(i) There are no material disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease.
(ii) The Company has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or Encumbered any interest in the leasehold
or subleasehold.
(iii) All Leased Properties have received all approvals of
governmental authorities (including Permits) required in connection
with the operation thereof.
(iv) The Company is not in default with respect to any
material terms or conditions of the Leases other than defaults which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(v) All rents due and payable as of the Closing Date under the
leases and subleases for the Leased Properties shall have been paid
prior to or simultaneously with the Closing.
2.16 Environmental Matters. Except with respect to matters
which could not reasonably be expected to (i) have in the aggregate a Material
Adverse Effect or (ii) result in aggregate liability to the Company in excess of
$100,000 in any one case, and except as set forth in the Disclosure Schedule or
the SEC Reports filed prior to the date hereof (in each case, including, without
limitation, the documents referenced therein), as of the Closing Date, to the
Company's knowledge:
AMENDED AGREEMENT PAGE 17
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(a) The Company (i) has complied and is in compliance in all
material respects with the Environmental, Health and Safety Laws, including,
without limitation, such laws relating to waste disposal, and (ii) has obtained
all material Permits which are required under the Environmental, Health and
Safety Laws for its operation and has been in substantial compliance in all
material respects with all terms and conditions of such Permits;
(b) No Hazardous Material has been Released into the
environment by the Company on or from the premises of the Company which is
required by the Environmental, Health and Safety Laws currently in effect to be
remediated by or at the expense of the Company.
(c) The Company has not received during the last eighteen (18)
months, written notice of any alleged violation of or liability under any
Environmental, Health and Safety Laws (including, without limitation, notices
made pursuant to Section 104(e) of CERCLA) in connection with real property
owned or operated by the Company.
(d) Since 1988 the Company has not executed a release that
directly releases any environmental claims, including, without limitation, to
any prior owner or lessee of the SCSM Property.
(e) The transaction contemplated by this Agreement is not
motivated in any substantial part by environmental management concerns.
(f) The Seller has not owned any manufacturing companies other
than a manufacturing facility in Kalamazoo, Michigan and has not participated in
the general management of the SCSM Property, including, without limitation, the
environmental management of the SCSM Property.
(g) No liens have arisen under or pursuant to any
Environmental, Health and Safety Laws on any site or facility owned, operated or
leased by the Company.
(h) Within the past twelve (12) months, there have been no
environmental investigations, studies, audits, assessments, tests or reviews, or
other analyses performed on behalf of the Company that resulted in a written
report other than those which have been performed, from time to time, in the
Ordinary Course of Business.
The Parties agree that the only representations and warranties
as to any matters relating to Environmental, Health and Safety Laws are those
expressly set forth in this Section 2.16.
AMENDED AGREEMENT PAGE 18
<PAGE> 25
2.17 Undisclosed Liabilities. Except as reflected in the
Financial Statements or in the Disclosure Schedule (or in any of the documents
listed in the Disclosure Schedule) or the SEC Reports filed prior to the date of
this Agreement (including, without limitation, the documents referenced therein)
and other than pursuant to, under, arising out of or in connection with the
Assumed Debt, and except as contemplated by this Agreement, and except for
liabilities as to which no disclosure is required pursuant to this Article II
(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), the Company has no debts,
liabilities or obligations of any nature (whether known or unknown, absolute or
contingent) except any debts, liabilities or obligations (a) incurred after the
date of the Most Recent Balance Sheets in the Ordinary Course of Business or (b)
that exceed $100,000 in any one case.
2.18 Insurance. The Disclosure Schedule contains a list, as of
the date hereof, of all material insurance policies maintained by or for the
benefit of the Company (the "Insurance Policies"). The Company has made
available to the 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. Except as set forth on the
Disclosure Schedule or in the SEC Reports filed prior to the date hereof
(including, without limitation, the documents referenced therein), to the
Company's knowledge no written notice has been received from any insurance
carrier purporting to cancel coverage under any of the Insurance Policies, which
cancellation would have a Material Adverse Effect. The Company has complied with
the terms and provisions of the Insurance Policies except where the failure to
comply does not individually or in the aggregate have a Material Adverse Effect.
The Disclosure Schedule identifies any general risk categories which the Company
has designated as being self-insured. Except as set forth in the Disclosure
Schedule or the SEC Reports filed prior to the date hereof (in each case,
including, without limitation, the documents referenced therein) or as reserved
against on or as set forth in the Most Recent SCSM Financial Statements, since
the Most Recent Fiscal Year End there are no pending material claims as to which
the Company's Insurers have denied liability, which denial has resulted in a
loss exceeding $100,000 in any one case.
2.19 Labor Relations. There is no collective bargaining
agreement, memorandum agreement or other labor contract covering employees of
the Company, and no such collective bargaining agreement or memorandum agreement
or other labor contract is scheduled to expire prior to the Closing Date. Except
as set forth in the Disclosure Schedule or in the SEC Reports filed prior to the
date of the Agreement (in each case, including without limitation, the documents
referenced therein), (a) no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of
the Company, and (b) there is no pending or (to the best of the Company's
knowledge) threatened, strike, work
AMENDED AGREEMENT PAGE 19
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stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting the Company or its employees.
2.20 Product Warranties; Consignments. (a) Except (i) as
reserved against on or as set forth in the Most Recent Financial Statements or
(ii) as set forth in the Disclosure Schedule or the SEC Reports filed prior to
the date hereof (in each case, including, without limitation, the documents
referenced therein) or (iii) as set forth in purchase orders from certain
customers to the Company or (iv) as required or implied by operation of law, no
warranties, indemnifications or guarantees are now in effect or outstanding with
respect to products or services manufactured, produced or performed by the
Company in the conduct of its business. Except as set forth in the Disclosure
Schedule or the SEC Reports filed prior to the date hereof (in each case,
including, without limitation, the documents referenced therein), no claims for
breach of product or service warranties to customers which could reasonably be
expected to have a Material Adverse Effect are pending against the Company.
(b) Other than pursuant to the terms of any warranty or as may
be required by law, except as may be set forth on the Disclosure Schedule or the
SEC Reports filed prior to the date hereof (in each case, including, without
limitation, the documents referenced therein) the Company is not under any
obligation to return to any supplier or other third party or to receive
consignments back from any customer a material quantity of any inventory or
products used, manufactured or produced by the Company, which obligations,
individually or in the aggregate, would have a Material Adverse Effect.
2.21 Inventory. Except as reserved against on or as set forth
in the Most Recent Financial Statements, or as set forth in the Disclosure
Schedule or the SEC Reports filed prior to the date hereof (in each case,
including, without limitation, the documents referenced therein), all inventory
of the Company reflected thereon and all inventory of the Company acquired since
such date was acquired in the ordinary course of its business and consistent
with the Company's respective prior practice, and is valued as set forth in the
Disclosure Schedule.
2.22 Accounts Receivable. Except as reserved against on or set
forth in the Most Recent SCSM Balance Sheets, or as set forth in the Disclosure
Schedule or the SEC Reports filed prior to the date hereof (in each case,
including, without limitation, the documents referenced therein), the accounts
receivable of the Company as reflected on such balance sheets or arising since
that date, have arisen solely out of bona fide sales and deliveries of goods,
performance of services and other business transactions in the Ordinary Course
of Business consistent with past practices, and to the knowledge of the Company,
are not subject to valid defenses, setoffs or counterclaims.
2.23 Non-Foreign Status. The Seller is not a "foreign person"
within the meaning of Section 1445(b)(3) of the Code.
AMENDED AGREEMENT PAGE 20
<PAGE> 27
2.24 ELIC Settlement Agreement. The transaction contemplated
by this Agreement is not required to be included in the calculation of any
amount which may be owing to the ELIC Trust under the ELIC Settlement Agreement.
2.25 Disclaimer. Except as set forth in this Article II and in
Section 12.7 hereof, the Company makes no representation or warranty, express or
implied, and the assets and business of the Company being transferred to the
Buyer upon the acquisition by the Buyer of the Stock at the Closing are to be
conveyed hereunder "AS IS WHERE IS" on the Closing Date, and in their then
present condition, and the Buyer and Mayflower shall each rely upon their own
examination thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents to the Buyer as follows:
3.1 Title. The Seller holds of record and owns beneficially
all of the shares of Stock, free and clear of any restrictions on transfer
(other than restrictions, if any, under the Securities Act and state securities
laws), taxes, Encumbrances, equities, claims and demands, except such as will be
released prior to or at the Closing. The Seller is not a party to any voting
trust, proxy, or other agreement or understanding with respect to the voting of
the Stock. The sale and delivery of the Stock to the Buyer pursuant to Article I
hereof will vest in the Buyer legal and valid title to the Stock, free and clear
of all mortgages, pledges, liens, charges, security interests or other
encumbrances (collectively, "Encumbrances") (other than Encumbrances created or
suffered by the Buyer).
3.2 Litigation. There is no Litigation pending, or to the
Seller's knowledge, threatened against the Seller or any company affiliated with
the Seller (including, without limitation, the Company), which seeks to enjoin
or obtain damages in respect of the transactions contemplated hereby.
3.3 Power and Authority; No Conflict. The execution, delivery
and performance by the Seller of this Agreement and the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Seller. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes the valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms. The
execution, delivery and performance by the Seller of this Agreement and the
consummation by the Seller of the transactions contemplated hereby will not,
with or without the giving of notice or the lapse of time, or both, (i) violate
any provision of law, rule or regulation to which the
AMENDED AGREEMENT PAGE 21
<PAGE> 28
Seller is subject, (ii) violate any order, judgment or decree applicable to the
Seller or (iii) violate any provision of the Certificate of Incorporation or the
By-laws of the Seller.
3.4 Consents. Except as set forth in the Disclosure Schedule,
no consent, approval or authorization of, or exemption by or filing with, any
governmental authority (other than applicable requirements, if any, pursuant to
the HSR Act) is required in connection with the execution, delivery and
performance by the Seller of this Agreement or the taking of any other action
required hereby, excluding, however, consents, approvals, authorizations,
exemptions and filing, if any, which the Buyer or Mayflower 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, either
individually or in the aggregate, prevent the Seller from performing its
obligations under this Agreement.
3.5 Disclaimer. Except as set forth in this Article III and in
Section 12.7 hereof, the Seller makes no representation or warranty, express or
implied, and the assets and business of the Company being transferred to the
Buyer upon the acquisition by the Buyer of the Stock at the Closing are to be
conveyed hereunder "as is where is" on the Closing Date, and in their then
present condition, and the Buyer and Mayflower shall each rely upon their own
examination thereof.
3.6 Value of GDT; Value of Kalamazoo. (a) GDT has and, from
and after the closing will have, net assets in excess of $65,000,000 prior to
and after giving effect to the transactions contemplated hereby and, to the
Seller's knowledge, based upon independent review and other factors, has a fair
market value in excess of that amount.
(b) The Seller will provide what it believes will be adequate
resources to enable Kalamazoo to exist as a going concern.
3.7 PBGC. The PBGC has not explicitly stated that it will
require the termination of the GDT Plan.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND MAYFLOWER
Each of the Buyer and Mayflower hereby represents and warrants
to the Seller, jointly and severally, as follows:
AMENDED AGREEMENT PAGE 22
<PAGE> 29
4.1 Organization. Each of the Buyer and Mayflower is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite corporate 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. Mayflower is a public limited company organized under the
laws of England and owns indirectly all of the issued and outstanding shares of
capital stock of the Buyer.
4.2 Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Buyer and Mayflower of this Agreement
and the consummation by the Buyer and Mayflower of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of each of the Buyer and Mayflower. This Agreement has been duly and validly
executed and delivered by the Buyer and Mayflower and constitutes the valid and
binding obligation of the Buyer and Mayflower, enforceable against the Buyer or
Mayflower in accordance with its terms. The execution, delivery and performance
by the Buyer and Mayflower of this Agreement and the consummation by the Buyer
and Mayflower of the transactions contemplated hereby will not, with or without
the giving of notice or the lapse of time, or both, (i) violate any provision of
law, rule or regulation to which the Buyer or Mayflower is subject, (ii) violate
any order, judgment or decree applicable to the Buyer or Mayflower, (iii)
violate any provision of the Certificate of Incorporation or the By-laws of the
Buyer or the Memorandum and Articles of Association of Mayflower, (iv) 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 the Buyer or
Mayflower or any of their respective Affiliates or subsidiaries pursuant to any
note, bond, mortgage, indenture, contract, agreement, lease, Permit, franchise
or other instrument or obligation to which the Buyer or Mayflower or any of
their respective Affiliates or subsidiaries is a party or by which the Buyer or
Mayflower or any of their respective Affiliates, subsidiaries or 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.
4.3 Consents. Except for the required Shareholder Approval, no
consent, approval or authorization of, or exemption by, or filing with, any
governmental authority or third party (other than applicable requirements, if
any, pursuant to the HSR Act or the rules of the London Stock Exchange) is
required in connection with the execution, delivery and performance by the Buyer
or Mayflower of this Agreement, or the taking of any other action contemplated
hereby, excluding, however, consents, approvals, authorizations, exemptions and
filings, if any, which the Seller 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, either individually or in the
aggregate, prevent the Buyer or Mayflower from performing their respective
obligations under this Agreement.
AMENDED AGREEMENT PAGE 23
<PAGE> 30
4.4 Availability of Funds. Mayflower will derive sufficient
funds necessary for the Buyer and Mayflower to consummate the transactions
contemplated by this Agreement from a commercial loan agreement dated November
7, 1996 (the "Buyer Loan Agreement") with National Westminster Bank plc. and
from the proceeds of a placement of shares for new shares (the "New Mayflower
Shares") for which Mayflower has entered into a firm commitment standby
underwriting agreement dated November 7, 1996 (the "Underwriting Agreement")
with Barclays De Zoete Wedd Limited. Neither the Buyer Loan Agreement nor the
Underwriting Agreement contains any terms or conditions not customarily
contained in the loan agreements and underwriting agreements entered into in
connection with transactions similar to the transactions contemplated by this
Section 4.4. Mayflower is not aware of any factors which would prevent the
approval by its shareholders of the transactions contemplated hereby or by the
Buyer Loan Agreement or the Underwriting Agreement, or the admission of the New
Mayflower Shares to the Official List of the London Stock Exchange becoming
effective. Mayflower is not aware of any factors which would prevent the
consummation of the transactions contemplated by the Buyer Loan Agreement or the
Underwriting Agreement. Within one day following the execution and delivery by
the parties of this Agreement, Mayflower will deliver to the Seller true and
correct copies of the Buyer Loan Agreement and the Underwriting Agreement.
Within two business days following the execution and delivery to Mayflower of
any amendment to the Buyer Loan Agreement or the Underwriting Agreement,
Mayflower will deliver a copy of such amendment to the Seller.
4.5 Litigation. There is no Litigation pending or, to the
Buyer's knowledge, threatened against the Buyer or Mayflower or any of their
respective Affiliates or subsidiaries (i) with respect to which there is a
reasonable likelihood of a determination which would have a material adverse
effect on the ability of the Buyer or Mayflower to perform their respective
obligations under this Agreement, or (ii) which seeks to enjoin or obtain
damages in respect of the consummation of the transactions contemplated hereby.
Neither Mayflower nor the Buyer nor any of their respective Affiliates or
subsidiaries is subject to any outstanding orders, rulings, judgments or decrees
which would have a material adverse effect on the ability of the Buyer or
Mayflower to perform their respective obligations under this Agreement.
4.6 Purchase for Investment. The Buyer is an "accredited
investor" (within the meaning of Rule 501(e) of the regulations promulgated
under the Securities Act) and is purchasing the Stock for investment and not
with a view to any public resale or other distribution thereof. Each of the
Buyer and Mayflower acknowledges that it has received, or has had access to, all
information which it considers necessary or advisable to enable it to make a
decision concerning its purchase of the Stock.
4.7 Solvency of the Buyer. The Buyer is and, from and after
the Closing will be, Solvent prior to and after giving effect to the
transactions contemplated by this Agreement.
AMENDED AGREEMENT PAGE 24
<PAGE> 31
4.8 Knowledge of the Buyer and Mayflower of the Seller and the
Company and Their Business. To the knowledge of the Buyer and Mayflower, the
representations and warranties made by the Seller and the Company are true and
accurate and the Buyer and Mayflower are unaware of any facts or circumstances
which would cause such representations and warranties to be untrue or
inaccurate.
ARTICLE V
COVENANTS OF THE COMPANY AND THE SELLER
Each of the Seller and the Company hereby, jointly and
severally, covenants and agrees with the Buyer and Mayflower as follows:
5.1 Cooperation. From the date hereof and prior to the
Closing, the Company and the Seller will cooperate with the Buyer and Mayflower
to secure all necessary consents, approvals, authorizations, exemptions and
waivers from third parties (including pursuant to the HSR Act and the rules of
the London Stock Exchange), 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 the rules of the London Stock Exchange and any other applicable
law, including, without limitation, any other federal, state or foreign
securities laws and the HSR Act, 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 Conduct of Business. Except as may be otherwise
contemplated by this Agreement or required by any of the documents listed in the
Disclosure Schedule or as may occur as a result of or in connection with any
transaction with respect to the sale or spinoff, or the contemplated sale,
transfer, assignment, spinoff or other disposition, no later than the Closing
Date, of the Other Assets or except as the Buyer and Mayflower may otherwise
consent in writing (which consent shall not be unreasonably withheld), from the
date hereof and prior to the Closing:
(a) The Company will and the Seller will cause the Company to:
(i) in all material respects, operate only in the Ordinary
Course of Business;
(ii) use reasonable efforts to preserve intact their
business organization;
AMENDED AGREEMENT PAGE 25
<PAGE> 32
(iii) maintain their properties, machinery and
equipment in sufficient operating condition and repair to enable them
to operate their 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) use reasonable efforts to preserve their
relationships with their material lenders, agents, suppliers,
customers, licensors and licensees and others having material business
relationships with the Company such that their business will not be
materially impaired.
(b) The Company will not and the Seller will not permit the
Company to:
(i) take or omit to take any action, the effect of
which would reasonably be expected to cause any of the representations
or warranties set forth in Article II or Article III to be inaccurate
as of the Closing Date;
(ii) effect or agree to effect any change in the debt
or equity capitalization of the Company;
(iii) amend its Certificate of Incorporation or by-laws
or other organizational documents or change the accounting methods or
practices followed by the Company, except as may be required by changes
in GAAP;
(iv) license, sell, transfer, lease, pledge or
otherwise dispose of or encumber any of its tangible or intangible
assets, except in each case in the Ordinary Course of Business;
(v) 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;
(vi) enter into any transaction between the Seller on
the one hand and the Company or any director, officer or employee of
the Company, on the other hand;
(vii) 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; 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;
AMENDED AGREEMENT PAGE 26
<PAGE> 33
(viii) make any capital expenditure in excess of
$100,000 in any one case or $1,000,000 in the aggregate, except for (A)
capital expenditures included in budgets presented to the Buyer and (B)
an expenditure of (1) approximately $275,000 to upgrade the process
water supply, (2) approximately $30,000 for a surface grinder, or (3)
approximately $35,000 for payroll system software; or
(ix) increase, decrease or otherwise modify or commit
to increase, decrease or modify in any manner the compensation or
fringe benefits of any director, officer, employee or independent
contractor or pay any benefit not required by an existing Commitment,
except in the Ordinary Course of Business consistent with past
practice;
(x) make any material income tax election or settle
or compromise any material income tax liability to the extent such
election, settlement or compromise relates specifically to the Company
and their operations, in each case except as is otherwise contemplated
by this Agreement or as may occur in the Ordinary Course of Business;
(xi) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent
or otherwise) in an amount in excess of $100,000 in the aggregate, in
each case, except (A) as is otherwise contemplated by this Agreement
(including, without limitation, pursuant to Section 1.4 hereof), or (B)
as may occur in the Ordinary Course of Business;
(xii) authorize any of the foregoing, or enter into
any contract, agreement, commitment or arrangement to do any of the
foregoing; or
(xiii) terminate the Management Employees other than
for cause.
Without limiting the generality of the foregoing, the Seller covenants
and agrees that from the close of business, Eastern Standard Time on December 4,
1996 through and including the Closing Date, the Company shall not declare or
pay any dividends on or make any distribution or other payment with respect to
any class of its equity or ownership interest, or purchase, redeem, retire or
otherwise acquire any of its equity.
(c) The Seller will continue all material existing insurance
policies (or comparable insurance) of or relating to the Company in full force
and effect.
5.3 Access. From the date hereof and prior to the Closing, the
Seller and the Company shall provide the Buyer and Mayflower with such
information as the Buyer and Mayflower may from time to time reasonably request
with respect to the Company and the transactions contemplated by this Agreement,
and shall provide the Buyer and Mayflower and their representatives reasonable
access during regular business hours and upon reasonable notice
AMENDED AGREEMENT PAGE 27
<PAGE> 34
to (a) the properties, books and records of the Company as the Buyer and
Mayflower may from time to time reasonably request and (b) such additional
information concerning the Company's corporate affairs, assets, liabilities,
commitments and financial condition as may be reasonably requested by the Buyer
and Mayflower in order to satisfy the legal, contractual and stock exchange
requirements for the implementation of this transaction; provided that, in each
case, the Company shall not be obligated to provide, and the Seller shall not be
obligated to cause the Company to provide, the Buyer and Mayflower with any
information relating to trade secrets 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 the Seller or any of its Affiliates (including
the Company) to assert attorney-client, attorney work product or other similar
privilege. Any disclosure whatsoever during such investigation by the Buyer and
Mayflower shall not constitute an enlargement of or additional representations
or warranties of the Seller or the Company 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 26, 1996 (the "Confidentiality
Agreement").
5.4 Further Assurances. At any time or from time to time after
the Closing, the Seller shall, at the request of the Buyer and at the Buyer's
expense, execute and deliver any further instruments or documents and take all
such further action, as the Buyer may reasonably request in order to (i) vest in
the Buyer good and marketable title to and possession of the Stock, (ii) perfect
and record, if necessary, the sale, transfer, assignment, conveyance and
delivery to the Buyer of the Stock; and (iii) otherwise evidence the
consummation of the transactions contemplated hereby.
5.5 Acquisition Proposals. From the date hereof until the
termination of this Agreement or the Closing Date, whichever first occurs, GDHI
will not, and will cause the Company not to, directly or indirectly, and shall
use its reasonable best efforts to prevent any of its shareholders, directors,
officers, attorneys, financial advisors and other authorized representatives
from directly or indirectly, and the Seller will not (i) take any action to
encourage (including by furnishing documentation), solicit or initiate any offer
or indication of interest from any Person with respect to any Acquisition
Proposal (defined below), (ii) engage in or continue discussions or 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, or
(iii) vote its shares of Stock in favor of any such Acquisition Proposal.
"Acquisition Proposal" means any proposal or offer for a merger or other
business combination involving the Company, or the acquisition of any equity
interest in, or a substantial portion of the assets of, the Company, other than
the transactions contemplated by this Agreement.
5.6 Advice of Changes. The Company, and the Seller (solely
with respect to the representations and warranties made by the Seller), shall
promptly advise the Buyer in writing of any event occurring after the date
hereof and prior to the Closing which would render
AMENDED AGREEMENT PAGE 28
<PAGE> 35
any representation or warranty of the Company or the Seller contained in this
Agreement untrue or inaccurate, if made on or as of the date of such event or as
of the Closing Date. No supplement or amendment made to the Disclosure Schedule
after the date hereof pursuant to this Section 5.6 shall be deemed to cure a
breach of any representation or warranty made by the Company or the Seller
herein (nor shall the Buyer have any rights or remedies with respect thereto)
unless, subject to Sections 4.8 and 6.3 hereof, such supplement or amendment
discloses an item which will directly result in a Material Adverse Effect and
the Buyer has not consented to its inclusion in the Disclosure Schedule.
5.7 Certain Events. Prior to or simultaneously with the
Closing, the Company shall make available or deliver copies of all existing
agreements or documents with respect to:
(a) ELIC Payment and Release. Payment of all amounts due under
the ELIC Agreement, including a full release of both the Company and the
Subsidiary from any further liability to the ELIC under the ELIC Agreement;
(b) Termination of Airplane Lease. The termination of the
Company's obligations with regard to the airplane leased by the Company from
Tessler Aviation Leasing Corporation under an oral arrangement, including a
release of any such obligation or liability of the Company; and
(c) Termination of Certain Employment Agreements. The
termination, transfer, disposition or assignment to another entity of all
employment agreements between the Company and any person, including a release of
the Company from any further liability with regard to any such employment
agreement (other than any agreements which may be entered into pursuant to
Section 5.11).
5.8 Additional Documents. In addition to any other documents
or agreements required to be furnished by the Company prior to or at the Closing
pursuant to the express terms of this Agreement (including, without limitation,
pursuant to Section 5.7 and Article IX hereof), at or prior to the Closing, the
Company will deliver each of the following documents or agreements to the Buyer:
(a) Loan Agreement Termination. Satisfactory evidence of the
full discharge and satisfaction of all indebtedness from the Credit Banks, fully
discharging the Company from any further liability under the Loan Agreement.
(b) Third Party Consents. A consent from each of the third
parties set forth on the Disclosure Schedule.
AMENDED AGREEMENT PAGE 29
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(c) Opinion of Counsel. An opinion or opinions, dated the
Closing Date, of counsel to the Company and the Seller and counsel to each of
the Parent Shareholders, setting forth the opinions listed on Exhibit 5.8(c)
hereto, in a form reasonably acceptable to Buyer or its counsel.
(d) FIRPTA Certificate. A certificate, dated the Closing Date,
to the effect that the Seller is not a "foreign person" within the meaning of
the Code and applicable Treasury Regulations, in substantially the form of
Exhibit 5.8(d) hereto.
(e) Corporate Resolutions. Resolutions of the Board of
Directors of the Seller authorizing the execution of this Agreement and the
transactions contemplated hereby.
(f) Escrow Agreement. The Escrow Agreement, duly executed and
delivered by each of the Parent Shareholders.
(g) Indemnification Agreement. The Indemnification Agreement,
duly executed and delivered by each of the Parent Shareholders.
5.9 Documents to be Delivered by the Seller and the Company on
the Date Hereof. The Company and the Seller shall duly execute and deliver each
of the following documents or agreements contemporaneously with the execution of
this Agreement and agrees to at all times maintain such document or agreement in
full force and effect the:
(a) Escrow Agreement;
(b) Indemnification Agreement;
(c) Insurance Claims Letter Agreement;
(d) Transition Services Agreement;
(e) Records Letter Agreement; and
(f) General Release.
In addition, the Seller and the Company shall cooperate with
Mayflower and the Buyer, and shall use their best efforts, to cause the Escrow
Agreement to be duly executed and delivered by the Escrow Agent, in each case as
soon as practicable on or after the date hereof but prior to the Closing.
AMENDED AGREEMENT PAGE 30
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5.10 Waiver of Rights Upon the Closing. The Buyer and
Mayflower each hereby acknowledges and agrees that (a) the obligations of the
Company, the Seller and the Parent Shareholders to deliver the documents set
forth in Sections 5.7, 5.8 and 5.9 of this Agreement shall not survive the
Closing and (b) if the Closing shall occur, (i) the Buyer and Mayflower shall
each be deemed to have been satisfied in all respects with the form and terms of
any and all agreements and documents delivered pursuant to Sections 5.7, 5.8 or
5.9 of this Agreement, (ii) neither the Buyer nor Mayflower shall have any claim
or cause of action (against the Seller, the Parent Shareholders, or any of their
Affiliates, or against the Escrow Account or otherwise) for any breach, default
or violation of any obligations to deliver the documents set forth in Sections
5.7, 5.8 or 5.9 of this Agreement, and (iii) the Buyer and Mayflower shall be
deemed to have irrevocably and unconditionally waived any and all rights they
may have with respect to any such breach, default or violation.
5.11 Certain Employees. The Company shall, and the Seller
shall cause the Company to, reasonably cooperate with the Buyer and Mayflower in
connection with their efforts to cause employment agreements (which agreements
will be effective after the Closing) between the Buyer and each of the persons
set forth on Exhibit 5.11 attached hereto to be executed prior to or at the
Closing (it being understood that the failure of any such employee to enter into
any such employment agreement shall not be construed in any way as a breach by
the Seller or the Company of the requirements of this Section 5.11).
ARTICLE VI
COVENANTS OF THE BUYER AND MAYFLOWER
Each of the Buyer and Mayflower hereby jointly and severally
covenants and agrees with the Seller and the Company as follows:
6.1 Cooperation by the Buyer. From the date hereof and prior
to the Closing, Mayflower and the Buyer will each cooperate with the Seller and
the Company to secure all necessary consents, approvals, authorizations,
exemptions and waivers from third parties (including pursuant to the HSR Act and
the rules of the London Stock Exchange), 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, the rules of the
London Stock Exchange and any other applicable law, including, without
limitation, any other federal or state securities laws and the HSR Act, 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.
AMENDED AGREEMENT PAGE 31
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6.2 Books and Records; Personnel.
(a) Mayflower and the Buyer shall not, Mayflower shall cause
the Buyer not to, and the Buyer and Mayflower shall cause the Company not to,
dispose of or destroy any of the books and records of the Company relating to
periods prior to the Closing ("Books and Records").
(b) For a period of five (5) years following the Closing Date
or such longer period as may be required by law, the Buyer and Mayflower shall,
and each of the Buyer and Mayflower shall cause the Company to (i) maintain all
Books and Records in the continental United States in a place in which they are
easily and reasonably promptly accessible, (ii) allow each of GDHI, the Seller
and each Parent Shareholder and each of their agents access, upon reasonable
advance notice, to all Books and Records during normal working hours at the
Buyer's or Mayflower's principal place of business or in the United States at
any location in the United States where any Books and Records are stored (as
permitted hereby) (or, if stored in a warehouse or similar facility (as
permitted hereby), at any office location of the Buyer in the United States),
and GDHI, the Seller and the Parent Shareholders 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 Buyer's or Mayflower's business. After
such five (5) year period, the Buyer or Mayflower shall notify the Seller and
the Parent Shareholders of their desire to dispose of such Books and Records (at
least ninety (90) days prior to such disposal date), in which event the Buyer
and Mayflower shall, and Mayflower shall cause the Buyer to, at GDHI's, the
Seller's or the Parent Shareholder's request, within 90 days following the date
of the receipt of such request, deliver all such Books and Records to the Parent
Shareholders.
(c) The Buyer and Mayflower shall, Mayflower shall cause the
Buyer not to, and the Buyer and Mayflower each shall cause the Company to, make
available to GDHI, the Seller and each Parent Shareholder upon written request
(i) copies of any Books and Records, (ii) the Buyer's and the Company's
personnel to assist GDHI, the Seller and each of the Parent Shareholders in
locating and obtaining any Books and Records, and (iii) any of the Buyer's and
the Company's personnel whose assistance or participation is reasonably required
by GDHI, the Seller or any Parent Shareholder or any of their Affiliates in
anticipation of, or preparation for, existing or future Litigation, tax returns
or other matters in which the Seller, any Parent Shareholder or any of their
Affiliates is involved. The Seller or such Parent Shareholder, as appropriate,
shall reimburse the Buyer or the Company for the reasonable out-of-pocket
expenses incurred by any of them in performing the covenants contained in this
Section 6.2(c).
(d) The foregoing provisions of this Section 6.2 shall be in
addition to the obligations of the Buyer under Section 7.1(d) hereof and the
Indemnification Agreement.
AMENDED AGREEMENT PAGE 32
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6.3 Advice of Changes. Prior to the date hereof, the Buyer and
Mayflower have acquired knowledge, and between the date hereof and the Closing,
the Buyer or Mayflower may acquire additional knowledge concerning the matters
covered by the Company's or the Seller's representations and warranties. The
Buyer and Mayflower shall not knowingly withhold any written information in the
possession of either of them which has caused, or which is likely to cause, any
of the representations and warranties of the Company or the Seller to become
untrue or inaccurate and, to the extent that Seller is not so informed, the
Buyer and Mayflower agree that neither of them shall have any rights hereunder
or under the Indemnification Agreement by reason of such untruth or inaccuracy.
6.4 Liabilities.
(a) Each of the Buyer and Mayflower understands and agrees
that, from and after the Closing, except as specifically provided in the
Indemnification Agreement to the contrary neither the Seller nor GDHI nor the
Parent Shareholders nor any of their respective Affiliates shall have any
liability or responsibility for any liability or obligation of or arising out of
or relating to the Company, or the operation or ownership by the Seller (or any
of its predecessors) of the Company (including as to Environmental, Health and
Safety Laws), of whatever kind or nature, whether contingent or absolute,
whether arising prior to or on or after, and whether determined or
indeterminable on, the Closing Date, and whether or not specifically referred to
in this Agreement (such liabilities and obligations being collectively referred
to as the "Liabilities"). Accordingly, each of the Buyer and Mayflower agrees
that, in addition to their obligations under the Indemnification Agreement,
effective upon the Closing, the Buyer, Mayflower and the Company shall jointly
and severally be responsible for and indemnify the Seller, GDHI, the Parent
Shareholders and each of their respective Affiliates and hold each of them
harmless from and against any Losses incurred or suffered by any of them arising
out of any of the Liabilities.
(b) (i) Each of the Buyer and Mayflower agrees that effective
from and after the Closing, the Seller shall have no obligation for (and neither
the Buyer nor Mayflower shall have any right pursuant to the Indemnification
Agreement to retain any portion of the Escrow Amount or claim for
indemnification otherwise with respect to) the self-insured retention portion of
any workers compensation, product liability, general liability, property,
casualty, automobile liability, medical and other claims relating to the Company
made or to be made in the future in respect of periods prior to, on or after the
Closing ("Claims"), for which the Company are responsible to the Company's
insurers (the "Company's Insurers") so that, from and after the Closing, neither
the Buyer nor Mayflower, the Company, or the Company's Insurers will seek from
the Seller, GDHI, the Parent Shareholders or any of their respective Affiliates
for reimbursement of any payment made by the Buyer, Mayflower, the Company or
the Company's Insurers in respect of any Claim.
AMENDED AGREEMENT PAGE 33
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(ii) Promptly after the Closing, the Buyer shall, and
Mayflower shall cause the Buyer to, notify each of the Company's Insurers of the
consummation of transactions contemplated by this Agreement (including that the
Buyer has purchased the Stock and that it is the new owner of the Company) and
of the address where such Company Insurer shall send all notices relating to the
Company. A copy of all such notices shall be promptly forwarded by the Buyer to
the Seller.
(c) Nothing set forth in this Agreement or the Indemnification
Agreement or any Ancillary Document shall be interpreted or construed to mean
that Mayflower or the Buyer has assumed or will assume any liabilities whatever
of the Other Entities or Checker L.P. or the Other Assets; provided, however,
that nothing herein shall restrict the application of Section 12.1 and
Mayflower's and the Buyer's acknowledgement and agreement that its sole recourse
for any such Liability is solely against the then remaining balance of the
Escrow Account and solely in accordance with (and to the extent permitted by)
the provisions set forth in the Indemnification Agreement.
6.5 Shareholder Approval. Mayflower shall use its reasonable
best efforts to obtain the approval of at least such number of institutional and
other shareholders of Mayflower necessary to approve this Agreement and the
transactions contemplated hereby on the terms set forth herein ("Shareholder
Approval"). If Mayflower shall at any time conclude that Mayflower is not
reasonably likely to receive such Shareholder Approval, then Mayflower shall
immediately inform the Seller thereof and shall agree, upon the request of the
Seller, to terminate this Agreement pursuant to Section 11.1(a) hereof.
6.6 Further Assurances. Notwithstanding Section 6.10 hereof,
at any time or from time to time after the Closing, the Buyer and Mayflower
shall, at the request of the Seller and at the Seller's expense, each execute
and deliver any further instruments or documents and take all such further
action as the Seller may reasonably request in order to evidence the
consummation of the transactions contemplated hereby.
6.7 Solvency. The Buyer and, from after the Closing, the
Company, shall at all times be, and Mayflower shall cause the Buyer and, from
and after the Closing, the Company, to at all times be, Solvent. For a period of
one (1) year after the Closing, the Buyer shall not, and Mayflower shall not
permit the Buyer to, transfer, assign, or otherwise dispose of the Stock or the
Company to an entity which is not, and prior to and after the consummation of
such transaction will not be Solvent.
6.8 Additional Documents, Agreements or Instruments. In
addition to any other agreement or document required to be furnished by the
Buyer or Mayflower prior to or at the Closing pursuant to the express terms of
this Agreement (including, without limitation,
AMENDED AGREEMENT PAGE 34
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pursuant to Article VIII hereof), prior to or at the Closing, the Buyer or
Mayflower shall, and Mayflower shall cause the Buyer to, deliver each of the
following documents to the Seller:
(a) Opinion of the Buyer's Counsel. An opinion of Walter,
Conston, Alexander & Green, P.C., dated the Closing Date, in the form of Exhibit
6.8(a) hereto.
(b) Opinion of Mayflower's Counsel. An opinion of Nabarro
Nathanson, dated the Closing Date, in the form of Exhibit 6.8(b) hereto.
(c) Third Party Consents. A consent from each of the third
parties as set forth in the Disclosure Schedule, in form and substance
satisfactory to the Buyer.
(d) Letter of Credit. A replacement (or, if the beneficiary
thereof will not permit replacement, a back-up) letter of credit satisfactory to
WVEDA to replace the letter of credit No. 5145635 issued by NBD Bank in favor of
WVEDA.
6.9 Documents to be Delivered by Mayflower and the Buyer
Simultaneously Herewith. Mayflower and the Buyer shall, and Mayflower shall
cause the Buyer to, duly execute and deliver each of the following documents or
agreements contemporaneously with the execution of this Agreement and each
hereby covenants and agrees to at all times maintain such document or agreement
in full force and effect, the:
(a) Escrow Agreement;
(b) Indemnification Agreement;
(c) Insurance Claims Letter Agreement;
(d) Transition Services Agreement; and
(e) Records Letter Agreement.
In addition, the Buyer and Mayflower shall, and Mayflower
shall cause the Buyer to, cooperate with the Seller and the Company and shall
use their best efforts to cause the Escrow Agreement to be duly executed and
delivered by the Escrow Agent as soon as practicable on the date hereof but
prior to the Closing.
6.10 Waiver of Rights Upon the Closing. The Seller hereby
acknowledges and agrees that (a) the obligations of the Buyer and Mayflower to
deliver the documents set forth in Sections 6.8 and 6.9 of this Agreement shall
not survive the Closing and (b) if the Closing shall occur, (i) the Seller shall
be deemed to have been satisfied on all respects with the form
AMENDED AGREEMENT PAGE 35
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and terms of any agreements and documents delivered pursuant to Section 6.8 or
6.9 of this Agreement, (ii) the Seller shall have no claim or cause of action
(against the Buyer, Mayflower, or any of their Affiliates) for any breach,
default or violation of any of the Buyer's or Mayflower's obligations to deliver
the documents set forth in Section 6.8 of this Agreement, and (iii) the Seller
shall be deemed to have irrevocably and unconditionally waived any and all
rights it may have with respect to any such breach, default or violation.
6.11 Corporate Name. The Buyer and Mayflower each acknowledges
and agrees that the Seller and its Affiliates (other than the Company) have the
absolute and exclusive proprietary right to all names, marks, tradenames,
trademarks, service names and service marks (collectively, the "Names")
incorporating "Checker Motors," "Checker" or "CMC" and to all corporate symbols,
corporate names or logos (collectively, the "Logos") incorporating "Checker
Motors," "Checker" or "CMC", all rights to which and goodwill represented
thereby and pertaining thereto are being retained by the Seller. The Buyer
agrees that it will not, and will cause its Affiliates (including the Company)
not to, use the Name "Checker Motors," "Checker" or "CMC" or any Logo
incorporating such Name in connection with the Buyer's or Mayflower's or any of
their respective Affiliate's (including the Company) activities, including
without limitation, in connection with the sale of any products or services by
Mayflower or the Buyer or any of their Affiliates (including the Company).
ARTICLE VII
ADDITIONAL COVENANTS
7.1 Income and Franchise Taxes.
(a) Returns and Payments.
(i) The Seller shall include, or cause to be included, the
Company in the consolidated federal tax return and in any consolidated, and (to
the extent required by law) any combined or unitary, state, local or foreign tax
return to be filed by the Seller for all tax periods, or portions thereof,
ending on or before the Closing Date. Seller shall cause to be prepared,
consistent with past practice, and file, or cause to be filed, all such
consolidated and combined tax returns. The Buyer agrees to cooperate, and
Mayflower agrees to cause the Buyer to cooperate, with the Seller in the
preparation of all such tax returns and agrees to take no position inconsistent
with the Company being a member of such consolidated, combined, or unitary
group. The Seller shall cause to be timely paid all taxes to which such tax
returns relate for all periods covered by such tax returns including as they
relate to the Company (including any such taxes resulting from an election
pursuant to Code Section 338(h)(10)).
AMENDED AGREEMENT PAGE 36
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(ii) Seller shall cause to be prepared, consistent
with past practice, and shall file or submit to the Buyer for filing, all
required income and franchise tax returns of the Company (except to the extent
described in Section 7.1(a)(i)) for any period which ends on or before the
Closing Date, for which tax returns are not required to have been filed as of
the Closing Date. The Seller shall pay or shall pay to the Buyer and upon
receipt the Buyer shall cause to be timely paid in each instance to the
appropriate taxing authorities all taxes to which such tax returns relate for
all periods covered by such tax returns.
(iii) The Buyer shall cause to be prepared, consistent
with past practice, and Mayflower shall cause the Buyer to cause to be prepared,
and timely filed all required state and local income and franchise tax returns
for taxable periods beginning before and ending after the Closing Date (the
"Straddle Returns"). At least fifteen (15) days prior to the filing of any
Straddle Return required to be filed by the Buyer pursuant to the preceding
sentence, the Buyer shall, and Mayflower shall cause the Buyer to submit copies
of such returns to the Seller for its approval, which shall not be unreasonably
withheld. The Buyer shall, and Mayflower shall cause the Buyer to timely cause
to be paid, and Mayflower shall cause the Buyer to timely cause to be paid, all
taxes reflected on the Straddle Returns. Such taxes to the extent attributable
to any period or portion of a period on or before the Closing shall be referred
to herein as "Pre-Closing Taxes". Pre-Closing Taxes shall be calculated on the
basis of the income of the Company as though the taxable year of the Company
terminated at the close of business on the day immediately preceding the Closing
Date; provided, however, that in the case of a tax not based on income,
Pre-Closing Taxes shall be equal to the tax imposed with respect to the entire
taxable year multiplied by a fraction, the numerator of which shall be the
number of days preceding the Closing Date, and the denominator of which is the
number of days in the taxable year. The Seller shall reimburse the Buyer for
Pre-Closing Taxes at such time as the Straddle Return is filed with the
appropriate taxing authority.
(b) Audits. The Buyer shall promptly notify, and Mayflower
shall cause the Buyer to promptly notify, the Seller in writing upon receipt by
the Buyer, or any Affiliate of the Buyer (including the Company) of notice of
any pending or threatened federal, state, local or foreign tax audit or
assessment for which the Buyer may seek indemnification pursuant to the terms of
the Indemnification Agreement. Seller shall have the sole right to represent the
Company's interests in any federal, state, local or foreign tax matter,
including any audit or administrative or judicial proceeding of the filing of
any amended return (a "Tax Matter"), involving a tax liability or potential tax
liability for which the Buyer may seek indemnification pursuant to the
Indemnification Agreement, and to employ counsel of the Seller's choice and
reasonably acceptable to the Buyer at the Seller's expense. The Buyer agrees
that it will cooperate fully with Seller and its counsel in the defense or
compromise of any Tax Matter. The Seller will not concede the correctness of any
part of any proposed adjustment pertaining to Taxes and will not enter into any
closing or compromise agreement with respect to any of the issues which form the
basis for such proposed adjustment without the consent of the Buyer;
AMENDED AGREEMENT PAGE 37
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provided, however, that if the Buyer fails to so consent, the Buyer may not
thereafter seek indemnification for an amount in excess of the amount it would
have been entitled to had it consented to such closing or compromise agreement.
The Seller will give the Buyer prompt notice of any proposed audit adjustment
pertaining to Taxes which might result in an additional amount of Taxes due for
which the Buyer or the Company may be liable, including any adjustment or
assessment of the Company for periods ending on or before the Closing Date which
could result in an increase in the Tax paid or payable by the Company for
periods after such date.
(c) The Buyer's Taxes. The Buyer shall pay, or cause to be
paid, and Mayflower shall cause the Buyer to pay (or cause to be paid), all
taxes, additions to tax, interest, or penalties arising from any action of the
Buyer, or an Affiliate of the Buyer (including the Company) from and after the
Closing, including, without limitation, an election or deemed election under
Code Section 338 (other than Code Section 338(h)(10)), and any sale or other
disposition by the Buyer of assets of the Company after the Closing.
(d) Cooperation. After the Closing Date, the Buyer and its
Affiliates (including, Mayflower and the Company) and the Seller 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 the Company for all periods prior to
the Closing Date (including Pre-Closing Taxes described in Section 7.1(a)(iii))
and shall preserve all such information, records and documents until the
expiration of any applicable statute of limitations or extension thereof.
(e) Any tax allocation or sharing agreement shall be cancelled
as of the date prior to the Closing. There will be no payment covered by any tax
sharing agreement after the Closing due to or from Buyer and the Company on the
one hand, and the Seller, on the other hand, with respect to any tax year ending
on or before the Closing Date.
(f) The Seller's payment of Taxes (including Pre-Closing
Taxes) with respect to returns as originally filed pursuant to this Article VII
shall not be paid out of the Escrow Amount; provided, however, that any
subsequent claim by the Buyer with respect to such Taxes (including as a result
of any audit adjustment to such returns) shall be subject to the terms of the
Indemnification Agreement and shall be limited to the available balance in the
Escrow Account.
7.2 Election Pursuant to Section 338(h)(10). The Seller, the Company
and the Buyer will, and the Seller and the Company shall cause GDHI to, join in
making an election pursuant to Section 338(h)(10) of the Code with respect to
the stock of the Company and will jointly take such action as is necessary to
effect such election. The purchase price (inclusive of cash portion, aggregate
amount of liabilities assumed and expenses) as determined in accordance with
Treasury Regulations promulgated under Code Section 338(h)(10) will be allocated
to the assets of the
AMENDED AGREEMENT PAGE 38
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Company for all purposes as set forth in such section. As soon as practicable,
on or after the Closing Date the Parties will file such forms as are required
pursuant to the Treasury Regulations to effect such election.
7.3 Allocation of Purchase Price. No later than thirty (30) days after
the Closing Date, Buyer and Seller shall agree upon a schedule which shall set
forth the allocation of the purchase price among the assets of the Company. Such
allocation shall be based on appraisals performed by the Buyer's independent
accountant and the Seller's independent accountant.
ARTICLE VIII
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligations of the Buyer to purchase the Stock, and
Mayflower's obligations with respect thereto, shall be subject to the
satisfaction (or waiver) on or prior to the Closing Date of all of the following
conditions:
8.1 Representations, Warranties and Covenants of the Seller
and the Company. Each of the Seller and the Company shall have complied in all
material respects with its agreements and covenants contained herein to be
performed on or prior to the Closing Date, and the representations and
warranties of the Seller and the Company contained herein or in any Ancillary
Document shall be true in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except (a) as
otherwise contemplated hereby, and (b) to the extent that any such
representations and warranties were made as of a specified date and as to such
representations and warranties the same shall continue on the Closing Date to
have been true in all material respects as of the specified date. The Buyer
shall have received a certificate of an officer of the Seller (the "Seller's
Certificate"), and a certificate of an officer of the Company (the "Company
Certificate"), dated as of the Closing Date and signed by such officer, as the
case may be, certifying as to the fulfillment of the condition set forth in this
Section 8.1.
8.2 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the Seller
from consummating the transactions contemplated hereby.
8.3 Shareholder Approval. Mayflower shall have received
Shareholder Approval and the admission of the New Mayflower Shares to the
Official List of the London Stock Exchange shall have become effective.
AMENDED AGREEMENT PAGE 39
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8.4 Governmental Consents. The applicable waiting period under
the HSR Act shall have expired or been terminated and all other consents,
approvals, authorizations, exemptions and waivers from governmental agencies
that shall be required in order to enable the Buyer to consummate the
transactions contemplated hereby, including, if applicable, those required under
the rules of the London Stock Exchange, shall have been obtained (except for
such consents, approvals, authorizations, exemptions and waivers, the absence of
which would not prohibit consummation of such transactions or render such
consummation illegal).
ARTICLE IX
CONDITIONS TO THE SELLER'S OBLIGATIONS
The obligations of the Seller to sell the Stock shall be
subject to the satisfaction (or waiver) on or prior to the Closing Date of all
of the following conditions:
9.1 Representations, Warranties and Covenants of the Buyer.
The Buyer and Mayflower shall have complied in all material respects with their
respective agreements and covenants contained herein to be performed by them on
or prior to the Closing Date, and the representations and warranties of the
Buyer and Mayflower contained herein or in an Ancillary Document shall be true
in all material respects on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, except (a) as otherwise contemplated
hereby, and (b) to the extent that any such representations and warranties were
made as of a specified date and as to such representations and warranties the
same shall continue on the Closing Date to have been true in all material
respects as of the specified date. The Seller shall have received a certificate
of each the Buyer (the "Buyer's Certificate") and a certificate of Mayflower
("Mayflower Certificate"), dated as of the Closing Date and signed by an officer
of the Buyer or Mayflower, as the case may be, certifying as to the fulfillment
of the condition set forth in this Section 9.1.
9.2 No Prohibition. No statute, rule or regulation or order of
any court or administrative agency shall be in effect which prohibits the Seller
from consummating the transactions contemplated hereby.
9.3 Shareholder Approval. Mayflower shall have received
Shareholder Approval.
9.4 Governmental Consents. The applicable waiting period under
the HSR Act shall have expired or been terminated and all other consents,
approvals, authorizations, exemptions and waivers from governmental agencies
that shall be required in order to enable the Seller to consummate the
transactions contemplated hereby shall have been obtained (except for
AMENDED AGREEMENT PAGE 40
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such consents, approvals, authorizations, exemptions and waivers, the absence of
which would not prohibit consummation of such transactions or render such
consummation illegal).
9.5 General Release. Each of the Buyer and Mayflower shall
have duly executed and delivered the General Release to the Seller, GDHI, the
Other Entities, the Parent Shareholders and GDT substantially in the form of
Exhibit 9.5 attached hereto (the "General Release").
ARTICLE X
EMPLOYMENT AND EMPLOYEE BENEFITS ARRANGEMENTS
10.1 Definitions.
(a) The term "COBRA" shall mean the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.
(b) The term "Code Affiliate" shall mean any entity or person
that may be aggregated with the Company under Section 414(b), (c), (m) or (o) of
the Code.
(c) The term "Code Affiliate Employees" shall mean current
employees, former employees and retired employees of any Code Affiliate, and the
term "Code Affiliate Employee" shall mean any of the Code Affiliate Employees.
(d) The term "Employees" shall mean all current employees
(including those on lay-off, disability or leave of absence, whether paid or
unpaid), former employees and retired employees of the Company, and the term
"Employee" shall mean any of the Employees.
(e) The term "Business Benefit Plans" shall mean (i) each and
all "employee benefit plans," as defined in Section 3(3) of ERISA, maintained or
contributed to by the Company or Code Affiliate or in which the Company or Code
Affiliate participates or participated and which provides benefits to Employees,
Code Affiliate Employees or independent contractors or their dependents, and
(ii) whether or not an "employee benefit plan" as so defined, each and all
pension, supplemental pension, accidental death and dismemberment, life and
health insurance benefits (including medical, dental, vision and
hospitalization), workers' compensation, 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, profit sharing, stock based compensations, fringe benefit and other
employee benefit arrangements, plans, contracts (including individual employment
agreements or consulting contracts), policies
AMENDED AGREEMENT PAGE 41
<PAGE> 48
or practices of the Company or Code Affiliate (either written or oral) providing
employee or executive compensation or benefits to one or more Employees or Code
Affiliate Employees or independent contractors or their dependents.
Notwithstanding the foregoing, the term "Business Benefit Plans" shall include
only those plans, contracts, policies, practices and arrangements of Code
Affiliates with respect to which the Company has or could have material
liability, either under the terms thereof or under the Code, ERISA or other
applicable law, including, without limitation, all "employee pension benefit
plans" as defined under Section 3(2) of ERISA, and all employee benefit plans
which provide health or life insurance benefits after termination of employment
(excluding benefits provided pursuant to COBRA).
(f) The term "Multiemployer Plan" means a Business Benefit
Plan which is a "multiemployer plan" as such term is defined in Section 3(37) or
Section 4001(a)(3) of ERISA.
10.2 Special Payments. Without limiting the generality of
Section 6.4 hereof, the Seller shall pay or provide for the payment (other than
by the Company) of amounts to which the Management Employees will be entitled as
incentives or compensation to assist GDHI and the Seller in the sale of the
Company pursuant to the Special Bonus Plan of GDHI ("Special Bonus Plan
Payments") in accordance with the Memorandum, dated November 5, 1996, from David
Markin to the Management Employees relating to such Special Bonus Plan Payments.
Seller shall use its best efforts to obtain or cause to be obtained a waiver of
claims or a release from each person who receives payment under the Special
Bonus Plan, and the Seller shall make any such waiver or release applicable to
the Company.
10.3 Employment Pension Benefit Plans.
(a) No later than the Closing Date, the Seller shall take, or
cause to be taken, all such action as may be necessary to cause the Seller and
the Company (the "Severed Employers") to cease to be sponsors or participating
employers under each of the Checker Motors Pension Plan; the Checker Motors
Corporation Pension Plan for United Paperworkers International Union, Local
7862; the Yellow Cab Company Hourly Pension Plan; the Checker Motors Pension
Plan for Cab and Taxi Companies; and the Checker Employees' 401(k) Retirement
Benefit Plan ("Transferred Benefit Plans") and to cause one or more of the Other
Entities to assume sponsorship of the Transferred Benefit Plans.
(b) Seller shall not cause or permit the Severed Employers to
be required to make contributions to the Transferred Benefit Plans and all
funding obligations with respect to the Transferred Benefit Plans shall be
assumed by the Other Entities.
(c) As soon as practicable after the actions taken pursuant to
Section 10.3(a), and in any event no later than the Closing Date, the Seller
shall establish or cause to be established by one or more of the Other Entities
one or more defined benefit pension plans (the
AMENDED AGREEMENT PAGE 42
<PAGE> 49
"Clone Plans") providing substantially the same benefits, terms and conditions
as the Checker Motors Pension Plan (the "Checker Pension Plan"). As soon as
practicable after establishment of the Clone Plans, Seller shall transfer or
cause to be transferred to the Clone Plans designated for such purpose the
liabilities of the Checker Motors Pension Plan with respect to eligible
employees, former employees and beneficiaries of American Country Insurance
Company and other persons formerly employed in the Seller's historical insurance
operations (the "American Country Participants") and eligible employees, former
employees and beneficiaries of Yellow Cab Company and other persons formerly
employed in the Seller's historical vehicular operations (the "Yellow Cab
Participants") and the appropriate Clone Plan shall assume such liabilities in
consideration for the transfer to such Clone Plan from the Checker Pension Plan
of an amount of assets, valued at fair market value, attributable to the
liabilities so transferred, as determined in accordance with Section 414(1) of
the Code. The determination of the liabilities to be transferred and the assets
attributable thereto shall be made by an actuary selected by the Seller. Buyer
shall cooperate with Seller after the Closing to the extent Seller reasonably
requests in preparing and filing such notices and documentation as may be
required by law to effectuate such transfer.
(d) As soon as practicable after, but not on or before the
Closing Date, the Seller shall take or cause to be taken all such action
necessary to terminate or cause to be terminated the Checker Pension Plan and to
have its assets distributed in accordance with applicable law.
(e) Seller shall take or cause to be taken all such actions as
may be necessary to cause one million two hundred thousand dollars ($1,200,000)
to be contributed at the Closing to the Checker Motors Corporation Pension Plan
for United Paperworkers International Union, Local 7862 from sources other than
the Company or from the proceeds of the Initial Purchase Price paid by Buyer
pursuant to this Agreement.
(f) Seller shall take or cause to be taken all such action as
may be necessary to cause two million four hundred thousand dollars ($2,400,000)
to be contributed at or before the Checker Pension Plan at or before the Closing
from sources other than the Company or from the proceeds of the Initial Purchase
Price paid by Buyer pursuant to this Agreement.
(g) The Seller shall provide or cause to be provided such
additional funding or take or cause to be taken such other action with respect
to the Business Benefit Plans as may be required by the PBGC as a condition of
issuing the letter described in Section 10.3(h); provided such additional
funding and the cost of such additional actions do not exceed nine hundred
thousand dollars ($900,000) in the aggregate.
(h) Subject to the limitations of Section 10.3(g), the Seller
shall use its best efforts to obtain a letter from the PBGC prior to the Closing
Date indicating that the PBGC will
AMENDED AGREEMENT PAGE 43
<PAGE> 50
not make a claim against the Buyer, the Company under Section 4069 of ERISA in
connection with the transactions contemplated under this Agreement. Buyer shall
have the right to monitor but not participate in negotiations with the PBGC for
the purpose of confirming that Seller is complying with its obligations under
the preceding sentence. Such monitoring shall include contacting the PBGC with
the Seller or the Seller's designee, to make inquiries within the scope mutually
agreed to by the Seller and Buyer, each of whose agreement shall not be
unreasonably withheld.
(i) Prior to the Closing, Seller shall either (1) validly
assign to one or more of the Other Entities all rights and obligations of the
Company under the Checker Motors Corporation Excess Benefit Retirement Plan, the
Yellow Cab Company Excess Benefit Retirement Plan, any of the Checker Motors
Stated Benefit Salary Continuation Agreements and any employment agreement
executed between any Employee and the Seller or guaranteed or assumed by the
Company (such plans and agreements, collectively, the "Supplemental
Arrangements") or (2) pay or cause to be paid (other than by the Company) all
accumulated benefits or other amounts due or which may become due under the
Supplemental Arrangements (including, without limitation, any of the Checker
Motors Stated Salary Continuation Agreements not assigned or assumed pursuant to
Section 10.3(i)(1)) in full satisfaction thereof and shall obtain or cause to be
obtained a waiver of claims or a release from any person who receives an
accelerated payout under any of the Supplemental Arrangements, and the Seller
shall make any such waiver or release applicable to the Company.
(j) The Seller shall not terminate the GDT Plan prior to the
Closing.
10.4 Benefit Plans. With respect to Employees of the Company,
the Buyer shall cause the Company to maintain in accordance with their terms the
Business Benefit Plans maintained or sponsored by the Company immediately prior
to the Closing Date which solely cover Employees of the Company (and not any
other employees of the Seller or any of its Affiliates), and shall, or shall
cause the Company to, as of the Closing Date, establish or continue employee
benefit plans providing benefits which are substantially similar in the
aggregate to the benefits provided to Employees of the Company under each other
Business Benefit Plan of the Company (the "Buyer's Benefit Plans"). With respect
to the Buyer's Benefit Plans, the Buyer shall, and cause the Company to, grant
all Employees of the Company from and after the Closing Date credit for all
service with the Seller and its Affiliates (including the Company) and their
respective predecessors prior to the Closing Date for all purposes for which
such service was recognized by the Seller and its Affiliates (including the
Company). Without limiting the generality of Section 6.4, the Buyer shall, or
shall cause the Company to assume or retain all liabilities and obligations of
the Seller and its Affiliates (including the Company) under the Business Benefit
Plans maintained or contributed to by the Company and workers' compensation
arrangements with respect to the Employees of the Company and their dependents
and beneficiaries, including, but not limited to (i) liabilities and obligations
for benefits,
AMENDED AGREEMENT PAGE 44
<PAGE> 51
compensation, contributions, insurance and health maintenance organization
premiums, reserves and administrative expenses, whether incurred or accrued
before, on or after the Closing Date and whether or not reported as of the
Closing Date, and (ii) liabilities and obligations arising under the
continuation coverage requirements of Section 4980B of the Code and Section 601
of ERISA with respect to all Employees of the Company (or any beneficiary or
dependent of any Employee of the Company) who, as of the Closing Date, have
exercised or are eligible to exercise their right to such continuation coverage.
Nothing in this Section 10.4 shall limit the right of Buyer to amend or
terminate or cause to be amended or terminated any of Buyer's Benefit Plans
after the Closing Date.
10.5 WARN Act. Seller shall not take or permit to be taken any
action on or prior to the Closing Date which would cause Buyer to incur
liability under the WARN Act.
10.6 Indemnity. In addition to the indemnification obligations
of the Buyer set forth in the Indemnification Agreement, the Buyer and the
Company shall jointly and severally indemnify the Seller and its Affiliates and
hold each of them harmless from and against any Losses which may be incurred or
suffered by any of them under the WARN Act arising out of, or relating to, any
actions taken by the Buyer or the Company on or after the Closing Date.
10.7 No Rights to Continuing Employment. Nothing in this
Article X shall abridge any right the Company or the Buyer may have to amend or
terminate any agreements, plans or arrangements, including but not limited to
the Business Benefit Plans (except as provided in Section 10.3) or to terminate
the employment of any Employee.
ARTICLE XI
TERMINATION PRIOR TO CLOSING
11.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of the Buyer and the Seller;
or
(b) By the Seller or the Buyer in writing, without liability
to the terminating Party (and, if the Buyer is the terminating party, Mayflower)
on account of such termination (provided that the terminating Party (and, if the
Buyer is the terminating Party, Mayflower) is not otherwise in material default
or in material breach of this Agreement), if the Closing shall not have occurred
on or before December 31, 1996; provided that neither the Buyer nor the Seller
may terminate this Agreement pursuant to this clause if the Buyer's or the
Seller's failure (and, in the case of the Buyer, Mayflower's failure), as
appropriate, to fulfill any of its
AMENDED AGREEMENT PAGE 45
<PAGE> 52
obligations under this Agreement shall have been the reason that the Closing
shall not have occurred on or before said date; or
(c) By the Seller or the Buyer in writing, without liability
to the terminating Party on account of such termination (provided that the
terminating Party (and, in the case in which the terminating Party is the Buyer,
Mayflower) is not otherwise in material default or in material breach of this
Agreement), if there shall have been a material breach by the other party or a
material breach by Mayflower of any of its representations, warranties,
covenants or agreements contained herein and such material breach or material
default results in (i) a failure to satisfy a condition to the terminating
party's obligation to consummate the transactions provided herein and (ii) a
Material Adverse Effect; or
(d) By the Seller or the Buyer in writing if there shall be
(i) any law or regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or (ii) any judgment,
injunction, order or decree (including, without limitation, under the HSR Act or
the rules of the London Stock Exchange) enjoining the Buyer or the Seller from
consummating the transactions contemplated hereby and such judgment, injunction,
order or decree shall become final and nonappealable.
11.2 Effect of Termination. Termination of this Agreement
pursuant to this Article XI shall terminate all obligations of the Parties
hereunder, except for the obligations under Sections 12.7, 12.8, 12.10 and
12.11; provided, however, that in the event of a termination pursuant to clause
(b) or (c) of Section 11.1 by reason of a breach by the Buyer and/or Mayflower
of the representations and warranties contained in Section 4.4 the Buyer shall
reimburse and to the extent the Buyer does not reimburse, Mayflower shall
reimburse, the Seller for any and all of its reasonable costs and expenses
(including without limitation, reasonable attorneys fees and expenses) incurred
by it in connection with this Agreement or the transactions contemplated hereby.
ARTICLE XII
MISCELLANEOUS
12.1 Indemnification. Each of the Parties hereby acknowledges
and agrees that no Party shall have any obligations to any other Party with
respect to any and all Losses which may be incurred or suffered by any of them
hereunder or in connection with the transactions contemplated hereby or
otherwise, and the Parties hereto shall not be entitled to any recovery
whatsoever against any other Party for any such Losses other than as expressly
contemplated by the Indemnification Agreement and the procedures and limitations
set forth therein. Except as expressly set forth in the Indemnification
Agreement, no Party shall have any
AMENDED AGREEMENT PAGE 46
<PAGE> 53
recourse against the Seller, GDHI, any stockholder of GDHI, the Other Entities
or the Parent Shareholders with respect to any Losses whatsoever.
12.2 Interpretive Provisions.
(a) Whenever used in this Agreement, unless expressly stated
otherwise, "to the Seller's knowledge" or "to the knowledge of the Seller" or
"the Seller is not aware of" and "to the Company's knowledge" or "to the
knowledge of the Company" or "the Company is not ware of" shall mean to the
actual knowledge of those persons who are listed in Exhibit 12.2(a)(i) which
knowledge is obtained in their respective capacities set forth therein, and "to
the Buyer's knowledge" or "to the knowledge of the Buyer" or "the Buyer is not
aware of" or "to Mayflower's knowledge" or "to the knowledge of Mayflower" or
"Mayflower is not aware of" shall mean the actual knowledge of the Buyer and
Mayflower and the persons listed on Exhibit 12.2(a)(ii) hereof.
(b) The words "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or subdivision thereof.
(c) The inclusion of any dollar amount in any of the
representations or warranties made in Article II shall not be construed as
evidence of materiality for purposes of that or any other representation or
warranty contained in Article II.
12.3 Entire Agreement. This Agreement (including the
Disclosure Schedule and all Exhibits hereto) and the Ancillary Documents
constitute the sole understanding of the Parties with respect to the subject
matter hereof. Matters disclosed by the Seller or the Company to the Buyer
pursuant to any Section of this Agreement shall be deemed to be disclosed with
respect to all Sections of this Agreement.
12.4 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 the Buyer without the prior written consent of
the Seller and the Company, except that the Buyer may, at its election, assign
this Agreement to any direct or indirect wholly owned subsidiary of the Buyer so
long as (a) the representations and warranties of the Buyer made herein are
equally true of such assignee, (b) such assignment does not have any adverse
consequences to the Seller or any of its Affiliates (including, without
limitation, any adverse tax consequences or any adverse effect on the ability of
the Buyer to consummate (or timely consummate) the transactions contemplated
hereby), and (c) the Buyer shall, and Mayflower shall cause the Buyer to, assign
all of its rights under the Indemnification Agreement to the same assignee
simultaneously with any permissible assignment thereto but no such assignment of
this Agreement or any of the
AMENDED AGREEMENT PAGE 47
<PAGE> 54
rights or obligations hereunder shall relieve the Buyer or Mayflower of their
respective obligations under this Agreement. Such assignee shall execute a
counterpart of this Agreement agreeing to be bound by the provisions hereof as
the "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.
12.5 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.
12.6 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.
12.7 Broker's Fees. Other than Berenson, Minella & Company,
neither the Seller nor the Company (nor any of their respective subsidiaries or
Affiliates) has paid or become obligated to pay any fee or commission to any
finder or intermediary in connection with the transactions contemplated hereby.
Other than Citicorp Securities, Inc., neither Mayflower nor the Buyer (nor any
of their respective subsidiaries or Affiliates) has paid or become obligated to
pay any fee or commission to any finder or intermediary in connection with the
transactions contemplated hereby. 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.
12.8 Expenses. Except as otherwise provided herein, the
Seller, the Buyer and Mayflower shall each pay (and to the extent the Buyer does
not pay, Mayflower shall 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; provided,
however, that the Parent Shareholders shall pay, or arrange for the payment of,
all costs and expenses incurred by the Seller and the Company in connection with
this Agreement and the transactions contemplated hereby which have not already
been paid as of the Closing Date.
AMENDED AGREEMENT PAGE 48
<PAGE> 55
12.9 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 the Seller, to:
SCSM Holdings, Inc.
2016 N. Pitcher Street
Kalamazoo, Michigan 49007
Attention: David R. Markin, President
Telephone: (616) 343-6121
Telecopy: (616) 343-1660
with a copy to:
Hutton Ingram Yuzek Gainen Carroll & Bertolotti
250 Park Avenue
New York, New York 10177
Attention: Paulette Kendler, Esq.
Telephone: (212) 907-9600
Telecopy: (212) 907-9681
and
Rose & Atkinson
1403 Bank One Center
P.O. Box 549
Charleston, West Virginia 25322-0549
Attention: Herschel Rose, III, Esq.
Telephone: (304) 346-5100
Telecopy: (304) 346-4678
AMENDED AGREEMENT PAGE 49
<PAGE> 56
if to the Buyer to:
Mayflower Acquisition Corporation
c/o Walter, Conston, Alexander & Green P.C.
90 Park Avenue
New York, N.Y. 10016
Attention: Ram Sundar, Esq.
Telephone: (212) 210-9404
Telecopy: (212) 210-9444
if to the Company, to:
South Charleston Stamping
and Manufacturing Company, Inc.
3100 MacCorkle Avenue, S.W.
South Charleston, West Virginia 25303
Attention: David Hannah
Telephone: (304) 744-4601
Telecopy: (304) 744-4876
after the Closing, with a copy to:
Philippe Schreiber, Esq.
235 Old Spring Road
Fairfield, CT 06430
Telephone: (203) 255-3009
Telecopy: (203) 255-3615
AMENDED AGREEMENT PAGE 50
<PAGE> 57
prior to the Closing, with a copy to:
SCSM Holdings, Inc.
2016 N. Pitcher Street
Kalamazoo, Michigan 49007
Attention: David R. Markin, President
Telephone: (616) 343-6121
Telecopy: (616) 343-1660
Hutton Ingram Yuzek Gainen
Carroll & Bertolotti
250 Park Avenue
New York, NY 10177
Attention: Paulette Kendler, Esq.
Telephone: (212) 907-9600
Telecopy: (212) 907-9681
Rose & Atkinson
1403 Bank One Center
P.O. Box 549
Charleston, West Virginia 25322-0549
Attention: Herschel Rose, III, Esq.
Telephone: (304) 346-5100
Telecopy: (304) 346-4678
if to Mayflower:
The Mayflower Corporation Plc
Mayflower House
London Road
Loudwater, High Wycombe
Buckinghamshire, HP10 9RF
England
Attention: Mr. David Donnelly
Telephone: 44-(149)-445-0145
Telecopy: 44-(149)-445-0607
AMENDED AGREEMENT PAGE 51
<PAGE> 58
with a copy to:
Philippe Schreiber, Esq.
235 Old Spring Road
Fairfield, CT 06430
Telephone: (203) 255-3009
Telecopy: (203) 255-3615
or at such other address for a party as shall be specified by like notice.
12.10 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
giving effect to the conflicts of laws provisions thereof. 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 the 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 12.9 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 the 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.
12.11 Public Announcements. None of the Seller, the Company,
the Buyer or Mayflower shall (and Mayflower shall cause the Buyer not to) 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 each of Mayflower and the Seller (which consent shall
not be unreasonably withheld) except as may be required by the Exchange Act,
state or foreign securities laws, the rules of the London Stock Exchange 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.
12.12 Counterparts. This Agreement 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.
AMENDED AGREEMENT PAGE 52
<PAGE> 59
12.13 Certain Definitions. The following terms shall have the
meanings set forth for purposes of this Agreement.
"Acquisition Proposal" is defined in Section 5.5.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Exchange Act. For purposes of this Agreement,
the Company shall be deemed to be an Affiliate of the Seller prior to the
Closing and an Affiliate of the Buyer and Mayflower after the Closing.
"Aggregate Purchase Price" is defined in Section 1.3.
"Agreement" is defined in the Recitals.
"American Country" means American Country Insurance Company,
an Illinois corporation.
"American Country Participants" is defined in Section 10.3(c).
"Ancillary Document" means any agreement, certificate or other
document executed in connection with this Agreement.
"Arbitrator" is defined in Section 1.5 (c).
"Assumed Debt" means (a) the indebtedness of the Company to
the West Virginia Economic Development Authority ("WVEDA") pursuant to five loan
agreements as follows:
(i) Agreement, dated May 30, 1995 - Saturn Project
Loan - in the original principal amount of $1,827,867.00;
(ii) Agreement, dated December 8, 1995 - Mercedes-Benz
Loan - in the original principal amount of $8,700,000.00;
(iii) Agreement, dated March 26, 1996 - Press Line 5
Project Loan - in the original principal amount of $7,500,000.00;
(iv) Agreement, dated December 8, 1988 - Press Line 11
Project Loan, between the Company and WVEDA, as successor in interest
to West Virginia Industries and Jobs Development Corporation ("WVIJDC")
- in the original principal amount of $2,250,000.00;
AMENDED AGREEMENT PAGE 53
<PAGE> 60
(v) Agreement, dated April 11, 1988, between WVEDA,
as successor in interest to WVIJDC, and the Park Corporation - Loan #2
- in the original principal amount of $13,100,000, ($12,694,537.23 of
which was assumed by GDHI on August 1, 1989); and
(b) debt to Volkswagen of America, Inc. pursuant to a Loan
Agreement, dated April 11, 1988, as amended August 1, 1989, in the original
principal amount of $3,500,000; and
(c) accrued interest on each of the foregoing as of and
including the Closing Date.
"Books and Records" is defined in Section 6.2(a).
"Business Benefit Plans" is defined in Section 10.1.(f).
"Buyer" is defined in the Recitals.
"Buyer Loan Agreement" is defined in Section 4.4.
"Buyer's Benefit Plans" is defined in Section 10.1(f).
"Buyer's Certificate" is defined in Section 9.1.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., as amended.
"Checker" is defined in Section 6.11.
"Checker L.P." means Checker Motor Company L.P., a Delaware
limited partnership.
"Checker Motors" is defined in Section 6.11.
"Checker Pension Plan" is defined in Section 10.3(c).
"City Wide" means City Wide Towing, Inc., an Illinois
corporation.
"Claims" is defined in Section 6.4(b)(i).
"Clone Plans" is defined in Section 10.3(c).
AMENDED AGREEMENT PAGE 54
<PAGE> 61
"Closing" is defined in Section 1.2.
"Closing Date" is defined in Section 1.2.
"Closing Net Assets" is defined in Section 1.5 (a)(ii).
"CMC" is defined in Section 6.11.
"Closing Statement of Net Assets" is defined in Section 1.5
(a)(ii).
"COBRA" is defined in Section 10.1 (a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Code Affiliate" is defined in Section 10.1(b).
"Code Affiliate Employees" is defined in Section 10.1(c).
"Commitments" is defined in Section 2.7.
"Company" is defined in the Recitals.
"Company Certificate" is defined in Section 8.1.
"Company's Insurers" is defined in Section 6.4(b)(i).
"Company's Net Assets" is defined in Section 1.5(a)(iii).
"Confidentiality Agreement" is defined in Section 5.3.
"Contract" is defined in Section 7.1(e).
"Credit Banks" means the lenders who are signatories to the
Loan Agreement.
"Department of Labor" means the United States Department of
Labor.
"Disclosure Schedule" is defined in Section 2.2.
"Disposition" is defined in Section 7.1(e).
"E & Y" means Ernst & Young, L.L.P.
AMENDED AGREEMENT PAGE 55
<PAGE> 62
"ELIC Agreement" means the Stock Purchase Agreement, dated as
of June 26, 1996, by and between the Seller, Wilbert F. Schwartz, Thomas E.
Arnold, Jr. and Karl W. Dolk, Trustees of the ELIC Trust, and the promissory
note and guaranty executed in connection therewith.
"ELIC Settlement Agreement" means the Settlement Agreement,
dated as of June 21, 1994, by and among John Garamendi, as insurance commission
of the State of California in his capacity as conservator, rehabilitator and
liquidator or ELIC, and the ELIC Trust, on the one hand, and Checker L.P., the
Company, Checker Holdings Corp. III, and International Controls Corp.
"ELIC Trust" means the Base Assets Trust.
"Employees" is defined in Section 10.1(e).
"Encumbrances" is defined in Section 3.1.
"Environmental, Health and Safety Laws" means any and all
applicable federal, state and local laws, rules or regulations, and any orders
or decrees, relating to the regulation or protection of the natural environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemical or toxic or hazardous substances or wastes into the
outdoor environment, including, without limitation, ambient air, soil, surface
water, ground water, wetlands, land or subsurface strata, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or toxic or
hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Account" is defined in the Indemnification Agreement.
"Escrow Agent" is defined in the Indemnification Agreement.
"Escrow Agreement" means the Amended Escrow Agreement, dated
as of the date hereof, in substantially the form attached as Exhibit 5.9(a)
hereto.
"Escrow Amount" is defined in Section 1.3 hereof.
"Escrow Termination Date" means the third anniversary of the
Closing Date.
"Estimated Net Assets" is defined in Section 1.5(a)(i).
AMENDED AGREEMENT PAGE 56
<PAGE> 63
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"First Agreement" means the Stock Purchase Agreement, dated
November 7, 1996, by and among GDHI, the Seller, the Buyer and Mayflower.
"First Amendment" means Amendment No. 1 to the First
Agreement, dated as of November 27, 1996, by and among GDHI, the Seller, the
Company, the Buyer and Mayflower.
"Financial Statements" is defined in Section 2.3.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"GDT" means Great Dane Trailers, Inc., a Georgia corporation
and its subsidiaries.
"GDT Plan" means the Retirement Plan for Great Dane Trailers,
Inc.
"General Release" is defined in Exhibit 9.5 hereof.
"GDHI" means Great Dane Holdings, Inc., a Delaware
corporation.
"Hazardous Materials" means, collectively, (a) any petroleum
or petroleum products, flammables, explosives, radioactive materials, asbestos
in any form that is or could become friable, urea formaldehyde foam insulation,
and transformers or other equipment that contain dielectric fluid containing
polycholorinated biphenyls (PCBs), (b) any chemicals or other materials or
substances which as of the Closing Date are defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"toxic substances", "toxic pollutants", "contaminants", "pollutants", or words
of similar import under any Environmental, Health and Safety Law and (c) any
other chemical or other material or substances, exposure to which are as of the
Closing Date prohibited, limited or regulated under any Environmental, Health
and Safety law.
"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.
AMENDED AGREEMENT PAGE 57
<PAGE> 64
"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.
"Increase Adjustment" is defined in Section 1.5 (f).
"Increased Purchase Price" is defined in Section 1.5 (a)(i).
"Indemnification Agreement" means the Amended Indemnification
Agreement, in substantially the form attached as Exhibit 5.9(b) hereto.
"Initial Net Assets" is defined in Section 1.5 (a)(i).
"Initial Purchase Price" is defined in Section 1.3.
"Initial Statement" is defined in Section 1.5 (a)(i).
"Insurance Claims Letter Agreement" means the amended
Insurance Claims Letter Agreement in substantially the form of Exhibit 5.9(c).
"Insurance Policies" is defined in Section 2.18.
"IRS" means the United States Internal Revenue Service.
"Kalamazoo" means CMC Kalamazoo Inc., a Delaware Corporation.
"Leased Property" is defined in Section 2.15(b).
"Leases" is defined in Section 2.15(b).
"Liabilities" is defined in Section 6.4(a).
"Litigation" is defined in Section 2.8.
"Loan Agreement" means the Loan Agreement, dated January 26,
1995, as amended on September 22, 1995, December 8, 1995 and June 5, 1996
between NBD Bank, as agent, the Credit Banks and each of the borrowers set forth
therein.
"Logos" is defined in Section 6.11.
AMENDED AGREEMENT PAGE 58
<PAGE> 65
"Losses" means any and all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind, including, without limitation,
reasonable attorneys fees and other legal costs and expenses.
"Management Employees" means John Wise, David Hannah, Glenn O.
Taylor and Robert Vickars.
"Material Adverse Effect" is defined in Section 2.2.
"Mayflower" is defined in the Recitals.
"Mayflower Certificate" is defined in Section 9.1.
"Mayflower Shareholder's Meeting" means the meeting of the
shareholders of Mayflower relating to the Shareholder's Approval.
"Most Recent Balance Sheets" means the Most Recent SCSM
Balance Sheet and the Most Recent Company Balance Sheet.
"Most Recent Company Balance Sheet" means the balance sheet
contained in the Most Recent Company Financial Statements.
"Most Recent Company Financial Statements" is defined in
Section 2.3(c).
"Most Recent Financial Statements" means the Most Recent SCSM
Financial Statements and the Most Recent Company Financial Statements.
"Most Recent Fiscal Year End" is defined in Section 2.3(a).
"Most Recent SCSM Balance Sheet" means the balance sheet
contained in the Most Recent SCSM Financial Statements.
"Most Recent SCSM Financial Statements" is defined in Section
2.3(b).
"Multiemployer Plan" is defined in Section 10.1 (g).
"Names" is defined in Section 6.11.
"NBD Bank" means NBD Bank, the agent of the Credit Banks under
the Loan Agreement.
AMENDED AGREEMENT PAGE 59
<PAGE> 66
"New Mayflower Shares" is defined in Section 4.4.
"Notice of Disagreement" is defined in Section 1.5(b).
"Ordinary Course of Business" means the ordinary course of
business of the Company consistent with past custom and practice.
"Other Assets" means cash and cash equivalents.
"Other Entities" means Yellow Cab, American Country, Chicago
AutoWerks, City Wide, Kalamazoo and each of their respective subsidiaries, if
any.
"Parent Shareholders" shall mean David R. Markin, Martin L.
Solomon, Allan R. Tessler, Wilmer J. Thomas, Jr. and Jay H. Harris.
"Party" or "Parties" is defined in the Recitals.
"Patent and Trademark Rights" is defined in Section 2.6.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" is defined in Section 2.9.
"Permitted Exceptions" is defined in Section 2.5.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, a limited
liability company, an unincorporated organization, or a governmental entity (or
any department, agency, or political subdivision thereof).
"Pre-Closing Statement" is defined in Section 1.5(a)(i).
"Pre-Closing Taxes" is defined in Section 7.1(a)(iii).
"Purchase Price Increase" is defined in Section 1.5(f).
"Purchase Price Reduction" is defined in Section 1.5(e).
"Records Letter Agreement" means the Letter Agreement,
substantially in the form of Exhibit 5.9(e) hereof.
AMENDED AGREEMENT PAGE 60
<PAGE> 67
"Reduced Purchase Price" is defined in Section 1.5(a)(i).
"Reduction Adjustment" is defined in Section 1.5(e).
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment.
"SCSM Annual Statements" is defined in Section 2.3(a).
"SCSM Financial Statements" is defined in Section 2.3(b).
"SCSM Property" means the site leased by the Company for its
facility located at 3100 MacCorkle Avenue, S.W., South Charleston, West Virginia
25303.
"SCSM Property Lease" means the Company's lease with the Park
Corporation, dated December 1, 1988, for the manufacturing facility in the
Charleston Ordinance Center in the City of South Charleston, West Virginia.
"SEC" means the Securities and Exchange Commission.
"SEC Reports" means all forms, reports, statements and other
documents filed pursuant to the Exchange Act by the Seller with the SEC
including, without limitation, (A) all Annual Reports on Form 10-K, (B) all
Quarterly Reports on Form 10-Q, (C) all Reports on Form 8-K, (D) all other
required reports and (E) all amendments and supplements to all such reports.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" is defined in the Recitals.
"Seller's Certificate" is defined in Section 8.1.
"Severed Employers" is defined in Section 10.3(a).
"Shareholder Approval" is defined in Section 6.5.
"Solvent" means when used with respect to any Party that (a)
the fair value of all of its real and personal property (including, without
limitation, plant, building, facility, structure, inventory; or any asset owned
or leased by such Party) is in excess of the total amount of its liabilities
(including, without limitation, contingent liabilities); (b) it is able to pay
its debts as they mature; (c) it does not have unreasonably small capital for
the business in which it is
AMENDED AGREEMENT PAGE 61
<PAGE> 68
engaged or for any business or transaction in which it is about to engage; and
(d) it is not "insolvent" as such term is defined in Section 101 of the
Bankruptcy Code.
"Special Bonus Plan" means the Special Bonus Plan of the
Seller set forth in the Disclosure Schedule.
"Special Bonus Plan Payments" is defined in Section 10.2.
"Stock" is defined in the Recitals.
"Straddle Returns" is defined in Section 7.1(a)(iii).
"Supplemental Arrangements" is defined in Section 10.3(i).
"Tax Matter" is defined in Section 7.1(b).
"Taxes" means all United States federal, state or local taxes
and foreign taxes, including but not limited to, those which are payable or
remittable by the Company, Checker L.P. or the Seller or levied on their
property, income, or assets and all additions to tax, penalties and interest
relating thereto.
"Trademarks" is defined in Section 2.6.
"Transferred Benefit Plans" is defined in Section 10.3(a).
"Transition Services Agreement" means the Transition Services
Agreement, in substantially the form of Exhibit 5.9(d).
"Treasury Regulations" means the regulations promulgated by
the United States Department of the Treasury.
"Underwriting Agreement" is defined in Section 4.4.
"WARN Act" means Worker Adjustment and Retraining Notification
Act of 1988, as amended.
"WVEDA" is defined in the definition of Assumed Debt.
"WVIJDC" is defined in the definition of Assumed Debt.
"Yellow Cab" means Yellow Cab Company, a Delaware corporation.
AMENDED AGREEMENT PAGE 62
<PAGE> 69
"Yellow Cab Participants" is defined in Section 10.3(c).
12.14 No Third Party Beneficiaries. Neither this Agreement nor
any Ancillary Document creates, and shall not be construed as in any manner
creating, any rights enforceable by any person not a party to this Agreement, or
any Ancillary Document as the case may be, except as provided in Section 12.5
hereof. Without limiting the generality of the foregoing, no provision of this
Agreement or any Ancillary Document shall create any third party beneficiary
rights in any Employee or former Employee (including any beneficiary or
dependent thereof) of the Company in respect of continued employment (or resumed
employment) or any other matters, and no provision of this Agreement or any
Ancillary Document shall create any such rights in any such persons in respect
of any benefits that may be provided, directly or indirectly, under any Business
Benefit Plan.
12.15 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
12.16 Effectiveness. Anything set forth in this Agreement to
the contrary notwithstanding, the terms set forth herein shall be effective if,
and only if, the Transaction (as defined in the First Amendment) is consummated
and the First Agreement is amended in its entirety to read as set forth in this
Agreement (as set forth in the First Amendment) and the Closing (as defined in
this Agreement) occurs as set forth herein.
AMENDED AGREEMENT PAGE 63
<PAGE> 70
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.
SCSM HOLDINGS INC.
By: ___________________________
Name:
Title:
SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY
By: ___________________________
Name:
Title:
MAYFLOWER ACQUISITION
CORPORATION
By: ___________________________
Name:
Title:
THE MAYFLOWER CORPORATION
PLC
By: ____________________________
Name:
Title:
AMENDED AGREEMENT PAGE 64
<PAGE> 1
Technical Amendment No. 1 dated as of December 18, 1996
1. Section 1.5(a)(ii) of Amended Stock Purchase Agreement dated as of November
7, 1996 by and among SCSM Holdings, Inc., South Charleston Stamping &
Manufacturing Company, Mayflower Acquisition Corporation, and The Mayflower
Corporation Plc (the "Amended Contract") is hereby amended to read as follows in
its entirety:
"(ii) Within thirty (30) days after the Closing Date, the Buyer shall (and
Mayflower shall cause the Buyer to) cause the Company's management to prepare
and deliver to the Seller and the Buyer a statement setting forth the Company's
Net Assets (the "Closing Net Assets") as of the close of business, Eastern
Standard Time on December 4, 1996 (the "Closing Statement of Net Assets"),
together with a representation by the Company's management that the Closing
Statement of Net Assets has been prepared consistent with past accounting
practices, policies and procedures with consistent classifications utilized by
the Company's management in the preparation of the Initial Statement and the
Pre-Closing Statement; provided, however, that the Closing Statement of Net
Assets shall not reflect any liability or reserve for any cost or expense
(including, without limitation, Liabilities or Taxes) for which the Seller is
responsible pursuant to the terms of this Agreement."
2. Section 2.3(c) of the Amended Contract is hereby amended to read as follows
in its entirety:
"(c) audited consolidated balance sheet and statement of operations,
shareholders' equity and cash flow for the Seller as and for December 31, 1995
(the "Most Recent Company Financial Statements")."
3. The last full paragraph of Section 5.2(b) of the Amended Contract is hereby
amended to read as follows in its entirety:
"Without limiting the generality of the foregoing, the Seller covenants and
agrees that from the close of business, Eastern Standard Time on December 4,
1996 through and including the Closing Date, the Company shall not declare or
make any payment not in the Ordinary Course of Business including, without
limitation, declare or pay any dividends on or make any distribution or other
payment with respect to any class of its equity or ownership interest, or
purchase, redeem, retire or otherwise acquire any of its equity or make any
other payment not in the Ordinary Course of Business."
4. Section 5.7(a) of the Amended Contract is hereby amended to read as follows
in its entirety:
<PAGE> 2
"(a) ELIC Payment and Release. Payment of all amounts due under the ELIC
Agreement, including a full release of the Company from any further liability to
the ELIC under the ELIC Agreement;"
5. The first sentence of Section 12.1 of the Amended Contract is hereby amended
to read as follows in its entirety:
"Each of the Parties hereby acknowledges and agrees that no Party shall
have any obligations to any other Party with respect to any and all Losses which
may be incurred or suffered by any of them hereunder or in connection with the
transactions contemplated hereby or otherwise and the Parties hereto shall not
be entitled to any recovery whatsoever against any other Party for any such
Losses other than in each case as expressly contemplated by the Indemnification
Agreement and the procedures and limitations set forth therein or as set forth
in Section 1.7 hereof."
<PAGE> 3
IN WITNESS WHEREOF, each of the parties has caused this Technical
Amendment No. 1 to be executed in its behalf as of the date first above written.
SCSM HOLDINGS, INC.
By: ________________________________________
Name_______________________________
Title:_____________________________
SOUTH CHARLESTON STAMPING &
MANUFACTURING COMPANY
By: ________________________________________
Name_______________________________
Title:_____________________________
MAYFLOWER ACQUISITION CORPORATION
By: ________________________________________
Name_______________________________
Title:_____________________________
THE MAYFLOWER CORPORATION PLC
By: ________________________________________
Name_______________________________
Title:_____________________________
<PAGE> 1
NOTICE OF FULL REDEMPTION TO THE HOLDERS OF
GREAT DANE HOLDINGS INC.
(FORMERLY INTERNATIONAL CONTROLS CORP)
12 3/4% SENIOR SUBORDINATED DEBENTURES
DUE AUGUST 1, 2001
CUSIP NO 459362AB5*
NOTICE IS HEREBY GIVEN, that Great Dane Holdings Inc. has elected to
redeem the entire outstanding principal amount of the above referenced bonds on
January 21, 1997 (the "Redemption Date"), pursuant to Article III of the
Indenture. The redemption price will be 100% of the principal amount thereof
plus accrued interest to January 21, 1997.
Bonds to be redeemed will be payable upon presentation and surrender on or
after January 21, 1997 at First Union National Bank of North Carolina, Bond
Administration, Corporate Trust, 230 South Tryon Street, 9th Floor, Charlotte,
NC 28288-1179.
On and after such Redemption Date interest thereon shall cease to accrue
and be payable.
*No representation is made as to the correctness of the CUSIP Number
either as printed on the Bonds or as contained herein.
Under the provisions of the Interest and Dividends Tax Compliance Act of
1983, Paying Agents making payments of principal on municipal securities may be
obligated to withhold a 31% tax from remittances to individuals who have failed
to furnish the Paying Agent with a certified Taxpayer Identification Number.
Holders of The above-described securities who wish to avoid the application of
these provisions should submit certificated Taxpayer Identification Number on
I.R.S. Form W-9 when presenting their securities for redemption.
By: Great Dane Holdings Inc.
Dated: December 19, 1996
<PAGE> 1
PNC BANK, N.A. 908 205 4515 TEL
CORPORATE TRUST DEPARTMENT 908 205 4525 FAX
P.O. BOX 600
EDISON, NJ 08818
NOTICE OF REDEMPTION
TO THE HOLDERS OF
GREAT DANE HOLDINGS INC.
SUBORDINATED DISCOUNT DEBENTURES
DUE: JANUARY 1, 2006 PNCBANK
CUSIP NO: 39031 PAB1*
Notice is hereby given that, pursuant to the provisions of the Indenture dated
as of December 27, 1985 (the "Indenture") providing for the issuance of the
Subordinated Discounted Debentures due January 1, 2006 (the "Debentures") of
International Controls Corp. as succeeded by Great Dane Holdings Inc. (the
"Company"), the Company has elected to redeem and will redeem on January 27,
1997 (the "Redemption Date") the entire principal amount outstanding of the
Debentures at a redemption price equal to 100% of the principal amount thereof
(the "Redemption Price") together with accrued but unpaid interest thereon to
the Redemption Date.
To receive payment of the Redemption Price on or after the Redemption Date
holders of the Debentures should present and surrender the Debentures, by mail
or hand delivery, at the principal corporate trust office of Bankers Trust
Company, as follows:
<TABLE>
<S> <C> <C>
BY OVERNIGHT DELIVERY: BY HAND: BY MAIL:
BT Services Tennessee, Inc. Bankers Trust Company BT Services Tennessee, Inc.
Corporate Trust and Agency Group Corporate Trust and Agency Group Securities Payment Unit
Securities Payment Unit 123 Washington Street P.O. Box 291207
648 Grassmere Park Road 1st Floor Window Nashville, TN 37229-1207
Nashville, TN 37211 Attn: Bond Redemption
New York, New York 10006
</TABLE>
The debentureholders can call the Security Holder Relations Department at (800)
735-7777.
The method of delivery is at the risk of the debentureholder. If delivered by
mail, certified or registered mail is recommended for the debentureholder's
protection.
If payment for Debentures is to be made to other than the registered holder, the
Debentures must be accompanied by appropriate instruments of transfer by the
registered holder or his duly authorized agent or legal representative.
On the Redemption Date the Redemption Price will become due and payable together
with accrued interest to the Redemption Date and interest on the Debentures will
cease to accrue.
THE NOTICE OF REDEMPTION IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED
AS, AN OFFER TO SELL, OR AS A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
SECURITIES OF THE COMPANY.
Date: December 27, 1996 PNC BANK, N.A., AS TRUSTEE FOR
FOR GREAT DANE HOLDINGS INC.
- --------------------------------------------------------------------------------
Under the provisions of Section 3406(a) of the Internal Revenue Code, as
amended, paying agents making payments of interest or principal may be obligated
to withhold a 31% tax from remittance to individuals who have failed to furnish
the Paying Agent with a certified and valid Taxpayer Identification Number on a
fully completed Form W-9. Holders of the above-described securities who wish to
avoid the application of these provisions should submit certified Taxpayer
Identification Numbers of I.R.S. Form W-9 when presenting their securities for
redemption or for payment at maturity.
*No representation is made as to the correctness of the Cusip number
either as printed on the Bonds or as contained here.
