SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) OCTOBER 4, 1996
ANCHOR GLASS CONTAINER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-14770 22-2452609
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
ONE ANCHOR PLAZA, 4343 ANCHOR PLAZA PARKWAY, TAMPA, FL 33634-7513
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code:
(813) 884-0000
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
On October 4, 1996, the Registrant entered into an asset purchase
agreement (the "Agreement") with Ball-Foster Glass Container Co. L.L.C., a
limited liability company organized under the laws of the State of Delaware
("Ball-Foster"). Pursuant to the Agreement, Ball-Foster will acquire
substantially all of the assets of the Registrant for $365 million in cash at
closing, subject to adjustment as set forth in the Agreement. In addition,
Ball-Foster will assume specified liabilities of the Registrant. Payment of the
purchase price is guaranteed by Saint-Gobain Corporation. The Agreement is
subject to several conditions, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act and approval by the United States Bankruptcy Court
for the District of Delaware of a sale free and clear of liens.
The foregoing description of the acquisition is qualified in its
entirety by reference to the complete text of the Agreement which is filed as an
exhibit to this Report.
Item 7. Financial Statements, Pro Forma Financial Information
AND EXHIBITS
2(a) Asset Purchase Agreement dated as of October 4, 1996
between the Registrant and Ball-Foster.
<PAGE>
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 thereunto duly authorized.
ANCHOR GLASS CONTAINER CORPORATION
By: /S/ MARK A. KIRK
Name: Mark A. Kirk
Title: Senior Vice President
and Chief Financial
Officer
Dated: October 11, 1996
<PAGE>
EXHIBIT INDEX
Sequentially
EXHIBIT DESCRIPTION NUMBERED PAGE
2(a) Asset Purchase 5
Agreement dated as
of October 4, 1996
between Registrant and
Ball-Foster
ASSET PURCHASE AGREEMENT
AGREEMENT dated as of October 4, 1996 between Anchor Glass Container
Corporation, a Delaware corporation ("Seller"), and Ball-Foster Glass Container
Co., L.L.C., a limited liability company organized under the laws of the State
of Delaware ("Buyer").
W I T N E S S E T H :
WHEREAS, Seller and its subsidiaries conduct a business which manufactures,
sells and distributes a diverse line of glass containers of various types,
designs and sizes, which are sold principally to customers in the food and
beverage industries (the "Business");
WHEREAS, Buyer desires to purchase substantially all of the assets of the
Business from Seller, and Seller desires to sell substantially all of the assets
of the Business to Buyer, upon the terms and subject to the conditions
hereinafter set forth;
WHEREAS, on September 13, 1996, Seller filed a voluntary petition (the
"Petition") for reorganization relief pursuant to Chapter 11 of Title 11 of the
United States Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware and such case is
presently pending under Case No. 96-1434 PJW;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such other
Person.
"Balance Sheet Date" means June 30, 1996.
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware.
"Citicorp" means Citicorp Leasing, Inc., a Delaware corporation and the
current holder of the Citicorp Loan.
"Citicorp Loan" means the loan evidenced and secured by the Renewal First
Mortgage Note dated as of June 16, 1992 by Landlord to Citicorp, the Amended and
Restated Mortgage and Security Agreement dated as of June 16, 1992 by Landlord
to Citicorp and the Amended Assignment of Leases and Rents dated as of June 16,
1992 by Landlord to Citicorp.
"Closing Balance Sheet" means a statement of the Purchased Assets and the
Assumed Liabilities as at the close of business on the Closing Date, together
with the notes thereto, prepared in accordance with the provisions of Section
2.08 and Exhibit A hereto.
"Closing Date" means the date of the Closing.
"Closing Net Assets" means the excess of the value of the Purchased Assets
over the amount of the Assumed Liabilities as reflected on the Closing Balance
Sheet.
"Excluded Contracts" means (i)(A) all purchase or supply agreements of
Seller or any of its subsidiaries, (B) all agreements relating to the
disposition of assets of Seller or any of its subsidiaries, the consummation of
which has occurred prior to the date hereof, and (C) all agreements of Seller or
any of its subsidiaries relating to indebtedness for borrowed money, in each
case, other than those designated in writing by Buyer to Seller within 30 days
of the date hereof and (ii) all other contracts, agreements or instruments of
Seller or any of its subsidiaries that are designated in writing by Buyer to
Seller within 30 days of the date hereof as "Excluded Contracts" pursuant to
Section 2.01(iv).
"Final June 30 Net Assets" means the June 30 Net Assets as the same may be
adjusted and finally determined pursuant to Section 2.08.
"Final Post-Filing Trade Payables" means the trade payables of Seller
incurred subsequent to the filing of the Petition and in existence on the
Closing Date, as the same is finally determined pursuant to Section 2.08.
"Final Net Assets" means Closing Net Assets (i) as shown in Buyer's
calculation delivered pursuant to Section 2.08(a) if no notice of disagreement
with respect thereto is delivered pursuant to Section 2.08(b) or (ii) if such a
notice of disagreement is delivered, (A) as agreed by the parties pursuant to
Section 2.08(c) or (B) in the absence of such agreement, as shown in the
Accounting Referee's calculation delivered pursuant to Section 2.08(c); PROVIDED
that Final Net Assets shall not in any event be less than Buyer's calculation of
Closing Net Assets delivered pursuant to Section 2.08(a) nor more than Seller's
calculation of Closing Net Assets delivered pursuant to Section 2.08(c).
"Headquarters Lease" means the Lease dated March 31, 1988 between Landlord
and Seller, as modified by the First Amendment to Lease dated June 16, 1992, the
Letter Agreement dated as of April 27, 1992 attached as Schedule 1 to said First
Amendment to Lease, the Agreement dated as of June 16, 1992 attached as Schedule
1 to the First Amendment to Building Option Agreement, the Second Amendment to
Lease dated as of September 30, 1993 and the Third Amendment to Lease dated as
of February 22, 1995, and the Memorandum of Lease, the Building Option Agreement
(as modified by Amendment No. 1 to Building Option Agreement), the Memorandum of
Building Option Agreement, the Land Option Agreement, the Memorandum of Land
Option Agreement, the Option Agreement for Parking Easement and Memorandum of
Option for Parking Agreement (referred to therein).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Included Insurance Policies" means the policies of Seller and its
subsidiaries maintained under or in connection with any Benefit Arrangement or
Employee Plan, to the extent (i) the Seller's obligations under such Benefit
Arrangement or Employee Plan are an Assumed Liability, (ii) such policies have
been identified to Buyer pursuant to the provisions of Section 3.13(n) and (iii)
Buyer has, at least 30 days prior to the Closing Date, expressly identified such
policies as "Included Insurance Policies" by written notice to Seller.
"June 30 Net Assets" means the excess of the value of the Purchased Assets
over the amount of the Assumed Liabilities as reflected on the Reference Balance
Sheet.
"June 30 Trade Payables" means the trade payables of Seller and its
subsidiaries at June 30, 1996 as agreed to by Buyer and Seller or as finally
determined pursuant to Section 2.06(i).
"Landlord" means Fountain Associates I, Ltd., a Florida limited partnership
and the current holder of the landlord's interest under the Headquarters Lease.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For the purposes of this Agreement, a
person shall be deemed to own subject to a Lien any property or asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means a material adverse effect on the condition
(financial or otherwise), business, assets or results of operations of the
Business, taken as a whole.
"Person" means an individual, corporation, partnership, association, trust
or other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
"Purchase Option" has the meaning assigned to it in the Headquarters Lease.
"Reference Balance Sheet" means the pro forma adjusted statement of the
Purchased Assets and Assumed Liabilities, and the notes thereto, as of June 30,
1996 and attached hereto as Exhibit A.
"Renewal Option" has the meaning assigned to it in the Headquarters Lease.
"Residual Value Guaranty Amount" has the meaning assigned to it in the
Headquarters Lease.
"Sale Order" means an order issued by the Bankruptcy Court substantially in
the form of Exhibit B hereto, authorizing the assumption of this Agreement and
approving this Agreement and all of the transactions contemplated hereby.
"Seller Defined Benefit Plans" means the Anchor Glass Container Corporation
Service Retirement Plan, the Pension Plan for Hourly Employees of Latchford
Glass Company and Associated Companies, the Anchor Glass Container Corporation
Retirement Plan for Salaried Employees, and the Retirement Plan for Salaried
Employees of Latchford Glass Company and Associated Companies.
"Seller Defined Contribution Plans" means the Anchor Glass Container
Corporation Salaried Employees Savings Plan and the Anchor Glass Container
Corporation Hourly Employees Supplemental Retirement Plan.
"Termination Option" has the meaning assigned to it in the Headquarters
Lease.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Accounting Referee 2.06
Actual Balance Sheet 3.05
Allocation Statement 2.06
Apportioned Obligations 8.03
Assumed Liabilities 2.03
Bankruptcy Code Preamble
Benefit Arrangement 3.13
Books and Records 5.02
Business Preamble
Business Union Employees 9.05
CERCLA 3.12
Closing 2.07
Code 8.01
Confidentiality Agreement 6.01
Contracts 3.06
Coors 10.01
Employee Plan 3.13
Environmental Laws 3.12
ERISA 3.13
ERISA Affiliate 3.13
Estimated Purchase Price 2.06
Estimated Post-Filing Trade Payables 2.06
Exchange Act 3.02
Excluded Assets 2.02
Excluded Liabilities 2.04
Fee Properties 3.11
Governmental Entity 10.01
Hazardous Substances 3.12
Headquarters Property 3.11
Included Contracts 2.01
Intellectual Property Rights 3.16
Interim Order 5.05
Leased Properties 3.11
Multiemployer Plan 3.13
PBGC 3.13
Permit 3.14
Permitted Lien 3.11
Petition Preamble
Petty Cash 2.01
Post-Closing Tax Period 8.03
Pre-Closing Tax Period 8.01
Predecessor Entity 3.05
Purchased Assets 2.01
Purchase Price 2.06
Real Properties 3.11
Real Property Leases 3.06
SEC 3.05
SEC Documents 3.05
Securities Act 3.05
Seller Products and Services 3.17
Strohs 10.01
Tax 8.01
Vitro 3.06
Vitro-Saint Gobain Agreement 10.01
WARN Act 7.04
ARTICLE 2
PURCHASE AND SALE
2.01. PURCHASE AND SALE. Except as otherwise provided below, upon the terms
and subject to the conditions of this Agreement, Buyer agrees to purchase from
Seller and Seller agrees to sell, transfer, assign and deliver, or cause to be
sold, transferred, assigned and delivered, to Buyer at Closing, free and clear
of all Liens, other than Permitted Liens, all of Seller's and its subsidiaries'
right, title and interest in, to and under the assets, properties and business,
of every kind and description, wherever located, real, personal or mixed,
tangible or intangible, owned, held or used primarily in the conduct of the
Business by Seller and its subsidiaries as the same shall exist on the Closing
Date, including all assets shown on the Reference Balance Sheet and not disposed
of in the ordinary course of business, and all assets of the Business thereafter
acquired by Seller and its subsidiaries (the "Purchased Assets"), and including,
without limitation, all right, title and interest of Seller in, to and under:
(i) all real property and leases of, and other interests in, real
property used or owned or held for use in the conduct of the Business, in
each case together with all buildings, fixtures, and improvements erected
thereon, including without limitation the items listed on Schedule 3.11(b),
but excluding all residential real property leases;
(ii) all personal property and interests therein, including machinery,
equipment, furniture, office equipment, communications equipment, vehicles,
storage tanks, spare and replacement parts, fuel and other tangible
property;
(iii) all raw materials, work-in-process, finished goods, supplies and
other inventories;
(iv) all rights under (A) all collective bargaining agreements,
employment and severance agreements, leases (other than all residential
real property leases), non-governmental licenses or franchises, sales
agreements, joint venture agreements, sales and purchase orders, and the
Included Insurance Policies, and (B) all other contracts, agreements and
instruments of Seller or any of its subsidiaries (other than Excluded
Contracts) relating to the Purchased Assets or the Business, including
without limitation the items listed on Schedule 3.06(a), other than those
contracts, agreements or instruments in this clause B that are designated
in writing by Buyer to Seller within 30 days of the date hereof as
"Excluded Contracts" (the items referred to in clauses (A) and (B),
together with any agreements designated in writing by Buyer to Seller
within 30 days of the date hereof pursuant to clause (ii) of the definition
of Excluded Contracts, collectively, the "Included Contracts");
(v) all accounts, notes and other receivables;
(vi) all prepaid expenses, including but not limited to ad valorem
taxes, leases and rentals;
(vii) all petty cash located at operating facilities of the Business
("Petty Cash");
(viii) all of Seller's and its subsidiaries' rights, claims, credits,
causes of action or rights of set-off against third parties relating to the
Purchased Assets, including, without limitation, unliquidated rights under
manufacturers' and vendors warranties and rebates;
(ix) all patents, copyrights, trademarks, trade names, service marks,
service names, technology, know-how, processes, trade secrets, inventions,
proprietary data, formulae, research and development data, computer
software programs and other intangible property, in each case owned or
licensed by Seller or any Affiliate of Seller and used or held for use in
the Business, and any applications for the same, including without
limitation the items listed on Schedule 3.16(a);
(x) all transferable licenses, permits or other governmental
authorization affecting, or relating in any way to, the Business, including
without limitation the transferable items listed on Schedule 3.14(a);
(xi) all books, records, files and papers, whether in hard copy or
computer format, used in the Business, including, without limitation,
engineering information, sales and promotional literature, manuals and
data, sales and purchase correspondence, lists of present and former
suppliers, lists of present and former customers, personnel and employment
records, and any information relating to Tax imposed on the Purchased
Assets;
(xii) all computer software programs and data used in connection with
the Business;
(xiii) all goodwill associated with the Business or the Purchased
Assets, together with the right to represent to third parties that Buyer is
the successor to the Business;
(xiv) all employee salary or bonus deferrals under any employee
benefit plan the obligations under which are an Assumed Liability, to the
extent the amount of such deferrals have not, as of the Closing Date, been
disbursed in accordance with such plan, contributed to an employee benefit
trust or paid as an insurance premium; and
(xv) all air emissions Seller has, is entitled to or applied for,
including any air emissions where Seller has credit for or has banked,
applied to bank or agreed to sell or trade.
2.02. EXCLUDED ASSETS. Buyer expressly understands and agrees that the
following assets and properties of Seller (the "Excluded Assets") shall be
excluded from the Purchased Assets:
(i) all of Seller's cash and cash equivalents on hand and in banks
except for Petty Cash;
(ii) insurance policies, other than the Included Insurance Policies;
(iii) the Excluded Contracts;
(iv) capital stock of subsidiaries of Seller;
(v) minute and stock books of Seller and its subsidiaries; and
(vi) any Purchased Assets sold or otherwise disposed of in the
ordinary course of business and not in violation of any provisions of this
Agreement during the period from the date hereof until the Closing Date.
2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees, effective at the time of Closing, to
assume the following liabilities (the "Assumed Liabilities"):
(i) all liabilities set forth on the Reference Balance Sheet to the
extent included or reflected on the Closing Balance Sheet;
(ii) all liabilities and obligations of Seller arising from and after
the Closing Date under all Included Contracts (other than liabilities or
obligations attributable to any failure by Seller to comply with the terms
thereof);
(iii) all liabilities and obligations under the Anchor Glass Container
Corporation Executive/Key Employee Retention Plan as such Plan is in effect
on the date hereof (other than liabilities and obligations arising under
such Plan prior to the Closing, which shall remain liabilities and
obligations of Seller);
(iv) all liabilities under Seller Defined Benefit Plans (but excluding
any and all liabilities for excise tax or related taxes or penalties to the
Internal Revenue Service arising out of the failure of Seller to contribute
to Seller Defined Benefit Plans) and all liabilities to the PBGC in
connection with Seller Defined Benefit Plans, which liabilities shall be
paid by Buyer in full on the Closing Date to the extent due and owing on
the Closing Date;
(v) all environmental liabilities relating to the Purchased Assets or
Business (but excluding any liabilities resulting from or arising out of
any (i) claim, action, suit, investigation, proceeding or judgment relating
to property disposed of by Seller or any of its subsidiaries prior to the
Closing Date or (ii) asbestos-related claims, actions, suits,
investigations, proceedings or judgments arising out of any event or
condition existing on or occurring prior to the Closing Date);
(vi) trade payables of Seller which have arisen after the filing of
the Petition and which are in existence on the Closing Date; and
(vii) accrued expenses relating to workers compensation claims.
2.04. EXCLUDED LIABILITIES. Notwithstanding any provision in this Agreement
or any other writing to the contrary, Buyer is assuming only the Assumed
Liabilities and is not assuming any other liability or obligation of Seller (or
any predecessor owner of all or part of its business and assets) of whatever
nature whether presently in existence or arising hereafter, including, without
limitation, except as set forth in clause (v) of Section 2.03, any liability for
any claim, action, suit or proceeding pending against, or judgment against,
Seller or any of its subsidiaries (including the Purchased Assets) as of the
Closing Date. All such other liabilities and obligations shall be retained by
and remain obligations and liabilities of Seller (all such liabilities and
obligations not being assumed being herein referred to as the "Excluded
Liabilities").
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this Agreement to the
contrary notwithstanding, this Agreement shall not constitute an agreement to
assign any Purchased Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach or other
contravention thereof or in any way adversely affect the rights of Buyer or
Seller thereunder. Seller and Buyer will use their best efforts (but without any
payment of money by Seller or Buyer) to obtain the consent of the other parties
to any such Purchased Asset or any claim or right or any benefit arising
thereunder for the assignment thereof to Buyer as Buyer may request. If such
consent is not obtained, or if an attempted assignment thereof would be
ineffective or would adversely affect the rights of Seller thereunder so that
Buyer would not in fact receive all such rights, Seller and Buyer will cooperate
in a mutually agreeable arrangement under which Buyer would obtain the benefits
and assume the obligations thereunder in accordance with this Agreement,
including sub-contracting, sub-licensing, or sub- leasing to Buyer, or under
which Seller would enforce for the benefit of Buyer, with Buyer assuming
Seller's obligations, any and all rights of Seller against a third party
thereto. Seller will promptly pay to Buyer when received all monies received by
Seller under any Purchased Asset or any claim or right or any benefit arising
thereunder, except to the extent the same represents an Excluded Asset.
2.06. PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE. (a) The purchase price
for the Purchased Assets (the "Purchase Price") is an amount in cash equal to
(i) $365 million plus (ii) the June 30 Trade Payables minus (iii) the Final
Post-Filing Trade Payables. The Purchase Price shall be subject to adjustment as
provided in Section 2.09, and shall be paid as provided in Section 2.07. On the
Closing Date, Buyer shall pay to Seller as provided in Section 2.07 an amount in
cash (the "Estimated Purchase Price") equal to (i) $365 million plus (ii) the
June 30 Trade Payables minus (iii) the Estimated Post-Filing Trade Payables.
(b) Not less than three business days prior to the Closing Date, Seller
shall deliver to Buyer a certificate, signed by the chief financial officer of
Seller, setting forth Seller's good faith estimate of trade payables incurred
subsequent to filing of the Petition and estimated to be in existence on the
Closing Date (the "Estimated Post-Filing Trade Payables"), together with
reasonable information supporting such estimate.
(c) As soon as practicable after the Closing, Buyer shall deliver to Seller
a statement (the "Allocation Statement"), setting forth the value of the
Purchased Assets, which shall be used for the allocation of the Purchase Price
(together with the Assumed Liabilities) among the Purchased Assets; PROVIDED
that prior to the Closing Date, if required as the result of transfer or similar
taxes, Buyer and Seller shall agree as to the allocation for Fee Properties.
(d) Seller shall have a period of 45 days after the delivery of the
Allocation Statement to present in writing to Buyer notice of any objections
Seller may have to the allocation set forth in the Allocation Statement. Unless
Seller timely objects, the Allocation Statement shall be binding on the parties
without further adjustment.
(e) If Seller shall raise any objections within the 45 day period, Buyer
and Seller shall negotiate in good faith and use their best efforts to resolve
such dispute. If the parties fail to agree within 15 days after the delivery of
the notice, then the disputed items shall be resolved by Arthur Andersen, or if
such firm declines to act in such capacity, by such other firm of independent
nationally recognized accountants chosen and mutually accepted by both parties
(the "Accounting Referee"). The Accounting Referee shall resolve the dispute
within 30 days of having the items referred to it. The costs, fees and expenses
of the Accounting Referee shall be borne equally by Seller and Buyer.
(f) Any adjustment made with respect to the Purchase Price pursuant to
Section 2.09 of this Agreement shall be allocated in accordance with the
determination mutually agreed by Seller and Buyer. In the event that an
agreement is not reached within 15 days after the determination of Final Net
Assets pursuant to Section 2.09(a), the disputed item(s) shall be resolved
pursuant to Section 2.06(e) hereof.
(g) Seller and Buyer agree to report an allocation of such Purchase Price
among the Purchased Assets in a manner entirely consistent with the Allocation
Statement (including any adjustment made pursuant to Section 2.06(f) hereof),
and agree to act in accordance with such Allocation Statement in the filing of
all tax returns (including, without limitation, filing Form 8594 with its
Federal income tax return for the taxable year that includes the date of the
Closing) and in the course of any tax audit, tax review or tax litigation
relating thereto.
(h) Not later than 10 days prior to the filing of their respective Form
8594 relating to this transaction, each party shall deliver to the other party a
copy of its Form 8594.
(i) Within 30 business days after the date of this Agreement, Buyer and
Seller shall negotiate in good faith to agree on the June 30 Trade Payables. If
the parties fail to agree within such 30 business days, then the disputed items
only shall be referred to the Accounting Referee. The Accounting Referee shall
resolve the dispute within 10 days of having the items referred to it, which
resolution shall be final and binding upon the parties hereto.
2.07. CLOSING. Subject to the terms and conditions of this Agreement, the
sale and purchase of the Purchased Assets and the assumption of the Assumed
Liabilities contemplated hereby shall take place at a closing (the "Closing") to
be held at the offices of Stroock & Stroock & Lavan, Seven Hanover Square, New
York, New York 10004 at 9:00 A.M., New York City time, on the later to occur of
(i) the date on which the conditions to Closing set forth in Article 10 shall
have been satisfied or waived and (ii) the first business day following the day
that is ten days after the entry of the Sale Order, or at such other time or
place as Buyer and Seller may agree. At the Closing,
(a) Buyer shall deliver to Seller a certified or official bank check
payable to the order of Seller in the amount of the Estimated Purchase Price in
immediately available funds or shall wire transfer such amount to an account
designated in writing by Seller to Buyer not less than two days prior to the
Closing Date.
(b) Seller and Buyer shall enter into an assignment and assumption
agreement and Seller shall deliver to Buyer (or permitted assignees) such
special warranty deeds (or local equivalents), bills of sale, endorsements,
consents, assignments and other good and sufficient instruments of conveyance
and assignment as the parties and their respective counsel shall deem reasonably
necessary or appropriate to vest in Buyer all right, title and interest in, to
and under the Purchased Assets.
2.08. CLOSING BALANCE SHEET. (a) As promptly as practicable, but no later
than 90 days, after the Closing Date, Buyer will cause to be prepared and
delivered to Seller (a) the Closing Balance Sheet and (b) the Final Post-Filing
Trade Payables, together with an unqualified report of Price Waterhouse thereon,
and a certificate based on such Closing Balance Sheet setting forth Buyer's
calculation of Closing Net Assets and Final Post-Filing Trade Payables. The
Closing Balance Sheet shall include the Purchased Assets and Assumed Liabilities
as at the close of business on the Closing Date presented fairly in accordance
with generally accepted accounting principles through the application of the
accounting methods and such other procedures applied in the preparation of the
Reference Balance Sheet. In preparing the Closing and Reference Balance Sheets,
consistent account definitions, analytical procedures, and valuation methods
should be applied in determining the account balances. Except as provided below
for accruals for pension and other post-retirement benefit obligations, if, in
connection with the preparation of the Closing Balance Sheet or the calculation
of Closing Net Assets, any errors are discovered that affect the value of the
Purchased Assets or the Assumed Liabilities set forth on the Reference Balance
Sheet, the Reference Balance Sheet shall be adjusted to correct for the effect
of such errors. With regard to accruals for pension and other post-retirement
benefit obligations, if an error is discovered in the Reference Balance Sheet
that remains applicable at the Closing Balance Sheet date, then the Closing
Balance Sheet only, not the Reference Balance Sheet, shall be adjusted to
correct for the effect of such errors. For purposes of this Section 2.08, in
determining whether any corrections are to be made as a result of errors or
inconsistencies, corrections will not be made unless an individual item exceeds
$50,000 and the aggregate net amount of all such items exceeds $500,000. In
preparing the Reference Balance Sheet certain "excess" reserves were applied and
reallocated to cover reserve requirements for other accounts. Attached as part
of Exhibit A is the final June 30, 1996 reserve allocation of Seller. In the
preparation of the Closing Balance Sheet, the reallocation of such "excess"
reserves shall be applied consistent with Exhibit A. Exhibit A sets forth the
Reference Balance Sheet including explanatory notes as to the use of the
Reference Balance Sheet in the determination of Purchased Assets and Assumed
Liabilities, and in determining a purchase price adjustment (if any), pursuant
to the provisions of this Agreement.
(b) If Seller disagrees with Buyer's calculation of Closing Net Assets or
Final Post-Filing Trade Payables delivered pursuant to Section 2.08(a), Seller
may, within 45 days after delivery of the documents referred to in Section
2.08(a), deliver a notice to Buyer disagreeing with such calculations and
setting forth Seller's calculations of such amounts. Any such notice of
disagreement shall specify those items or amounts as to which Seller disagrees
and the basis for such disagreement, and Seller shall be deemed to have agreed
with all other items and amounts contained in the Closing Balance Sheet and
Final Post-Filing Trade Payables and the calculation of Closing Net Assets and
Final Post-Filing Trade Payables delivered pursuant to Section 2.08(a).
(c) If a notice of disagreement shall be duly delivered pursuant to Section
2.08(b), Buyer and Seller shall, during the 15 days following such delivery, use
their best efforts to reach agreement on the disputed items or amounts in order
to determine, as may be required, the amounts of Closing Net Assets and Final
Post-Filing Trade Payables, which amounts shall not be less than the amounts
thereof shown in Buyer's calculations delivered pursuant to Section 2.08(a) nor
more than the amounts thereof shown in Seller's calculations delivered pursuant
to Section 2.08(b). If during such period, Buyer and Seller are unable to reach
such agreement, they shall promptly thereafter cause the Accounting Referee
promptly to review this Agreement and the disputed items or amounts for the
purpose of calculating Closing Net Assets and Final Post-Filing Trade Payables.
In making such calculations, the Accounting Referee shall consider only those
items or amounts as to which Seller has disagreed. The Accounting Referee shall
deliver to Seller and Buyer, as promptly as practicable, a report setting forth
such calculations. Such report shall be final and binding upon the parties
hereto. The cost of such review and report shall be borne (i) by Buyer if the
difference between Final Net Assets and Closing Net Assets as set forth in
Buyer's calculation of Closing Net Assets delivered pursuant to Section 2.08(a)
is greater than the difference between Final Net Assets and Closing Net Assets
as set forth in Seller's calculation of Closing Net Assets delivered pursuant to
Section 2.08(b), (ii) by Seller if the first such difference is less than the
second such difference and (iii) otherwise equally by Seller and Buyer.
(d) Buyer and Seller agree that they will, and agree to cause their
respective independent accountants and actuaries to, cooperate and assist in the
preparation of the Closing Balance Sheet and the calculation of Closing Net
Assets and Final Post-Filing Trade Payables and in the conduct of the audits and
reviews referred to in this Section 2.08, including without limitation, the
making available to the extent necessary of books, records, work papers and
personnel.
2.09. ADJUSTMENT OF PURCHASE PRICE. (a) If Final June 30 Net Assets exceeds
Final Net Assets, Seller shall pay to Buyer, as an adjustment to the Purchase
Price, in the manner and with interest as provided in Section 2.09(c), the
amount of such excess. If Final Net Assets exceeds Final June 30 Net Assets,
Buyer shall pay to Seller, as an adjustment to the Purchase Price, in the manner
and with interest as provided in Section 2.09(c), the amount of such excess.
(b) If Final Post-Filing Trade Payables exceeds Estimated Post-Filing Trade
Payables, Seller shall pay to Buyer, as an adjustment to the Purchase Price, in
the manner and with the interest as provided in Section 2.09(c), the amount of
such excess. If Estimated Post-Filing Trade Payables exceeds Final Post-Filing
Trade Payables, Buyer shall pay to Seller, as an adjustment to the Purchase
Price, in the manner and with interest as provided in Section 2.09(c), the
amount of such excess.
(c) METHOD OF PAYMENT. Any payments pursuant to Sections 2.09(a) or (b)
shall be added together or netted against each other, as appropriate, and shall
be made at a mutually convenient time and place within 10 days after the same
have been determined. Any payments pursuant to this Section 2.09 shall be made
by delivery by Buyer, or Seller, as the case may be, of a certified or official
bank check payable in immediately available funds to the other party or by wire
transfer of such funds to an account designated by such other party or by
causing such payments to be credited to such account of such other party as may
be designated by such other party. The amount of any payment to be made pursuant
to this Section 2.09 shall bear interest from and including the Closing Date to
but excluding the date of payment at a rate per annum equal to the rate publicly
announced from time to time by Citibank, N.A. in New York City as its prime rate
in effect from time to time during the period from the Closing Date to the date
of payment. Such interest shall be payable at the same time as the payment to
which it relates and shall be calculated daily on the basis of a year of 365
days and the actual number of days elapsed.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.01. AUTHORITY. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Seller has all
requisite corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. Subject to approval by the Bankruptcy Court, (a) all corporate and
stockholder acts and other proceedings required to be taken by Seller to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and properly
taken and (b) this Agreement has been duly executed and delivered by Seller and
constitutes a legal, valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms.
3.02. NO CONFLICTS; CONSENTS. (a) Except as set forth in Schedule 3.02(a),
the execution and delivery of this Agreement by Seller do not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation under, or
loss of a benefit relating to the Business under, or result in the creation of
any Lien (other than Permitted Liens) upon any of the Purchased Assets under,
any provision of (i) the Certificate of Incorporation or By-laws of Seller or
any of its subsidiaries, (ii) assuming the obtaining of all required consents,
any agreement or obligation to which Seller or any of its subsidiaries is a
party or by which any of the Purchased Assets are bound or (iii) any applicable
judgment, injunction, order or decree, or statute, law, ordinance, rule or
regulation, in each case other than such as, individually or in the aggregate,
would not have a Material Adverse Effect.
(b) No material consent, approval, license, permit, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Seller or any of its
subsidiaries in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby, other
than (i) compliance with and filings under the HSR Act, if applicable, (ii)
compliance with and filings under Section 13(a) or 15(d), as the case may be, of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (iii)
compliance with and filings and notifications under applicable Environmental
Laws, (iv) compliance with any notices, motions, orders or approvals required by
the Bankruptcy Court or the Bankruptcy Code and the rules thereunder, (v) those
set forth on Schedule 3.02(a) and (vi) those that may be required solely by
reason of Buyer's participation in the transactions contemplated hereby.
3.03. SUFFICIENCY OF AND TITLE TO THE PURCHASED Assets. (a) The Purchased
Assets constitute, and on the Closing Date will constitute, all of the assets or
property used or held for use primarily in the Business, except for the Excluded
Assets.
(b) Upon consummation of the transactions contemplated hereby, Buyer will
have acquired good and marketable title (which in the case of Fee Properties are
insurable at regular rates by a reputable title company) in and to, or a valid
leasehold interest in, each of the Purchased Assets, free and clear of all
Liens, except for Permitted Liens.
3.04. ORGANIZATION AND STANDING; BOOKS AND RECORDS. All subsidiaries of
Seller and their respective jurisdictions of incorporation are set forth on
Schedule 3.04(a). Each of Seller and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Except as set forth on Schedule 3.04(b), each of
Seller and its subsidiaries has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its assets and to carry
on its business as presently conducted, other than such the lack of which would
not, individually or in the aggregate, have a Material Adverse Effect. Each of
Seller and its subsidiaries is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction in which the conduct or
nature of its business or the ownership, leasing or holding of its properties
makes such qualification necessary, except such jurisdictions where the failure
to be so qualified or in good standing would not, individually or in the
aggregate, have a Material Adverse Effect.
Seller has prior to the execution of this Agreement delivered to Buyer true
and complete copies of the Certificate of Incorporation and By-laws, each as
amended to date and as currently in effect, of Seller and each of its
subsidiaries. The minute books of Seller and each of its subsidiaries (which
have been made available for inspection by Buyer prior to the date hereof) are
true and complete in all material respects.
3.05. SEC DOCUMENTS; FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES. (a)
Seller (and any entity to which it is a successor issuer for purposes of Rule
12g-3 under the Exchange Act, each such entity being a "Predecessor Entity") has
filed all required reports, schedules, forms, statements and other documents
with the Securities and Exchange Commission (the "SEC") since June 30, 1993 (the
"SEC Documents"). Seller has delivered to Buyer (i) Seller's annual reports on
Form 10-K for its fiscal years ended December 31, 1995, 1994 and 1993, (ii) its
quarterly reports on Form 10-Q for its fiscal quarters ended March 31, 1996 and
June 30, 1996, and (iii) all of the other SEC Documents filed since December 31,
1995. The audited consolidated balance sheets of Seller and its subsidiaries
(including the notes thereto) set forth in the most recent SEC Document of
Seller filed prior to the date hereof on Form 10-K, as updated or modified by
the consolidated balance sheet and the notes thereto set forth in the June 30,
1996 Form 10-Q filed subsequently thereto, shall be hereinafter referred to as
the "Actual Balance Sheet". As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the Securities Act of
1933 (the "Securities Act"), or the Exchange Act, as the case may be, applicable
to such SEC Documents, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of Seller and each Predecessor Entity included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and fairly present the consolidated
financial position of Seller and its subsidiaries and of each Predecessor Entity
and its subsidiaries, as the case may be, as of the dates thereof and the
consolidated results of operations and statements of cash flows of Seller and
its subsidiaries and of each Predecessor Entity and its subsidiaries, as the
case may be, for the periods then ended (subject, in the case of any unaudited
statements, to the absence of footnotes and to normal year-end audit
adjustments).
(b) There are no material liabilities or obligations relating to the
Purchased Assets or the Business of any nature (whether accrued, absolute,
contingent or unasserted), except (1) as disclosed, reflected or fully reserved
against in the Actual Balance Sheet, (2) for items set forth in Schedule 3.05
and (3) for other liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date which,
individually or in the aggregate, are not material to the Purchased Assets and
the Business taken as a whole.
3.06. CONTRACTS. Except as set forth in Schedule 3.06(a), with respect to
the Business neither the Seller nor any of its subsidiaries is a party to or
bound by:
(a) (i) any lease of real property ("Real Property Leases")
under which Seller or any subsidiary of Seller uses or occupies or has
the right to use or occupy, now or in the future, any real property, in
each case providing for annual rentals of more than $90,000 per annum
or $1,000,000 in the aggregate or (ii) any lease of personal property
under which Seller or any subsidiary of Seller uses or has the right to
use, now or in the future, any personal property, in each case
providing for annual rentals of more than $50,000 per annum or $100,000
in the aggregate;
(b) any agreement for the purchase of materials, supplies,
goods, services, equipment or other assets that provides for either (i)
annual payments by Seller and its subsidiaries of $500,000 or more or
(ii) aggregate payments by Seller and its subsidiaries of $500,000 or
more, or any agreement for the purchase of real property;
(c) any sales, distribution or other similar agreement
providing for the sale by Seller or any of its subsidiaries of
materials, supplies, goods, services, equipment or other assets that
provides for either (i) annual payments to Seller and its subsidiaries
of $5,000,000 or more or (ii) aggregate payments to Seller and its
subsidiaries of $10,000,000 or more, or any agreement for the sale of
real property or granting to a third party an option to purchase or
lease, or a right of first refusal to purchase or lease, any real
property of Seller or any of its subsidiaries;
(d) any partnership, joint venture or other similar
agreement or arrangement;
(e) any agreement relating to the acquisition or disposition
of any business that provides for aggregate payments by or to Seller or
any of its subsidiaries of $10,000,000 or more (whether by merger, sale
of stock, sale of assets or otherwise);
(f) any option, license, franchise or similar agreement that
provides for either (i) annual payments by Seller and its subsidiaries
of $100,000 or more or (ii) aggregate payments by Seller and its
subsidiaries of $200,000 or more;
(g) any agency, dealer, sales representative, marketing,
distribution or other similar agreement that provides for either (i)
annual payments by Seller and its subsidiaries of $500,000 or more or
(ii) aggregate payments by Seller and its subsidiaries of $1,000,000 or
more;
(h) any agreement that limits the freedom of Seller or any of
its subsidiaries to compete in any line of business or with any person
or in any area or to own, operate, sell, transfer, pledge or otherwise
dispose of or encumber any Purchased Asset or which would so limit the
freedom of Buyer after the Closing Date;
(i) any agreement with or for the benefit of (i) any
stockholder, officer or director of Seller or any of its subsidiaries,
(ii) Vitro, S.A. or any of its subsidiaries ("Vitro") or (iii) any
employee of Seller or any of its subsidiaries (other than Seller and
its subsidiaries), other than, (x) in each case, agreements set forth
on Schedule 3.13(b), and (y) with respect to clause (iii) compensatory
arrangements with employees in general and agreements entered into in
the ordinary course of business; or
(j) any other agreement or commitment not made in the ordinary
course of business that is material to the Business taken as a whole.
Except as set forth in Schedule 3.06(b), all such agreements listed in such
Schedule (collectively, the "Contracts") are valid and binding agreements of
Seller or one of its subsidiaries and are in full force and effect in all
material respects. Except as set forth in Schedule 3.06(c): each of Seller and
its subsidiaries has performed all material obligations required to be performed
by it to date under the Contracts and it is not in breach or default in any
material respect thereunder; to the knowledge of Seller, no condition exists
that with notice or lapse of time or both would constitute a material default
thereunder; and, to the knowledge of Seller, no other party to any of the
Contracts is in material breach or default thereunder. Seller has delivered or
made available true and complete copies of each of the Contracts (including all
modifications, amendments and supplements) to Buyer prior to the date hereof.
3.07. ABSENCE OF CHANGES OR EVENTS. Except as set forth in Schedule
3.07(a), since the Balance Sheet Date, the Business has been conducted in the
ordinary course substantially consistent with past practices; PROVIDED that
since the filing of the Petition, Seller has been required to subject certain
transactions to Bankruptcy Court approval, has been precluded from paying
pre-petition liabilities except as otherwise authorized by the Bankruptcy Court,
has been granted authority to incur new and replacement liens in favor of its
debtor-in-possession lenders and certain other secured creditors, and has been
subject to set-off, recoupment and reclamation claims by creditors, and to the
alteration of normal trade credit terms by many suppliers. As a result of the
Petition, Seller is in default in many of its obligations to creditors, which
creditors are stayed from proceeding on their claims. In addition, prior to and
after the filing of the Petition, Seller experienced liquidity constraints which
caused it to alter certain normal business practices as set forth on Schedule
3.07(a). The existence of the constraints described herein are acknowledged by
Buyer. Except as set forth above, there has not been:
(a) any material adverse change in the condition of
the plant, property and equipment that constitutes part of the
Purchased Assets;
(b) any creation or assumption by Seller or any of its
subsidiaries of any Lien (other than Permitted Liens) on any Purchased
Asset other than in the ordinary course of business consistent with
past practices;
(c) any making of any loan, advance or capital contribution to
or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned subsidiaries of Seller;
(d) any damage, destruction or other casualty loss (whether or
not covered by insurance) or condemnation or other governmental taking
or sale in lieu thereof affecting the Business or any Purchased Asset
which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect (it being understood for
purposes of this clause (d) that a material adverse change in the
operations of any operating manufacturing plant shall constitute a
Material Adverse Effect);
(e) any transaction or commitment made, or any contract or
agreement entered into, by Seller or any of its subsidiaries relating
to the Business or any Purchased Asset (including the acquisition or
disposition of any such assets) or any relinquishment by Seller or any
of its subsidiaries of any contract or other right, in any such case,
that is material to the Business, taken as a whole;
(f) any change in any method of accounting or
accounting practice by Seller or any of its subsidiaries
with respect to the Business;
(g) any (i) individual employment, deferred compensation,
severance, retirement or other similar agreement entered into with any
director, officer or employee of Seller or any of its subsidiaries (or
any amendment to any such existing agreement), (ii) grant of any
severance or termination pay to any director, officer or employee of
Seller or any of its subsidiaries, or (iii) change in compensation or
other benefits payable to any director, officer or employee of Seller
or any of its subsidiaries pursuant to any severance or retirement
plans or policies thereof, except in the case of clauses (ii) and
(iii), such grants or changes as may have been on a Seller-wide or
subsidiary-wide basis pursuant to a written Seller or subsidiary policy
concurrently in effect, or in the ordinary course of business
consistent with past practices;
(h) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Business, which
employees were not subject to a collective bargaining agreement at the
Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees; or
(i) any capital expenditure, or commitment for a capital
expenditure, for additions or improvements to property, plant and
equipment in excess of that set forth on the budget used in connection
with Seller's debtor-in-possession financing previously furnished by
Seller to Buyer.
3.08. LITIGATION. Except as set forth on Schedule 3.08(a) or in the most
recent SEC Document of Seller filed prior to the date hereof on Form 10-K, there
are no (i) outstanding judgments, orders, injunctions or decrees of any
Governmental Entity or arbitration tribunal against Seller or any of its
subsidiaries or any Purchased Asset which, individually or in the aggregate,
have had or would reasonably be expected to have a Material Adverse Effect or
which would restrain, prohibit, alter or materially delay the transactions
contemplated by this Agreement or (ii) actions, suits, investigations or
proceedings pending against, or to the knowledge of Seller threatened against or
affecting, the Business or any Purchased Asset before any court or arbitrator or
any Governmental Entity which, if determined or resolved adversely in accordance
with the plaintiff's demands, would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or which in any manner
challenge or seek to restrain, prohibit, alter or materially delay the
transactions contemplated by this Agreement. The provisions of this Section do
not apply to Environmental Laws, which are covered elsewhere in this Agreement.
3.09. COMPLIANCE WITH LAWS AND COURT ORDERS. Except as set forth on
Schedule 3.09(a), neither Seller nor any of its subsidiaries is in violation of,
and has not since January 1, 1994 violated, any law, rule, regulation, judgment,
injunction, order or decree applicable to the Purchased Assets or the conduct of
the Business in any respect that, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect. The provisions
of this Section do not apply to Environmental Laws, which are covered elsewhere
in this Agreement.
3.10. EMPLOYEES. Schedule 3.10(a) sets forth a true and complete list as of
a recent date of the names, titles and annual salaries and cash bonuses of all
officers of Seller and its subsidiaries and all other employees of the Business
whose annual base salary exceeds $100,000. Except as set forth in Schedule
3.10(b), to the actual knowledge of the executive officers of Seller none of
such employees has indicated to Seller or its subsidiaries that he intends to
resign or retire as a result of the transactions contemplated by this Agreement
or otherwise within one year after the Closing Date.
3.11. PROPERTIES. (a) (1) As of the date hereof, Seller and its
subsidiaries have (i) good and valid title to all material tangible Purchased
Assets (other than the Real Properties which are covered below) reflected on the
Actual Balance Sheet or acquired after the Balance Sheet Date (except for
property sold or otherwise disposed of since the Balance Sheet Date in the
ordinary course of business consistent with past practices), (ii) good and valid
fee simple title (which is insurable at regular rates by a reputable title
company) to the Fee Properties, and (iii) valid leasehold interests in the
Leased Properties, in the case of each of clauses (i) through (iii) above, free
and clear of all Liens, except for the following:
(v) Liens in favor of Seller Defined Benefit Plans for failure
to make required contributions to Seller Defined Benefit Plans which
arose by operation of law on September 16, 1996;
(w) Those matters relating to each Fee Property and
Leased Property set forth on Schedule 3.11(a);
(x) Liens disclosed on the Actual Balance Sheet or
the notes thereto;
(y) Liens for taxes not yet due or being contested in good
faith or which, though due, may be paid without interest or penalty, in
each case for which adequate accruals or reserves have been established
on the Reference Balance Sheet; or
(z) In the case of the Real Properties, Liens that do not
secure any monetary obligations and that do not materially
(individually or in the aggregate with all other matters) detract from
the value of the property to which they relate as now used or adversely
affect the continued use of the property to which they relate in the
conduct of the business of Seller or its subsidiaries currently
conducted thereat, or in the case of personal property, Liens that do
not secure any monetary obligations and that do not materially
(individually or in the aggregate with all other matters) detract from
the value of the property to which they relate, as now used or
adversely affect the continued use of such assets in the conduct of the
business of Seller or its subsidiaries as currently utilized.
(2) As of the Closing Date, Seller and its subsidiaries shall have (I) good
and valid title to all material tangible Purchased Assets (other than Real
Properties which are covered below) reflected on the Reference Balance Sheet or
acquired after the Balance Sheet Date (except for property sold or otherwise
disposed of since the Balance Sheet Date in the ordinary course of business
consistent with past practices), (II) good and valid fee simple title (which is
insurable at regular rates by a reputable title company) to the Fee Properties
and (III) valid leasehold interests in the Leased Properties, in the case of
each of clauses (I) through (III) above, free and clear of all Liens, except for
the following (collectively, "Permitted Liens"):
(A) Liens set forth on Schedule 3.11(a) that are in effect as
of the Closing Date and affect the property to which they relate, do
not secure any monetary obligation and do not, individually or in the
aggregate with all other matters, materially detract from the value of
the property to which they relate as now used or materially adversely
affect the continued use of the property to which they relate in the
conduct of the business of Seller or its subsidiaries currently
conducted thereat;
(B) Liens disclosed on the Reference Balance Sheet
and in effect as of the Closing Date; or
(C) Liens referred to in paragraphs (v), (y) and (z) of
Section 3.11(a)(1) and in effect as of the Closing Date.
Without limiting the foregoing, the items on Schedule 3.11(a) marked "not a
Permitted Lien" shall not be Permitted Liens for purposes of this Agreement.
(b) Schedule 3.11(b) identifies all of the real properties owned (the "Fee
Properties") or leased (the "Leased Properties") by Seller and its subsidiaries
(the Fee Properties and the Leased Properties being collectively referred to as
the "Real Properties").
(c) Except as set forth on Schedule 3.11(c), to the knowledge of Seller,
the buildings and structures constituting part of the Fee Properties and the
Leased Property covered by the Headquarters Lease (the "Headquarters Property")
and related equipment, are in good operating condition and repair and have been
reasonably maintained in a manner consistent with standards generally followed
in the industry (giving due account to the age and length of use of same,
ordinary wear and tear excepted and damage by fire and other casualty covered by
insurance excepted), are structurally sound.
(d) Except as set forth on Schedule 3.11(d), the buildings and structures
constituting part of each of the Fee Properties and the Headquarters Property
currently have access to (i) public roads or valid easements over private
streets or private property for such ingress to and egress from such property
and (ii) water supply, storm and sanitary sewer facilities, telephone, gas and
electrical connections, fire protection, drainage and other public utilities, in
each case as is reasonably necessary for the current use of such properties.
(e) The installation and construction of the buildings and structures
located on the Fee Properties and the Headquarters Property have been completed
in material compliance with all laws, rules, regulations, judgments, orders,
permits, licenses and other requirements of and agreements with all Governmental
Entities applicable to such properties; and all building permits, certificates
of occupancy, licenses and other authorizations required for current uses of
such properties have been obtained, other than those the failure of which to
obtain would not materially adversely affect the continued use of the relevant
property as now used, and true and complete copies thereof (to the extent in
Seller's or any of its subsidiary's possession) have been provided to Buyer. The
provisions of this Section do not apply to the requirements under Environmental
Laws, which are covered elsewhere in this Agreement.
(f) Except as set forth in Schedule 3.02(a) or Schedule 3.11(f), (i) each
Real Property Lease is in full force and effect and has not been amended,
modified or supplemented, (ii) all rent and other sums and charges payable under
each Real Property Lease are current, (iii) no notice of a material default on
the part of the tenant or termination notice has been served under any Real
Property Lease which remains outstanding, (iv) other than as may exist as of the
date hereof (but not as of the Closing Date) by reason of filing of the
Petition, no uncured material default or termination event exists (and no
condition exists which with the giving of notice or the passage of time or both
would constitute a material default or termination event) under any Real
Property Lease and (v) the consummation of the transactions provided for herein
will not constitute a material default under any Real Property Lease or grounds
for the termination thereof.
(g) There is no underlying Lien affecting the Seller's Headquarters Lease
(other than arising under the Citicorp Loan) which is superior to the interest
of the tenant under such lease.
(h) there are no encroachments or other facts or conditions affecting any
of the Fee Properties or the Headquarters Property that would be revealed by an
accurate survey or inspection thereof which would, individually or in the
aggregate, materially detract from the value of such property as now used or
materially adversely affect the continued use of such property in the conduct of
the business of the Seller or its subsidiaries as currently utilized. None of
the material buildings and structures on the Fee Properties or the Headquarters
Property materially encroaches upon real property of another person or upon the
area of any easement (other than encroachments on utility easements to the
extent such encroachments would not, individually or in the aggregate,
materially detract from the value of such property as now used or materially
adversely affect the continued use of such property in the conduct of the
business of Seller and its subsidiaries as currently utilized) affecting the Fee
Properties or Headquarters Property.
3.12. ENVIRONMENTAL MATTERS. (a) For purposes of this Section, the
following terms shall have the meanings set forth below:
(i) "Environmental Laws" means any applicable federal, state,
local and foreign law, treaty, regulation, rule, judicial decision,
judgment, order, decree, injunction, permit or agreement as in effect
on the date hereof relating to human health and safety, the environment
or to pollutants, contaminants, wastes or chemicals or toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials;
(ii) "Hazardous Substances" means any pollutant, contaminant or
waste or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substance, waste or material, including petroleum,
its derivatives, by-products and other hydrocarbons, and any substance,
chemical or material regulated under Environmental Laws; and
(iii) For purposes of this Section 3.12, "Seller" and
"subsidiary" shall include any entity which is, in whole or in part, a
predecessor of Seller or any subsidiary of Seller.
(b) Except as disclosed on Schedule 3.12, to the actual knowledge (without
any independent investigation) of any of Seller's executive officers, plant
managers, corporate environmental personnel or plant personnel with supervisory
responsibility for environmental matters (if any):
(i) except for matters that have been resolved with no
obligation, whether monetary or otherwise, remaining on the part of the
Seller or any of its subsidiaries, no notice, notification, demand,
request for information, citation, summons or order has been issued,
and no complaint has been filed, no penalty has been assessed, no
investigation, action, claim, suit, proceeding or review is pending or
threatened by any Governmental Entity or other person with respect to
any matters relating to Seller or any subsidiary of Seller and relating
to or arising out of any Environmental Law;
(ii) no Hazardous Substance has been discharged, disposed of,
dumped, injected, pumped, deposited, spilled, leaked, emitted or
released at, on or under any property now or previously owned, leased
or operated by Seller or any subsidiary of Seller except in accordance
with Environmental Laws;
(iii) there are no liabilities of Seller or any subsidiary of
Seller or of or relating to the Purchased Assets or the Business
arising under or relating to any Environmental Law;
(iv) no property now or previously owned, leased or operated by
Seller or any subsidiary of Seller nor any property to which Seller or
any subsidiary of Seller has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Substances is listed
or proposed for listing, on the National Priorities List promulgated
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), on CERCLIS (as defined in CERCLA) or
on any similar federal, state or foreign list of sites requiring
investigation or clean-up (excluding any state lists of leaking
underground storage tanks); and
(v) Seller and its subsidiaries are in compliance with all
Environmental Laws and have obtained all permits, licenses and
authorizations of Governmental Entities relating to or required by
Environmental Laws and necessary or proper for the business of Seller
or any subsidiary of Seller as currently conducted.
(c) There has been no written environmental assessment, investigation,
study or audit conducted which Seller has in its possession in relation to the
current or prior business of Seller or any subsidiary of Seller or any property
or facility now or previously owned, leased or operated by Seller or any
subsidiary of Seller which has not been made available to Buyer.
3.13. EMPLOYEE BENEFIT PLANS.
(a) For purposes of this Section, the following terms shall have the
meanings set forth below:
"Benefit Arrangement" means any employment, severance or
similar contract or arrangement (whether or not written) or any plan,
policy, fund, program or contract or arrangement (whether or not
written) providing for compensation, bonus, profit-sharing, stock
option, or other stock related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage (including
any self-insured arrangements), health or medical benefits, disability
benefits, worker's compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by
Seller or any of its subsidiaries or ERISA Affiliate and (iii) covers
any employee or former employee of Seller or any of its subsidiaries by
virtue of the individual's employment with Seller or any of its
subsidiaries.
"Employee Plan" means any material "employee benefit plan", as
defined in Section 3(3) of ERISA, that (i) is subject to any provision
of ERISA, (ii) is maintained, administered or contributed to by Seller
or any of its subsidiaries or ERISA Affiliate and (iii) covers any
employee or former employee of Seller or any of its subsidiaries by
virtue of the individual's employment with Seller or any of its
subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" of any entity means any other entity which,
together with such entity, would be treated as a single employer under
Section 414 of the Code.
"Multiemployer Plan" means any plan that is a multiemployer
plan, as defined in Section 3(37) or Section 4001(a)(3) of ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation.
(b) Schedule 3.13(b) lists each Employee Plan. Prior to the execution of
this Agreement, Seller has delivered or made available to Buyer complete and
accurate copies of the Employee Plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations thereof
(including any summary plan description and summary of material modifications)
together with (i) the most recent annual report prepared in connection with any
Employee Plan (Form 5500 including, if applicable, Schedule B thereto) and (ii)
if applicable, the most recent actuarial valuation report prepared in connection
with any Employee Plan. Seller has provided or made available to Buyer complete
actuarial data (including age, salary, service and related data) for employees
of Seller and its subsidiaries as of the most recent practicable date.
(c) Except as set forth on Schedule 3.13(c), neither Seller nor any of its
ERISA Affiliates has incurred, or reasonably expects to incur prior to the
Closing, any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or
previously covered by Title IV of ERISA that is likely to become, after the
Closing Date, an obligation of Buyer or any of its ERISA Affiliates. Except as
disclosed in Schedule 3.13(c), no condition exists that is likely to constitute
grounds for termination by the PBGC of any Employee Plan subject to Title IV of
ERISA that is maintained solely by Seller or any of its ERISA Affiliates. Except
as set forth on Schedule 3.13(c), no "reportable event", within the meaning of
Section 4043(c)(5), (6) or (10) of ERISA, has occurred in connection with any
Employee Plan subject to Title IV of ERISA.
(d) Except as disclosed in Schedule 3.13(d), none of the Employee Plans is
a Multiemployer Plan. To Seller's knowledge, no Employee Plan which is a
Multiemployer Plan is or is reasonably expected to become "insolvent" or in
"reorganization," as such terms are defined for purposes of Title IV of ERISA.
Between the date of this Agreement and the Closing Date, Seller will use
reasonable efforts to determine the aggregate amount of withdrawal liability
which would be incurred if Seller were to incur a complete withdrawal from any
of the scheduled Multiemployer Plans on or before the Closing Date.
(e) Except as disclosed in Schedule 3.13(e), each Employee Plan which is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service that it is so
qualified and, to Seller's knowledge, no event has occurred since the date of
such determination letter to adversely affect the qualified status of such Plan.
Prior to the execution of this Agreement, Seller has furnished or made available
to Buyer the most recent determination letter of the Internal Revenue Service
relating to each such Employee Plan for which such a letter has been received.
Except as set forth on Schedule 3.13(e), each Employee Plan (other than a
Multiemployer Plan) has been maintained in compliance with its terms and with
the requirements prescribed by any and all applicable statutes, orders, rules
and regulations, including ERISA and the Code, except where failure to so
maintain would not be reasonably likely to have a Material Adverse Effect.
(f) Schedule 3.13(f) lists each Benefit Arrangement. Prior to the execution
of this Agreement, Seller has furnished or made available to Buyer copies or
descriptions of each Benefit Arrangement. Each Benefit Arrangement has been
maintained in compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations other than where
the failure to so maintain would not have a Material Adverse Effect.
(g) Except as disclosed by Seller in writing to Buyer prior to the date
hereof or as set forth on Schedule 3.13(g), there has been no amendment to,
written interpretation of or announcement (whether written or not written) by
Seller or any of its ERISA Affiliates relating to, or change in employee
participation or coverage under, any Employee Plan or Benefit Arrangement which
would increase materially the expense of maintaining such Plan or Arrangement
above the level of the expense incurred in respect thereof for the most recent
fiscal year. Except as set forth in Schedule 3.13(g), neither Seller nor any
Affiliate or employee of Seller has taken any action or made any statement that
could preclude or interfere with the right of Seller or its successor to reduce
or eliminate any post-retirement welfare benefits provided under any Employee
Plan or Benefit Arrangement.
(h) The accumulated post-retirement benefit obligations as of June 30,
1996, in accordance with the principles of Financial Accounting Standard No.
106, is fairly presented in the Reference Balance Sheet, subject to the
adjustments and assumptions set forth on Exhibit A.
(i) Except as disclosed in Schedule 3.13(i), no legal action, suit or claim
is pending or, to the knowledge of Seller, threatened, with respect to any
Employee Plan or Benefit Arrangement (other than claims for benefits in the
ordinary course). Except as disclosed in Schedule 3.13(i), no employee of Seller
or any of its subsidiaries will become entitled to any retirement, severance or
other benefit solely as a result of the transactions contemplated hereby.
(j) The obligation for unfunded pension obligations as of June 30, 1996,
calculated in accordance with the principles of Financial Accounting Standard
No. 87, under all defined benefit plans maintained by Seller is fairly presented
on the Reference Balance Sheet, subject to the adjustments and assumptions set
forth on Exhibit A.
(k) Except as set forth in Schedule 3.13(k), (i) neither Seller nor any
subsidiary of Seller is a party to any collective bargaining agreement or other
material labor union contract applicable to any employee thereof; (ii) there are
no material grievances outstanding against Seller or any of its subsidiaries
under any such agreement or contract; (iii) there are no unfair labor practice
charges or complaints pending against Seller or any of its subsidiaries before
the National Labor Relations Board or any similar state agency; and (iv) there
are no strikes, slowdowns, work stoppages, lockouts, union organizational
campaigns or other protected concerted activity under the National Labor
Relations Act or, to Seller's knowledge, threats thereof, by or with respect to
any employees of Seller or any of its subsidiaries which are reasonably likely
to have a Material Adverse Effect.
(l) Except as set forth in Schedule 3.13(l), neither Seller nor any of its
subsidiaries employs any person outside the United States, and no Employee Plan
or Benefit Arrangement is maintained principally for employees of Seller or its
subsidiaries outside the United States.
(m) The Purchased Assets include sufficient equipment, books, records
(including personnel and employment records), computer software programs and
data, rights under contracts and other assets necessary to administer the
Benefit Arrangements and Employee Plans without interruption on and after the
Closing Date.
(n) Within 30 days after the date of this Agreement, Seller shall provide
Buyer with a list of each insurance policy of Seller or its subsidiaries
maintained under or in connection with any Benefit Arrangement or Employee Plan.
3.14. LICENSES AND PERMITS. Schedule 3.14(a) correctly describes each
material license, franchise, permit or other similar authorization affecting, or
relating to, the Purchased Assets or Business and issued by a Governmental
Entity (collectively, the "Permits"), together with the name of the Governmental
Entity issuing such Permit. Except as set forth on Schedule 3.14(b) and except
for matters which would not be reasonably likely to have a Material Adverse
Effect, such Permits are valid and in full force and effect and neither Seller
nor any subsidiary of Seller is in default under, and no condition exists that
with notice or lapse of time or both would constitute a default under, any such
Permit. In general, the Permits are not transferable by Seller and all or
substantially all of the Permits will be terminated or impaired or become
terminable as a result of the transactions contemplated by this Agreement. The
provisions of this Section do not apply to the requirements under Environmental
Laws, which are covered elsewhere in this Agreement.
3.15. INSURANCE COVERAGE. All material tangible Purchased Assets and risks
of Seller are covered by currently effective insurance policies or binders of
insurance or programs of self-insurance in such types and amounts as are
consistent with customary practices and standards of companies engaged in
businesses and operations similar to the Business. Seller has furnished or made
available to Buyer true and complete copies of all insurance policies and
fidelity bonds relating to the Purchased Assets, the operation of the Business
and the employees, officers and directors of Seller or its subsidiaries. Except
as set forth on Schedule 3.15, to the knowledge of Seller, there is no material
claim by Seller or any subsidiary of Seller pending under any of such policies
or bonds relating to the Purchased Assets, the operation of the Business or the
employees, officers or directors of Seller and its subsidiaries.
3.16. INTELLECTUAL PROPERTY. (a) Schedule 3.16(a) contains a list of all
trademarks, service marks, trade names, service names, inventions, patents,
trade secrets, know-how, copyright (including any registration or applications
for registration of any of the foregoing) or any other similar type of
proprietary intellectual property right, in each case which is owned or licensed
by Seller or any of its Affiliates and used or held for use primarily in the
Business (collectively, the "Intellectual Property Rights"). Schedule 3.06(a)
lists all licenses, sublicenses and other agreements to which Seller or any of
Affiliates is a party and pursuant to which any Person is authorized to use such
Intellectual Property Rights.
(b) (i) Except as set forth on Schedule 3.16(b), neither Seller nor any of
its subsidiaries has been named as a defendant in any pending action, suit,
investigation or proceeding relating to, or otherwise has been notified in
writing of, any alleged claim of material infringement of any patents,
trademarks, trade names, service marks, service names, or copyrights of any
third party and (ii) Seller has no knowledge of any continuing material
infringement by any other person of any Intellectual Property Right. No
Intellectual Property Right is subject to any outstanding judgment, injunction,
order or decree restricting the use thereof by Seller or any of its subsidiaries
or restricting the licensing thereof by Seller or any of its subsidiaries to any
Person.
3.17. CUSTOMERS. Listed on Schedule 3.17 are the names of each customer of
Seller or any subsidiary of Seller that ordered products, goods or services from
Seller or a subsidiary of Seller (the "Seller Products and Services") with an
aggregate value of $5,000,000 or more during the twelve-month period ended July
31, 1996. Except as set forth on Schedule 3.17, as of the date hereof to the
actual knowledge of the executive officers of the Seller, Seller has not
received any notice from any such customer that it has (i) ceased or is planning
to cease using the Seller Products and Services or (ii) within the past 30 days
substantially reduced, or will substantially reduce, the amount of the Seller
Products and Services to be purchased in the future.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
4.01. AUTHORITY. Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of Delaware and has all
corporate powers and all material governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted. Buyer has all requisite corporate power and authority to enter into
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. All corporate and stockholder (or equivalent)
acts and other proceedings required to be taken by Buyer to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly and properly taken. This
Agreement has been duly executed and delivered by Buyer and constitutes a legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms.
4.02. NO CONFLICTS; CONSENTS. (a) The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof shall not, conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, (i) the Certificate of Incorporation or By-laws of Buyer or other
comparable governing instruments of Buyer, as the case may be, or the comparable
governing instruments of any subsidiary of Buyer, (ii) any agreement or
obligation to which Buyer or any subsidiary of Buyer is a party or by which any
of their respective assets are bound, or (iii) any judgment, injunction, order,
or decree, or statute, law, ordinance, rule or regulation applicable to Buyer or
any subsidiary of Buyer or their respective assets, in each case other than such
as in the aggregate would not have a material adverse effect on the ability of
Buyer to consummate the transactions contemplated hereby.
(b) No material consent, approval, license, permit, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained or made by or with respect to Buyer or any of its
subsidiaries or their respective affiliates in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, other than (i) compliance with and filings
under the HSR Act, if applicable, (ii) compliance with and filings under Section
13(a) or 15(d), as the case may be, of the Exchange Act, (iii) compliance with
and filings and notifications under applicable environmental laws, (iv) any
notices, motions, orders or approvals required by the Bankruptcy Court or the
Bankruptcy Code and the rules thereunder and (v) those that may be required
solely by reason of Seller's participation in the transactions contemplated
hereby.
4.03. ACTIONS AND PROCEEDINGS, ETC. There are no (a) outstanding judgments,
orders, injunctions or decrees of any Governmental Entity or arbitration
tribunal against Buyer or any of its affiliates, (b) lawsuits, actions or
proceedings pending or, to the knowledge of Buyer, threatened against Buyer or
any of its affiliates, or (c) investigations by any Governmental Entity which
are, to the knowledge of Buyer, pending or threatened against Buyer or any of
its affiliates, and which, in the case of each of clauses (a), (b) and (c), have
a material adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby.
4.04. AVAILABILITY OF FUNDS. Buyer has cash available or has existing
borrowing facilities or firm commitments which together are sufficient to enable
it to purchase the Purchased Assets and otherwise consummate the transactions
contemplated by this Agreement.
ARTICLE 5
COVENANTS OF SELLER
Seller agrees that:
5.01. CONDUCT OF THE BUSINESS. From the date hereof until the Closing Date,
subject to the requirements and restrictions of the Bankruptcy Court
proceedings, Seller shall conduct the Business in the ordinary course consistent
with past practice and use its best efforts to preserve intact the business
organizations and relationships with third parties and to keep available the
services of the present employees of the Business. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date, Seller
will not:
(a) with respect to the Business acquire a material
amount of assets from any other Person;
(b) sell, lease, license or otherwise dispose of (i) property,
plant or equipment constituting part of the Purchased Assets or (ii)
any Purchased Assets (other than property, plant or equipment) other
than in the case of this clause (ii) (A) pursuant to existing contracts
or commitments and (B) in the ordinary course consistent with past
practice; or
(c) agree or commit to do any of the foregoing.
Seller will not (i) take or agree or commit to take any action that would make
any representation and warranty of Seller hereunder inaccurate in any respect
at, or as of any time prior to, the Closing Date or (ii) omit or agree or commit
to omit to take any action necessary to prevent any such representation or
warranty from being inaccurate in any respect at any such time.
5.02. ACCESS TO INFORMATION. (a) Subject to the restrictions contained in
the Confidentiality Agreement, from the date hereof until the Closing Date,
Seller (i) will give Buyer, its counsel, financial advisors, auditors and other
authorized representatives access to the offices, properties, books and records
of Seller relating to the Business, (ii) will furnish to Buyer, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information relating to the Business as such
Persons may reasonably request and (iii) will instruct the employees, counsel
and financial advisors of Seller to cooperate with Buyer in its investigation of
the Business; PROVIDED that no investigation by Buyer or other information
received by Buyer shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by Seller hereunder. Any
investigation pursuant to this Section shall be conducted in such manner as not
to interfere unreasonably with the conduct of the business of Seller.
Notwithstanding the foregoing, Buyer shall not have access to personnel records
of Seller relating to individual performance or evaluation records, medical
histories or other information which in Seller's good faith opinion is sensitive
or the disclosure of which could subject Seller to risk of liability.
(b) After the Closing Date, each party agrees that it will cooperate with
and make available to the other party, during normal business hours, all books
of account and other financial records (including, without limitation,
accountant's work papers) pertaining to the Business (collectively, "Books and
Records"), information and employees (without substantial disruption of
employment) retained and remaining in existence after the Closing Date which are
necessary or useful in connection with any inquiry relating to Taxes or any
audit, investigation or dispute, any litigation or investigation or any other
matter requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and Records,
information or employees shall bear all of the out-of-pocket costs and expenses
(including, without limitation, attorneys' fees, but excluding reimbursement for
general overhead, salaries and employee benefits) reasonably incurred in
connection with providing such Books and Records, information or employees.
Seller may require certain financial information relating to the Business for
periods prior to the Closing Date for the purpose of filing federal, state,
local and foreign Tax Returns and other governmental reports, and Buyer agrees
to furnish such information to Seller at Seller's request and expense.
(c) After the Closing, Seller will hold, and will use its best efforts to
cause its Affiliates and its and their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless required to disclose by judicial or administrative process or
by other requirements of law or if reasonably necessary in connection with any
disputes arising in connection with this Agreement or the transactions
contemplated hereby, all confidential documents and information concerning the
Business, except to the extent that such information can be shown to have been
(A) in the public domain through no fault of Seller or (B) later lawfully
acquired by Seller from sources other than those related to Seller's prior
ownership of the Business and the Purchased Assets. The obligation of Seller and
its Affiliates to hold any such information in confidence shall be satisfied if
they exercise the same care with respect to such information as they would take
to preserve the confidentiality of their own similar information.
5.03. NOTICES OF CERTAIN EVENTS. (a) Seller shall promptly notify Buyer of:
(i) any notice or communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(iii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or
involving or otherwise affecting Seller or the Business that, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.08 or that relate to the
consummation of the transactions contemplated by this Agreement;
(iv) the damage or destruction by fire of other casualty of any
Purchased Asset or part thereof or in the event that any Purchased
Asset or part thereof becomes the subject of any proceeding or, to the
knowledge of Seller, threatened proceeding for the taking thereof or
any part thereof or of any right relating thereto by condemnation,
eminent domain or other similar governmental action;
(v) any material changes of the type represented in Section
3.17 which occur from the date hereof until the Closing Date with
respect to customers listed on Schedule 3.17; and
(vi) any item that would have been required to be described on
Schedule 3.12 if Seller had knowledge of such item on or prior to the
date hereof and any adverse change in any of the items described on
Schedule 3.12.
(b) Seller shall promptly notify Buyer of, and furnish Buyer any
information it may reasonably request with respect to, the occurrence to
Seller's knowledge of any event or condition or the existence to Seller's
knowledge of any fact that would cause any of the conditions to Buyer's
obligation to consummate the purchase and sale of the Purchased Assets not to be
fulfilled. If between the Balance Sheet Date and the Closing Date, any of the
matters referenced in Section 5.03(a)(iv) shall have occurred, then Seller, at
its option, shall either repair any damage or casualty at its expense or deliver
to Buyer on the Closing Date any insurance proceeds (including but not limited
to condemnation insurance proceeds), or rights to receive insurance proceeds,
with respect thereto or the Purchase Price shall be reduced by such amount.
5.04. ENVIRONMENTAL COVENANTS. Prior to Seller's providing any documents or
other information to the New Jersey Department of Environmental Protection, the
Connecticut Commissioner of Environmental Protection or any other federal or
state environmental agency with respect to this Agreement or the transactions
contemplated hereby, Seller shall afford Buyer the opportunity to review the
form and substance of any such documents and other information.
5.05. BANKRUPTCY COURT APPROVAL. (a) As promptly as practicable after the
date of execution of this Agreement, Seller shall file and serve motions with
the Bankruptcy Court seeking (i) an order approving Buyer's break-up fee
described below, the bidding procedures relating to the sale of Seller's assets
under Section 363 of the Bankruptcy Code, the notice procedures for the asset
sale and setting a date for hearing on the asset sale (the "Interim Order") and
(ii) a Sale Order.
(b) Seller shall use its best efforts to obtain the Interim Order no later
than eight business days after the date hereof and shall use its best efforts to
obtain a hearing on the Sale Order no later than November 30, 1996.
(c) The Interim Order shall be substantially in the form attached hereto as
Exhibit C, and the motions relating to the Interim Order and Sale Order shall be
in form and substance satisfactory to Buyer.
(d) Seller agrees to pay a $10 million break-up fee to Buyer upon the terms
and conditions contained in the Interim Order.
(e) Seller shall promptly make any filings, take all actions and use its
best efforts to obtain any and all other approvals and orders necessary or
appropriate for the consummation of the transactions contemplated hereby,
subject to its obligations to comply with any order of the Bankruptcy Court.
(f) In the event an appeal is taken from either of the Interim Order or
Sale Order, Seller shall immediately notify Buyer of such appeal and shall
within one business day provide Buyer with a copy of the related notice of
appeal. Seller shall also provide Buyer with written notice of any motion or
application filed in connection with any appeal from either of such orders.
5.06. USE OF ANCHOR NAME. After the Closing Date, neither Seller nor any of
its subsidiaries shall use the name or mark "Anchor" or "Anchor Glass" or any
derivative thereof, except that during the pendency of Seller's bankruptcy case
(Case No. 96-1434 PJW), Seller shall be permitted to use the name "Anchor Glass
Container Corporation" as its corporate name in connection with all matters
relating to such case, but for no other purpose. Immediately after the Closing
Date, Seller's subsidiaries shall file with the applicable Governmental Entities
all documents necessary to delete from their names the name "Anchor" or any
derivative thereof and shall do or cause to be done all other acts, including
the payment of any fees required in connection therewith, to cause such
documents to become effective.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
6.01. CONFIDENTIALITY. Buyer acknowledges that the information being
provided to it in connection with the purchase and sale of the Purchased Assets
and the consummation of the other transactions contemplated hereby is subject to
the terms of a confidentiality agreement dated as of July 3, 1996 between an
Affiliate of each of Buyer and Seller, as supplemented by the Confidentiality
Agreement dated as of August 26, 1996, between an Affiliate of each of Buyer and
Seller (collectively, the "Confidentiality Agreement"), the terms of which are
incorporated herein by reference. Effective upon, and only upon, the Closing,
the Confidentiality Agreement shall terminate.
6.02. NO ADDITIONAL REPRESENTATIONS. Buyer acknowledges and agrees that
none of Seller or any other person has made any representation or warranty,
expressed or implied, with respect to the transactions contemplated hereby,
Seller and its subsidiaries or their assets, liabilities and business, the
accuracy or completeness of any information regarding Seller and its
subsidiaries furnished or made available to Buyer and its representatives,
except as expressly set forth in this Agreement.
6.03. SUPPLEMENTAL DISCLOSURE. Buyer shall promptly after the occurrence
thereof notify Seller of, and furnish Seller any information it may reasonably
request with respect to, the occurrence to Buyer's knowledge of any event or
condition or the existence to Buyer's knowledge of any fact that would cause any
of the conditions to Seller's obligation to consummate the purchase and sale of
the Purchased Assets not to be fulfilled.
6.04. ACCESS. On and after the Closing Date, Buyer will afford promptly to
Seller and its agents reasonable access to its properties, books, records,
employees and auditors to the extent necessary to permit Seller to determine any
matter relating to its rights and obligations hereunder or to any period ending
on or before the Closing Date; PROVIDED that any such access by Seller shall not
unreasonably interfere with the conduct of the business of Buyer. Seller will
hold, and will use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning Buyer
or the Business provided to it pursuant to this Section.
ARTICLE 7
COVENANTS OF BOTH PARTIES
Buyer and Seller agree that:
7.01. BEST EFFORTS; FURTHER ASSURANCES. (a) Subject to the terms and
conditions of this Agreement, Buyer and Seller will each use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Seller and Buyer
each agree to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in Buyer good and marketable title to
the Purchased Assets.
(b) Seller hereby constitutes and appoints, effective as of the Closing
Date, Buyer and its successors and assigns as the true and lawful attorney of
Seller with full power of substitution in the name of Buyer or in the name of
Seller, but for the benefit of Buyer (i) to collect for the account of Buyer any
items of Purchased Assets and (ii) to institute and prosecute all proceedings
which Buyer may in its sole discretion deem proper in order to assert or enforce
any right, title or interest in, to or under the Purchased Assets, and to defend
or compromise any and all actions, suits or proceedings in respect of the
Purchased Assets. Buyer shall be entitled to retain for its own account any
amounts collected pursuant to the foregoing powers, including any amounts
payable as interest in respect thereof.
7.02. CERTAIN FILINGS. Seller and Buyer shall cooperate with one another
(a) in determining whether any action by or in respect of, or filing with, any
Governmental Entity is required, or any actions, consents, approvals or waivers
are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (b) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers.
7.03. PUBLIC ANNOUNCEMENTS. The parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
7.04. WARN ACT. The parties agree to cooperate in good faith to determine
whether any notification may be required under the Worker Adjustment and
Retraining Notification Act (the "WARN Act") or any similar state or local law
as a result of the transactions contemplated by this Agreement. In accordance
with the WARN Act, or any similar state or local law, Seller will be responsible
for providing any notification that may be required under the WARN Act or any
similar state or local law with respect to any employees of the Business up to
and including the Closing. Seller agrees to provide any notification that may be
required under the WARN Act or any similar state or local law with respect to
employees of the Business to whom Buyer does not intend to offer employment;
provided that Buyer has given to Seller at least 65 days before Closing a list
of employees of the Business to whom Buyer intends to offer employment and the
location where such employees would work.
ARTICLE 8
TAX MATTERS
8.01. TAX DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
on or before the close of business on the Closing Date.
"Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up
capital, profits, greenmail, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of any such tax.
8.02. TAX MATTERS. Seller hereby represents and warrants to Buyer that:
(a) Seller has timely paid all Taxes, and all interest and penalties due
thereon, payable by it for the Pre-Closing Tax Period which will have been
required to be paid on or prior to the Closing Date, the non-payment of which
would result in a Lien on any Purchased Asset, would otherwise adversely affect
the Business or would result in Buyer becoming liable or responsible therefor.
(b) Seller has established, in accordance with generally accepted
accounting principles applied on a basis consistent with that of preceding
periods, adequate reserves for the payment of, and will timely pay all Tax
liabilities, assessments, interest and penalties which arise from or with
respect to the Purchased Assets or the operation of the Business and are
incurred in or attributable to the Pre-Closing Tax Period, the non-payment of
which would result in a Lien on any Purchased Asset, would otherwise adversely
affect the Business or would result in Buyer becoming liable thereof.
(c) The Closing Balance Sheet will reflect accrued and unpaid real and
personal property Taxes on all Purchased Assets using a ratable daily accrual
method. Seller will furnish Buyer with an analysis of this amount itemized by
property and jurisdiction.
8.03. TAX COOPERATION; ALLOCATION OF TAXES. (a) Buyer and Seller agree to
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, such information and assistance relating to the Purchased Assets
and the Business as is reasonably necessary for the filing of all Tax returns,
and making of any election related to Taxes, the preparation for any audit by
any taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax return. Seller and Buyer shall cooperate with
each other in the conduct of any audit or other proceeding related to Taxes
involving the Business and each shall execute and deliver such documents as are
necessary to carry out the intent of this paragraph (a) of Section 8.03.
(b) All real property taxes, personal property taxes and similar AD VALOREM
obligations levied with respect to the Purchased Assets for a taxable period
which includes (but does not end on) the Closing Date (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyer as of
the Closing Date based on the number of days of such taxable period included in
the Pre-Closing Tax Period and the number of days of such taxable period after
the Closing Date (such period, the "Post-Closing Tax Period"). Seller shall be
liable for the proportionate amount of such taxes that is attributable to the
Pre-Closing Tax Period, and Buyer shall be liable for the proportionate amount
of such taxes that is attributable to the Post-Closing Tax Period. Within 90
days after the Closing, Seller and Buyer shall present a statement to the other
setting forth the amount of reimbursement to which each is entitled under this
Section 8.03(b) together with such supporting evidence as is reasonably
necessary to calculate the proration amount. The proration amount shall be paid
by the party owing it to the other within 10 days after delivery of such
statement. Thereafter, Seller shall notify Buyer upon receipt of any bill for
real or personal property taxes relating to the Purchased Assets, part or all of
which is attributable to the Post-Closing Tax Period, and shall promptly deliver
such bill to Buyer who shall pay the same to the appropriate taxing authority,
provided that if such bill covers the Pre-Closing Tax Period, Seller shall also
remit prior to the due date of assessment to Buyer payment for the proportionate
amount of such bill that is attributable to the Pre-Closing Tax Period. In the
event that either Seller or Buyer shall thereafter make a payment for which it
is entitled to reimbursement under this Section 8.03(b), the other party shall
make such reimbursement promptly but in no event later than 30 days after the
presentation of a statement setting forth the amount of reimbursement to which
the presenting party is entitled along with such supporting evidence as is
reasonably necessary to calculate the amount of reimbursement. Any payment
required under this Section and not made within 10 days of delivery of the
statement shall bear interest at the rate per annum determined, from time to
time, under the provisions of Section 6621(a)(2) of the Code for each day until
paid.
(c) Any transfer, documentary, sales, use or other Taxes assessed upon or
with respect to the transfer of the Purchased Assets to Buyer and any recording
or filing fees with respect thereto shall be paid by Seller.
ARTICLE 9
EMPLOYEES
9.01. RETIREMENT PLANS. (a) Effective as of the Closing Date, Buyer will
assume sponsorship of the Seller Defined Benefit Plans (and shall assume the
liability for any required contributions with respect thereto accrued but not
paid as of or prior to the Closing Date) and the Seller Defined Contribution
Plans, as well as the trusts maintained in connection with such plans. Buyer
shall be entitled to receive from Seller, within a reasonable time after the
Closing Date, such pertinent data or information as Buyer may reasonably require
to determine the service and accrued benefits (or account balances, as the case
may be) of participants and former participants in the Seller Defined Benefit
Plans and the Seller Defined Contribution Plans.
(b) Effective as of the Closing Date, Buyer will assume sponsorship of the
Anchor Glass Container Corporation Non-Qualified Additional Credited Service and
ERISA Excess Plan and the Diamond-Bathhurst Inc. Preferred Compensation Plan, as
well as the "rabbi trust" maintained in connection therewith. Buyer shall be
entitled to receive from Seller, within a reasonable time after the Closing
Date, such pertinent data or information as Buyer may reasonably require to
determine the service and accrued benefits of participants and former
participants in such Plans.
(c) Seller contributes to the Multiemployer Plans listed on Schedule
3.13(d). In connection with Buyer's assumption of the collective bargaining
agreements. Buyer will assume, effective as of the Closing Date, Seller's
obligations to contribute to the Multiemployer Plans. Accordingly, to avoid the
imposition of any withdrawal liability on Seller, Buyer shall:
(A) contribute to each Multiemployer Plan for substantially the
same number of contribution base units for which Seller has an
obligation to contribute prior to the Closing Date;
(B) provide to each Multiemployer Plan for a period of five plan
years commencing with the first plan year beginning after the Closing
Date, a bond to be obtained by the Buyer issued by a corporate surety
corporation, or a sum to be provided by Buyer held in escrow by a bank
or similar financial institution, or an irrevocable letter of credit
to be obtained by Buyer, equal to the greater of (I) the average
annual contribution required to be made by Seller under the
Multiemployer Plans for the three plan years preceding the plan year
in which the Closing Date occurs or (II) the annual contribution that
Seller was required to make under each Multiemployer Plan for the last
plan year prior to the plan year in which the Closing Date occurs, or
shall obtain a waiver of the requirements to provide any of the
foregoing or shall comply with alternatives acceptable to the
Multiemployer Plan or Plans, in order to ensure compliance with
Section 4204 of ERISA. Buyer shall cooperate with Seller to obtain a
waiver of the bond, escrow or letter of credit requirement set forth
above. If at any time during the first five plan years beginning after
the Closing Date, Buyer withdraws from, or fails to make a required
contribution to one of the Multiemployer Plans, the bond, escrow, or
letter of credit obtained with respect to such Multiemployer Plan, if
any, shall be paid to such Multiemployer Plan.
Notwithstanding any other provision hereof, Buyer's obligations under this
Section 9.01(c) are limited to the extent necessary to comply with Section 4204
of ERISA. If Buyer effects a complete or partial withdrawal from a Multiemployer
Plan during the first five plan years following the Closing Date and the Buyer
fails to make any withdrawal liability payment to the Multiemployer Plan when
due, then Seller shall be secondarily liable to the Multiemployer Plan for any
unpaid withdrawal liability to the extent that Seller would have incurred such
liability following the Closing Date had Buyer not agreed to the provisions of
this Section. Seller's obligations set forth in this paragraph shall continue
with respect to events that occurred prior to the last day of the five plan year
period referred to in this Section 9.01(c) (regardless of when notice of such
liability is received by either Buyer or Seller). Either Buyer or Seller shall
promptly notify the other party of any demand for payment of withdrawal
liability received by Buyer or Seller within five years from the Closing Date.
Buyer and Seller agree to take all such further action as may be necessary to
satisfy the sale of assets exception requirements set forth in Section 4204 of
ERISA.
9.02. OTHER EMPLOYEE PLANS AND BENEFIT ARRANGEMENTS.
(a) Effective as of the Closing Date, Buyer will assume sponsorship of (i)
all Employee Plans and Benefit Arrangements which provide post-retirement life
insurance and health benefits, (ii) any and all Employee Plans and Benefit
Arrangements required to be maintained under or pursuant to currently existing
collective bargaining agreements, (iii) the Anchor Glass Container Corporation
Executive/Key Employee Retention Plan, (iv) the Anchor Glass Container
Corporation Health Care Flexible Spending Account Plan, (v) the Anchor Glass
Container Corporation Dependent Care Flexible Benefits Plan, (vii) the Anchor
Glass Container Medical and Dental Cafeteria Plan, (viii) the Anchor Glass
Container Health Care Flexible Spending Account Plan for AFGWU Hourly Employees,
(ix) the Anchor Glass Container Medical and Dental Cafeteria Plan for AFGWU and
GMP Hourly Employees and (x) Seller's short-term and long-term disability plans
(but Buyer may, in its sole discretion, limit participation therein to persons
who are disabled as of the Closing Date and who remain continuously disabled
thereafter). Buyer shall be entitled to receive from Seller, within a reasonable
time after the Closing Date, such pertinent data or information as Buyer may
reasonably require to determine the benefits of participants and former
participants in the Employee Plans and Benefit Arrangements to be assumed by
Buyer pursuant to this Section 9.02(a).
(b) Except as expressly provided in Sections 9.01 and 9.02(a), Buyer is not
obligated to assume the sponsorship of any Employee Plan or Benefit Arrangement;
PROVIDED that Buyer, in its sole discretion, may elect to assume the sponsorship
of Employee Plans or Benefit Arrangements in addition to those subject to
Sections 9.01 and 9.02(a) by furnishing written notice thereof to Seller not
less than 15 days prior to the Closing Date.
(c) Notwithstanding anything to the contrary, the Buyer, in its sole
discretion, may direct the Seller, by written notice furnished not less than 15
days prior to the Closing Date, to amend any or all of (i) the Anchor Glass
Container Corporation Health Care Flexible Spending Account Plan, (ii) the
Anchor Glass Container Corporation Dependent Care Flexible Spending Account
Plan, (iii) the Anchor Glass Container Corporation Flexible Benefits Plan and
(iv) the Anchor Glass Container Medical and Dental Cafeteria Plan, in each case
so as to amend, modify or terminate, effective as of the Closing Date, any
benefit under such Plans other than a "flexible spending account" within the
meaning of Proposed Treasury Regulation 1.125-2, Q+A 7(c).
9.03. EMPLOYEE COMMUNICATIONS. Seller and Buyer shall each use their best
efforts to cooperate in making any required communications with employees of
Seller as they relate to any employee benefits or other matters described in
this Article 9.
9.04. THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create any third party beneficiary rights in any employee or former employee of
Seller or Buyer (including any beneficiary or dependent thereof) in respect of
continued employment or resumed employment, and no provision of this Agreement
shall create any rights in any such persons in respect of any benefits that may
be provided, directly or indirectly, under any employee benefit plan or
arrangement.
9.05. UNION EMPLOYEES. Employees of the Seller and its subsidiaries who are
covered by collective bargaining agreements are referred to herein as "Business
Union Employees." Effective as of the Closing, Buyer shall, subject to Section
10.01(h), (i) assume all of the currently existing collective bargaining
agreements and (ii) employ all of the Business Union Employees under said
collective bargaining agreements. Without limiting the generality of the
foregoing, Business Union Employees shall be given credit, for all purposes
under their currently existing collective bargaining agreements and all Employee
Plans, Benefit Arrangements and Included Insurance Policies pursuant thereto,
for their service with Seller or its subsidiaries before the Closing to the same
extent such service was credited by Seller or its subsidiaries.
9.06. NON-UNION EMPLOYEES. Effective as of the Closing, employees of the
Business (other than Business Union Employees) shall continue to be employed on
an "at will" basis (other than those who are employed under an employment
agreement listed in Schedule 3.06(a)). For any people who continue to be so
engaged, Buyer agrees to provide such employees with salaries and benefits
generally comparable, in the aggregate, to those in effect for such employees as
of the Closing Date for a period of at least nine months after the Closing Date;
PROVIDED that notwithstanding the foregoing, Buyer shall not be required to
continue in effect any Employee Plan or Benefit Arrangement after the Closing
Date in order to fulfill the requirements of this Section 9.06. Without limiting
the generality of the foregoing, Buyer shall give such employees credit for
their service with Seller or its subsidiaries before the Closing Date, to the
same extent that such service was credited by Seller or its subsidiaries, for
all purposes under all employee benefit plans and arrangements maintained by
Buyer for its employees or assumed by Buyer pursuant to this Agreement
including, but not limited to, for purposes of determining severance, vacation,
eligibility, participation, and vesting; and PROVIDED that Buyer shall not be
obligated to recognize service rendered after December 31, 1994 under any plan
(other than the Anchor Glass Container Corporation Retirement Plan for Salaried
Employees and the Retirement Plan for Salaried Employees of Latchford Glass
Company and Associated Companies) for purposes of pension accruals, including
early retirement subsidies, pre-retirement death benefits, disability benefits,
or any other pension benefits which may increase with service and shall not be
obligated to recognize service rendered after December 31, 1994 for purposes of
calculating the amount of accrued benefit under the Anchor Glass Container
Corporation Retirement Plan for Salaried Employees and the Retirement Plan
for Salaried Employees of Latchford Glass Company and Associated Companies (in
accordance with their terms as of the date hereof).
ARTICLE 10
CONDITIONS TO CLOSING
10.01. CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of Buyer to
consummate the Closing are subject to the satisfaction (or waiver by Buyer) of
the following conditions:
(a) Except for the representations and warranties contained in
Section 3.12, the representations and warranties of Seller made in this
Agreement that are qualified as to materiality or Material Adverse
Effect shall be true and correct as of the Closing Date as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). The representations
and warranties of Seller made in this Agreement that are not qualified
as to materiality or Material Adverse Effect shall be true and correct
in all material respects as of the time of the Closing as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). Seller shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with
by Seller by the Closing Date. Seller shall have delivered to Buyer a
certificate dated the Closing Date and signed by the chief executive
officer or chief financial officer of Seller confirming the foregoing.
(b) No provision of any applicable statute, rule, regulation,
executive order, decree, temporary restraining order, judgment,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity") shall be
in effect that (x) prevents the sale and purchase of the Purchased
Assets or any of the other transactions contemplated by this Agreement,
(y) would adversely affect or interfere with the operation of the
Business as currently conducted after the Closing, or (z) would require
Buyer or any of its Affiliates to sell or otherwise dispose of, hold
separate or otherwise divest itself of, or operate in any particular
manner, any of the Purchased Assets or any of the assets, properties or
business of Buyer or any of its Affiliates.
(c) There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding, (i) challenging or
seeking to restrain, prohibit, alter or materially delay the sale and
purchase of the Purchased Assets or any of the other transactions
contemplated by this Agreement, or seeking to obtain from Buyer or any
of its Affiliates in connection with the sale and purchase of the
Purchased Assets any material damages or (ii) seeking to prohibit Buyer
or any of its Affiliates from effectively controlling or operating a
material portion of the Business or the Purchased Assets.
(d) The waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
(e) Since the date hereof, there shall not have been any
material adverse change in the condition or operation of the property,
equipment or any plant of Seller.
(f) The conditions to the effectiveness of the Agreement
between Buyer and Vitro S.A. dated as of the date hereof (the
"Vitro-Saint Gobain Agreement") shall have been satisfied or waived and
assuming the consummation of the transactions contemplated by this
Agreement, the Vitro-Saint Gobain Agreement shall be in full force and
effect.
(g) The Bankruptcy Court shall have issued the Sale Order on
or prior to December 15, 1996, and the Sale Order shall not be subject
to any stay.
(h) (i) The provisions of the master and local collective
bargaining agreements covering employees of Seller and its subsidiaries
relating to work rules shall have been amended to reflect prevailing
industry standards and (ii) any retroactive (but not prospective)
payments of wage increases forfeited in prior periods under such
agreements as a result of the consummation of the transactions
contemplated hereby shall have been waived or the Bankruptcy Court
shall have issued an order, not subject to stay, that Seller may assign
and Buyer may assume such collective bargaining agreements without any
acceleration of the deferred wage increases negotiated under the
current agreements.
(i) Buyer shall have obtained the consent of each of Coors
Brewing Company ("Coors"), The Stroh Brewery Company ("Strohs"), and
the parties (other than Seller) to the agreements listed on Schedule
10.01, or the Bankruptcy Court shall have issued an order, that
Seller's supply agreements with each of Coors and Strohs and the
agreements listed on Schedule 10.01, will not be terminated or
materially altered as a result of the transactions contemplated hereby.
(j) Buyer shall have obtained the consent of Owens-Illinois,
or the Bankruptcy Court shall have entered an order, not subject to any
stay, (i) enabling Buyer to make full use of the existing Seller
equipment and technology covered by the Owens-Illinois Technical
Assistance Agreement for a period of time equal to the earlier of the
useful life of such equipment and eight years, (ii) enabling Buyer to
purchase complementary equipment (of a type being used by Seller prior
to the filing of the Petition) for ongoing projects at current prices
and to purchase spare parts at commercially reasonable prices, (iii)
providing for the termination of the Owens-Illinois Technical
Assistance License Agreement as of the Closing Date and (iv) providing
for a phase-out over five years of the licensing fee payable by Buyer
to Owens-Illinois, in each case, on terms reasonably satisfactory to
Buyer.
(k) Buyer, at its expense, shall have received for
each of the Fee Properties:
(I) an ALTA (or local equivalent) owner's extended
coverage policy of title insurance issued by a
title company satisfactory to Buyer and dated the
Closing Date insuring the Company's or its
subsidiaries' title to such Fee Property in an
amount not exceeding the allocated portion of the
Purchase Price applicable thereto and free and
clear of all Liens and other exceptions to or
exclusions from coverage other than Permitted
Liens. Without limiting the foregoing, no such
title insurance policy shall create an exception
for or exclusion from the coverage of such policy
or from the liability of the title company on
account of acts or omissions of Seller or its
subsidiaries or facts known to the insured (or to
its or their current or former directors,
stockholders, partners, officers, agents or
employees) where such acts or omissions occurred
prior to the Closing Date. Each such title
insurance policy shall contain, where obtainable
in the particular jurisdiction, ALTA (or local
equivalent) zoning, comprehensive, survey,
contiguity (where appropriate), nonimputation and
public-street access endorsements and otherwise
be in form and substance reasonably satisfactory to
counsel for Buyer; and
(II) a survey of such Fee Property dated no earlier
than six months prior to the date hereof, prepared
in insurable form in accordance with standards
applicable to registered and licensed land
surveyors making surveys in the jurisdiction in
which the Fee Property is located. Each survey
shall be certified to Buyer and the title company
and shall show (A) the courses and distances of
all boundary lines of the Fee Property (including
appurtenant easements), (B) the location of all
improvements situated on or above such parcel and
on or above any easements or rights of way
affecting the Fee Property, (C) all encroachments
of adjoining improvements onto such Fee Property,
(D) all encroachments of improvements onto any
adjoining property, (E) the location of all
easements and other rights burdening the Fee
Property and all encroachments of improvements
onto the areas of such easements, (F) the location
of all roadways, alleys, rights of way and the
like affecting the Fee Property, (G) all
accessways from the Fee Property to public
streets and (H) such other facts and conditions
affecting the Fee Property as are appropriate, or as
may have been reasonably requested by Buyer, to be
shown on such survey. Each such survey shall
otherwise be in form and substance reasonably
satisfactory to counsel for Buyer.
(l) The joint venture agreement with Coors shall have been
amended (i) to eliminate or modify the provision of such joint venture
agreement that requires Seller to purchase the production output of the
Rocky Mountain Bottling Company in excess of the Coor's Golden,
Colorado plant's volume requirements or (ii) to modify the transfer
pricing provided in such joint venture agreement for the purchase by
Seller of such excess production, in either case on terms reasonably
satisfactory to Buyer; PROVIDED that representatives of Seller shall be
invited and be given sufficient opportunity to attend or participate in
any meetings or conversations with Coors.
(m) The Bankruptcy Court shall have issued an order not
subject to any stay providing for the assignment to Buyer of all of the
leases relating to the Leased Property.
(n) As of the Closing Date, (i) there shall be no material
liabilities of Seller and its subsidiaries (including any of their
respective predecessors) or of or relating to the Purchased Assets or
the Business arising under or relating to any Environmental Law, except
as disclosed on Schedule 3.12, and (ii) there shall have been no
material adverse change in the items (or the related liabilities)
disclosed on Schedule 3.12, taken as a whole.
(o) Buyer shall have received in respect of each Fee Property
and Leased Property located in the State of New Jersey, evidence of
compliance by Seller with the requirements of the New Jersey Industrial
Site Recovery Act, which evidence shall be satisfactory to Buyer in its
sole discretion and shall not impose upon Buyer any obligations or
liabilities to which Buyer shall not have consented in writing prior to
the Closing.
(p) Buyer shall have received in respect of each Fee Property
and Leased Property located in the State of Connecticut, a Connecticut
Transfer Form from Seller, which form shall be satisfactory to Buyer in
its sole discretion and shall not impose upon Buyer any obligations or
liabilities to which Buyer shall not have consented in writing prior to
the Closing.
(q) Without limiting any conditions set forth in Sections
10.01(o) and 10.01(p), Seller shall have complied with all applicable
environmental notification statutes, laws and regulations unless
failure to do so would not have a Material Adverse Effect.
(r) Buyer shall have received an agreement or agreements among
Seller, Buyer, Landlord and Citicorp with respect to the Headquarters
Lease that acknowledges and provides that (i) Seller has assumed the
Headquarters Lease, cured all defaults thereunder and satisfied all of
its obligations thereunder pursuant to the Letter Agreement dated as of
April 27, 1992 attached as Schedule 1 to the First Amendment to Lease;
(ii) the Headquarters Lease is modified (A) to provide that the
Purchase Option and the Termination Option may be exercised at any time
to and including April 17, 1997 or 60 days after the Closing Date
(whichever is later), that the purchase price under the Purchase Option
is the unpaid principal amount of the Citicorp Loan and that the Liens
securing the Citicorp Loan will be released upon closing and payment of
the purchase price under the Purchase Option, (B) to provide that the
expiration date of the Headquarters Lease and the date of payment of
the Residual Value Guaranty Amount will be June 16, 1997 or 150 days
after the Closing Date (whichever is later), (C) to provide that
Seller, Buyer and Landlord do not need to negotiate the renewal terms
pursuant to the Renewal Option and (D) to delete from the Lease the
events of default in subparagraphs (12), (13), (14) and (15) and any
other covenants, events of default and provisions that are personal to
Seller; (iii) the Headquarters Lease, as so modified, is assigned to
Buyer or its designee; (iv) Buyer or its designee assumes Seller's
obligations under the Lease (including the obligation to pay monthly
rent) after the Closing Date; and (v) Landlord and Citicorp consent to
the foregoing amendment, assignment and assumption of the Headquarters
Lease. The agreement or agreements required under this clause (r) shall
be in form and substance reasonably satisfactory to Buyer. Except for
Buyer's legal fees and expenses, Buyer shall not be required to make
any monetary payments to Landlord or Citicorp or otherwise in
order to obtain such agreement or agreements.
10.02. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate the Closing are subject to the satisfaction (or waiver by Seller) of
the following conditions:
(a) The representations and warranties of Buyer made in this
Agreement that are qualified as to materiality or Material Adverse
Effect shall be true and correct as of the Closing Date as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). The representations
and warranties of Buyer made in this Agreement that are not qualified
as to materiality or Material Adverse Effect shall be true and correct
in all material respects as of the time of the Closing as though made
as of such time, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date). Buyer shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with
by Buyer by the Closing Date. Buyer shall have delivered to Seller a
certificate dated the Closing Date and signed by the chief financial
officer of Buyer confirming the foregoing.
(b) No provision of any applicable statute, rule, regulation,
executive order, decree, temporary restraining order, judgment,
preliminary or permanent injunction or other order enacted, entered,
promulgated, enforced or issued by any Governmental Entity shall be in
effect that prevents the sale and purchase of the Purchased Assets or
any of the transactions contemplated by this Agreement.
(c) There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding, (i) challenging or
seeking to restrain, prohibit, alter or materially delay the sale and
purchase of the Purchased Assets or any of the other transactions
contemplated by this Agreement or seeking to obtain from Seller or any
of its subsidiaries in connection with the sale and purchase of the
Purchased Assets any material damages.
(d) The waiting period under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated.
(e) The Bankruptcy Court shall have issued the Sale Order on
or prior to December 15, 1996, and the Sale Order shall not be subject
to any stay.
(f) The conditions to the effectiveness of the Vitro-Saint
Gobain Agreement shall have been satisfied or waived and assuming the
consummation of the transactions contemplated by this Agreement, the
Vitro-Saint Gobain Agreement shall be in full force and effect.
10.03. FRUSTRATION OF CONDITIONS. Neither Buyer nor Seller may rely on the
failure of any condition set forth in Section 10.01 or 10.02, respectively, to
be satisfied if such failure was caused by such party's failure to act in good
faith or to use its reasonable efforts to cause the Closing to occur, as
provided in this Agreement.
ARTICLE 11
SURVIVAL
11.01. SURVIVAL. The covenants, agreements, representations and warranties
of the parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall not survive
the Closing except for the covenants and agreements contained herein which
contemplate or specifically provide for performance after the Closing Date.
ARTICLE 12
TERMINATION
12.01. GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(i) by mutual written agreement of Seller and Buyer;
(ii) by either Seller or Buyer if the Closing shall
not have been consummated on or before December 31, 1996;
(iii) by either Seller or Buyer if there shall be any law or
regulation that makes the consummation of the transactions contemplated
hereby illegal or otherwise prohibited or if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction;
(iv) by Buyer if the Interim Order shall not have been entered
by the Bankruptcy Court within eight business days after the date
hereof;
(v) by Buyer if the Sale Order shall not have been
entered on or prior to December 15, 1996;
(vi) by Buyer or Seller if any Governmental Entity
shall have commenced litigation seeking to enjoin
consummation of the transaction; and
(vii) by Buyer or Seller if the Bankruptcy Court shall have
approved a sale of the Purchased Assets or Business (or the stock of
Seller) to a Person other than Buyer.
The party desiring to terminate this Agreement pursuant to clauses (ii),
(iii), (vi) or (vii) shall give notice of such termination to the other party.
12.02. EFFECT OF TERMINATION. If this Agreement is terminated as permitted
by Section 12.01, such termination shall be without liability of either party
(or any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party to this Agreement; PROVIDED
that if such termination shall result from the willful failure of either party
to fulfill a condition to the performance of the obligations of the other party,
failure to perform a covenant of this Agreement or breach by either party to
this Agreement of any representation or warranty or agreement contained herein,
such party shall be fully liable for any and all losses incurred or suffered by
the other party as a result of such failure or breach. The provisions of
Sections 6.01 and 13.03 shall survive any termination hereof pursuant to Section
12.01.
ARTICLE 13
MISCELLANEOUS
13.01. NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by confirmed fax or sent, postage prepaid, by registered, certified or express
mail or reputable overnight courier service and shall be deemed given when so
delivered by hand, confirmed faxed or if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service), as
follows:
(i) if to Buyer,
Ball-Foster, L.L.C.
15 S. Macedonia Avenue
Muncie, IN 47302
Attention: President
Telecopy: (317) 741-7601
with copies to:
Saint-Gobain Corporation
750 E. Swedesford Road
P.O. Box 860
Valley Forge, PA 19482
Attention: Thomas A. Decker, Esq.
Telecopy: (610) 341-7728
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: William L. Rosoff, Esq.
Telecopy: (212) 450-4800
(ii) if to Seller,
Anchor Glass Container Corporation
4343 Anchor Plaza Parkway
Tampa, FL 33634
Attention: Mark A. Kirk, CFO
Carl H. Young, III,
General Counsel
Telecopy: (813) 882-7859
with a copy to:
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004
Attention: Robin E. Keller, Esq.
Telecopy: (212) 806-6006
13.02. AMENDMENTS AND WAIVERS. (a) Any provision of this Agreement may be
amended or waived prior to the Closing Date if, but only if, such amendment or
waiver is in writing and is signed, in the case of an amendment, by each party
to this Agreement, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
13.03. FEES AND EXPENSES. (a) Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
(b) Seller shall pay all fees or commissions of any investment banker,
broker or finder retained by it and approved by the Bankruptcy Court that has
acted for Seller in connection with this Agreement or the transactions
contemplated hereby.
(c) Buyer shall pay all fees or commissions of Lazard Freres & Co., which
Buyer represents is the only investment banker, broker or finder that has acted
for Buyer which might be entitled to any fee or commission in connection with
this Agreement or the transactions contemplated hereby.
13.04. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto except that Buyer may transfer or assign, in
whole or from time to time in part, to one or more of its Affiliates, the right
to purchase all or a portion of the Purchased Assets, but no such transfer or
assignment will relieve Buyer of its obligations hereunder.
13.05. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the law of the State of New York, without regard to the
conflicts of law rules of such state.
13.06. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto.
13.07. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement, the
Confidentiality Agreement and the documents referred to herein and therein
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to such subject matter. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by either party hereto. Neither
this Agreement nor any provision hereof is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
13.08. BULK SALES LAWS. Buyer and Seller each hereby waive compliance by
Seller with the provision of the "bulk sales", "bulk transfer" or similar laws
of any state.
13.09. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
13.10. SEVERABILITY. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other persons or
circumstances.
13.11. CONSENT TO JURISDICTION. Each party hereto irrevocably submits to
the exclusive jurisdiction of (a) the Supreme Court of the State of New York,
New York County, (b) the United States District Court for the Southern District
of New York, and (c) to the extent applicable, the United States Bankruptcy
Court for the District of Delaware for the purposes of any suit, action or other
proceeding arising out of or related to this Agreement, or any transaction
contemplated hereby but for no other purpose. Each party hereto agrees to
commence any action, suit or proceeding relating hereto either in the United
States District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
reasons, in the Supreme Court of the State of New York, New York County or, to
the extent applicable, the United States Bankruptcy Court for the District of
Delaware. Each party hereto further agrees that service of any process, summons,
notice or document by U.S. registered mail to such party's respective address
set forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 13.11. Each party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, (ii)
the United States District Court for the Southern District of New York or (iii)
to the extent applicable, the United States Bankruptcy Court for the District of
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
13.12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT, ANY OTHER DOCUMENT REFERRED TO HEREIN OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BALL-FOSTER GLASS CONTAINER
CO., L.L.C.
By: /S/ HERBERT H. THOMPSON
Title: President and CEO
ANCHOR GLASS CONTAINER
CORPORATION
By: /S/ MARK A. KIRK
Title: Senior Vice President
and Chief Financial
Officer
