Securities and Exchange Commission
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 12, 1995
AMREP CORPORATION
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(Exact name of registrant as specified in charter)
Oklahoma 1-4702 59-0936128
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
641 Lexington Avenue, New York, New York 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 705-4700
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<PAGE>
Item 2. Acquisition Disposition of Assets.
- ------- ----------------------------------
On January 12, 1995, pursuant to an Agreement dated
December 22, 1994, between Kable Fulfillment Services of
Ohio, Inc. ("Kable Fulfillment") and Fulfillment Corporation
of America ("FCA"), Kable Fulfillment purchased the business
and most of the assets of FCA. Kable Fulfillment is a
wholly-owned subsidiary of Kable News Company, Inc. ("Kable
News"), which in turn is a wholly-owned subsidiary of
Registrant. The purchase price was $2,070,000 cash plus the
assumption of various liabilities. The purchase price was
negotiated at arms-length. No material relationship existed
or exists between FCA or its affiliates and the Registrant or
any of its affiliates, any such director or officer. The
funds used to purchase the assets were advanced by Kable
News, which obtained the funds from American National Bank
and Trust Company under a revised Line of Credit Agreement.
The assets acquired include (i) an office building
with approximately 44,500 square feet of space, (ii) an
assignment of a lease of approximately 60,000 square feet of
office space, which lease expires in January 1996, and (iii)
all tangible personal property of FCA. The business acquired
is similar to the business of the Fulfillment Services
Division of Kable News, and Kable News intends to operate the
business acquired as a part of its Fulfillment Services
Division and to devote the assets acquired to such business.
Item 7. Financial Statements and Exhibits.
- ------- ----------------------------------
(a) Financial Statements of Fulfillment
Corporation of America.
Note:
----- It is impracticable to provide the
required Financial Statements at the time
this Report is filed. Such Statements
will be filed not later than March 28,
1995 (the date which is 60 days after the
date this Report must be filed).
-2-
<PAGE>
(b) Pro forma financial information.
Note:
----- It is impracticable to provide the
required pro forma financial information
at the time this Report is filed. Such
information will be filed not later than
March 28, 1995 (the date which is 60 days
after the date this Report must be
filed).
(c) Exhibits
1. Assets Purchase and Sale Agreement dated as of
December 22, 1994 by and among Kable Fulfillment Services of
Ohio, Inc. and Fulfillment Corporation of America.
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.
AMREP Corporation
Date: January 24, 1995 By: /s/ Rudolph J. Skalka
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Vice President
-3-
<PAGE>
EXHIBIT 1
ASSET PURCHASE AND SALE AGREEMENT
ASSET PURCHASE AND SALE AGREEMENT, dated as of December
22, 1994 by and among KABLE FULFILLMENT SERVICES OF OHIO, INC., a
Delaware corporation having an address at 16 South Wesley Avenue,
Kable Square, Mt. Morris, Illinois 61054 ("Kable") and FULFILLMENT
CORPORATION OF AMERICA, a Delaware corporation with an address at
205 West Center Street, Marion, Ohio 43302 ("FCA").
W I T N E S S E T H:
WHEREAS, FCA is engaged in the business of providing
customized marketing/fulfillment programs to the publishing and
direct marketing industries; and
WHEREAS, on the terms and subject to the conditions
hereinafter set forth, Kable desires to purchase and acquire from
FCA, and FCA desires to transfer, convey and assign to Kable,
certain of the assets, properties and rights of FCA, subject to the
assumption by Kable of certain liabilities and obligations of FCA
relating to the business of FCA;
NOW, THEREFORE, in consideration of the premises and of
the mutual agreements hereinafter contained, the parties hereto
agree as follows:
1. Purchase and Sale of Assets.
---------------------------
1.1 Business and Assets to be Purchased and Sold.
Upon the terms and subject to the conditions hereinafter set forth,
and except as expressly provided in Section 1.2 below, Kable shall
purchase from FCA, and FCA shall sell, assign, convey, transfer and
deliver to Kable, all of the right, title and interest of FCA in
and to the assets, properties and rights of FCA, of every nature,
kind and description, wherever located, tangible and intangible,
real, personal and mixed. The assets to be purchased and sold
hereunder are hereinafter referred to in the aggregate as the
"Assets, and the business of FCA associated with the Assets is
hereinafter referred to as the "FCA Business." Subject in all
respects to the provisions of Section 1.2 hereof, the Assets shall
include, without limitation, all of FCA's right, title and interest
in and to the following:
(a) the real property known as 205 West Center
Street, Marion, Ohio and a certain contiguous parcel, all as more
fully described in SCHEDULE 1.1(a) annexed hereto, including all
buildings and improvements thereon (the "Premises"), together with
(i) all fixtures and articles of personal property attached to or
used in connection with the Premises and (ii) all easements,
rights-of-way, streets, ways, alleys, passages, sewer rights, water
rights and powers, and all estates, rights, titles, interests and
privileges of any nature whatsoever, in any way belonging, relating
or pertaining to the Premises. FCA shall give and Kable shall
accept such title as Ohio Bar Title Insurance Company will be
willing to approve and insure in accordance with their standard
form of title insurance policy, subject, however, to (A) all
existing zoning laws and ordinances and to any other Federal, state
or local laws, ordinances, rules or regulations affecting the
Premises or the use thereof, provided same are not violated by the
existing buildings and improvements, (B) rights of eminent domain
or governmental rights of police power, (C) taxes, assessments,
water rates and sewer usage charges accruing and payable from and
after the Closing Date (as defined in Section 1.3(a) hereof), (D)
such state of facts as shown by the survey of the Premises dated as
of December 6, 1994 by T.L. Boblenz & Associates, Inc., Registered
Surveyors (the "Survey"), and (E) such other easements, covenants
and restrictions of record, provided same do not materially
interfere with the use of the Premises as presently used in
connection with the FCA Business.
(b) that certain lease and related rights of
renewal and options to purchase covering premises located at
228-238 and 242-252 West Center Street, Marion, Ohio (the "Leased
Premises") under a Lease and Joinder of Contiguous Leases dated
September 28, 1990 by and between FCA and Bobby J. Godwin and
Bonnie R. Godwin, and the leasehold improvements thereon (the
"Lease");
(c) all tangible and intangible personal
property of FCA located in or on the Premises and the Leased
Premises, together with all other tangible and intangible personal
property owned by FCA, wheresoever situated, and used, useful or
necessary in connection with, or in any way pertaining to the
business of FCA, including, without limitation: (i) all machinery,
equipment, supplies, inventories, work-in-process, furniture and
other items of personal property owned by FCA and more fully
described in SCHEDULE 1.1(c) hereto;
(d) all cash, bank balances, money in
possession of banks and similar cash items;
(e) all accounts and notes receivable as they
may exist on the Closing Date, including, without limitation all
accounts receivable arising from services performed prior to the
Closing Date notwithstanding that invoices relating thereto have
not yet been issued;
(f) all pre-paid expenses, advances and
deposits of FCA;
(g) all business procedures and data
processing and accounting procedures used in the business of FCA;
(h) all contracts, commitments, leases,
licenses, purchase orders, sales orders and other agreements to
which FCA is a party or in which FCA has rights (collectively,
"Contracts" and individually a "Contract"), including, without
limitation, those contracts, commitments, leases, licenses,
purchase orders, sales orders and other agreements set forth in
SCHEDULE 1.1(h) hereto;
(i) any governmental licenses, permits, and
other authorizations (collectively, "Permits" and individually a
"Permit");
(j) all trade names, trademarks and service
marks (and registrations and applications with respect thereto),
copyrights (and registrations and applications with respect
thereto), trade secrets, logos, slogans, proprietary processes,
computer software and all other information, know-how and rights to
use any of the foregoing, relating to the FCA Business, including,
without limitation, the trademarks "FCA" and "Fulfillment
Corporation of America," and the good will associated therewith;
(k) originals or copies of all operating data
and books and records of FCA, including, without limitation,
correspondence, employment records, accounting records, property
records, mailing lists, customer and vendor lists and other records
and files of or relating to the Assets, other than FCA's corporate
record books, original cash journals and general ledgers, bank
statements and such other items as both parties agree; provided
that FCA (and its agents and representatives) shall have reasonable
access to such books and records, at reasonable times and upon
reasonable notice, and to the extent reasonably required by FCA;
and
(l) all other properties, assets, rights and
interests of every kind and description, wherever located, owned by
FCA and used, useful or necessary in connection with, or in any way
pertaining to the FCA Business.
The Assets shall be delivered to Kable hereunder free and clear of
all mortgages, liens, encumbrances, security interests,
restrictions, options, claims or assessments of any nature
whatsoever, direct or indirect, whether accrued, absolute,
contingent or otherwise (hereinafter referred to collectively as
"Encumbrances") except only as expressly assumed by Kable under
Section 1.4 hereof or as otherwise expressly set forth in Section 3
or elsewhere in this Agreement.
1.2 Assets Retained by FCA. Notwithstanding any
other provision of this Agreement, FCA shall retain all right,
title and interest in and to the following assets (the "Excluded
Assets"):
(a) the real property known as 173 Oak Street,
Marion, Ohio and three contiguous parcels, all as more fully
described in SCHEDULE 1.2(a) hereto (the "Oak Street Property"),
including (i) all buildings and improvements thereon, (ii) all
fixtures and articles of personal property attached to or used in
connection with the Oak Street Property, excluding such personal
property described in SCHEDULE 1.1(c) hereto, (iii) all easements,
rights of way, streets, ways, alleys, passages, sewer rights, water
rights and powers, and all estates, rights, titles, interests and
privileges of any nature whatsoever, in any way belonging, relating
or pertaining to the Oak Street Property, including, without
limitation, FCA's right to use a private grade crossing as more
fully described in that certain Consolidated Rail Corporation
License Agreement for Private Grade Crossing dated as of 3/18/94
and the pole attachment rights granted to FCA by Ohio Edison, and
(iv) all Contracts and Permits pertaining solely to the Oak Street
Property, subject in all respects to that certain Use and Occupancy
Agreement between FCA and Kable being executed and delivered in
connection with this transaction (the "Oak Street Agreement");
(b) all rights of insurance coverage and other
like protections against liabilities (including, without
limitation, under workers compensation laws), which rights cannot
be assigned by FCA to Kable, excluding all such rights relating to
the Employee Benefit Plans (as defined in Section 4.22 hereof);
(c) income tax records of FCA for periods
prior to the Closing Date, provided that Kable shall have
reasonable access to such records on reasonable notice and to the
extent reasonably required by Kable;
(d) minute and stock books of FCA, provided
that Kable shall have reasonable access to such minute and stock
books on reasonable notice and to the extent reasonably required by
Kable;
(e) subject to Kable's rights hereunder, the
rights of FCA under this Agreement and the proceeds payable to FCA
hereunder;
(f) all deposits with respect to income tax
liabilities;
(g) all Permits and Contracts pertaining
solely to the ownership, use and occupancy of the Oak Street
Property; and
(h) any amounts due to FCA from its parent
company, Engelhard Hanovia, Inc. ("Engelhard") or any Engelhard
affiliate.
1.3 Closing of Purchase and Sale/Payment
Provisions.
(a) The closing of the transactions herein
contemplated shall take place on or about January 4, 1995, or such
other date as the parties shall mutually agree (the "Closing").
The date on which the Closing shall occur is referred to herein as
the "Closing Date."
(b) Subject to the provisions of this
Agreement, on the Closing Date, Kable shall pay to FCA the
aggregate cash sum of Two Million and Seventy Thousand ($2,070,000)
Dollars (the "Purchase Price"). All payments required to be made
to FCA hereunder shall be made by certified or official bank check
or, at the option of FCA, by wire transfer to a bank account
designated by FCA. All payments and other currency amounts
referred to in this Agreement shall be payable in lawful money of
the United States of America in immediately available funds.
1.4 Assumption of Liabilities. Subject to the
provisions of this Agreement and, simultaneously with the transfer,
conveyance and assignment by FCA to Kable of the Assets, Kable
shall assume on the Closing Date, and shall subsequently pay, honor
and discharge when due and payable and otherwise in accordance with
the relevant governing agreements (subject to all applicable
defenses to non-payment or discharge), such of the following
liabilities and obligations of FCA (the "Assumed Obligations") as
are not included in the definition of Retained Liabilities set
forth in Section 1.5 below:
(a) those accounts payable and other
liabilities and obligations disclosed or reserved against on the
Interim Financial Statement (up to but not in excess of the amount
of each such liability) plus those incurred in the ordinary and
usual course of the business of FCA between the Interim Financial
Statement Date and the Closing Date, less those paid in the period
between the Interim Financial Statement Date and the Closing Date;
(b) subject to the provisions of Section 3
hereof, liabilities and obligations of FCA under all Contracts
which are included in the Assets, which are not performed or
discharged prior to the Closing Date. Such liabilities and
obligations include, without limitation, any and all liabilities
and obligations of FCA (i) for unfilled purchase orders entered
into by FCA in the ordinary course of business; (ii) under the
Service Agreements (as defined in Section 3.1 hereof), including,
without limitation, the liabilities more fully described in Section
3.1(b) hereof; (iii) under the Lease; and (iv) under the Amended
and Restated Mortgage Note in the original principal amount of
$187,878.83 ($111,378.83 as at November 30, 1994) dated August 1,
1990 for the benefit of Society National Bank and the Amended and
Restated Open End Mortgage dated as of December 24, 1991 securing
said note (collectively, the "Note and Mortgage");
(c) liabilities and obligations of FCA arising
under the Employee Benefit Plans, solely to the extent set forth in
Section 2 hereof; and
(d) liabilities and obligations of FCA arising
in connection with matters set forth on SCHEDULE 1.4(d) hereto.
1.5 Retained Liabilities. Kable shall not, by the
execution and performance of this Agreement or otherwise, assume,
become responsible for, or incur any of the liabilities or
obligations described in subparagraphs (a) through (h) of this
Section 1.5 or any other liability or obligation of any nature of
FCA not described in Section 1.4 hereof, matured or contingent,
known or unknown, and whether arising out of occurrences or
circumstances prior to, at or after the Closing Date (the "Retained
Liabilities"). FCA agrees to pay, honor and discharge the Retained
Liabilities when due and payable and otherwise in accordance with
the relevant governing agreements (subject to all applicable
defenses to non-payment or discharge). Without limitation of the
foregoing, the Retained Liabilities shall include:
(a) any and all obligations or liabilities
arising under or related to the Excluded Assets;
(b) any liability or obligation of FCA to any
person or entity, the existence of which constitutes a breach of
any covenant, agreement, representation or warranty of FCA
contained in this Agreement;
(c) any liability or obligation in respect of
Taxes imposed on FCA and any Taxes of any person, firm or entity
other than FCA for which FCA may be liable by law, contract or
otherwise;
(d) any liability or obligation which FCA may
owe Engelhard or any Engelhard affiliate;
(e) any liability or obligation for which FCA
has rights of insurance coverage or other like protection
(including, without limitation, under workers compensation laws)
which rights cannot be assigned by FCA to Kable or the benefits of
which cannot otherwise be made available to Kable, but only to the
extent FCA has such rights or protection, and excluding all such
liabilities and obligations described in Section 1.4(c) hereof;
(f) any liability or obligation relating to
the asbestos condition described in the Environmental Reports (as
defined in Section 4.27.1 hereof) as such condition existed for any
period prior to the Closing Date;
(g) any liability or obligation of FCA
relating to or arising under or out of any "Environmental Laws" or
"Hazardous Substances," with respect to conditions existing or acts
or omissions occurring prior to the Closing Date. For the purposes
of this Agreement: (i) the term "Hazardous Substances" shall mean
any hazardous substance, hazardous material or toxic substance, as
defined in or regulated under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act, as amended, or any other
Environmental Law, including, but not limited to, asbestos, radon,
formaldehyde, radioactive substances, hydrocarbons, industrial
solvents, flammables and explosives, or any other substance or
material which would constitute or cause a health, safety or
environmental hazard or require remediation at the behest of any
governmental agency; and (ii) the term "Environmental Laws" shall
mean all applicable requirements of any existing federal, state, or
local statute, ordinance, rule or regulation, any judicial or
administrative order (whether or not on consent), request or
judgment, any common law doctrine or theory, any provision or
condition of any permit, license or other operating authorization
(A) relating to protection of the environment, persons or the
public welfare from actual or potential exposure (or the effects of
exposure) to any actual or potential release, discharge or emission
(whether past or present) of, or relating to the possession,
manufacture, processing, importation, use, treatment, storage or
disposal of, any chemical, raw material, pollutant, contaminant, or
Hazardous Substances; or (B) relating to occupational or public
health or safety; and
(h) liabilities and obligations of FCA arising
in connection with matters set forth on SCHEDULE 1.5(h) hereto,
including, without limitation, for legal fees and expenses.
1.6 FCA and Kable each agree that for tax purposes
they will allocate the Purchase Price and any liabilities assumed
by Kable hereunder which are considered as part of the purchase
price for tax purposes in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended, and the regulations
thereunder, pursuant to an allocation of value thereof made and
agreed to in writing by Kable and FCA. FCA further agrees to file
all tax returns including all returns and forms required under
Section 1060 of the Internal Revenue Code of 1986 as amended,
consistent with such allocation.
<PAGE>
2. Pension and Benefit Matters.
---------------------------
The parties intend that the sale of the Assets contemplated
hereunder shall be as an ongoing business and shall not constitute
a shutdown of FCA's operations for purposes of entitling any FCA
employee to immediate payment of pension or severance pay benefits
or any other shutdown related benefits arising on account of a
shutdown under FCA's existing Employee Benefit Plans or employment
policies or agreements applicable to FCA's employees immediately
prior to the Closing. Consistent with such intent of the parties,
it is hereby agreed as follows:
(a) Effective on the Closing Date, Kable shall
offer employment to all employees then employed by FCA, as set
forth in a certified payroll schedule (the "Payroll Schedule") to
be delivered by FCA to Kable at closing (the "Employees");
provided, however, that nothing in this Section 2(a) shall be
construed as giving any Employee any right, remedy or claim under
or in respect of this Agreement or any employment or other
agreement between such Employee and FCA (as assigned to and assumed
by Kable).
(b) Subject to the provisions of this
Agreement, the Employee Benefit Plans and all obligations of FCA to
fund and pay benefits thereunder shall be fully assumed in all
respects by Kable as of the Closing Date; provided, however, that
nothing in this Agreement shall be construed to require Kable to
continue to maintain any particular Employee Benefit Plan. Kable
shall ensure that credit is provided to Employees for prior service
as employees of FCA under such Employee Benefit Plans to the extent
such Employee Benefit Plans so credited such service as of the
Closing Date. FCA and Kable shall execute and deliver such
instruments and documents and shall take such actions as may be
necessary to effectuate the substitution, as of the Closing Date,
of Kable for FCA under the trust agreements, insurance contracts
and other funding and ancillary agreements which relate to such
Employee Benefit Plans.
(c) Kable shall assume all pension and
severance pay liabilities, including any liabilities incurred by
reason of the termination of any pension or the vesting of any
benefits under any Employee Benefit Plan, or any other shutdown
related liabilities arising on account of shutdowns from and after
the Closing, including, without limitation, any such liabilities
arising as a direct result of the sale of Assets pursuant to this
Agreement, and FCA shall have no obligation with respect thereto.
(d) FCA shall bear the cost and responsibility
for obtaining a favorable determination letter from the IRS with
respect to the submission of application therefor referred to in
Section 4.22(b)(iii) hereof.
3. Assignment of Contracts/Service Agreement Consents.
--------------------------------------------------
3.1 Kable hereby acknowledges that pursuant to the
terms and conditions of those service agreements between FCA and
its clients (hereinafter, "Clients") set forth in SCHEDULE 3 hereto
(hereinafter, the "Service Agreements"), certain of such Service
Agreements may be construed as requiring, in the event of an
assignment thereof as herein contemplated, the consent of and/or
notice to said Clients (such consents and notices being hereinafter
referred to as the "Service Agreement Consents and Notices").
Kable further acknowledges and agrees that as of the Closing Date,
certain (if not all) of such Service Agreement Consents and Notices
will not have been obtained or given, as the case may be. Kable
further acknowledges that in the event that, for any reason, the
Service Agreement Consents and Notices are not obtained or given,
as the case may be, prior to the Closing Date, such Service
Agreements may be construed as giving Clients certain legal rights
thereunder. Accordingly, FCA and Kable hereby agree as follows:
(a) It shall be Kable's sole and exclusive
responsibility to obtain and give the Service Agreement Consents
and Notices; provided, however, that FCA shall fully cooperate with
Kable in all reasonable respects and in good faith to facilitate
Kable's obtaining the Service Agreement Consents, including,
without limitation, consulting with Kable regarding the Service
Agreement Consents and responding to Client inquiries concerning
Kable promptly and in a manner which portrays Kable in a favorable
light.
(b) Kable shall assume, accept and be
responsible for, in all respects, the risk of loss, liability,
damage and expense (including, without limitation, attorneys' fees)
arising or which may arise out of or in connection with any claim,
action or proceeding by a Client arising out of or in connection
with a client declining to give any Service Agreement Consent or
any other inability to obtain, or failure to request or give, as
the case may be, the Service Agreement Consents and Notices.
3.2 Non-Assignable Contracts. Except as provided
in Section 3.1 above, to the extent that any of the Contracts for
which assignment to Kable is provided herein are not assignable
without the consent of another party, this Agreement shall not
constitute an assignment or an attempted assignment if such
assignment or attempted assignment would constitute a breach
thereof. FCA agrees to use its best efforts to obtain the consent
of each other party to any Contract to the assignment thereof to
Kable in all cases in which such consent is required for assignment
or transfer. If such consent is not obtained at or prior to the
Closing, FCA agrees to cooperate with Kable in subsequently seeking
such consent and in any reasonable arrangements designed to provide
for Kable the benefits under any such Contract, including
enforcement at the cost and for the account of Kable of any and all
rights of FCA against each other party thereto arising out of the
cancellation by such other party, or otherwise. If and to the
extent that such arrangements cannot be made, Kable shall have no
obligation with respect to any such Contract, and FCA shall have no
liability to Kable for the failure to make such arrangements and
assign such contracts.
4. Representations and Warranties of FCA.
-------------------------------------
FCA hereby represents and warrants to Kable as follows:
4.1 Organization and Good Standing. FCA is duly
organized, validly existing and in good standing under the laws of
the State of Delaware and is duly qualified to do business in every
jurisdiction where its ownership of property or conduct of business
requires it to qualify, excluding those jurisdictions in which a
failure to so qualify would not have a material adverse effect on
the business or condition, financial or otherwise, of FCA. FCA has
full corporate power and authority to carry on its business as it
is now being conducted, to own or hold under lease the properties
and assets which it owns or holds under lease, and to perform all
its obligations under the agreements and instruments to which it is
a party or by which it is bound.
4.2 Subsidiaries; Investments in Others. FCA does
not own, directly or indirectly, any capital stock or other equity
securities of any corporation, nor does it have any direct or
indirect equity or ownership interest in any other business.
4.3 Authorization, etc. FCA has all requisite
corporate power and authority to make, execute, deliver and perform
this Agreement and to transfer the legal and beneficial title and
ownership of the Assets to Kable. This Agreement has been duly
executed and delivered by FCA and constitutes a legal, valid and
binding agreement enforceable against FCA in accordance with its
terms. The execution, delivery and performance of this Agreement
by FCA in accordance with its terms will not, with or without the
giving of notice or the passage of time, or both, conflict with,
result in a default, right to accelerate or loss of rights under,
or result in the creation of any Encumbrance upon any of the
Assets, or require the consent of any third party or governmental
authority, pursuant to: (a) any provision of the certificate of
incorporation or bylaws of FCA; or (b) except as set forth in
Section 3 hereof or SCHEDULES 3 or 4.3 hereto, any mortgage,
indenture or deed of trust or any material lease, license or other
agreement or any law, rule, regulation, order, judgment or decree
to which FCA is a party or by which it or any of the Assets may be
bound, subject to or affected.
4.4 Financial Statements. FCA has delivered to
Kable (i) a Balance Sheet of FCA as at December 31, 1992 and
Statement of Operations and Retained Earnings and Statement of Cash
Flows for the year then ended, (ii) a Balance Sheet of FCA as at
December 31, 1993 (the "December 31, 1993 Balance Sheet") and
Statements of Operations and Retained Earnings and Statement of
Cash Flows for the year then ended, together with footnotes
thereto, as reported upon by KPMG Peat Marwick and (iii) the
financial statement of FCA as at November 30, 1994 (the "Interim
Financial Statement," November 30, 1994 being hereinafter referred
to as the "Interim Financial Statement Date"). The financial
statements as at and for the years ended December 31, 1992 and
December 31, 1993 and the Interim Financial Statement have been
prepared in accordance with Generally Accepted Accounting
Principles consistently applied, subject, with respect to the
Interim Financial Statement only, to normal year-end adjustments
and the absence of footnotes, and present fairly the financial
position of FCA as of the dates thereof and the results of
operations and cash flow of FCA for the periods then ended.
4.5 Absence of Certain Changes or Events. Since
the Interim Financial Statement Date, FCA has not, except as set
forth in SCHEDULE 4.5 hereto:
(i) incurred any material obligation or
liability (absolute, accrued, contingent or otherwise);
(ii) discharged or satisfied any lien or
encumbrance, or paid or satisfied any obligation or liability
(absolute, accrued, contingent or otherwise) owed by FCA to
Engelhard or any affiliate of Engelhard or any other such
obligation or liability other than (A) current liabilities shown or
reflected on the balance sheet included within the Interim
Financial Statement when due and payable, or (B) liabilities
incurred since the date of such balance sheet in the ordinary
course of business;
(iii) increased or established any
reserve for taxes or any other liability on its books or otherwise
provided therefor, except as may have been required due to income
or operations of FCA since the Interim Financial Statement Date;
(iv) mortgaged, pledged or subjected to
any lien, charge or other Encumbrance any of the Assets;
(v) transferred any of its assets or
interests therein, whether by sale, license, lease or otherwise,
cancelled any debts or claims or waived any rights under any
agreement to which it is a party or by which it is bound, except in
the ordinary course of business;
(vi) granted any company-wide increase in
the rates of pay of employees or any substantial increase in salary
payable or to become payable by it to any director, officer,
employee, consultant or agent, or by means of any bonus or benefit
plan, contract or other commitment substantially increased the
compensation of any director, officer, employee, consultant or
agent;
(vii) authorized or made any capital
expenditures which exceed $5,000, individually, or $10,000, in the
aggregate;
(viii) entered into any transaction other
than in the ordinary course of business;
(ix) made any declaration, setting aside
or payment of any dividend or other distribution in respect of its
capital stock, or otherwise, or redeemed or purchased any of its
capital stock, or repaid any loans or other advances from Engelhard
or any affiliate of Engelhard or agreed to take any such action;
(x) borrowed any funds or modified any
agreement or instrument evidencing any indebtedness of FCA;
(xi) entered into any employment contract
or arrangement which is not terminable at will without penalty to
it;
(xii) made any payment or distribution
under any bonus, pension, profit sharing or retirement plan or made
any payment or distribution pursuant to or in respect of any other
plan or contract or arrangement or incurred any obligation to make
any such payment or contribution (other than in the ordinary course
pursuant to the terms of the Employee Benefit Plans) providing for
bonuses, executive incentive compensation, pensions, deferred
compensation, retirement payments, profit sharing or the like;
(xiii) extended credit to any customer
other than in the ordinary course of business;
(xiv) guaranteed the obligation of any
person, firm or corporation other than in the ordinary course of
business;
(xv) experienced damage, destruction or
loss (whether or not covered by insurance) materially and adversely
affecting any of the Assets, or experienced any other material
adverse change in its financial condition, assets, liabilities,
business or prospects (and, to its knowledge, no event, condition
or state of facts exists which would be likely to result in any
such material adverse change) except for the continuing losses from
operations in the ordinary course which have been consistent with
the loss disclosed in the Interim Financial Statement; or
(xvi) otherwise conducted the business of
FCA other than in the ordinary and usual course consistent with
past practice.
4.6 Taxes. Except as set forth in SCHEDULE 4.6,
FCA has no liability for Taxes which have been assessed or are due
and payable as of the date hereof which would create or permit the
imposition of any lien on the Assets being transferred to Kable
pursuant to the terms hereof. For purposes of this Agreement, the
term "Taxes" shall mean all taxes, levies, charges or withholdings,
including but not limited to income (on the corporate or
shareholder level), franchise, sales, use, gross receipts,
transfer, property, capital stock, employment and excise taxes and
shall also include interest, penalties and additions to tax.
4.7 Schedules. FCA has furnished to Kable,
copies, true and complete in all material respects, of all written
items listed in the Schedules hereto and, as to items not written,
the Schedules contain true and substantially complete summaries of
the material terms thereof. Each such Schedule is true and
complete in all material respects. To the extent that FCA can not
produce a complete copy of any written item, it shall be deemed not
written.
4.8 Title to Assets/Condition of Personal
Property. FCA has good and marketable title to the Assets which it
purports to own, except properties and assets the sale or
disposition of which, since the Interim Financial Statement Date,
does not conflict with or constitute a breach of the
representations, warranties or provisions of this Agreement. None
of such Assets are subject to any Encumbrances, except for (i)
Encumbrances under the Note and Mortgage; (ii) Encumbrances
described in Section 1.1(a) hereof with respect to the Premises; or
(iii) as set forth in SCHEDULE 4.8 hereto. All the furniture,
fixtures, equipment and other personal property reflected in
SCHEDULE 1.1(c) are in reasonably good operating condition and
repair, normal wear and tear excepted, are adequate for the
purposes used, and are adequate and sufficient for all current
operations. FCA has no knowledge of any proposed taking of the
Premises pursuant to rights of eminent domain or governmental
rights of police power or of any proposed assessments relating to
the Premises or the Leased Premises.
4.9 Inventory. The inventories of FCA reflected
in the balance sheet included within the Interim Financial
Statement and all inventory items which have been acquired since
the Interim Financial Statement Date are merchantable and of such
quality and in such quantities as are usable and saleable within
FCA's normal operating cycle in the ordinary course of its
business.
4.10 Consents and Approvals of Governmental
Authorities. Except as set forth in SCHEDULE 4.10, no consent,
approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority is
required in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions
contemplated hereby.
4.11 Real Property. Except for the Premises,
Leased Premises and the Oak Street Property, FCA does not own or
hold any leasehold or other interest in, and has never owned or
held any leasehold or other interest in, any real property. FCA
has not assigned, or sublet the Premises or Leased Premises, or
granted any rights therein, to third parties.
4.12 Agreements re: Encumbrances. SCHEDULE 4.12
hereto sets forth a true and complete list of all loan agreements,
indentures, mortgages, pledges, conditional sale or title retention
agreements, security agreements, equipment obligations, guaranties,
and lease purchase agreements to which FCA is a party or by which
any of its properties is bound and which are included in the
Assumed Obligations.
4.13 Personal Property. SCHEDULE 4.13 hereto sets
forth a true and complete list of all material items of machinery,
equipment, furniture, fixtures, motor vehicles and facilities owned
by FCA or in which FCA has a leasehold or other interest and which
are included in the Assets or constitute a Contract, together with
a description of each lease or other instrument under which FCA
claims or holds such leasehold or other interest. Except as set
forth in such Schedule, FCA has no obligation or liability
(contingent or otherwise) in respect of any lease, license or other
obligation purportedly assigned or transferred to Acxiom
Corporation pursuant to or in connection with the Data Processing
Agreement dated October 22, 1991, as amended, or any obligation to
repurchase any item of property, whether presently existing or upon
termination of such Agreement.
4.14 Material Contracts. SCHEDULE 4.14 hereto
sets forth a true and complete list of (i) all Contracts written or
oral, relating to the sale or furnishing by FCA of goods or
services where the consideration for such sale is $20,000 or more,
per annum or in any single case; (ii) all Contracts written or
oral, relating to the purchase by FCA of goods or services where
the consideration for such purchase is $10,000 or more, per annum
or in any single case; (iii) all other Contracts which are material
to the Assets, the financial condition of FCA or the FCA Business;
and (iv) all Service Agreements. Except as set forth in such
Schedule, FCA has not given to any Client any notice to terminate
or of election not to renew any Service Agreement, nor has FCA
received any formal or written notice of such termination or of
election not to renew, nor have any of Lawrence Morse, the
President of FCA, Larry G. Geissler, the Senior Vice President of
FCA or Sharon Jerome, the V.P./Controller of FCA, been told by any
Client, explicitly, that any such Client is considering not
renewing its Service Agreement.
4.15 Employees. SCHEDULE 4.15 hereto sets forth a
true and complete list of the name of each employee of FCA whose
annual rate of compensation exceeds $20,000; the amount paid to
him/her for services rendered during the calendar year 1994; the
current annual rate of compensation; a list of all written or oral
contracts of employment with FCA and all written or oral consulting
agreements with FCA and the terms thereof; all arrangements or
understandings, written or oral, to pay bonuses or increase
compensation or regarding termination or severance payments. FCA
is not a party to any other employment agreement, termination or
severance agreement, bonus agreement, contract, arrangement or
understanding with any employee, officer or director of FCA.
4.16 No Guaranties. Except with respect to
product/service warranties or guarantees set forth in the Service
Agreements and provided by FCA in the ordinary course of business,
FCA is not a party to or bound by any agreement of guarantee,
indemnification, assumption, or endorsement or any other like
commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any other person, firm or
corporation.
4.17 Agreements in Full Force and Effect. Subject
in all respects to the provisions of Section 3 hereof, all the
Contracts included in the Assets are valid and in full force and
effect, and there is not under any such Contract, any existing
default by FCA (or to the knowledge of FCA, any other party), or
any event which, after notice or lapse of time, or both, would
constitute a default by FCA (or to the knowledge of FCA, any other
party) or result in a loss of any rights of FCA thereunder.
4.18 Trademarks, etc. FCA owns or possesses the
royalty-free license or other right to use all copyrights,
trademarks (other than the registered trademark "GS 2000" which is
the property of Acxiom Corporation and which FCA has used in the
past with prior approval), service marks, service names, trade
names and patents which are on SCHEDULE 4.18 or which are necessary
to conduct its business as presently operated, and, to the
knowledge of FCA, no person, firm, corporation or other entity is
entitled to restrain FCA from using any such copyright, trademark,
service mark, service name, trade name or patent. FCA has no
knowledge that it is, nor has FCA received any notice claiming that
it is, infringing upon or otherwise acting adversely to any
copyrights, trademarks, trademark rights, service marks, service
names, trade names, patents, patent rights, licenses or trade
secrets owned by any person, firm, corporation or other entity
which might reasonably be expected to have a material adverse
effect on the continued operation of the FCA Business.
4.19 Accounts Receivable. All accounts receivable
of FCA which are reflected in the Interim Financial Statement, and
all such receivables which have arisen since the Interim Financial
Statement Date, represent services actually performed in the
ordinary course of business and are current and collectible net of
any reserves shown on the Interim Financial Statement (which
reserves are adequate and were calculated consistent with past
practice).
4.20 Litigation. Except as set forth on SCHEDULE
4.20 hereto, there is no claim, legal action, arbitration,
governmental investigation or other legal, administrative or
alternative dispute resolution proceeding, nor any order, decree or
judgment in progress, pending or in effect, or to the knowledge of
FCA threatened, against or relating to FCA, its respective
properties, assets or business or the transactions contemplated by
this Agreement, and, except as set forth in Section 3 hereof, FCA
does not know or have any reasonable ground to know of any basis of
the same.
4.21 Compliance with Laws and Other Instruments.
Except as set forth on SCHEDULE 4.27.1(d) hereto, to the best of
FCA's knowledge, FCA has complied with all existing laws, rules,
regulations, ordinances, orders, judgments and decrees now or
hereafter applicable to its business, properties or operations as
presently conducted, the failure of which might reasonably be
expected to have a material adverse effect on the business or
condition of FCA, financial or otherwise. Except as set forth in
SCHEDULE 4.27.1(d), FCA has not received any notification of any
asserted present or past failure by FCA to comply with such laws,
rules, regulations, ordinances, orders, judgments and decrees.
4.22 Employee Benefit Plans and Agreements.
(a) SCHEDULE 4.22 hereto accurately identifies
all pension, retirement, disability, medical, dental or other
health insurance plans, life insurance or other death benefit
plans, profit sharing, savings, deferred compensation, stock
options, bonus or other incentive plans, severance plans, or other
employee benefit plans or arrangements, whether or not funded and
whether formal or informal, covering any of FCA's current or former
officers, employees, directors or consultants (all such plans,
policies or arrangements are referred to herein as "Employee
Benefit Plans").
(b) Except as disclosed on SCHEDULE 4.22: (i)
each Employee Benefit Plan has been operated and administered in
accordance with its terms and is, subject to subsection (b)(iii)
below, in compliance with the applicable requirements of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA") and, where applicable, the Internal Revenue Code of 1986,
as amended, (the "Code"), and other applicable laws, including
recent amendments thereto and regulations promulgated thereunder;
(ii) each Employee Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA
("Employee Pension Benefit Plan") is, subject to subsection
(b)(iii) below, a "qualified plan" under Section 401(a) of the Code
(without regard to any corrective measures that may be available to
avoid disqualification) for which a favorable determination letter
from the Internal Revenue Service (the "IRS") has been received;
(iii) each Employee Pension Benefit Plan has been adequately
restated to comply in form with the Tax Reform Act of 1986 and all
subsequent legislation, and with regulations issued thereunder, and
an application for a favorable determination letter from the IRS
with respect to the FCA Retirement Plan (referred to in SCHEDULE
4.22) as so restated was submitted by or on behalf of FCA to the
IRS on November 18, 1994; (iv) all required reports and
descriptions (including Form 5500 Annual Reports, Summary Annual
Reports, Forms PBGC-1, and Summary Plan Descriptions) have been
filed or distributed appropriately with respect to each Employee
Benefit Plan; (v) all contributions, premiums or other payments
which are currently due with respect to the Employee Benefit Plans
on or prior to the Closing Date have been paid and all
contributions, premiums or other payments for any period ending on
or prior to the Closing Date which are not yet due have been paid
or recorded in FCA's books and records; (vi) the market value of
assets under each Employee Pension Benefit Plan, as of the Closing
Date, equals or exceeds the present value of all vested and
non-vested benefit liabilities accrued thereunder, determined as of
the Closing Date in accordance with the methods, factors and
assumptions applicable to a continuing Employee Pension Benefit
Plan; (vii) to the extent applicable with respect to each Employee
Benefit Plan, FCA has delivered to Kable correct and complete
copies of the plan documents and summary plan descriptions, the
most recent determination letter received from the IRS, the most
recent Form 5500 Annual Report, the most recent financial
statements and actuarial report, and all related trust agreements,
insurance contracts and other funding and ancillary agreements
which implement each such Employee Benefit Plan; (viii) no facts or
circumstances which constitute a "reportable event" as defined in
ERISA and the regulations promulgated thereunder, for which a
30-day notice requirement has not been waived by the Pension
Benefit Guaranty Corporation (the "PBGC"), have accrued with
respect to any Employee Pension Benefit Plan, nor has any Employee
Pension Benefit Plan incurred an "accumulated funding deficiency"
(as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived; (ix) no liability under Title IV of ERISA
has been incurred by FCA or any other members of the controlled
group of corporations (within the meaning of Code Section 414(b),
(c), (m) or (o)) that includes FCA (the "Controlled Group"), that
has not been satisfied in full, and no condition exists that
presents a material risk of incurring such a liability, other than
liability for premiums due the PBGC (which premiums have been paid
when due); (x) no proceeding by the PBGC to terminate any Employee
Pension Benefit Plan has been instituted or threatened, and no
condition exists that presents a material risk that such
proceedings will be instituted; (xi) there have been no "prohibited
transactions" within the meaning of Section 406 of ERISA and
Section 4975 of the Code with respect to any Employee Pension
Benefit Plan; (xii) there are no pending or threatened claims by or
on behalf of any Employee Benefit Plan or any of the employees of
FCA alleging a breach of any Employee Benefit Plan, fiduciary
duties thereunder or violations of ERISA or other applicable
Federal or state law with respect to any Employee Benefit Plan
which could result in liability on the part of Kable or an Employee
Benefit Plan, nor does there exist any condition that presents a
material risk that such a claim will be instituted; (xiii) none of
FCA and the other members of the Controlled Group contributes to,
ever has contributed to, or ever has been required to contribute to
any "multiemployer plan" (within the meaning of Section 3(37) of
ERISA) or has any liability (including withdrawal liability) under
any multiemployer plan; (xiv) FCA does not maintain and has never
maintained or contributed to any "employee welfare benefit plan"
within the meaning of Section 3(1) of ERISA providing medical,
health, or life insurance or other welfare-type benefits for
current or future retired or terminated employees, their spouses,
or their dependents (other than in accordance with Code Section
4980B); (xv) FCA has reserved the right to amend or terminate all
Employee Benefit Plans in a manner which would enable it to cease
making any further contributions or other payments with respect
thereto (except as may be required under ERISA or under a contract
of insurance) without incurring liability for the failure to make
such further contributions or payments; (xvi) with respect to each
Employee Benefit Plan that is funded wholly or partially through an
insurance policy (including a policy with a health maintenance
organization), there will be no liability, as of the Closing Date,
with respect to any such Employee Benefit Plan in the nature of a
retroactive rate adjustment, loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of
events occurring prior to the Closing Date, except to the extent
recorded in FCA's financial statements; (xvii) except as set forth
on SCHEDULE 4.22, no Employee Pension Benefit Plan, whether or not
terminated, holds, or has discharged any of its liabilities through
the acquisition of, any annuity contract; (xviii) none of the
members of the Controlled Group other than FCA has engaged in any
transaction with respect to its employee plans (within the meaning
of subsection (a) of this Section 4.22) which could give rise to
liability on the part of Kable or an Employee Benefit Plan; and
(xix) each of the following items of information and documents
provided by or on behalf of FCA to Kable, AMREP Corporation or
Kable's counsel is true and complete in all material respects: (1)
no awards are currently outstanding under the Management Incentive
Award Plan (referred to in SCHEDULE 4.22); (2) lump sum
distributions in excess of $3,500 have never been made or offered
to participants or beneficiaries in the FCA Retirement Plan; (3) no
employees accrued vacation benefits which extend beyond a calendar
year-end; and (4) the Summary of Holdings indicating the value of
the assets as of June 30, 1994 of the FCA Retirement Plan.
4.23 Labor Matters. FCA is not a party to any
collective bargaining agreement, is in compliance with all
applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practices. There is no labor strike,
dispute, slowdown or stoppage actually pending or threatened
against or affecting FCA, and FCA has not experienced any work
stoppage or other material labor difficulty. FCA has not
experienced or been threatened with any material union organizing
effort with respect to its employees.
4.24 Disclosure. No representation or warranty by
FCA contained in this Agreement, and no information contained in
any Schedule or other instrument furnished or to be furnished to
Kable pursuant to this Agreement or in connection with the
transactions herein contemplated contains or will contain any
untrue statement of a material fact or omits or will omit to state
a material fact necessary in order to make the statements contained
therein not misleading.
4.25 Permits, Licenses, etc. SCHEDULE 4.25 sets
forth all Permits required in connection with the conduct of FCA's
business and operations, excluding those Permits which, if not
obtained or held by FCA, would not have a material adverse effect
on the business or condition of FCA, financial or otherwise. FCA
is in material compliance with obligations under all Permits listed
in SCHEDULE 4.25.
4.26 Consents and Authorizations. Except as set
forth in Section 3 hereof, as of the Closing Date, FCA will have
obtained all consents and authorizations and given all notices
required in connection with the transactions herein contemplated,
except where the failure to obtain any such consent or
authorization or to give any such notice would not have a material
adverse effect on the Assets or continued operation of the FCA
Business.
4.27 Environmental Matters.
4.27.1 Except as specifically disclosed in the
Environmental Site Assessment Report prepared by Professional
Service Industries, Inc. or in the Asbestos Sampling Survey Report
prepared by Beta Associates for ENVIRON, copies of which are set
forth in SCHEDULE 4.27.1 hereto (hereinafter referred to as the
"Environmental Reports"),
(a) FCA is not in violation of any
Environmental Laws which violation would have a material adverse
effect on the Assets or the continued operation of the FCA
Business;
(b) no disposal or known or suspected release
of any Hazardous Substance has occurred on, from, or under, the
Premises or the Leased Premises which could have a material adverse
effect on the Assets or the continued operation of the FCA
Business;
(c) there has been no treatment, generation,
handling, storage, transport or disposal of any Hazardous Substance
at or from the Premises or the Leased Premises, except as may have
occurred in accordance with applicable Environmental Laws or
permits or except as would not have a material adverse effect on
the Assets or the continued operation of the FCA Business; and
(d) except as set forth in SCHEDULE 4.27.1(d),
no litigation, investigation, or administrative enforcement action
has been instituted, or is pending or threatened, nor have any
settlements been reached with any public or private party or
parties, nor has FCA received any notice that it is a potentially
responsible party for response costs, relating in any way to the
alleged or actual presence, disposal, or known or suspected release
of any Hazardous Substance or any violation of any Environmental
Law.
5. Representations and Warranties of Kable.
---------------------------------------
Kable represents and warrants to FCA as follows:
5.1 Organization and Standing. Kable is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware. Kable has full corporate power and
authority to carry on its business as it is now being conducted, to
own or hold under lease the properties and assets which it owns or
hold under lease, and to perform all its obligations under the
agreements and instruments to which it is a party or by which it is
bound.
5.2 Authority; Execution, Delivery and Performance
of Agreement. Kable has all requisite corporate power and
authority to make, execute, deliver and perform this Agreement and
to carry out the transactions contemplated hereby, and all
proceedings required to be taken by Kable to authorize the
execution and delivery of this Agreement by Kable and the
performance by Kable of this Agreement and the consummation of the
transactions contemplated hereby have been properly taken. This
Agreement constitutes the valid and binding obligation of Kable.
Neither the execution, delivery nor performance of this Agreement
by Kable will, with or without the giving of notice or the passage
of time, or both, conflict with, result in a default, right to
accelerate or loss of rights under, or require the consent of any
third party or governmental authority pursuant to (a) any provision
of Kable's certificate of incorporation or by-laws or (b) any
franchise, mortgage, indenture or deed of trust or any material,
lease, license, agreement, or any law, rule, regulation, order,
judgment or decree to which Kable is a party or by which it may be
bound or affected.
5.3 Disclosure. No representation or warranty by
Kable contained in this Agreement, and no information contained in
any instrument furnished or to be furnished to FCA pursuant to this
Agreement or in connection with the transactions herein
contemplated contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein not
misleading.
6. Covenants Prior to Closing.
--------------------------
6.1 FCA's Affirmative Covenants. Prior to the
Closing, FCA will, except as required pursuant to this Agreement:
(a) conduct its operations only in the usual
and ordinary course of business substantially in accordance with
past practices;
(b) keep in full force and effect its
corporate existence;
(c) use reasonable business efforts to retain
its employees and preserve its present business relationships
(provided that this subsection (c) shall not prohibit FCA from
terminating the employment of any of its employees);
(d) use reasonable business efforts to
maintain the Assets in customary repair, order and condition and
maintain insurance with respect thereto reasonably comparable to
that in effect on the date of this Agreement;
(e) maintain its books, accounts and records
substantially in accordance with past custom and practice as used
in the preparation of the financial statements described in Section
4.4 hereof;
(f) permit Kable and Kable's employees, agents
and accounting and legal representatives to have access (at
reasonable times and upon reasonable notice to FCA) to FCA's books,
records, invoices, contracts, leases, key personnel, independent
accountants, facilities, equipment and other things reasonably
related to the FCA Business and the Assets;
(g) use reasonable business effort to obtain
all consents and approvals necessary or desirable to consummate the
transactions contemplated by this Agreement and to cause the other
conditions to Kable's obligation to close to be satisfied; and
(h) promptly notify Kable in writing of any
variances from the representations and warranties contained in
Section 4 hereof resulting from acts, events or conditions arising
subsequent to the date of this Agreement which become known to FCA;
provided that no such written notice shall modify any provision of
this Agreement without the prior written consent of Kable, which
consent will not be unreasonably withheld.
6.2 FCA's Negative Covenant. Except as otherwise
specifically contemplated herein, prior to the Closing, without the
prior written consent of Kable, FCA will not willfully take any
action that, to its knowledge, would require disclosure under
Section 6.1(h) hereof.
6.3 Kable's Covenant. Kable will use its
reasonable efforts to satisfy the conditions to obligations of FCA
set forth in Sections 7.1 and 7.3.
7. Conditions to Closing.
---------------------
7.1 Conditions to Obligations of Each Party. The
obligations of each party to consummate the transactions
contemplated hereby shall be subject to the fulfillment, at or
prior to the Closing Date, of the following conditions:
7.1.1 No Action or Proceeding. No claim,
action, suit, investigation or other proceeding shall be pending or
threatened before any court or governmental agency which presents a
substantial risk of the restraint or prohibition of the
transactions contemplated by this Agreement or, except in
connection with the failure to obtain Service Agreement Consents,
the obtaining of material damages or other relief in connection
with the transactions contemplated by this Agreement.
7.1.2 Compliance with Law. There shall have
been obtained all permits, approvals and consents of all
governmental bodies or agencies which counsel for Kable or for FCA
may reasonably deem necessary or appropriate so that consummation
of the transactions contemplated by this Agreement by Kable and
FCA, respectively, will be in compliance with applicable laws.
7.2 Conditions to Obligations of Kable. The
obligations of Kable to consummate the transactions contemplated
hereby shall be, at the option of Kable, subject to the
fulfillment, at or prior to the Closing Date, of the following
additional conditions:
7.2.1 Representations and Warranties True.
The representations and warranties of FCA contained in this
Agreement or in any other document of FCA delivered pursuant hereto
shall be true and correct in all material respects on the Closing
Date with the same effect as if made on the Closing Date
(notwithstanding any disclosure made by FCA pursuant to Section
6.1(h) hereof), and at the Closing FCA shall have delivered to
Kable a certificate to such effect signed by the President or any
Vice President and the Secretary or any Assistant Secretary of FCA.
7.2.2 FCA's Performance. Each of the
obligations of FCA to be performed by it on or before the Closing
Date pursuant to the terms of this Agreement shall have been duly
performed in all material respects on or before the Closing Date,
and at the Closing FCA shall have delivered to Kable a certificate
to such effect signed by the President or any Vice President and
the Secretary or any Assistant Secretary of FCA.
7.2.3 Authority. All actions required to be
taken by, or on the part of, FCA and Engelhard, respectively, to
authorize the execution, delivery, and performance of this
Agreement and the other agreements or instruments provided for
herein and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by the respective Boards of
Directors of FCA and Engelhard and by Engelhard as sole shareholder
of FCA.
7.2.4 Opinion of FCA's Counsel. Kable shall
have been furnished at the Closing with opinions of Lane &
Mittendorf, counsel to Engelhard and special counsel to FCA, and
Frericks and Howard, counsel to FCA, dated the Closing Date,
addressed to and in form and substance reasonably satisfactory to
Kable;
7.2.5 Additional Closing Documents of FCA.
Kable shall have received at the Closing the following documents,
each dated the Closing Date:
(a) Copies, certified by the Secretary or an
Assistant Secretary of FCA, of (i) resolutions of the Board of
Directors of FCA and Engelhard as sole shareholder of FCA
authorizing the execution, delivery and performance of this
Agreement and all other agreements, documents and instruments
relating hereto and the consummation of the transactions
contemplated hereby and (ii) the Certificate of Incorporation and
By-Laws of FCA;
(b) Copies, certified by the Secretary or an
Assistant Secretary of Engelhard, of (i) resolutions of the Board
of Directors of Engelhard authorizing the execution, delivery and
performance of the Engelhard Agreement (as defined in Section
7.2.5(p) and (ii) the Certificate of Incorporation and By-Laws of
Engelhard;
(c) A Bill of Sale duly executed by FCA, in
form and substance reasonably satisfactory to Kable;
(d) A counterpart of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement"),
duly executed by FCA in form and substance reasonably satisfactory
to Kable;
(e) A General Warranty Deed with respect to
the transfer of the Premises, together with a declaration of value
(under Ohio Revised Code 319.202), duly executed by FCA and
acknowledged, in form and substance reasonably satisfactory to
Kable;
(f) A counterpart of the Assignment and
Assumption of 228-238 and 242-252 West Center Street Leases (the
"Assignment and Assumption of Leases"), to cover assignment,
assumption, consent of landlord, release of FCA and estoppel
certification of landlord, in form and substance reasonably
satisfactory to Kable; duly executed by FCA and the landlord(s)
under the Lease;
(g) A counterpart of the Assignment and
Assumption of Society Bank Note (the "Assignment and Assumption of
Society Bank Note"), to cover assignment, assumption, consent of
bank, release of FCA and estoppel certification of bank, in form
and substance reasonably satisfactory to Kable, duly executed by
FCA and Society National Bank;
(h) The Assignment of Registered Service Mark
in form and substance reasonably satisfactory to Kable (the
"Assignment of Registered Service Mark"), duly executed by FCA and
acknowledged;
(i) A counterpart of the Oak Street Agreement
substantially in the form of Exhibit A hereto, duly executed by
FCA;
(j) A letter from Acxiom confirming certain of
FCA's rights under FCA's agreement with Acxiom, in form and
substance reasonably satisfactory to Kable, duly executed by
Acxiom;
(k) A non-foreign entity certification under
1445 of the Internal Revenue Code, duly executed by FCA;
(l) An agreement of non-disturbance in favor
of Kable in respect of any mortgage on the Leased Premises, if any,
duly executed by the mortgagee and in form and substance reasonably
satisfactory to Kable;
(m) UCC-3 termination statements terminating
all outstanding financing statements covering any of the Assets
relating to any Retained Liabilities, duly executed by the named
secured parties in such financing statements;
(n) Duly executed consents of third parties to
the assignment by FCA to Kable of such Contracts as Kable shall
reasonably request in writing;
(o) Such instruments and documents as may be
necessary to effectuate the substitution, as of the Closing Date,
of Kable for FCA under the trust agreements, insurance contracts
and other funding and ancillary agreements which relate to the
Employee Benefit Plans;
(p) The Agreement of Engelhard substantially
in the form of Exhibit B annexed hereto (the "Engelhard
Agreement");
(q) The Payroll Schedule;
(r) Such further instruments of sale,
transfer, conveyance, assignment and delivery covering the Assets
or any part thereof as Kable may reasonably request, in writing, to
assure the full and effective sale, transfer, conveyance,
assignment and delivery to it of the Assets to be transferred to
Kable under this Agreement;
(s) A certification by the Secretary of State
of Delaware and Ohio that FCA is a corporation in good standing in
such states as of a date not earlier than one (1) business day
prior to the Closing;
(t) A certification of the Secretary of State
of Delaware that Engelhard is a corporation in good standing in
such state as of a date not earlier than one (1) business day prior
to Closing; and
(u) Such other documents and instruments as
may be required or contemplated by this Agreement. Simultaneously,
with such delivery, FCA shall take such action as may be necessary
or reasonably requested by Kable to place Kable in possession and
control of originals or copies of all accounting, financial,
payroll and other records, documents, books, and files containing
information used in or by the Assets, and other data relating to
the Assets or the Assumed Obligations.
7.2.6 Name Change. Kable shall have received
evidence of the change of the name of FCA from "Fulfillment
Corporation of America" to another name not similar to Fulfillment
Corporation of America.
7.2.7 At the Closing, the title to the
Premises together with the personal property and other interests
described in Section 1.1(a) hereof described will be such that Ohio
Bar Title Insurance Company will insure at normal and usual rates
and issue to Kable, on the Closing Date an ALTA owner's title
insurance policy (the "Title Policy"), with liability in the amount
of approximately $380,000, showing title to the Premises vested in
Kable and subject to no exceptions to title other than matters
listed in Section 1.1(a) hereof. Without limiting the generality
of the preceding sentence, the Title Policy shall include no
exception for mechanics' liens, and shall insure against any rights
of mechanics, materialmen, contractors, or subcontractors to file
liens against the Premises with respect to work done prior to the
Closing Date and shall also insure:
(a) That each parcel comprising the
Premises is contiguous along the common boundaries as shown on the
Survey;
(b) That the improvements and the use
thereof do not violate any applicable zoning or subdivision
ordinances;
(c) That the Premises are the same
premises shown by the Survey; and
(d) That there will be no forfeiture of
title in the event of a breach of any covenants, conditions, or
restrictions of record.
7.2.8 The Remediation shall have been
completed in accordance with the Specifications (as defined in
Section 8(f) hereof).
7.2.9 The obligations of FCA and Engelhard, as
the case may be, arising under or in connection with the $850,000
Industrial Development First Mortgage Revenue Bonds (Fulfillment
Corporation of America, Division of Engelhard Hanovia, Inc.
Project) will have been completely satisfied.
7.3 Conditions to Obligations of FCA. The
obligations of FCA to consummate the transactions contemplated
hereby shall be, at the option of FCA, subject to the fulfillment,
at or prior to the Closing Date, of the following additional
conditions:
7.3.1 Representations and Warranties True.
The representations and warranties of Kable contained in this
Agreement or in any document delivered pursuant hereto shall be
true and correct in all material respects on the Closing Date with
the same effect as if made on the Closing Date, and at the Closing
Kable shall have delivered to FCA a certificate to such effect,
signed by the President or any Vice President and the Secretary or
any Assistant Secretary of Kable.
7.3.2 Kable's Performance. Each of the
obligations of Kable to be performed by it on or before the Closing
Date pursuant to the terms of this Agreement shall have been duly
performed in all material respects on or before the Closing Date,
and at the Closing Kable shall have delivered to FCA a certificate
to such effect signed by the President or any Vice President and
the Secretary or any Assistant Secretary of Kable.
7.3.3 Authority. All actions required to be
taken by, or on the part of, Kable and Kable News Company, Inc.,
the sole shareholder of Kable ("Kable News"), respectively, to
authorize the execution, delivery, and performance of this
Agreement and the other agreements or instruments provided for
herein and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by the respective Boards of
Directors of Kable and Kable News.
7.3.4 Opinion of Kable's Counsel. FCA shall
have been furnished at the Closing with an opinion of Jacobs
Persinger & Parker, counsel to Kable and Kable News, dated the
Closing Date, addressed to and in form and substance reasonably
satisfactory to FCA.
7.3.5 Additional Closing Documents of Kable.
FCA shall have received at the Closing the following documents,
each dated the Closing Date:
(a) Copies, certified by the Secretary or an
Assistant Secretary of Kable, of (i) resolutions of the Board of
Directors of Kable and Kable News authorizing the execution,
delivery and performance of this Agreement and all other
agreements, documents and instruments relating hereto and the
consummation of the transactions contemplated hereby and (ii) the
Certificate of Incorporation and By-Laws of Kable;
(b) Copies, certified by the Secretary or an
Assistant Secretary of Kable News, of (i) resolutions of its Board
of Directors authorizing the execution, delivery and performance of
the Guarantee Agreement and all other agreements, documents and
instruments relating thereto and the consummation of the
transactions contemplated thereby and (ii) the Articles of
Incorporation and By-Laws of Kable News;
(c) A counterpart of the Assignment and
Assumption Agreement, duly executed by Kable;
(d) A counterpart of the Assignment and
Assumption of Leases, duly executed by Kable;
(e) A counterpart of the Assignment and
Assumption of Society Bank Note, duly executed by Kable;
(f) A counterpart of the Oak Street Agreement,
duly executed by Kable;
(g) The Guarantee Agreement substantially in
the form of Exhibit C hereto, duly executed by Kable News;
(h) Such instruments and documents as may be
necessary to effectuate the substitution, as of the Closing Date,
of Kable for FCA under the trust agreements, insurance contracts
and other funding and ancillary agreements which relate to the
Employee Benefit Plans;
(i) Such further instruments of assumption as
FCA may reasonably request, in writing, in order to effect the full
and effective assumption of the Assumed Obligations by Kable;
(j) A certification by the Secretary of State
of Delaware and Ohio that Kable is a corporation in good standing
in such states as of a date not earlier than one (1) business day
prior to the Closing;
(k) A certification of the Secretary of State
of Illinois that Kable News is a corporation in good standing in
such state as of a date not earlier than one (1) business day prior
to Closing;
(l) A certified or official bank check or, at
the option of FCA, evidence of the wire transfer of the Purchase
Price pursuant to Section 1.3(b) hereof; and
(m) Such other documents and instruments as
may be required or contemplated by this Agreement.
7.4 Further Assurances. Kable shall, at any time
and from time to time after the Closing Date, execute and deliver
such other instruments of assumption and do all such further acts
and things as may reasonably be requested by FCA to implement the
assumption of the Assumed Obligations. FCA shall, at any time and
from time to time after the Closing Date, execute and deliver such
other instruments of transfer and conveyance and do all such
further acts and things as may reasonably be requested by Kable to
transfer, convey, assign and deliver to Kable or to aid and assist
Kable in collecting and reducing to possession, any and all of the
Assets, or to vest in Kable good and valid title thereto.
8. Payment of Taxes and Expenses.
-----------------------------
(a) Except as otherwise expressly set forth in
this Agreement, each of Kable and FCA shall bear and pay all costs
and expenses incurred by them or on their behalf in connection with
the negotiation, execution, delivery and performance of this
Agreement.
(b) Kable shall bear (i) income taxes imposed
on Kable, (ii) sales taxes, (iii) document recording fees and
taxes, (iv) transfer taxes and (v) real and personal property taxes
(prorated between the parties as of the Closing Date), in each such
case to the extent arising from or relating to the sale and
transfer of the Assets. All such taxes shall be paid by Kable and
shall be in addition to the Purchase Price.
(c) FCA shall pay income taxes imposed on it
arising from or relating to the sale and transfer of the Assets,
including any real property transfer gains tax levied by the State
of Ohio or any other Ohio governmental authority. Kable and FCA
shall cooperate in completing and filing all required forms, if
any, regarding such gains tax.
(d) Kable shall bear the cost of title
insurance purchased by Kable with respect to its acquisition of the
Premises.
(e) Kable and FCA shall equally share the
total cost of the FCA audit being presently conducted by KPMG Peat
Marwick for the benefit of Kable in connection with this
transaction pursuant to the KPMG Peat Marwick engagement letter
dated October 11, 1994, a copy of which has been provided to Kable,
and which is annexed hereto as Exhibit D.
(f) FCA shall be solely responsible for the
costs incurred in connection with the asbestos remediation (the
"Remediation") as specified in the Specifications for Asbestos
Repair Project, Fulfillment Corporation of America, 205, 228, 238
and 242 West Center Street, Marion, Ohio, prepared by Beta
Associates and dated December 9, 1994 (the "Specifications"), a
copy of which Specifications have been provided to Kable, and which
are annexed hereto as Exhibit E.
9. Bulk Sales Law.
--------------
The parties agree that notifications shall not be filed with
respect to the purchase and sale contemplated hereby under the bulk
transfer provisions of the laws in the state(s) where the Assets
are situated. Such agreement shall not modify the obligations of
the parties hereto with respect to the retention of Retained
Liabilities by FCA and the assumption and payment of the Assumed
Obligations by Kable. FCA shall promptly discharge liens on the
Assets, if any, which arise from Retained Liabilities, and Kable
shall be responsible for liens on the Assets, if any, which arise
from the Assumed Obligations.
10. Indemnification; Remedies.
-------------------------
10.1 Indemnification by FCA. Except as otherwise
expressly provided in this Section 10, FCA shall indemnify, save,
defend and hold harmless Kable, those entities controlling,
controlled by or under common control with Kable, Kable's officers,
directors, agents, representatives and employees, and each of its
and their respective successors and assigns (Kable and such persons
are collectively referred to herein as "Kable's Indemnified
Persons"), and shall reimburse Kable's Indemnified Persons, for,
from and against each and every demand, claim, loss (which shall
include any diminution in value), liability, damage, judgment,
out-of-pocket cost and expense (including, without limitation,
interest, penalties, costs of preparation and investigation, and if
FCA does not defend the claim as herein provided, the reasonable
fees, disbursements and expenses of attorneys, accountants and
other professional advisors, including those fees, disbursements
and expenses incurred in enforcing these indemnification
provisions) (collectively, "Kable's Losses") imposed on or incurred
by Kable's Indemnified Persons, directly or indirectly, relating
to, resulting from or arising out of any (i) inaccuracy in any
respect in any representation or warranty of FCA set forth in this
Agreement (as supplemented by the Schedules hereto); (ii)
nonfulfillment of any covenant, agreement or other obligation of
FCA under this Agreement or any certificate delivered or to be
delivered by FCA pursuant hereto; or (iii) Retained Liability;
provided, however, that all indemnification obligations of FCA
under this Agreement shall be subject to the conditions and
limitations set forth in Section 10.2 below.
10.2 The total liability of FCA for amounts due
under this Section 10 shall be limited to an aggregate of $750,000
in respect of any indemnification obligation arising hereunder,
except that in respect of (i) any inaccuracy in any representation
or warranty of FCA set forth in Section 4.22 (a "Pension
Inaccuracy") or (ii) nonfulfillment of any covenant of FCA set
forth in Section 2 or (iii) in respect of Taxes, FCA's liability
hereunder shall be unlimited. Notwithstanding the foregoing
provisions of this Section 10, FCA shall have no liability for
claims under this Section 10 unless the aggregate amount of such
claims exceeds $25,000, and then, only to the extent that such
aggregate claims exceed $25,000; provided, however, that this
limitation shall not apply to claims relating to Pension
Inaccuracies or nonfulfillment of any covenant set forth in Section
2.
10.3 Indemnification by Kable. Except as
otherwise expressly provided in this Section 10, Kable shall
indemnify, save, defend and hold harmless FCA, those entities
controlled by, controlling or under common control with FCA, FCA's
officers, directors, agents, representatives and employees, and
each of its and their respective successors and assigns (FCA and
such persons are collectively referred to herein as "FCA's
Indemnified Persons"), and shall reimburse FCA's Indemnified
Persons, for, from and against each and every demand, claim, loss
(which shall include any diminution in value), liability, damage,
judgment, out-of-pocket cost and expense (including, without
limitation, interest, penalties, costs of preparation and
investigation, and if Kable does not defend the claim as herein
provided, and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisors, including
those fees, disbursements and expenses incurred in enforcing these
indemnification provisions) (collectively, "FCA's Losses") imposed
on or incurred by FCA's Indemnified Persons, directly or
indirectly, relating to, resulting from or arising out of (i) any
inaccuracy in any respect in any representation or warranty of
Kable set forth in this Agreement; (ii) nonfulfillment of any
covenant, agreement or other obligation of Kable under this
Agreement or any certificate delivered or to be delivered by Kable
pursuant hereto; (iii) the Assumed Obligations; or (iv) claims or
demands made by third parties with regard to the ownership,
management or use of the Assets or the conduct of the FCA Business
after the Closing Date (excluding any such claims or demands which
arise out of the Retained Liabilities).
10.4 Notice and Defense of Third Party Claims. If
any action, claim or proceeding shall be brought or asserted
against any indemnified party under this Section 10 or any
successor thereto (the "Indemnified Person") in respect of which
indemnity may be sought from an indemnifying person under this
Section 10 (the "Indemnifying Person"), the Indemnified Person
shall give prompt written notice of such action, claim or
proceeding to the Indemnifying Person. Any delay or failure to so
notify the Indemnifying Person shall relieve the Indemnifying
Person of its obligations hereunder only to the extent, if at all,
that it is prejudiced by reason of such delay or failure. The
Indemnifying Person shall be entitled at its own expense to assume
the defense of such action or to prosecute such claim, as the case
may be. In such event, such defense or prosecution shall be
conducted by counsel chosen by the Indemnifying Person and
reasonably satisfactory to the Indemnified Person and the
Indemnified Person shall bear the fees and expenses of any
additional counsel retained by the Indemnified Person. If the
Indemnifying Person shall not elect to assume the defense or
prosecution of such action or claim, it will reimburse the
Indemnified Person for the reasonable fees and expenses of any
counsel retained by the Indemnified Person. In the event that the
parties to any such action or claim (including impleaded parties)
include both the Indemnified Person and the Indemnifying Person and
either (i) the Indemnifying Person and the Indemnified Person
mutually agree or (ii) representation of both the Indemnifying
Person and the Indemnified Person by the same counsel is
inappropriate under applicable standards of professional conduct
due to actual or potential differing interests between them, then
the Indemnifying Person shall not have the right to assume the
defense of such action or the prosecution of such claim on behalf
of the Indemnified Person and will reimburse the Indemnified Person
for the reasonable fees and expenses of any counsel retained by the
Indemnified Person and reasonably satisfactory to the Indemnifying
Person. Anything in this Section 10 to the contrary
notwithstanding, the Indemnifying Person shall not, without the
Indemnified Person's prior written consent, settle or compromise
any action or claim or consent to the entry of any judgment with
respect to any action, claim or proceeding for anything other than
money damages paid by the Indemnifying Person. The Indemnifying
Person may, however, without the Indemnified Person's prior written
consent, settle or compromise any such action, claim or proceeding
or consent to entry of any judgment with respect to any such action
or claim that requires solely the payment of money damages by the
Indemnifying Person and that includes as an unconditional term
thereof the release by the claimant or the plaintiff of all
Indemnified Persons from all liability in respect of such action,
claim or proceeding.
10.5 Notification of Other Claims for Losses.
With respect to each Kable's Loss or FCA's Loss, as the case may be
(referred to collectively in this Section 10.5 as "Losses" and
individually as a "Loss") and each matter which may give rise to a
Loss which may be indemnified under this Section 10, the
Indemnified Person shall give notice to the Indemnifying Person
with reasonable promptness (provided, however, that if the
aggregate of all such actual and potential Losses as to which
notice has not been given is less than $5,000, the Indemnified
Person need not give such notice more often than once every three
months); and any delay or failure to notify the Indemnifying Person
shall relieve the Indemnifying Person of its obligations hereunder
only to the extent, if at all, that the Indemnifying Person is
prejudiced by reason of such delay or failure.
10.6 Expiration of Indemnity. Except as otherwise
provided in Section 10.7 below, an Indemnifying Person shall have
no liability under this Section 10 unless notice of a claim for
indemnity shall have been given to the Indemnifying Person on or
before the date which is two years from and after the Closing Date.
10.7 Exception to Two Year Limitation. The time
limitations of Section 10.6 above shall not apply to (i) any claims
relating to Taxes or Pension Inaccuracies, as to which Kable may
give notice of and make a claim up to 15 days after expiration of
the statutory limitation period applicable to such Taxes or Pension
Inaccuracies; (ii) any claims relating to, resulting from or
arising out of either the failure of FCA to transfer the Assets to
Kable free of Encumbrances under the terms hereof, or any claims by
other persons to receive or participate in the Purchase Price or to
receive any brokerage or finder's fee or agent's commission or like
payment in connection therewith, as to which there shall be no time
limit; (iii) any claims arising out of covenants set forth in
Section 11 hereof, as to which there shall be no time limit; or
(iv) any claims arising under Section 1.5(f), as to which Kable may
give notice of and make a claim up to the date which is three years
from and after the Closing Date.
11. Restrictive Covenants.
---------------------
11.1 From and after the Closing, FCA will not
directly or indirectly own, manage, operate or control, or
participate in the ownership, management, operation or control of,
or be connected with or have any interest in, as an employee,
consultant, advisor, agent, owner, partner, co-venturer, principal,
director, stockholder, lender or otherwise, any business or
enterprise under any name confusingly similar to the name of FCA.
11.2 FCA will not for a period of three years from
the Closing, (i) directly or indirectly, within the United States
and Canada, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected
with or have any interest in, as an employee, consultant, advisor,
agent, owner, partner, co-venturer, principal, director,
stockholder, lender or otherwise, any business or enterprise that
is competitive with the business of providing customized
marketing/fulfillment programs to the publishing and direct
marketing industries; provided, however, that nothing contained
herein shall prohibit FCA from owning, in the aggregate, directly
or indirectly, less than 5% of any class of securities listed on a
national securities exchange or traded publicly in the
over-the-counter market or (ii) participate in the solicitation of
any part of the business conducted by FCA from any person or entity
which was a customer of FCA, or a prospective customer of FCA or
from which FCA solicited business during the year immediately prior
thereto.
11.3 If FCA breaches, or threatens to commit a
breach of, any of the preceding provisions of this Section 11 (the
"Restrictive Covenants"), Kable shall have the right to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause
irreparable injury to Kable and that money damages would not
provide an adequate remedy therefor. The rights of Kable set forth
in this Section 11.3 shall be in addition to, and not in lieu of,
any other rights and remedies available to Kable under law or in
equity.
12. Brokerage.
---------
12.1 FCA represents and warrants to Kable that
neither it nor its representatives have engaged or dealt with any
broker or other person who may be entitled to any finder's fee,
brokerage commission or other like payment in respect of the
negotiation, execution, or performance of this Agreement, and that
it will indemnify and hold harmless Kable against all claims,
damages, expenses and losses (including reasonable attorneys' fees
and expenses) which may be asserted against Kable by Brown Brothers
Harriman & Co. as well as by any other person as a result of
dealings, arrangements or agreements by FCA or its representatives
with any such broker or other person.
12.2 Kable represents and warrants to FCA that
neither it nor its representatives have engaged or dealt with any
broker or other person who may be entitled to any finder's fee,
brokerage commission or other like payment in respect of the
negotiation, execution, or performance of this Agreement, and that
it will indemnify and hold harmless FCA against all claims,
damages, expenses and losses (including reasonable attorneys' fees
and expenses) which may be asserted against FCA by any person as a
result of dealings, arrangements or agreements by Kable or its
representatives with any such broker or other person.
<PAGE>
13. Notices.
-------
Any and all notices, requests, demands, consents, approvals or
other communications required or permitted to be given under any
provision of this Agreement shall be in writing and shall be deemed
given upon personal delivery or the mailing thereof by first class
certified mail, return receipt requested, as follows:
If to Kable, addressed to Kable at:
Kable Fulfillment Services of Ohio, Inc.
16 South Wesley Avenue
Kable Square
Mt. Morris, Illinois 61054
Attention: Rob Urish
with a copy to:
Valerie Asciutto, Esq.
c/o Amrep Corporation
641 Lexington Avenue
6th Floor
New York, New York 10022
and a copy to:
Jacobs, Persinger & Parker
77 Water Street
New York, New York 10005
Attention: Edward B. Winslow, Esq.
If to FCA, addressed to FCA at:
Engelhard Hanovia, Inc.
645 Fifth Avenue
New York, New York 10022
Attention: Anthony J. Gostkowski, Vice
President and Treasurer
with a copy to:
Lane & Mittendorf
99 Park Avenue
New York, New York 10016
Attention: Nathaniel J. Bickford, Esq.
Either party may change its address for the purpose of this
Agreement by notice to the other parties given as aforesaid.
14. Collections.
-----------
FCA hereby authorizes Kable to open any and all mail addressed to
FCA (if delivered to Kable) received on or after the Closing Date
and hereby grants to Kable a power of attorney to endorse and cash
any checks or instruments made payable or endorsed to FCA or its
order and received by Kable in payment of any accounts receivable
or any other amount due FCA and included in the Assets. FCA will
promptly remit to Kable any payments FCA may receive in respect of
any such account receivable or other amount due, and Kable will
promptly remit to FCA any payments Kable may receive in respect of
any Excluded Asset.
15. Consent to Jurisdiction.
-----------------------
Each party hereto irrevocably accepts the jurisdiction of the
Federal or State courts of competent jurisdiction located in the
City and State of New York and any related appellate court,
irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement, and irrevocably waives any
objection such party may now or hereafter have as to the venue of
any such action or proceeding brought in such a court or that such
court is an inconvenient forum. Each party hereto irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered mail, postage prepaid, return receipt
requested, such service to become effective upon receipt or refusal
of receipt by such party. FCA irrevocably designates Lane &
Mittendorf, 99 Park Avenue, New York, New York 10016 (Attention:
Nathaniel J. Bickford, Esq.), as agent upon whom process may be
served. Kable irrevocably designates Jacobs Persinger & Parker, 77
Water Street, New York, New York 10005 (Attention: Edward B.
Winslow, Esq.), as agent upon whom process may be served. Nothing
herein shall affect either party's right to serve process in any
other manner prescribed by law.
16. Miscellaneous.
-------------
16.1 Entire Agreement. This writing together with
the Exhibits and Schedules constitutes the entire agreement of the
parties with respect to the subject matter hereof and may not be
modified, amended or terminated except by a written agreement
specifically referring to this Agreement signed by both of the
parties.
16.2 Schedules Part of Agreement. The Schedules
referred to herein and delivered to Kable pursuant hereto shall be
deemed part of this Agreement as fully and effectively as if set
forth at length herein. The terms used in said Schedules shall
have the same meanings as such terms have in this Agreement unless
a contrary intention is clearly manifested therein.
16.3 No Waiver. No waiver of any breach or
default hereunder shall be considered valid unless in writing and
signed by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same or
similar nature.
16.4 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of each party hereto, and its
successors and assigns. This Agreement shall not be assigned by
either Kable or FCA, and any attempted assignment shall be void,
except upon the written consent of the other party having first
been obtained.
16.5 Headings. The article and section headings
contained herein are for the purpose of convenience only and are
not intended to define or limit the contents of said articles or
sections.
16.6 Cooperation. Each party hereto shall
cooperate, shall take such further action and shall execute and
deliver such further documents as may be reasonably requested by
any other party in order to carry out the provisions and purposes
of this Agreement. Without limiting the generality of the
foregoing, each of Kable and FCA shall assist the other in any
legal actions or proceedings, in the case of Kable, assumed under
the provisions of Section 1.4(d) hereof ("Assumed Actions"), and in
the case of FCA, retained under the provisions of Section 1.5(h)
hereof, including document production and preparation for and
appearances at examinations, depositions, trials or settlement
conferences. The provisions of Section 10.4 hereof shall be
applicable to the Assumed Actions but without regard to the
requirement of the initial notice from FCA to Kable; provided that
Kable shall be obligated to assume the defense and prosecution of
all such Assumed Actions, with counsel of its own choice. Further,
FCA shall consult with Kable regarding any actions required to be
taken prior to the Closing Date in connection with the defense of
any Assumed Action and will not take any such action if objected to
in writing by Kable.
16.7 Governing Law. This Agreement and all
amendments thereof shall, in all respects, be governed by and
construed and enforced in accordance with the internal laws
(without regard to principles of conflicts of law) of the State of
New York.
16.8 No Third Party Beneficiaries. Except as
expressly provided in Section 10 above or Section 16.9 below,
nothing in this Agreement will be construed as giving any person,
firm, corporation or other entity, other than the parties hereto
and their successors and permitted assigns, any right, remedy or
claim under or in respect of this Agreement or any provision
hereof.
16.9 Confidentiality. FCA agrees to keep
confidential all of the financial and other confidential
information, including, without limitation, trade secrets, research
and development data, know-how, market studies and forecasts,
competitive analyses, pricing policies and any other documents
embodying such confidential information, concerning FCA, except as
required by law, or to the extent necessary for the preparation of
tax returns or to the extent such information is readily
ascertainable from public or published information or trade
sources. Kable agrees to keep confidential all of the financial
and other confidential information of Engelhard obtained in
connection with this transaction, except as required by law or to
the extent with information is readily ascertainable from public or
published information.
16.10 Press Releases and Announcements. No press
releases or public announcements related to this Agreement and the
transactions herein contemplated, or other announcements to the
employees, customers and suppliers of FCA, will be issued prior to
the Closing Date without the joint approval of Kable and FCA.
16.11 Counterparts/Execution by Facsimile. This
Agreement may be executed in one or more counterparts, all of which
taken together will constitute one and the same instrument. This
Agreement may also be executed by facsimile signature, and will be
deemed to have been executed as of the date on which facsimile
signatures of each of the parties hereto have been transmitted,
provided that an original of such facsimile signature is received
by the other party within three (3) business days from and after
the date of such facsimile transmission.
* * * * * * * * * * * * * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed the day and year first above written.
FULFILLMENT CORPORATION OF AMERICA
/s/ Lawrence E. Morse
By:______________________________________
President
KABLE FULFILLMENT SERVICES OF OHIO, INC.
/s/ Daniel Friedman
By:_____________________________________
Chairman Of The Board
