SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 1995
FIGGIE INTERNATIONAL INC.
(Exact name of registrant specified in its charter)
Delaware 1-8591 52-1297376
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
4420 Sherwin Road, Willoughby, Ohio 44094
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 216/953-2700
(not applicable)
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
Figgie International Inc. (the "Registrant") is in the process of selling
its packaging business.
On February 7, 1995, the Registrant sold its Geo. J. Meyer packaging
business and Alfa Costruzioni Meccaniche S.p.A. labelling business to SASIB
S.p.A. of Bologna, Italy. The Registrant received preliminary consideration in
the amount of $35 million, $5 million of which was deposited in escrow for
post-closing purchase price adjustments and for payment of post-closing
indemnification claims. The preliminary consideration will be adjusted to
reflect the difference between the parties' estimate of the net book value of
certain assets less certain liabilities as of January 31, 1995 and the actual
net book value of certain assets less certain liabilities as of January 31, 1995
based upon a post-closing audit.
The Registrant intends is selling its Akron, OH-based packaging operations
to Barry-Wehmiller Acquisition Corp. of St. Louis, MO. The Registrant entered
into a definitive agreement with Barry-Wehmiller on February 1, 1995.
Consummation of the transaction is anticipated after completion of a review by
the Federal Trade Commission. In exchange for assets, Barry-Wehmiller will
assume the $23 million in liabilities of the Akron, OH-based packaging
operations.
Item 7. Financial Statements and Exhibits.
(a) Pro Forma Financial Information
(1) Pro forma balance sheet as of September 30, 1994.*
(2) Pro forma income statement for the nine months ended
September 30, 1994.*
(3) Pro forma income statement for the year ended December 31,
1993.*
* The Pro Forma Financial Information is on pages 4-6 of this
Current Report on Form 8-K.
(b) Exhibits
(2)(A) Amendment to Acquisition Agreement, dated February 7,
1995, by Figgie International Inc. and SASIB S.p.A.**
(2)(B) Acquisition Agreement, dated December 23, 1994, by
Figgie International Inc. and SASIB S.p.A.**
(2)(C) Definitive Agreement, dated February 1, 1995, by
Figgie International Inc. and Barry-Wehmiller
Acquisition Corp.**
- 2 -
<PAGE>
** Schedules and Exhibits are omitted.
- 3 -
<PAGE>
Figgie International
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 1994
<TABLE>
<CAPTION>
Total
As Packaging Other Total As
Reported Packaging ALFA & ALFA(1) Adjustments Adjustments Adjusted
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents 32,014 (1,042) (7) (1,049) 12,575(3) 11,526 43,540
Marketable securities 36,779 0 0 0 0 36,779
Accounts receivable, net 139,625 (11,911) (3,335) (15,246) (15,246) 124,379
Fianance receivables 4,794 0 0 0 0 4,794
Inventories 104,428 (17,886) (2,870) (20,756) (20,756) 83,672
Prepaid expenses and other 30,587 (1,248) (2,239) (3,487) (3,487) 27,100
Recoverable income taxes 8,107 (3,629) 0 (3,629) 7,000(2) 3,371 11,478
Net assets related to
discontinued operations 59,194 0 0 0 0 59,194
Total current assets 415,528 (35,716) (8,451) (44,167) 19,575 (24,592) 390,936
PROPERTY, PLANT & EQUIPMENT - NET 264,226 (8,121) (4,785) (12,906) (12,906) 251,320
OTHER ASSETS
Investments in affiliates 2,463 (368) (1) (369) (369) 2,094
Goodwill 38,116 0 0 38,116
Prepaid pension costs 12,007 (107) (107) (107) 11,900
Long-term finance receivables 23,685 (1,406) (1,406) (1,406) 22,279
Other 94,393 (1,552) (1,552) (1,552) 92,841
170,664 (1,920) (1,514) (3,434) 0 (3,434) 167,230
Total Assets 850,418 (45,757) (14,750) (60,507) 19,575 (40,932) 809,486
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable 73,435 (588) (2,398) (2,986) (2,986) 70,449
Current Maturities
of long-term debt 137,203 (612) (186) (798) (10,305)(3) (11,103) 126,100
Accounts payable 101,738 (3,688) (4,271) (7,959) (7,959) 93,779
Accrued salaries and wages 16,005 (760) (957) (1,717) (1,717) 14,288
Other accrued expenses 72,443 (6,808) (3,161) (9,969) (9,969) 62,474
Total current liabilities 400,824 (12,456) (10,973) (23,429) (10,305) (33,734) 367,090
LONG-TERM DEBT 242,296 (77) (116) (193) (193) 242,103
DEFERRED FEDERAL INCOME TAXES 17,665 (380) (380) (380) 17,285
OTHER LONG-TERM LIABILITIES 33,012 (2) (2) (2) 33,010
Total Liabilities 693,797 (12,915) (11,089) (24,004) (10,305) (34,309) 659,488
STOCKHOLDERS EQUITY
Original Investment (51,026) (51,026) 51,026(1) 0 0
Intercompany current (45,431) (653) (46,084) 46,084(1) 0 0
Preferred Stock 0 0 0 0
Common Stock 1,838 (566) (174) (740) 740(1) 0 1,838
Capital surplus 121,471 (221) (8,968) (9,189) 9,189(1) 0 121,471
Retained earnings 70,329 57,999 6,081 64,080 (77,159)(1,2) (13,079) 57,250
Unearned compensation (24,452) 0 0 0 (24,452)
Cumulative translation adjustment (12,472) 6,403 53 6,456 0 6,456 (6,016)
Unrealized loss on investments (93) 0 0 0 (93)
Total stockholders' equity 156,621 (32,842) (3,661) (36,503) 29,880 (6,623) 149,998
Total liabilities and
stockholders' equity 850,418 (45,757) (14,750) (60,507) 19,575 (40,932) 809,486
<FN>
1. To Eliminate Alfa and Packaging from the consolidated Statements.
2. To record the sale of Alfa and Packaging.
Gross Proceeds $35,000
Less: Holdbacks (5,000)
Operating Lease Pmts (3,844)
Expense Escrow (3,276)
Net Proceeds 22,880
Book Value (42,959)
Pre-tax loss (20,079)
Tax Benefit @ 35% 7,000
After tax loss ($13,079)
3. To record the cash flow impact of sale.
Net Proceeds $22,880
Paydown at debt (10,305)
Increase in cash 12,575
</FN>
</TABLE>
<PAGE>
Figgie International
Pro Forma Condensed Consolidated Income Statement
For the Nine Months Ended September 30, 1994
<TABLE>
<CAPTION>
Total
As Packaging Other Total As
Reported Packaging ALFA & ALFA (1) Adjustments Adjustments Adjusted
<S> <C> <C> <C> <C> <C> <C> <C>
SALES AND OTHER INCOME
FROM CONTINUING OPERATIONS:
Net sales 557,664 (47,682) (9,425) (57,107) (57,107) 500,557
Other income / (expense) (25) 164 (54) 110 110 85
Total sales and other income 557,639 (47,518) (9,479) (56,997) (56,997) 500,642
COSTS AND EXPENSES
FROM CONTINUING OPERATIONS:
Cost of sales 474,452 (42,304) (7,583) (49,887) (49,887) 424,565
Selling, general, and
administrative expenses 119,213 (15,229) (1,508) (16,737) (16,737) 102,476
Bad debt expense 1,805 0 0 1,805
Interest expense, net 31,770 108 (193) (85) (85) 31,685
Restructuring charges 1,474 0 0 0 1,474
Total costs and expenses 628,714 (57,425) (9,284) (66,709) 0 (66,709) 562,005
LOSS FROM CONTINUING OPERATIONS
BEFORE PROVISION FOR TAXES
ON INCOME (71,075) 9,907 (195) 9,712 0 9,712 (61,363)
PROVISION FOR TAXES ON INCOME FROM
CONTINUING OPERATIONS
Federal income tax benefit (18,122) 3,584 0 3,584 3,584 (14,538)
State income tax benefit 0 0 0 0
NET LOSS BEFORE DISCONTINUED
OPERATIONS AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING FOR
INCOME TAXES (52,953) 6,323 (195) 6,128 0 6,128 (46,825)
NET LOSS FROM DISCONTINUED
OPERATIONS (1,098) 0 (19,207)(1,2) (19,207) (19,207)
NET LOSS (54,051) 6,323 (195) 6,128 (19,207) (13,079) (66,032)
EARNINGS (LOSS) PER COMMON SHARE FROM
CONTINUING OPERATIONS ($2.98) ($2.63)
EARNINGS (LOSS) PER COMMON SHARE FROM
DISCONTINUED OPERATIONS ($0.06) ($1.08)
EARNINGS (LOSS) PER COMMON SHARE ON
NET INCOME ($3.04) ($3.71)
<FN>
1. To Eliminate Alfa and Packaging from the consolidated Statements.
2. To record the sale of Alfa and Packaging.
Gross Proceeds $35,000
Less: Holdbacks (5,000)
Operating Lease Pmts (3,844)
Expense Escrow (3,276)
Net Proceeds 22,880
Book Value (42,959)
Pre-tax loss (20,079)
Tax Benefit @ 35% 7,000
After tax loss (13,079)
</FN>
</TABLE>
<PAGE>
Figgie International
Pro Forma Condensed Consolidated Income Statement
For the Year Ended December 31, 1993
<TABLE>
<CAPTION>
Total
As Packaging Other Total As
Reported Packaging ALFA & ALFA (1) Adjustments Adjustments Adjusted
<S> <C> <C> <C> <C> <C> <C> <C>
SALES AND OTHER INCOME FROM
CONTINUING OPERATIONS:
Net sales 768,642 (79,870) (10,946) (90,816) (90,816) 677,826
Other income /(expense) (16,272) 2,885 (150) 2,735 2,735 (13,537)
Total sales and other income 752,370 (76,985) (11,096) (88,081) (88,081) 664,289
COSTS AND EXPENSES FROM
CONTINUING OPERATIONS:
Cost of sales 673,116 (91,222) (8,740) (99,962) (99,962) 573,154
Selling, general, and
administrative expenses 163,623 (24,223) (1,769) (25,992) (25,992) 137,631
Bad debt expense 2,864 0 0 2,864
Interest expense, net 34,998 342 (502) (160) (160) 34,838
Restructuring charges 51,005 (3,410) (3,410) (3,410) 47,595
Change in accounting estimate 77,344 (17,011) (17,011) (17,011) 60,333
Total costs and expenses 1,002,950 (135,524) (11,011) (146,535) 0 (146,535) 856,415
MINORITY INTEREST 51 0 51
LOSS FROM CONTINUING OPERATIONS
BEFORE PROVISION FOR TAXES
ON INCOME (250,529) 58,539 (85) 58,454 0 58,454 (192,075)
PROVISION FOR TAXES ON INCOME FROM
CONTINUING OPERATIONS
Federal income tax benefit (65,053) 20,838 (14) 20,824 20,824 (44,229)
State income tax benefit (6,142) 0 0 (6,142)
NET LOSS BEFORE DISCONTINUED OPERATIONS
AND CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES (179,334) 37,701 (71) 37,630 0 37,630 (141,704)
NET LOSS FROM DISCONTINUED
OPERATIONS (6,280) 0 (62,693)(1,2) (62,693) (62,693)
NET LOSS BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
FOR INCOME TAXES (185,614) 37,701 (71) 37,630 (62,693) (25,063) (204,397)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES 5,839 0 5,839
NET LOSS (179,775) 37,701 (71) 37,630 (62,693) (25,063) (198,558)
EARNINGS (LOSS) PER COMMON
SHARE FROM CONTINUING OPERATIONS ($10.09) ($7.97)
EARNINGS (LOSS) PER COMMON
SHARE FROM DISCONTINUED OPERATIONS ($0.35) ($3.53)
EARNINGS PER COMMON SHARE FROM
CHANGE IN ACCOUNTING FOR INCOME TAXES $0.33 $0.33
EARNINGS (LOSS) PER COMMON SHARE
ON NET INCOME ($10.00) ($11.17)
<FN>
1. To Eliminate Alfa and Packaging from the consolidated Statements.
2. To record the sale of Alfa and Packaging.
Gross Proceeds 35,000
Less: Holdbacks (5,000)
Operating Lease Pmts (3,844)
Expense Escrow (3,276)
Net Proceeds 22,880
Book Value (61,443)
Pre-tax loss (38,563)
Tax Benefit @ 35% 13,500
After tax loss (25,063)
</FN>
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on it behalf by
the undersigned hereunto duly authorized.
FIGGIE INTERNATIONAL INC.
By: /s/ Steven L. Siemborski
Steven L. Siemborski
Senior Vice President and
Chief Financial Officer
Dated: February 22, 1995
- 7 -
<PAGE>
Exhibit Index
Exhibit Page
(2)(A) Amendment to Acquisition Agreement, dated February 7,
1995, by Figgie International Inc. and SASIB S.p.A.**
(2)(B) Acquisition Agreement, dated December 23, 1994, by Figgie
International Inc. and SASIB S.p.A.**
(2)(C) Definitive Agreement, dated February 1, 1995, by Figgie
International Inc. and Barry-Wehmiller Acquisition Corp.**
- 8 -
AMENDMENT OF AGREEMENT OF PURCHASE AND SALE
THIS AMENDMENT OF AGREEMENT OF PURCHASE AND SALE (this
"Amendment") made and entered into this 7th day of February, 1995 by and between
FIGGIE INTERNATIONAL INC., a Delaware corporation ("Seller") and SASIB SpA, an
Italian corporation ("Buyer").
WITNESSETH:
WHEREAS, on December 23, 1994, Seller and Buyer made and
entered into that certain Agreement of Purchase and Sale pursuant to which,
among other things, Seller agreed to sell and Buyer agreed to buy the Assets
(the "Agreement"),
WHEREAS, Seller and Buyer desire to amend certain provisions
of the Agreement as more particularly set forth herein,
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the parties do hereby agree as follows:
1. Notwithstanding any provision of the Agreement to
the contrary, the Acquired Sub Assets shall
include (i) the accounts receivable of Figgie
Mexico or Figgie International Mexico listed on
Schedule 1 hereto which are accounts receivable of
----------
the Packaging Business but not the Business,
provided that except as expressly amended by the
foregoing the last sentence of Section 1.2 shall
continue to apply and (ii) amounts reflected on
the books of Alfa as VAT tax claims or assets. In
addition, notwithstanding the provisions of
Section 2.3(a) of the Agreement, the computer
software of Alfa which is currently reflected on
its books as an intangible shall be valued at
$240,000.
2. The term "Guadalajara Value" shall mean $2,300,000
U.S. Buyer agrees that it will not, nor will it
permit any Affiliate to, sell or transfer all or
any portion of the real estate located in
Guadalajara, Mexico (the "Guadalajara Real
Property"), except in a bona fide arms length
sales transaction with a third party. In the
event Buyer, or an Affiliate of Buyer, engages in
one or more such transactions, Buyer, or its
Affiliate, shall pay to Seller the Excess Proceeds
of such sale until such time as Seller shall have
<PAGE>
2
received, in the aggregate, $1,300,000 pursuant to this
provision. After Seller shall have received, in the aggregate,
$1,300,000 pursuant to this provision, Seller shall have no
further interest in the Excess Proceeds. "Excess Proceeds"
shall mean the Net Sales Proceeds received by Buyer, or its
Affiliates, from the sale of the Guadalajara Real Property, or
any portion thereof, in excess of the Threshold Amount. The
"Net Sales Proceeds" shall mean the gross sales price for the
Guadalajara Real Property, or any portion thereof, less all
reasonable out-of-pocket costs actually incurred by Buyer or
its Affiliates in connection with such sale, including without
limitation, brokers' fees and expenses, closing costs,
attorneys' fees and the fees of other professionals involved
in such transaction, taxes on the proceeds of such sale and
the cost of demolishing any improvements, but not including
any costs of relocating Buyer's operations from the
Guadalajara Real Property. The "Threshold Amount" shall mean
the product obtained by multiplying the area of the
Guadalajara Real Property, or the portion thereof sold,
(measured in square meters) by $69.00 ($2,300,000 / 33,219
square meters). Buyer shall cause any Excess Proceeds to which
Seller is entitled hereunder to be paid to Seller at the
closing of the sale of the Guadalajara Real Property, or any
portion thereof. Buyer acknowledges that the foregoing
provisions create in Seller an interest in and, to the extent
possible under Mexican law a lien upon, the Guadalajara Real
Property and accordingly agrees to promptly take such
reasonable actions as are possible under Mexican law in order
to make such interest and, to the extent possible under
Mexican law, lien of Seller a matter of public record. Such
actions shall be subject to Seller's approval which shall not
be unreasonably delayed or withheld. Until such approval is
obtained from Seller, Buyer shall cause Figgie International
Mexico to refrain from any sale, transfer or encumbrance of
the Guadalajara Real Property.
3. The parties agree that the Preliminary Purchase
Price is $35,000,000 consisting of a Fixed Price
Component of $21,486,000 and the parties best,
good faith estimate of the Closing Date Net Book
Value of $13,514,000. The parties acknowledge
that the Preliminary Purchase Price includes
Inter-Company Payables in the aggregate amount of
$15,601,327, of which $4,030,327 shall be paid by
<PAGE>
3
Buyer directly to Alfa's banks pursuant to Schedule 2. On the
Closing Date, Buyer shall (i) pay to, or on behalf of, Seller,
at its direction, pursuant to Schedule 2 attached hereto, the
sum of $29,850,000, consisting of a portion of the Preliminary
Purchase Price (less Buyer's deposit previously paid to Seller
of $150,000), and (ii) pay to the Escrow Agent the sum of
$5,000,000 pursuant to the Escrow Agreement consisting of the
balance of the Preliminary Purchase Price.
4. Provided the Closing occurs by February 10, 1995,
the parties agree that the Closing Balance Sheet
and the Closing Date Net Book Value shall be
prepared as of January 31, 1995, notwithstanding
that the Closing Date shall be a date subsequent
to such date. From and after January 31, 1995,
the Business shall be operated for the account of
Buyer.
5. Seller confirms that it is able to convey 100% of
the Alfa shares and that the price adjustment
provisions of Section 3.4 are not applicable.
6. The term "Escrow Amount" as defined in
Section 2.2(e) is amended to mean Five Million
Dollars ($5,000,000) and the Escrow Agreement is
amended as provided in Schedule 3 attached hereto.
----------
In addition, Section 2.3(f) of the Agreement is
amended by the addition of the following after the
words "Section 2.3(f)" on line 13 of page 10 "up
to a maximum amount of $2,500,000".
7. Notwithstanding the provisions of Section
1.2(f)(ii), the parties agree that the receivable
currently reflected on the books of Figgie UK from
the Iranian company Zam-Zam shall be an Acquired
Sub Asset and that for purposes of both the
Preliminary Purchase Price and the Final Purchase
Price it shall be valued at $871,000, provided
that if the amount actually received by Figgie UK
in respect of such receivable exceeds $871,000,
then the amount of such excess shall be paid to
Seller promptly upon its receipt. As to such
receivable, Buyer shall not have the right to
cause Seller to purchase such account receivable
if such account receivable remains unpaid, as
otherwise provided in the first sentence of
Section 8.6 of the Agreement. Buyer, or its
Affiliates, shall bear all risk of collection
associated with such receivable.
<PAGE>
4
8. The allocation of the Preliminary Purchase Price
required by Section 8.8 is attached hereto as
Schedule 4.
9. Capitalized terms herein shall have the meaning ascribed to
them in the Agreement, unless otherwise defined herein. Except
as amended hereby, the Agreement shall continue in full force
and effect as originally written.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
FIGGIE INTERNATIONAL INC.
By:
Steven L. Siemborski,
Senior Vice President
and Chief Financial Officer
SASIB SpA
By:
Gian Carlo Vaccari,
Vice Chairman and Managing
Director
<PAGE>
AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
FIGGIE INTERNATIONAL INC.
AND
SASIB SpA
Dated as of December 23, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I ASSETS TO BE ACQUIRED 2
1.1 Assets To Be Acquired 2
1.2 Excluded Assets 3
1.3 Treatment of Liabilities 4
ARTICLE II PURCHASE PRICE 6
2.1 Purchase Price and Payment 6
2.2 Purchase Price Definitions 7
2.3 Purchase Price Adjustment 7
2.4 Alfa Purchase Price Adjustment 10
2.5 Inter-Company Payables 11
ARTICLE III CLOSING 11
3.1 Closing Date 11
3.2 Proceedings at Closing 12
3.3 Deliveries by Seller to Buyer 12
3.4 Deliveries by Buyer to Seller 14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 15
4.1 Corporate Power and Authority; Effect of
Agreement 15
4.2 Subsidiaries 15
4.3 Organization of the Subsidiaries 16
4.4 Financial Statements 16
4.5 Absence of Certain Changes or Events 17
4.6 Title to and Condition of Properties 17
4.7 Patents and Trademarks 18
4.8 Contracts 19
4.9 Litigation 20
4.10 Compliance with Laws 21
4.11 Environmental and Health/Safety Compliance 21
4.12 Employee Benefit Plans 23
4.13 Consents 24
4.14 Taxes 25
4.15 Labor Relations and Practices 25
4.16 Product Warranty and Product Liability 26
4.17 Backlog Contracts 26
4.18 Supply Requirement Contracts 26
4.19 Government Contracts 26
4.20 Brokers 27
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER 27
5.1 Organization 27
5.2 Corporate Power and Authority; Effect of
Agreement 27
5.3 Consents 27
5.4 Availability of Funds 28
5.5 Litigation 28
5.6 Purchase for Investment 28
5.7 Brokers 28
i
<PAGE>
Page
ARTICLE VI COVENANTS OF SELLER 28
6.1 Cooperation; Assignments 28
6.2 Conduct of Business 29
6.3 Access 30
6.4 Further Assurances 30
6.5 Release of Certain Liens 30
ARTICLE VII COVENANTS OF BUYER 31
7.1 Cooperation by Buyer 31
7.2 Further Assurances 31
7.3 Post-Closing Access 31
ARTICLE VIII ADDITIONAL COVENANTS 32
8.1 Acquired Subsidiary Taxes 32
8.2 Corporate Names 33
8.3 Transition Services 34
8.4 Non-Competition 34
8.5 Separate Agreement for Acquired Subsidiaries 35
8.6 Accounts Receivable 35
8.7 South Carolina Lease 36
8.8 Allocation of Purchase Price 36
8.9 Seller's Supplemental Disclosure Schedule 36
8.10 Relocation of Assets 37
8.11 South Carolina Environmental Matters 37
8.12 Guadalajara Appraisal 37
ARTICLE IX CONDITIONS TO BUYER'S OBLIGATIONS 38
9.1 Representations, Warranties and Covenants of
Seller 38
9.2 No Prohibition 38
9.3 Absence of Proceedings 38
9.4 Italian Antitrust 38
9.5 Title Insurance Policy 39
9.6 Survey 39
9.7 Third Party Consents 39
9.8 Opinion of Seller's Counsel 39
9.9 Delivery of Documents 39
ARTICLE X CONDITIONS TO SELLER'S OBLIGATIONS 40
10.1 Representations, Warranties and Covenants of
Buyer 40
10.2 No Prohibition 40
10.3 Further Action 40
10.4 Absence of Proceedings 40
10.5 Opinion of Buyer's Counsel 41
10.6 Italian Antitrust 41
10.7 Delivery of Documents 41
ARTICLE XI EMPLOYMENT AND EMPLOYEE BENEFIT PLANS AND
ARRANGEMENTS 41
11.1 Offer of Employment 41
11.2 Collective Bargaining and Other Agreements 43
11.3 Welfare Plans 43
11.4 Post-retirement Welfare Benefits 43
ii
<PAGE>
Page
11.5 Credited Service 43
11.6 Termination Obligations 43
11.7 Indemnification 44
11.8 Certain Employees 45
ARTICLE XII TERMINATION PRIOR TO CLOSING 45
12.1 Termination 45
12.2 Effect on Obligations 46
ARTICLE XIII MISCELLANEOUS 46
13.1 Survival 46
13.2 Indemnification 46
13.3 Interpretive Provisions 49
13.4 Entire Agreement 49
13.5 Successors and Assigns 49
13.6 Headings 49
13.7 Modification and Waiver 49
13.8 Expenses 50
13.9 Notices 50
13.10 Governing Law 51
13.11 Public Announcements 51
13.12 Bulk Transfer Laws 51
13.13 Jury Waiver 51
13.14 Counterparts 51
13.15 Third Party Beneficiaries 51
13.16 Certain Definitions 52
iii
<PAGE>
INDEX TO ANNEXES AND SCHEDULES
ANNEXES
Annex 1 - List of machinery and equipment
Annex 2 - Aggregate value of the Fixed Price Assets
Annex 3 - Form of Escrow Agreement
Annex 4 - Inter-Company Payables
Annex 5 - Accounting Principles
Annex 6 - Transition Services
Annex 7 - Certain Akron Employees
SCHEDULES
1.1(a) - Goose Creek real property description
4.2 - Subsidiaries
4.4(c) - Material Liabilities of Acquired Subsidiaries
4.5 - Certain changes or events
4.6(a) - List of Property
4.6(b) - Encumbrances
4.6(c) - Condition of assets
4.7 - Patents and trademarks
4.8 - Contracts
4.9 - Pending litigation
4.10 - Compliance with laws re: permits
4.11 - Environmental and health/safety compliance
4.12(a)(i) - ERISA employee benefit plans
4.12(a)(ii)- Benefit arrangements
4.12(d) - Employee benefit claims
4.12(e) - Sufficiency of assets
4.12(g) - Adverse effect on benefits
iv
<PAGE>
4.12(h) - Payments by Buyer deductible for federal income tax
purposes
4.12(i) - Employee welfare plans
4.13 - Governmental consents, approvals, authorizations
4.14 - Taxes
4.15 - Labor relations and practices
4.16 - Product warranty and product liability
4.18 - Supply requirement contracts
11.1(b) - Employees
11.2 - Collective bargaining and other agreements
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AGREEMENT OF PURCHASE AND SALE
This Agreement of Purchase and Sale (this "Agreement"), made
and entered into this 23rd day of December, 1994, by and between FIGGIE
INTERNATIONAL INC., a Delaware corporation ("Seller") and SASIB SpA, an Italian
corporation ("Buyer");
W I T N E S S E T H:
WHEREAS, Seller, through its Figgie Packaging Systems
Division and through various subsidiaries, including Alfa
Costruzioni Meccaniche SpA ("Alfa"), Mojonnier do Basil Industria
Commercio de Equipmentos Ltda. ("Mojonnier Brazil"), Figgie
Packaging Systems Limited ("Figgie UK"), Figgie de Mexico, S.A. de
C.V. ("Figgie Mexico"), Figgie International de Mexico S.A. de
C.V. ("Figgie International Mexico") and Figgie Packaging Systems
Pty. Ltd. ("Figgie Australia"), is engaged in the manufacture,
sale, installation, service and repair of bottling and packaging
equipment (the "Packaging Business");
WHEREAS, a portion of the Packaging Business is comprised of
the beverage business conducted under the names "Geo. J. Meyer" and "Mojonnier"
and which produces pressure fillers, carbonation equipment and
processors-deareator equipment, and the labeller business conducted under the
name "Alfa" which produces labellers, weighfillers, cappers and chuck and rolls
(the beverage and the labeller portions of the Packaging Business are
hereinafter referred to collectively as the "Business");
WHEREAS, Seller desires to sell and Buyer desires to buy the
Business by (i) Seller's sale and Buyer's purchase of the shares of the capital
stock owned by Seller of Alfa, Figgie UK, Figgie Mexico and Figgie International
Mexico (the "Acquired Subsidiaries"), and (ii) Seller's, Mojonnier Brazil's, and
Figgie Australia's (Mojonnier Brazil and Figgie Australia being herein
collectively referred to as the "Selling Subsidiaries") sale and Buyer's
purchase of certain assets;
WHEREAS, certain capitalized terms used herein are defined in
Section 13.16 hereof.
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements, and upon the terms and
subject to the conditions, hereinafter set forth, the parties do hereby agree as
follows:
<PAGE>
ARTICLE I
ASSETS TO BE ACQUIRED
1.1 Assets To Be Acquired. At the Closing, on the terms and
subject to the conditions set forth in this Agreement, Seller shall sell,
convey, transfer, assign and deliver, or shall cause the Selling Subsidiaries to
sell, convey, transfer, assign and deliver to Buyer, or any Affiliates
designated by Buyer pursuant to Section 13.5, and Buyer, or such Affiliates of
Buyer, shall purchase and acquire all of Seller's and the Selling Subsidiaries'
right, title and interest in and to any and all of the assets, claims,
properties and rights used in the Business, and whether tangible or intangible
and wherever located, except only those which are Excluded Assets (collectively,
the "Assets"); provided that the Assets shall not include the assets, claims,
properties or rights owned by the Acquired Subsidiaries (collectively the
"Acquired Sub Assets"), it being understood that Buyer shall acquire control of
the Acquired Sub Assets only through its acquisition of the Subsidiary Shares.
Without limiting the generality of the foregoing, the Assets shall include the
following:
(a) Subject to the South Carolina Lease, all of
Seller's right, title and interest in and to certain improved real property
located in Goose Creek, South Carolina and more fully described in Schedule
1.1(a) of the Disclosure Schedule delivered by Seller to Buyer pursuant hereto
(the "Disclosure Schedule"), together with all buildings, structures and
improvements situated thereon and all rights, easements and appurtenances
pertaining thereto (the "South Carolina Real Property");
(b) All of Seller's or the Selling Subsidiaries'
right, title and interest in the leased real property (the "Leased Real
Property") described in Schedule 4.8 of the Disclosure Schedule;
(c) All machinery, equipment, vehicles, office
furniture, tools and other tangible property;
(d) All materials and inventories, including,
without limitation, inventories of work in process and inventories held by
customers on a consignment basis, stores, patterns and molds, spare parts and
finished goods;
(e) Subject to Section 8.6, all accounts
receivable of the Business;
(f) Subject to Section 6.1, all of Seller's and
the Selling Subsidiaries' rights under the Contracts, including, but not limited
to, any sales contracts, contracts for the purchase of materials, contracts for
services and supplies, and any options to purchase real or personal property;
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(g) All Intellectual Property which is owned by,
issued to or licensed to Seller or the Selling Subsidiaries and
which is used in the Business;
(h) All of the shares of capital stock of the
Acquired Subsidiaries owned by Seller or any of its Affiliates (collectively,
the "Subsidiary Shares"); provided, however, that the purchaser of such shares
may be designated by Buyer pursuant to and in accordance with Section 8.5;
(i) Subject to Section 6.1, all rights under or
pursuant to all warranties, representations and guarantees made by
suppliers, manufacturers, contractors and other third parties
affecting any of the Assets;
(j) Subject to Section 6.1, all Permits related to
or used in connection with the Assets, including, without limitation, the
Permits listed on Schedule 4.10 of the Disclosure Schedule, held by Seller or
any of the Selling Subsidiaries (to the extent permitted by applicable Law to be
transferred) but excluding Permits exclusively relating to or exclusively used
in connection with the Excluded Assets;
(k) All deferred and prepaid charges, sums and
fees related to the Business;
(l) Any claims or causes of action relating to the
Assets and any counterclaims, set-offs or defenses Seller or any of the Selling
Subsidiaries may have with respect to any of the Assumed Liabilities;
(m) All goodwill relating to the Business; and
(n) All other assets of Seller or its Affiliates
(other than Excluded Assets) used in the Business or reflected on the Base
Financial Statements, except to the extent any of such assets have been sold or
disposed of in the ordinary course of business of the Business between the date
of the Base Financial Statements and the Closing Date.
1.2 Excluded Assets. Notwithstanding anything in Section 1.1
to the contrary, the following items are specifically excluded from the Assets
and from the Acquired Sub Assets being indirectly acquired through the
acquisition of the Subsidiary Shares (and, if any of the following is held by
any of the Acquired Subsidiaries, such Acquired Subsidiaries shall, at Seller's
sole cost and expense, convey, pursuant to instruments of transfer reasonably
acceptable to Buyer, the same to Seller or its designee prior to the Closing)
(collectively, the "Excluded Assets"): (a) cash, cash deposits, marketable
securities, and other cash equivalent investments of Seller and the Selling
Subsidiaries (but the cash, cash deposits, marketable securities, and other cash
equivalent investments of the Acquired Subsidiaries
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shall not be Excluded Assets); (b) right to any tax refunds relating to Tax
Returns filed or to be filed by Seller or any of its Affiliates with respect to
tax periods ending on or prior to the Closing Date; (c) insurance policies
(other than policies held by an Acquired Subsidiary and exclusively insuring
that Acquired Subsidiary); (d) the name "Figgie" and any trade names,
trademarks, service names, service marks or corporate symbols or logos utilizing
such name; (e) the machinery and equipment listed in Annex 1 which are shown on
such list as not being purchased by Buyer; and (f) accounts receivable of the
Business which are (i) payable by Affiliates of Seller or (ii) payable over a
period longer than six (6) months. For the avoidance of doubt, the parties also
agree that the Excluded Assets include Seller's Cuyahoga Falls, Ohio facility,
all businesses conducted therefrom, except the Business, all assets located at
such facility, except only those related to the Business and designated pursuant
to Section 8.10, and all assets of Seller's Packaging Business (except the
Business) wherever located.
1.3 Treatment of Liabilities. (a) (i) For purposes of
this Agreement, the term "Assumed Liabilities" shall mean only the
following:
(A) with respect to the Business as conducted by Seller
and the Selling Subsidiaries:
(1) trade payables and accrued liabilities as of
the Closing Date to those who have supplied
goods and services in the ordinary course to
the Business prior to the Closing Date;
(2) those Liabilities which arise on and after
the Closing Date under any of the Contracts
of the Business, whether or not such
Contracts are required by the terms of
Section 4.8 to be listed on Schedule 4.8 of
the Disclosure Schedule, including any
commissioning and installation obligations
in respect of such Contracts; and
(3) the repair and replacement obligations to
customers of the Business in respect of
products and services delivered by the
Business prior to the Closing Date or which
relate to Backlog Contracts provided that
the Assumed Liabilities for these
obligations shall be limited to the reserve
therefor contained in the Final Balance
Sheet.
(B) with respect to the Acquired Subsidiaries:
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(1) those Liabilities of the Acquired Subsidiaries
which are of the type described in Section
1.3(a)(i)(A), and
(2) those Liabilities of the Acquired
Subsidiaries which have been incurred prior
to the Closing Date in the ordinary course
of business consistent with past practice,
including Liabilities for Taxes and accrued
compensation, provided that (x) the Assumed
Liabilities for these Liabilities shall be
limited to the reserve therefor set forth in
the Final Balance Sheet and (y) in no event
shall these Assumed Liabilities include any
amounts payable by the Acquired Subsidiaries
to Seller or any of its Affiliates, except
to the extent such Liabilities are
Inter-Company Payables.
(ii) As of the Closing Date, Buyer shall
assume or shall cause one or more of its Affiliates to assume and thereafter
discharge and perform in accordance with their terms the Assumed Liabilities
described in Section 1.3(a)(i)(A). From and after the Closing, Buyer shall
indemnify Seller and its Affiliates and hold each of them harmless from and
against any Damages incurred or suffered by any of them in respect of or arising
out of any of the Assumed Liabilities in accordance with Section 13.2.
(b) (i) For purposes of this Agreement, the term
"Retained Liabilities" shall mean: all Liabilities, other than the Assumed
Liabilities, arising out of or relating to (A) Seller, (B) any of the Acquired
Subsidiaries, (C) any other Affiliate of Seller, or (D) any of the current or
past assets or operations (including any sold or discontinued assets or
operations) of any of the foregoing of whatever kind or nature, whether due or
to become due, contingent, absolute, direct, indirect, asserted, unasserted,
whether arising prior to, and whether determined or indeterminable on, the
Closing Date, and whether or not specifically referred to in this Agreement. By
way of example, and not by way of limitation, the term "Retained Liabilities"
shall include:
(1) all Liabilities relating to or arising from the
Excluded Assets;
(2) except as otherwise provided in Section
1.3(a)(i)(B)(2), all Liabilities for all Taxes of
Seller, its Affiliates, including the Acquired
Subsidiaries, for periods prior to the Closing Date,
including Pre-Closing Taxes;
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(3) all Liabilities relating to employee compensation
and benefits and identified as Retained Liabilities
in Article XI.
(4) except as otherwise provide in Section
1.3(a)(i)(B)(2), all Environmental Liabilities
arising out of, resulting from or relating to (A)
the ownership, operations or conduct of the
Business, the Assets or the Subsidiaries and (B) a
state of facts or conditions existing on or before
the Closing Date;
(5) except as otherwise provided in Section
1.3(a)(i)(B)(2), Legal Proceedings pending against
Seller or its Affiliates, including the
Subsidiaries, as of the Closing Date;
(6) except as otherwise provided in Section
1.3(a)(i)(B)(2), all Liabilities arising out
of breach of contract, violation of Law, or
tortious conduct; and
(7) except as provided in Section 1.3(a)(i)(A)(3) or
1.3(a)(i)(B)(2), all Liabilities arising out of
services performed or products delivered by Seller or
any of its Affiliates prior to the Closing Date.
(ii) As of the Closing Date, Seller shall
assume and thereafter discharge and perform in accordance with their terms all
Liabilities of the Acquired Subsidiaries which are not Assumed Liabilities.
(iii) Neither Buyer nor any Affiliate of
Buyer is assuming nor will Buyer or any Affiliate be liable to Seller, its
Affiliates, any Governmental Body or other third parties for any of the Retained
Liabilities. From and after the Closing, Seller shall indemnify Buyer, the
Acquired Subsidiaries and their Affiliates and hold each of them harmless from
and against any Damages incurred or suffered by any of them in respect of or
arising out of any of the Retained Liabilities in accordance with Section 13.2
hereof.
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price and Payment. The purchase price for the
Assets and the covenant not to compete ("Final Purchase Price") shall be the sum
of (a) the aggregate value of the Fixed Price Assets, as calculated on Annex 2,
plus the Guadalajara Value, (b) the Closing Date Net Book Value and (c)
$3,000,000 less the $150,000 payment made to Seller on November 22, 1994 (the
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"Deposit"). The Final Purchase Price shall be allocated as provided in Section
8.8. As close as practical prior to the Closing Date, the parties shall meet to
prepare and agree upon their best, good faith estimate of the Closing Date Net
Book Value, the sum of said estimate together with the Fixed Price Component
being herein referred to as the "Preliminary Purchase Price". At the same time,
the parties shall also meet to prepare and agree upon their best, good faith
estimate of Inter-Company Payables. Immediately after the Closing, Buyer shall
pay or cause to be paid to Seller or such of its Affiliates as are designated by
Seller an amount equal to the amount of such estimate of Inter- Company
Payables. The Preliminary Purchase Price shall be payable as follows: (d) on the
Closing Date, the entire Preliminary Purchase Price less the Escrow Amount shall
be paid by wire transfer of immediately available funds to such account or
accounts as may be specified by Seller not later than three (3) Business Days
prior to the Closing Date, and (e) on the Closing Date, the Escrow Amount shall
be paid by Buyer into an account to be held in escrow pursuant to the terms and
conditions of an escrow agreement in the form of Annex 3 hereto (the "Escrow
Agreement"). The Deposit shall be returned by Seller to Buyer in the event the
Closing does not occur as contemplated herein.
2.2 Purchase Price Definitions. For purposes of this
Agreement, (a) the "Fixed Price Assets" shall mean the South Carolina Real
Property, the real property owned by Alfa in Mantova, Italy, the real property
owned by Figgie International Mexico in Guadalajara, Mexico and the machinery
and equipment listed on Annex 1, which are not Excluded Assets, (b) the "Fixed
Price Component" shall mean the sum of the amounts described in Section 2.1(a)
and (c), (c) the "Closing Date Net Book Value" shall mean the amount obtained by
subtracting (i) the net book value of the Assumed Liabilities from (ii) the net
book value of the Adjustment Assets, as such values are determined pursuant to
Section 2.3(a) and reflected in the Final Balance Sheet, (d) "Adjustment Assets"
shall mean (i) the Assets other than those which are Fixed Price Assets and the
Subsidiary Shares and (ii) the Acquired Sub Assets, other than those which are
Fixed Price Assets, (e) the "Escrow Amount" shall mean Six Million Dollars
($6,000,000), (f) the "Inter-Company Payables" shall mean those amounts payable
as of the Closing Date by the Acquired Subsidiaries to Seller or its Affiliates
as described on Annex 4 together with such changes as occur therein in the
ordinary course of business consistent with past practice between the date of
Annex 4 and the Closing Date and to the extent of the reserve therefor reflected
in the Final Balance Sheet and (g) the "Guadalajara Value" shall have the
meaning set forth in Section 8.12.
2.3 Purchase Price Adjustment. (a) Within sixty (60)
days after the Closing Date, Seller shall prepare and deliver to
Buyer a pro forma combined statement of the Adjustment Assets and
the Assumed Liabilities of the Business as of the close of
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business on the day immediately preceding the Closing Date, together with
footnotes (the "Closing Balance Sheet"). The Closing Balance Sheet shall be
prepared in accordance with United States generally accepted accounting
principles ("GAAP"), except with respect to Alfa, in which case Italian GAAP
shall be applied, and in accordance with such other accounting principles,
practices and methodologies set forth in Annex 5 hereto, provided that in no
event shall any value be assigned to any intangible assets, technologically
obsolete inventory shall not be valued, and provided further the Closing Balance
Sheet shall contain a reserve in an amount equal to a reasonable and good faith
estimate of the expenses (if any) to be incurred after Closing by Buyer in order
to perform any commissioning and installation obligations in respect of goods
delivered by the Business prior to the Closing Date, it being understood that
Buyer shall be responsible for performing such obligations even if its actual
expenses in doing so are different from the amount of such reserve. The Closing
Balance Sheet shall be audited by Arthur Andersen ("Andersen") in accordance
with United States generally accepted auditing standards and shall be
accompanied (within the 60-day period referred to above) by a letter report of
Andersen rendering its opinion that the Closing Balance Sheet presents fairly in
all material respects the Adjustment Assets and the Assumed Liabilities as of
the close of business on the day immediately preceding the Closing Date on the
basis of the accounting set forth in this Section 2.3(a).
(b) Buyer shall allow Seller and Andersen access
to the business, books and records of Buyer and the Acquired Subsidiaries which
are relevant to the Closing Balance Sheet, and shall cooperate and direct its
personnel to cooperate with Seller and Andersen, to facilitate preparation and
delivery of the Closing Balance Sheet and the accompanying letter report and in
connection with the resolution of any disputes with respect thereto and the
determination of the Final Balance Sheet. Buyer and its representatives shall be
entitled to review all workpapers prepared subsequent to the date hereof
relating to such audit, and to obtain access to the books and records of Seller
or its Affiliates to the extent required in order to permit Buyer to review the
Closing Balance Sheet and to resolve any disputes concerning same.
(c) The Closing Balance Sheet delivered by Seller
to Buyer shall be the Final Balance Sheet and shall be conclusive and binding on
the parties unless Buyer, within thirty (30) days after the delivery to Buyer of
the Closing Balance Sheet, notifies Seller in writing that Buyer disputes any of
the amounts set forth therein, specifying the nature of each dispute and the
basis therefor (the "Dispute Notice"). The parties shall attempt in good faith
to reach agreement resolving all of the disputes set forth in the Dispute Notice
within fifteen (15) days after the Dispute Notice is given by Buyer to Seller,
in which event the Closing Balance Sheet, as amended to the extent necessary to
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reflect the resolution of all such disputes, shall be the Final Balance Sheet
and shall be conclusive and binding on the parties. If the parties are unable to
resolve any or all of such disputes within the aforesaid 15-day period, the
parties shall, promptly after the expiration of such time period, submit all
unresolved disputes to a nationally recognized independent accounting firm
mutually agreeable to the parties, which firm shall not have had, or anticipate
having, a material relationship with either Buyer or Seller or their respective
Affiliates within the two (2) years preceding, or within one (1) year after, the
appointment (the "Arbiter"), for resolution. If the parties cannot agree on the
selection of the independent accounting firm to act as Arbiter, either party may
request the American Arbitration Association to appoint such a firm, and such
appointment shall be conclusive and binding on the parties. Promptly, but no
later than thirty (30) days after its acceptance of its appointment as Arbiter,
the Arbiter shall determine, based solely on presentations by Buyer and Seller,
and not by independent review, those items in dispute on the Closing Balance
Sheet and shall render a written report as to the resolution of each dispute and
the resulting calculation of the Final Balance Sheet and the Closing Date Net
Book Value. In resolving any disputed item, the Arbiter may not assign a value
to such item greater than the greatest value for such item claimed by either
party or less than the smallest value for such item claimed by either party. The
Arbiter shall have exclusive jurisdiction over, and resort to the Arbiter as
provided in this paragraph (c) shall be the sole recourse and remedy of the
parties against one another or any other person (including Andersen) with
respect to, any disputes arising out of or relating to the Closing Balance Sheet
and/or the Final Balance Sheet; and the Arbiter's determination shall be
conclusive and binding on the parties and shall be enforceable in a court of
law.
(d) The fees and expenses of Andersen shall be
paid by Seller. The fees and expenses of KPMG Peat Marwick, the consultant
employed by Buyer with respect to the transactions contemplated by this
Agreement, shall be paid by Buyer. The fees and expenses of the Arbiter shall be
borne equally by Seller and Buyer.
(e) As used herein, the term "Final Balance Sheet"
shall mean (i) the Closing Balance Sheet if no Dispute Notice is given by Buyer
within the time period set forth in Section 2.3(c) or (ii) if the Dispute Notice
is timely given and all of the disputed items are resolved by mutual agreement
of the parties, the Closing Balance Sheet, as amended, if necessary, to reflect
such resolution of all disputes, or (iii) if any or all of the disputed items
are submitted to the Arbiter for resolution, the Closing Balance Sheet, as
amended, if necessary, to reflect any resolution of any disputes by mutual
agreement of the parties and the resolution of all other disputes by the
Arbiter.
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(f) If the Final Purchase Price exceeds the
Preliminary Purchase Price, Buyer shall pay Seller the amount of such excess,
and if the Final Purchase Price is less than the Preliminary Purchase Price,
Seller shall pay Buyer the amount of such difference, in each case together with
interest thereon from the Closing Date to the date of payment at the annual rate
of five percent (5%) (the "Interest Rate"). Any payments to be made pursuant to
this Section 2.3(f) shall be made within five (5) Business Days after the date
on which the Final Balance Sheet is determined. Any payments to be made by Buyer
pursuant to this Section 2.3(f) shall be made by wire transfer of immediately
available funds to such account as may be designated by Seller and any payments
to be made by Seller pursuant to this Section 2.3(f) shall be made by Buyer and
Seller causing the amount payable to be disbursed to Buyer pursuant to the
Escrow Agreement and, if Seller's obligation exceeds the amounts paid to Buyer
pursuant to the Escrow Agreement, such excess payment shall be made by Seller by
wire transfer of immediately available funds to such account as may be
designated by Buyer.
2.4 Alfa Purchase Price Adjustment. If on the Closing Date
Seller shall not own 100% of the Alfa shares and shall convey less than 100% of
the Alfa shares to Buyer or an Affiliate of Buyer as directed by Buyer, the
Preliminary Purchase Price and the Final Purchase Price shall be reduced to
reflect that Buyer or its Affiliate is not purchasing 100% of the Alfa shares.
Such reduction in the Preliminary Purchase Price and the Final Purchase Price
shall be made by applying the Reduction Percentage to the value of the Fixed
Price Assets owned by Alfa and the Closing Date Net Book Value attributable to
Alfa in the calculation of the Preliminary Purchase Price and Final Purchase
Price as provided above. As used herein, the term "Reduction Percentage" shall
mean the percentage obtained by dividing the number of Alfa shares not being
purchased by Buyer or an Affiliate of Buyer by the total number of Alfa shares.
Notwithstanding any other provision of this Agreement to the contrary, Buyer
shall be obligated to proceed with the Closing if Seller is able to sell, on the
terms hereof, at least 89% of the share capital of Alfa, provided that all other
conditions to the obligations of Buyer have been satisfied or waived. Seller
shall also, if Seller shall not have acquired all of the shares covered thereby,
use its best efforts to assign to Buyer all of Seller's right to purchase
certain shares of Alfa pursuant to that certain Stock Purchase Agreement, dated
March 10, 1994, between Ireneo Orlandi and Seller (the "Orlandi Agreement"). If
Seller shall not be able to assign the Orlandi Agreement, Seller shall
nevertheless acquire the shares under the Orlandi Agreement and immediately
after acquiring such shares Seller shall deliver such shares to Buyer. In
connection with Buyer's acquisition of the Orlandi shares (directly or
indirectly), Buyer shall be responsible for the purchase price of the shares to
be acquired under the Orlandi Agreement (subject to reduction of the Preliminary
Purchase Price and the Final Purchase Price as provided herein) and Seller and
Buyer shall enter into
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such reasonably acceptable agreements as are necessary to effect the
simultaneous purchase of the shares under the Orlandi Agreement, the delivery of
such shares to Buyer, and, if applicable, the simultaneous consummation of the
Closing under this Agreement. In the event Buyer shall purchase (directly or
indirectly) the shares covered by the Orlandi Agreement, Seller shall cause all
Encumbrances (except any rights of first refusal or preemptive rights applicable
to Buyer's transfer of such shares) against the shares covered by the Orlandi
Agreement to be released and the Preliminary Purchase Price and Final Purchase
Price shall be reduced by the amounts which Buyer will be required to pay to
purchase the applicable Alfa shares pursuant to the Orlandi Agreement. It shall
be a condition precedent to the parties' obligations to consummate the
transactions contemplated by this Agreement that the other shareholders of Alfa
shall have waived, on terms reasonably satisfactory to Buyer, any right of first
refusal or pre-emptive rights they have with respect to the transfer of the Alfa
shares on the Closing Date (but not as to any subsequent transfer by Buyer).
2.5 Inter-Company Payables. Notwithstanding the foregoing,
Buyer shall have no obligation to assume any Inter-Company Payables or to pay
the amount thereof if Buyer determines that the Preliminary Purchase Price or
the Final Purchase Price would be materially increased thereby or if Buyer
determines that such assumption and payment would otherwise have a material
adverse effect on Buyer. Seller shall deliver to Buyer, by January 5, 1994,
reasonably detailed information concerning the Inter-Company Payables. In the
event Buyer determines that including Inter-Company Payables in Assumed
Liabilities would materially increase the Preliminary Purchase Price or the
Final Purchase Price or would otherwise have a material adverse effect on Buyer,
Buyer shall so notify Seller by January 21, 1995 and such notice shall set forth
in reasonable detail the basis of Buyer's determination. Upon receipt of such
notice, the parties shall commence good faith negotiations in an effort to reach
agreement on a treatment of the Inter-Company Payables which is fair and
equitable.
ARTICLE III
CLOSING
3.1 Closing Date. (a) The closing of the transactions
contemplated hereby (the "Closing") shall take place at Jones, Day, Reavis &
Pogue, North Point, 901 Lakeside Avenue, Cleveland, Ohio 44114 commencing at
9:00 a.m. on the later of January 31, 1995 or the second Business Day after the
conditions set forth in Articles IX and X have been satisfied, or at such other
time and/or place and/or on such other date as the parties may mutually agree
(the "Closing Date"). For all purposes, including without limitation, financial
accounting and tax purposes, the Closing shall be deemed to be effective as of
11:59 P.M. (Cleveland, Ohio
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time) on the Closing Date. The parties shall exert best efforts to consummate
the Closing on or before January 31, 1995.
(b) On the Business Day immediately preceding the
Closing Date, the parties shall conduct a pre-closing at the offices of Jones,
Day, Reavis & Pogue commencing at 9:00 a.m. at which each party shall present
for review by the other parties copies in execution form of all documents
required to be delivered by such party at the Closing.
3.2 Proceedings at Closing. All proceedings to be taken and
all documents to be executed and delivered by Seller and its Affiliates in
connection with the consummation of the transactions contemplated hereby shall
be reasonably satisfactory in form and substance to Buyer and its counsel. All
proceedings to be taken and all documents to be executed and delivered by Buyer
and its Affiliates in connection with the consummation of the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
Seller and its counsel. All proceedings to be taken and all documents to be
executed and delivered by all parties at the Closing shall be deemed to have
been taken, executed and delivered simultaneously, and no proceedings shall be
deemed taken nor any documents executed or delivered until all have been taken,
executed and delivered.
3.3 Deliveries by Seller to Buyer. At the Closing, Seller
shall deliver, or shall cause to be delivered, to Buyer, or such of its
Affiliates designated by Buyer under Section 13.5, the following:
(a) bills of sale and assignments, dated the
Closing Date;
(b) a limited warranty deed, dated the Closing
Date, duly executed by Seller and conveying the South Carolina Real Property and
containing warranties from Seller against matters arising by, through or under
Seller and against none other, subject only to the Permitted Exceptions;
(c) certificates evidencing the Subsidiary Shares,
duly endorsed for transfer or accompanied by duly executed stock powers
assigning the Subsidiary Shares, in blank, or other appropriate documentation
reflecting assignment of Seller's interest therein;
(d) approvals, certifications or other
documentation from or by Governmental Bodies necessary to evidence or signify
the successful assignment or transfer to Buyer of all Permits relating to the
Business or the Assets that are required by Law or this Agreement to be
transferred prior to the Closing;
(e) patent, trademark and copyright assignment
agreements, in recordable form dated the Closing Date;
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(f) assignment and assumption agreements in
respect of the Leased Real Property in each case dated the Closing
Date and in a recordable form;
(g) the certificates signed by a duly authorized
officer of Seller referred to in Section 9.1 hereof;
(h) the opinion of counsel for Seller referred to
in Section 9.8 hereof;
(i) the Escrow Agreement duly executed by Seller;
(j) the Transition Agreement duly executed by
Seller;
(k) the South Carolina Lease duly executed by
Seller;
(l) the Permits, plans, surveys and documents
related to the South Carolina Real Property and the other properties owned or
leased by Seller or its Affiliates with respect to the Business and to the
extent in Seller's or its Affiliates possession or control;
(m) such affidavits as the Title Company may
reasonably request in order to insure title in accordance with the
terms of this Agreement;
(n) any other approvals, certifications or other
documentation required by Law to be issued by or from any Governmental Body
evidencing or signifying approval or consent of such Governmental Body of or to
the consummation of the transactions contemplated by this Agreement;
(o) evidence reasonably satisfactory to Buyer that
Seller has complied with its obligations under Section 6.5 and that the consents
required by Section 9.7 have been obtained;
(p) evidence reasonably satisfactory to Buyer that
Seller has assumed and agreed to perform those Retained
Liabilities described in Section 1.3(b)(i);
(q) evidence reasonably satisfactory to Buyer that
the Subsidiaries have transferred to Seller or its Affiliates such
of the Acquired Sub Assets included within the Excluded Assets;
(r) all required real estate tax transfer returns
and affidavits required to transfer the South Carolina Real Property duly
executed by Seller, as required by applicable Law.
(s) an affidavit from Seller stating under
penalties of perjury the United States taxpayer identification
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number of Seller and that Seller is not a foreign person within
the meaning of Section 1445(b)(2) of the Code;
(t) the resignations of such directors and
officers of the Acquired Subsidiaries as Buyer may request not
later than five (5) days prior to the Closing Date;
(u) the assignment of the Orlandi Agreement and
evidence that the shares covered by the Orlandi Agreement are free from any
Encumbrance (except any rights of first refusal or preemptive rights on Buyer's
transfer of such shares), if the Orlandi Agreement is to be assigned to Buyer;
and
(v) all other agreements, certificates, documents
and instruments referred to in Article IX hereof to be executed by Seller or any
Affiliate of Seller on or prior to the Closing Date.
3.4 Deliveries by Buyer to Seller. At the Closing,
Buyer shall deliver to Seller the following:
(a) immediately available funds in the amount of
the Preliminary Purchase Price less the Escrow Amount by wire
transfer as provided in Section 2.1 hereof;
(b) evidence that Buyer has deposited funds in the
amount of the Escrow Amount into the escrow established pursuant
to the Escrow Agreement as provided in Section 2.1 hereof;
(c) an assumption agreement pursuant to which
Buyer, or one or more of its Affiliates, assumes all of the
Assumed Liabilities described in Section 1.3(a)(i)(A);
(d) patent, trademark and copyright assignment
agreements referred to in Section 3.3(e);
(e) Assignment and assumption of leases described
in Section 3.3(f);
(f) the Transition Agreement;
(g) the South Carolina Lease;
(h) the Escrow Agreement duly executed by Buyer;
(i) the certificates referred to in Section 10.1
hereof signed by duly authorized officers of Buyer;
(j) the opinion of counsel for Buyer referred to
in Section 10.5 hereof;
(k) all required real estate transfer tax returns
and affidavits required to transfer the South Carolina Real
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Property duly executed by Buyer, or any permitted assignee, as
required by applicable Law; and
(l) all other agreements, certificates, documents
and instruments referred to in Article X hereof to be executed by Buyer or any
Affiliate of Buyer on or prior to the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
4.1 Corporate Power and Authority; Effect of Agreement. (a)
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, is qualified to do business in all
jurisdictions in which it is required to be so qualified, and has all requisite
corporate power and authority to own or hold under lease the rights, properties
and assets it purports to own or hold under lease and to carry on the Business
as it is now conducted and to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Seller.
(b) This Agreement has been duly and validly
executed and delivered by Seller and constitutes the valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
except to the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws relating to
creditors' rights generally, and (ii) is subject to general principles of
equity. The execution, delivery and performance by Seller of this Agreement and
the consummation by Seller of the transactions contemplated hereby will not,
with or without the giving of notice or the lapse of time, or both, (x) violate
any provision of Law, rule or regulation to which Seller or any of the
Subsidiaries is subject, (y) violate any order, judgment or decree applicable to
Seller or any of the Subsidiaries or (z) violate any provision of the
Certificate of Incorporation or the By-laws, or equivalent organizational
documents of Seller or any of the Subsidiaries.
4.2 Subsidiaries. At Closing, Seller shall own 100% of the
issued and outstanding shares or quotas, as the case may be, of the
Subsidiaries, except with respect to Alfa, as to which Seller shall own, at
Closing, at least 89% of the issued and outstanding shares. Seller owns and at
Closing will own the shares of capital stock or quotas, as the case may be, of
the Subsidiaries free and clear of all Encumbrances. All of the
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issued and outstanding shares of capital stock or quotas, as the case may be, of
the Subsidiaries owned by Seller are validly issued, fully paid and
non-assessable. Except as set forth in Schedule 4.2 of the Disclosure Schedule,
there are outstanding no securities convertible into, exchangeable for, or
carrying the right to acquire equity securities of any of the Subsidiaries, or
subscriptions, warrants, options, rights or other arrangements or commitments
obligating any Subsidiary to issue or dispose of any of its equity securities or
any ownership interest therein. In the event Seller shall acquire additional
shares of Alfa prior to the Closing, the foregoing representations and
warranties shall be deemed made by Seller as to such additional shares.
4.3 Organization of the Subsidiaries. Each of the Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all requisite corporate
power and authority to own, or hold under lease, the rights, properties and
assets it purports to own or hold under lease and to carry on its business as it
is now being conducted. Each of the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation in all jurisdictions
where the nature of the property owned or leased by it, or the nature of the
business conducted by it, makes such qualification necessary and the absence of
such qualification would have a material adverse effect on the business or
financial condition of such Subsidiary.
4.4 Financial Statements. (a) Seller has delivered to Buyer
correct and complete copies of the unaudited balance sheets of the Business as
of October 31, 1994 and the related unaudited statements of operations and cash
flows for the ten (10) month period then ended (collectively, the "Base
Financial Statements").
(b) The Base Financial Statements (i) are accurate
and complete in all material respects, consistent with the books and records of
the Business (which are accurate and complete in all material respects), (ii)
have been prepared in accordance with the accounting principles which have been
used by Seller's Packaging Business, consistently applied throughout the periods
indicated, and (iii) fairly present the financial position, results of
operations and cash flows of the Business at the date thereof and for the
periods therein indicated.
(c) Except as and to the extent reflected in the
Base Financial Statements or Schedule 4.4(c) of the Disclosure Schedule, none of
the Acquired Subsidiaries had, as of the date of such financial statements, any
material Liabilities of any nature, except those of the type described in
Section 1.3(a)(i). Since the date of the Base Financial Statements, none of the
Acquired Subsidiaries have declared or paid any dividends or transferred any of
their assets to Seller or any of its Affiliates except as permitted in Section
1.2.
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(d) Buyer acknowledges that Seller has made no
representation as to the profitability of the Business and no such
representation shall be inferred from this Section 4.4 or any other
representation of Seller contained herein.
4.5 Absence of Certain Changes or Events. Except as set forth
in Schedule 4.5 of the Disclosure Schedule, since the date of the Base Financial
Statements, the Business has been conducted in all material respects only in the
ordinary course of business consistent with past practices, and the Business has
not (a) suffered any damage, destruction or casualty loss to its physical
properties; (b) incurred or discharged any obligation or liability or entered
into any other transaction except in the ordinary course of business consistent
with past practice; (c) suffered any material adverse change to its results,
financial condition or prospects; (d) increased the rate or terms of
compensation payable or to become payable to its directors, officers or key
employees or increased the rate or terms of any bonus, pension or other employee
benefit plan covering any of its directors, officers or key employees, except in
each case increases occurring in the ordinary course of business in accordance
with its customary practices (including normal periodic performance reviews and
related compensation and benefit increases) or as required by any pre-existing
Contract; (e) permitted any assets (whether real, personal or mixed, tangible or
intangible) to be subjected to any Encumbrance; or (f) cancelled or waived any
claims or rights of value or sold, transferred, distributed or otherwise
disposed of any material assets.
4.6 Title to and Condition of Properties. (a) The items listed
on Schedule 4.6(a) of the Disclosure Schedule constitute all of the machinery,
equipment, vehicles, office furniture, tools and other tangible personal
property, which have a net book value or replacement cost in excess of $25,000,
and all of the real property used in the Business.
(b) Except as set forth on Schedule 4.6(b) of the
Disclosure Schedule, Seller and its Affiliates with respect to the Business have
good title to all of the assets and properties which they purport to own,
including, without limitation, the items listed on Schedule 4.6(a) of the
Disclosure Schedule and those reflected on the Base Financial Statements),
except for assets and properties sold or consumed in the ordinary course of
business since the date of the Base Financial Statements, or, in the case of
leased property, have a valid, subsisting, good and marketable leasehold estate,
free and clear of Encumbrances, except (i) as set forth in Schedule 4.6(b) of
the Disclosure Schedule, and (ii) liens for taxes and assessments not yet due
(the matters set forth in the foregoing clauses (i) and (ii) being referred to
herein as the "Permitted Exceptions"). Seller owns fee simple title in and to
the South Carolina Real Property free and clear of
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all Encumbrances created by, through or under Seller, subject only
to the Permitted Exceptions.
(c) Except as set forth on Schedule 4.6(c) of the
Disclosure Schedule, the tangible assets and properties of Seller and its
Affiliates with respect to the Business (except the Excluded Assets) are in good
operating condition, normal wear and tear excepted, and are all of the tangible
assets used to conduct the Business as currently conducted.
4.7 Patents and Trademarks.
(a) The Intellectual Property comprise all of the
intellectual property rights used in the operation of the Business as currently
conducted. Schedule 4.7 of the Disclosure Schedule sets forth a complete and
correct list of all: (i) patented or registered Intellectual Property and
pending patent applications or other applications for registrations of
Intellectual Property owned or filed by or on behalf of Seller or its Affiliates
with respect to the Business; (ii) all trade names and unregistered trademarks
and service marks owned or used by Seller or its Affiliates with respect to the
Business and material to the financial condition, operating results or
operations of the Business; (iii) all unregistered copyrights, and mask works
owned or used by Seller or its Affiliates with respect to the Business and
material to the financial condition, operating results or operations of the
Business; and (iv) all licenses or similar agreements or arrangements for the
Intellectual Property to which Seller or its Affiliates with respect to the
Business is a party, either as licensee or licensor, including, without
limitation, material so-called "execute by opening" software licenses.
(b) Except as set forth in Schedule 4.7 of the
Disclosure Schedule: (i) Seller or an Affiliate of Seller owns and possesses all
right, title and interest in and to, or has a valid and enforceable license to
use, the Intellectual Property used in the Business as currently conducted free
and clear of all liens, licenses, security interests, encumbrances and other
restrictions; (ii) no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Intellectual Property has been
made, is currently outstanding or is, to Seller's Knowledge, threatened, and to
Seller's Knowledge there are no grounds for the same; (iii) no loss or
expiration of any part of the Intellectual Property is to Seller's Knowledge
threatened or pending; (iv) neither Seller nor any Affiliate of Seller has
received any written notice of any infringement or misappropriation by, or
conflict with, any third party with respect to the Intellectual Property
(including, without limitation, any demand or request that Seller or any
Affiliate of Seller license any rights from a third party); and (v) in
connection with the Business, to Seller's Knowledge, neither Seller nor any
Affiliate of Seller has infringed, misappropriated or otherwise conflicted with
any intellectual property rights or
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other rights of any third parties and neither Seller nor any Affiliate of Seller
is aware of any infringement, misappropriation or conflict which will occur as a
result of the continued operation of the Business as currently conducted.
(c) All of the Intellectual Property is or will be
owned by, or properly assigned or licensed to, Seller or an Affiliate of Seller
at the time of the Closing, as set forth in Schedule 4.7 of the Disclosure
Schedule. Except as set forth in Schedule 4.7 of the Disclosure Schedule, the
transactions contemplated by this Agreement will have no material adverse effect
on the right, title and interest in and to the Intellectual Property. Seller and
each Affiliate of Seller has taken all necessary and desirable action to
maintain and protect the Intellectual Property and will continue to maintain and
protect the Intellectual Property prior to the Closing so as to not materially
adversely affect the validity or enforceability of the Intellectual Property.
4.8 Contracts. (a) For purposes of this Agreement, the term
"Contract" means each contract or agreement, whether written or oral (including
any and all amendments thereto), to which Seller or any Affiliate of Seller with
respect to the Business is a party or by which Seller or any Affiliate of Seller
with respect to the Business is bound. Schedule 4.8 of the Disclosure Schedule
contains a true and correct list, as of the date hereof, of the following
Contracts:
(i) any collective bargaining agreement or
labor contract;
(ii) any distributorship, agency or
manufacturer's representative agreement;
(iii) any open sales order, contract or firm
quotation for more than $100,000 ("Backlog Contracts");
(iv) any purchase order or requirements
contract for more than $20,000 ("Supply Requirements Contracts");
(v) any insurance policies for which Seller
or any Affiliate of Seller with respect to the Business is a
beneficiary or a named insured;
(vi) any equipment lease requiring annual
expenditures of more than $20,000;
(vii) any vehicle lease requiring annual
expenditures of more than $5,000;
(viii) any real estate lease;
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(ix) any contract between Seller and any of
its Affiliates, or between any Affiliates of Seller, related to
the Business;
(x) any bond, letter of credit, or agreement
of guarantee, surety or indemnification;
(xi) any license agreement (other than
Intellectual Property license agreements);
(xii) any agreement or contract that
restricts Seller or any Affiliate with respect to the Business from competing in
any line of business with any other person anywhere in the world;
(xiii) any management, employment, consulting
or severance contract with any officer, consultant, director,
employee or other person or entity;
(xiv) any joint venture or partnership
agreement;
(xv) any contract or agreement that involves
capital expenditures of more than $15,000; and
(xvi) any Contract which requires the payment
or receipt of $25,000 in any one year period or is otherwise material to the
Business and is not of the type included in any of the foregoing clauses (i)
through (xv).
(b) Except as set forth in Schedule 4.8 of the
Disclosure Schedule, neither Seller, nor any Affiliate of Seller is in material
default, and to Seller's Knowledge and to the knowledge of any Affiliate of
Seller, none of the other parties thereto is in material default, under any of
the foregoing Contracts.
(c) Prior to Closing, Seller shall provide to
Buyer copies of all Contracts listed in Schedule 4.8 of the Disclosure Schedule.
4.9 Litigation. Except as set forth in Schedule 4.9 of the
Disclosure Schedule, there is no Legal Proceeding pending against Seller or any
Affiliate of Seller with respect to the Business. To Seller's Knowledge and to
its Affiliates' knowledge, there is no Legal Proceeding threatened against
Seller or any Affiliate of Seller with respect to the Business which, if
adversely determined, would have a material adverse effect on the Business.
Except as set forth in Schedule 4.9 of the Disclosure Schedule, none of Seller
or any Affiliate of Seller with respect to the Business is subject to any
outstanding orders, rulings, judgments or decrees.
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4.10 Compliance with Laws. (a) Schedule 4.10 of the Disclosure
Schedule lists all material Permits issued to Seller or any Affiliate of Seller
with respect to the Business. Except as set forth in Schedule 4.10 of the
Disclosure Schedule, (i) no other material Permit is necessary to lawfully
conduct the Business as it is currently conducted, (ii) Seller and each
Affiliate of Seller with respect to the Business is in material compliance with
all Permits, Laws and Orders of Governmental Bodies, (iii) none of Seller or any
Affiliate of Seller with respect to the Business has received written notice, or
knows of the actual or threatened issuance of any notice, of such violation or
alleged violation of any such Permits, Laws or Orders of Governmental Bodies,
and (iv) none of Seller or any Affiliate of Seller with respect to the Business
has received any written notice of any violation or alleged violation of any
applicable federal or state antitrust Laws, in respect of which violation the
period of limitations on liability has not expired.
(b) Except as set forth in Schedule 4.10, (i) the
real estate owned or leased by Seller or any Affiliate with respect to the
Business, including without limitation, the South Carolina Real Property, is
covered by a valid and subsisting certificate of occupancy or similar Permit
with respect to the occupancy and use of existing improvements located thereon,
and (ii) the improvements on such real property and the uses to which Seller or
any Affiliate of Seller are presently employing such improvements are not, and
will not be prior to the Closing Date, in material violation of such
certificates or applicable zoning and land use Laws or dependent upon variances,
conditional use permits or similar approvals.
4.11 Environmental and Health/Safety Compliance.
Except as set forth in Schedule 4.11 of the Disclosure Schedule:
(a) each of Seller and any Affiliate of Seller
with respect to the Business is and, to Seller's Knowledge, has at all times
been in material compliance with all applicable Environmental Laws and
Health/Safety Laws.
(b) each of Seller and any Affiliate of Seller
with respect to the Business has obtained, maintained and materially complied
with all environmental permits, licenses, authorizations or qualifications
required for the operation, ownership and use of its (i) present businesses and
(ii) presently owned or leased assets and properties.
(c) no Hazardous Materials have been generated,
transported, stored, buried, dumped, treated, recycled or otherwise handled in
any way by any of Seller or any Affiliate of Seller with respect to the
Business, except in compliance with applicable Laws and in a manner such that
there has been or is no Release of any Hazardous Material).
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(d) no Hazardous Materials are located on or
beneath, contained in or otherwise form a part of the owned or leased assets or
properties of any of Seller and any Affiliate of Seller with respect to the
Business, except for those handled in compliance with applicable Laws and in a
manner such that there has been or is no Release of any Hazardous Material).
(e) no PCBs or asbestos are or, to Seller's
Knowledge, have been located on or beneath, contained in or otherwise form a
part of the owned or leased assets or properties of any of Seller or any
Affiliate of Seller with respect to the Business in a manner not in material
compliance with applicable Laws.
(f) to Seller's Knowledge, there has been no prior
use of the owned or leased assets or properties of any of Seller or any
Affiliate of Seller with respect to the Business by any Person whereby Hazardous
Materials were located on or beneath, contained in or otherwise formed a part of
such assets or properties, except those handled in compliance with applicable
Laws and in a manner such that there has been or is no Release of any Hazardous
Material).
(g) there is no present, nor, to Seller's
Knowledge, has there been any past, Release of Hazardous Materials on or from
the owned or leased assets or properties of any of Seller or any Affiliate of
Seller with respect to the Business or from assets or properties formerly owned
or operated by any of Seller or any Affiliate of Seller with respect to the
Business that have caused Hazardous Material to become located on or beneath,
contained in or otherwise form a part of such properties.
(h) Seller has received no written information
indicating that any person or entity, including any employee, may have
materially impaired health as the result of the operation of the Business or as
a result of the Release of Hazardous Materials from the assets or properties of
any of Seller or any Affiliate of Seller with respect to the Business.
(i) neither Seller nor any Affiliate of Seller
with respect to the Business has treated, stored or disposed of any Hazardous
Waste, as such term is used within the meaning of the Resource Conservation and
Recovery Act of 1976, as amended, or similar applicable state or municipal Law,
in violation of any applicable Laws.
(j) neither Seller nor any Affiliate of Seller
with respect to the Business has received any notice from any governmental body
or agency or other person or entity advising it that it is potentially
responsible for response costs with respect to a Release or threatened Release
of Hazardous Materials.
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(k) no underground storage tanks are or have ever
been located on any properties owned or leased by any of Seller or any Affiliate
of Seller with respect to the Business.
(l) no administrative order or notice, consent
order or decree, litigation, action, claim, settlement or citation with respect
to Environmental Laws, Health/Safety Laws or Hazardous Materials exists with
respect to or in connection with the operation of any of the assets or
properties currently owned or leased by any of Seller or any Affiliate of Seller
with respect to the Business.
4.12 Employee Benefit Plans.
(a) Schedule 4.12(a)(i) of the Disclosure Schedule
lists each employee benefit plan as defined in Section 3(3) of ERISA or any
comparable Law currently covering any current employee of the Business (an
"Employee Benefit Plan"). Schedule 4.12(a)(ii) of the Disclosure Schedule lists
each employment or severance contract or arrangement, each stock option plan,
restricted stock plan, stock appreciation right plan, executive compensation
practice and other executive perquisite, each plan or arrangement providing for
insurance coverage, severance, termination or similar coverage and all written
compensation policies and practices maintained by Seller or any Affiliate of
Seller that covers any current or former employee, director or agent of the
Business or any portion of the Business and that is not an Employee Benefit Plan
(a "Benefit Arrangement").
(b) To Seller's Knowledge, each Employee Benefit
Plan and each Benefit Arrangement being assumed by Buyer (the "Assumed Plan")
complies in all material respects, and has been operated and administered in all
material respects in accordance with its terms and all applicable Laws. Except
as required by Law, no Assumed Plan currently covers any former employee of the
Business.
(c) Seller has delivered or made available to
Buyer complete and correct copies of (i) each Employee Benefit Plan and each
Benefit Arrangement, and (ii) with respect to each Assumed Plan, any trust
agreements, funding agreements or insurance contracts relating thereto and, if
applicable, the summary plan description currently in effect and all material
modifications thereto.
(d) Except as set forth on Schedule 4.12(d) of the
Disclosure Schedule, there are no actions or claims existing or pending (other
than routine claims for benefits) or, to Seller's Knowledge, threatened with
respect to any Assumed Plan.
(e) All contributions required to be made by
Seller or any Affiliate of Seller under applicable law or the terms of any
Assumed Plan to each Employee Benefit Plan and each
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Benefit Arrangement have been made within the time prescribed by such law, plan,
or arrangement. There does not exist any accumulated funding deficiency within
the meaning of either Section 412 of the Code or Section 302 of ERISA as to any
Assumed Plan maintained in the United States (the "U.S. Assumed Plan"), nor
would there exist any such deficiency but for the application of an alternative
minimum funding standard. There has not been issued any waiver of the minimum
funding standards imposed by the Code with respect to any such U.S. Assumed
Plan. Except as set forth on Schedule 4.12(e) of the Disclosure Schedule, the
fair market value of the assets of each Assumed Plan that is a funded defined
benefit pension plan or a funded foreign pension plan equals or exceeds the
actuarial present value of all accrued benefits under such plan or arrangement
(whether or not forfeitable), based on the actuarial assumptions used in the
most recent valuation performed by the actuary for such plan or arrangement.
(f) No U.S. Assumed Plan is a "multiple employer"
plan within the meaning of Section 4063 or 4064 of ERISA or a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA.
(g) Except as set forth on Schedule 4.12(g) of the
Disclosure Schedule, the execution and performance of the transactions
contemplated by this Agreement will not result in an increase in the amount of
compensation or benefits or accelerate the vesting or timing of payment of any
benefits payable under an Assumed Plan to or in respect of any current or former
employee of the Business or the beneficiary or dependent of any such current or
former employee.
(h) Except as set forth on Schedule 4.12(h) of the
Disclosure Schedule, to Seller's Knowledge, no amounts paid or payable by any of
Buyer or any Affiliate of Buyer (including without limitation, the Acquired
Subsidiaries) to current or former employees of the Business as a result of or
in connection with the transactions contemplated by this Agreement will fail to
be deductible for federal income tax purposes by reason of Section 280G of the
Code, provided that no such amount paid or payable to any such employee shall
exceed such employee's annual base salary.
(i) Except as set forth on Schedule 4.12(i) of the
Disclosure Schedule or required by Law, neither Seller, nor any Affiliate of
Seller, maintains, sponsors, or has any obligation to provide, any
post-employment welfare, health, medical or life insurance benefits to any
current or former employee of the Business.
4.13 Consents. Except as set forth in Schedule 4.13 of
the Disclosure Schedule, no consent, approval or authorization of,
or exemption by, or filing with, any Governmental Body (other than
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pursuant to the HSR Act) is required in connection with the execution, delivery
and performance by Seller or any Affiliate of Seller of this Agreement or the
taking of any other action contemplated hereby, excluding, however, consents,
approvals, authorizations, exemptions and filings, if any, which Buyer is
required to obtain or make.
4.14 Taxes. (a) Except as set forth in Schedule 4.14 of the
Disclosure Schedule, all Tax Returns required to be filed by or with respect to
the Subsidiaries have been filed in a timely manner (taking into account all
lawful extensions of due dates), all such Tax Returns are correct and complete
and all Taxes due, or which may be due, with respect to the periods or events
covered by such Tax Returns have been paid. Except as set forth in Schedule 4.14
of the Disclosure Schedule, there are no actions or proceedings pending or
threatened with respect to any of the Subsidiaries concerning any Taxes.
(b) Seller is not a "foreign person" within the
meaning of Section 1445(b) (2) of the Code, and Seller shall furnish Buyer at
Closing with affidavits to that effect in form reasonably satisfactory to Buyer.
(c) Each Subsidiary is a foreign corporation, none
of the Subsidiaries, other than Figgie International Mexico, is or ever has been
a corporation described in Section 1504(d) of the Code, and none of the
Subsidiaries is or ever has been subject to taxation pursuant to Sections 881 or
882 of the Code, or otherwise subject to taxation in the United States.
(d) None of the Assets has ever been the subject
of a so-called "safe harbor lease" to which Reg. ss. 5c.158(f)(8)
applies or applied. The transactions contemplated by this
Agreement will not, in any respect, subject Buyer or its
Affiliates to Section 1445 of the Code.
(e) Except as provided in Section 4.14(c), none of
the Subsidiaries is or ever has been a member of a consolidated or affiliated
group for purposes of taxation under any applicable Law. None of the
Subsidiaries is a party to any tax sharing agreement or similar agreement with
Seller or any Affiliate of Seller.
4.15 Labor Relations and Practices. (a) Except as set forth in
Schedule 4.15 of the Disclosure Schedule, there are no material controversies
pending or, to Seller's Knowledge, threatened, between Seller or any Affiliate
of Seller with respect to the Business and their employees. Schedule 4.15 of the
Disclosure Schedule contains a complete and accurate list of all labor
arbitrations, equal employment opportunity, unfair labor practice charges and
claims for unfair dismissal, if any, between Seller or any Affiliate of Seller
with respect to the Business and
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their employees or any of them, which occurred at any time within the last five
years.
(b) Schedule 4.15 of the Disclosure Schedule
contains a complete list of all collective bargaining agreements and other labor
agreements to which Seller or any Affiliate of Seller with respect to the
Business is a party. Except as set forth on Schedule 4.15 of the Disclosure
Schedule, neither Seller nor any Affiliate of Seller with respect to the
Business is a party to any collective bargaining agreement or other labor
agreement. Except as set forth on Schedule 4.15 of the Disclosure Schedule,
there is not now any actual or, to Seller's Knowledge, threatened strike,
picket, work stoppage or slowdown, or other material labor trouble with respect
to any of the employees of Seller or any Affiliate of Seller with respect to the
Business. Schedule 4.15 of the Disclosure Schedule contains a complete and
accurate list of all open claims for worker's compensation, including the names
of the claimants, the claim numbers, the potential dollar liabilities to the
insurer or Seller or any Affiliate of Seller with respect to the Business and
the amounts paid to date.
4.16 Product Warranty and Product Liability. Except as set
forth on Schedule 4.16 of the Disclosure Schedule, there are no product warranty
or product liability claims pending or, to Seller's Knowledge, threatened
against any of Seller or any Affiliate of Seller with respect to the Business
and, to Seller's Knowledge, there is no state of facts or the occurrence of any
event forming the basis for any such product warranty, product liability or
other tort claim. Schedule 4.16 of the Disclosure Schedule sets forth a complete
and accurate summary of product liability claims made against any of Seller or
any Affiliate of Seller with respect to the Business within the past five (5)
years.
4.17 Backlog Contracts. Seller and each Affiliate of Seller
which is party to any Backlog Contracts, as the case may be, has a reasonable
expectation of being able to meet its obligations under the Backlog Contracts to
which it is a party, in accordance with the terms of such Backlog Contracts.
4.18 Supply Requirement Contracts. Except as set forth on
Schedule 4.18 of the Disclosure Schedule, each of the Supply Requirement
Contracts is on commercially reasonable terms and none of the Supply Requirement
Contracts require purchases by Seller or any Affiliate of Seller, as the case
may be, in excess of their reasonably expected requirements.
4.19 Government Contracts. Neither Seller nor any
Affiliate of Seller with respect to the Business is party to any
contract, whether oral or written, with any Governmental Body.
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4.20 Brokers. No Person has acted directly or indirectly as a
broker, finder or financial advisor for Seller or any Affiliate of Seller in
connection with the negotiations relating to or the transactions contemplated by
this Agreement and no Person is entitled to any fee, commission or like payment
in respect thereof based in any way on any agreement, arrangement or
understanding made by or on behalf of Seller or any Affiliate of Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to carry on
its business as it is now being conducted, and to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby.
5.2 Corporate Power and Authority; Effect of Agreement. The
execution, delivery and performance by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes the valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms,
except to the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws relating to
creditors' rights generally, and (ii) is subject to general principles of
equity. The execution, delivery and performance by Buyer of this Agreement and
the consummation by Buyer of the transactions contemplated hereby will not, with
or without the giving of notice or the lapse of time, or both, (i) violate any
provision of law, rule or regulation to which Buyer is subject, (ii) violate any
order, judgment or decree applicable to Buyer or (iii) violate any provision of
the Certificate of Incorporation or the By-laws of Buyer.
5.3 Consents. No consent, approval or authorization of, or
exemption by, or filing with, any governmental authority (other than pursuant to
the HSR Act and similar Italian Laws) is required in connection with the
execution, delivery and performance by Buyer of this Agreement, or the taking of
any other action contemplated hereby, excluding, however, consents, approvals,
authorizations, exemptions and filings, if any, which Seller or any Affiliate of
Seller is required to obtain or make.
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5.4 Availability of Funds. Buyer will have available on the
Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
5.5 Litigation. There is no Litigation pending or, to Buyer's
knowledge, threatened (i) against Buyer or any of its Affiliates with respect to
which there is a reasonable likelihood of a determination which would have a
material adverse effect on the ability of Buyer to perform its obligations under
this Agreement, or (ii) which seeks to enjoin or obtain damages in respect of
the consummation of the transactions contemplated hereby. Neither Buyer nor any
of its Affiliates is subject to any outstanding orders, rulings, judgments or
decrees which would have a material adverse effect on the ability of Buyer to
perform its obligations under this Agreement.
5.6 Purchase for Investment. Buyer is purchasing the
Subsidiary Shares for investment and not with a view to any public
resale thereof.
5.7 Brokers. No Person has acted directly or indirectly as a
broker, finder or financial advisor for Buyer or any Affiliate of Buyer in
connection with the negotiations relating to or the transactions contemplated by
this Agreement and no Person is entitled to any fee, commission or like payment
in respect thereof based in any way on any agreement, arrangement or
understanding made by or on behalf of Buyer or any Affiliate of Buyer.
ARTICLE VI
COVENANTS OF SELLER
Seller hereby covenants and agrees with Buyer as follows:
6.1 Cooperation; Assignments. (a) From the date hereof and
prior to the Closing, Seller will use its best efforts, and will cooperate with
Buyer, to secure all necessary consents, approvals, authorizations, exemptions
and waivers from third parties (including pursuant to the HSR Act and similar
Italian Laws) as shall be required in order to enable Seller and its Affiliates
to effect the transactions contemplated hereby, and will otherwise use its best
efforts to cause the consummation of such transactions in accordance with the
terms and conditions hereof.
(b) Notwithstanding anything herein to the
contrary, to the extent that any Contract or any Permit included in the Assets
is not capable of being assigned, transferred, subleased or sublicensed without
the consent or waiver of the issuer thereof or the other party thereto or any
third party, and
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despite the exercise by Seller of its best efforts to obtain same such consent
or waiver cannot be obtained, or if such assignment, transfer, sublease or
sublicense would constitute a violation of any Law, this Agreement shall not
constitute an assignment, transfer, sublease or sublicense thereof.
(c) If any such consent or waiver is not obtained
or an assignment, transfer, sublease or sublicense would constitute a violation
of Law, (i) Seller shall, or shall cause its Affiliates to, at Buyer's request,
use their best efforts (x) to provide to Buyer the benefits of any such
Contracts or Permits included in the Assets, (y) to cooperate in any arrangement
designed to provide such benefits to Buyer and (z) to enforce for the account of
Buyer any rights of Seller or any Affiliate of Seller arising from any such
Contracts or Permits included in the Assets against such issuer or the other
party or parties referred to therein, including the right to elect to terminate
or not renew in accordance with the terms thereof on the advice of Buyer and
(ii) Buyer shall perform the obligations of Seller or its Affiliate arising
under such Contracts and Permits to the extent that by reason of the
transactions consummated pursuant to this Agreement, Buyer has control over the
resources necessary to perform such obligations and Buyer receives the benefit
of such Contract or Permit.
6.2 Conduct of Business. (a) Except as may be otherwise
contemplated by this Agreement, from the date hereof and prior to the Closing,
Seller will cause the Business to (i) operate only in the ordinary course in
substantially the same manner as heretofore conducted; (ii) preserve intact the
present business operations, organization and goodwill of the Business; (iii)
maintain its properties, machinery and equipment in good operating condition and
repair, sufficient to enable the Business to operate in all material respects in
the manner in which the Business is currently operated; (iv) continue all
existing insurance policies (or comparable insurance) of or relating to the
Business in full force and effect; (v) use its best efforts to keep available
until the Closing the services of its present officers, employees and agents (as
a group); and (vi) preserve its relationship with its lenders, suppliers,
customers, licensors and licensees and others having business dealings with it
such that the Business will not be impaired. In addition, Seller shall obtain
Buyer's written consent prior to amending an existing Contract or entering into
any additional Contract of the type described in Section 4.8(a)(i) through
(xvi).
(b) Except as otherwise may be contemplated by
this Agreement, Seller shall not, and shall cause its Affiliates
not to, do any of the following:
(i) (A) increase the rate of compensation
payable or to become payable to any of the employees or agents of
Seller or any Affiliate of Seller with respect to the Business,
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other than in the ordinary course of business of the Business, or (B) amend in
any material respect any Employee Benefit Plan or Benefit Arrangement to or in
respect of any such employee or agent, other than as may be required to maintain
compliance with ERISA and/or the Code;
(ii) (A) incur or become subject to, or agree
to incur or become subject to, any material obligation or liability (contingent
or otherwise) relating to Seller or any Affiliate with respect to the Business,
except normal trade or business obligations (including Contracts) incurred in
the ordinary course of business and consistent with past practice (except the
type of Contract described in Section 4.8(a)(i) through (xvi), subject, however,
to any dollar amounts set forth therein), (B) sell, assign, transfer, convey,
lease or otherwise dispose of any of the Assets or the properties or assets of
the Acquired Subsidiaries, other than inventory in the ordinary course of
business and consistent with past practice, (C) cancel or compromise any
material debt or claim, or waive or release any material right relating to the
Business, or (D) acquire any material assets relating to the Business other than
in the ordinary course of business; or
(iii) agree to do any of the foregoing.
6.3 Access. From the date hereof and prior to the Closing,
Seller shall provide Buyer with any routine reports provided by the management
of Seller and any Affiliate of Seller with respect to the Business promptly
after the preparation of same, and with such other information as Buyer may from
time to time reasonably request with respect to the Business and the
transactions contemplated by this Agreement, and shall provide Buyer and its
representatives reasonable access during regular business hours and upon
reasonable notice to the properties, books and records of the Business as Buyer
may from time to time reasonably request. All such information and access shall
be subject to the terms and conditions of the confidentiality agreement
previously entered into by Seller and Buyer (the "Confidentiality Agreement").
6.4 Further Assurances. At any time or from time to time after
the Closing, Seller shall, at the request of Buyer and at Buyer's expense,
execute and deliver any further instruments or documents and take all such
further action, or cause its Affiliates to do the same, as Buyer may reasonably
request in order to evidence the consummation of the transactions contemplated
hereby, including without limitation, preparing documents suitable for
recordation in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other similar domestic or foreign agency or office.
6.5 Release of Certain Liens. Seller shall file, or
cause to be filed, Form UCC-3 termination statements and obtain,
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or cause to be obtained, any other releases, consents, waivers or similar
documents necessary to release any Encumbrance on the Assets, the Subsidiary
Shares, and the properties and assets of the Subsidiaries that is not a
Permitted Exception or otherwise permitted herein.
ARTICLE VII
COVENANTS OF BUYER
Buyer hereby covenants and agrees with Seller as follows:
7.1 Cooperation by Buyer. From the date hereof and prior to
the Closing, Buyer will use its best efforts, and will cooperate with Seller, to
secure all necessary consents, approvals, authorizations, exemptions and waivers
from third parties (including pursuant to the HSR Act and any similar Italian
Law) as shall be required in order to enable Buyer to effect the transactions
contemplated hereby, and will otherwise use its best efforts to cause the
consummation of such transactions in accordance with the terms and conditions
hereof. Nothing in this Agreement shall be construed to require Buyer or any of
its Affiliates to divest or hold separate any portion of the Business or any
portion of the business of Buyer or its Affiliates.
7.2 Further Assurances. At any time or from time to time after
the Closing, Buyer shall, at the request of Seller and at Seller's expense,
execute and deliver any further instruments or documents and take all such
further action as Seller may reasonably request in order to evidence the
consummation of the transactions contemplated hereby.
7.3 Post-Closing Access.
(a) From and after the Closing, Buyer shall
provide Seller with reasonable access during normal business hours to the books
and records of Buyer (other than books and records protected by the
attorney-client privilege) to the extent relating to the Business prior to the
Closing as is necessary in connection with personnel, legal, tax and regulatory
matters relating directly to the Business.
(b) Buyer may take such action as it deems
reasonably appropriate to separate or redact information unrelated to the
Business from documents and other materials requested and made available
pursuant to this Section and to condition access to such materials which are
deemed confidential by Buyer upon the agreement by Seller in writing (i) not to
disclose to any Person or use, and not to permit its Affiliates to disclose to
any Person or use, such confidential information, and (ii) to obtain written
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confidentiality agreements from each Affiliate who is given access to such
confidential information.
ARTICLE VIII
ADDITIONAL COVENANTS
8.1 Acquired Subsidiary Taxes.
(a) (i) Buyer shall cause to be prepared and
timely filed all required Tax Returns of the Acquired Subsidiaries for any
period which ends on or before the Closing Date for which Tax Returns have not
been filed or required to have been filed on or before such date and for taxable
periods beginning before and ending after the Closing Date (Tax Returns for such
latter periods being referred to herein as "Straddle Returns"). At least fifteen
(15) days prior to the filing of any Tax Returns required to be filed by Buyer
pursuant to the preceding sentence, Buyer shall submit copies of such returns to
Seller for Seller's approval, which approval shall not be unreasonably withheld.
In the event of a dispute with respect to any such Tax Returns, Buyer shall
determine the final form of such returns. All such Tax Returns shall be prepared
and all elections with respect to such returns shall be made, to the extent
permitted by law, in a manner consistent with prior practice of the Acquired
Subsidiary involved.
(ii) Buyer shall timely cause to be paid all
Taxes for the periods to which the Tax Returns to be filed pursuant to Section
8.1(a)(i) relate. Taxes to be caused to be paid by Buyer to the extent
attributable to any period or portion of a period ending on or before the
Closing Date shall be referred to herein as "Pre-Closing Taxes." Seller will pay
to Buyer an amount equal to the Pre-Closing Taxes, in excess of any reserve
therefor in the Final Balance Sheet, due with respect to any such Tax Return. In
the case of a Straddle Return, Pre-Closing Taxes shall be calculated by Buyer on
the basis of events through the close of business on the Closing Date and at
least fifteen (15) days prior to the filing of a Straddle Return, Buyer shall
submit to Seller for Seller's approval, which shall not be unreasonably
withheld, Buyer's calculation of the Pre-Closing Taxes in respect of such
Straddle Return. Any amounts owed by Seller to Buyer pursuant to this Section
8.1(a)(ii) shall be paid by Seller within the later of five (5) days of Buyer's
request therefor or five (5) days prior to the date on which the related Tax is
due.
(b) Seller will indemnify and hold harmless Buyer
and its Affiliates against any and all Liability (including, without limitation,
interest, additions to Tax and penalties) for Pre-Closing Taxes. Such
indemnification shall be in accordance with Section 13.2.
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(c) After the Closing Date, Buyer and Seller shall
make available to the other, as reasonably requested, and to any Taxing
Authority, all information, records or documents relating to Tax liabilities or
potential Tax liabilities of any of the Acquired Subsidiaries for all periods
and shall preserve all such information, records and documents until the
expiration of any applicable statute of limitations or extensions thereof.
(d) In the event of any foreign Tax audits or
assessments which may affect the Tax liabilities of any Acquired Subsidiary for
which Seller would be liable under Section 8.1, Buyer shall provide Seller with
notice of such audit or assessment and Seller shall indemnify Buyer in respect
thereof in accordance with Section 13.2.
(e) Seller will indemnify and hold harmless Buyer
and its Affiliates against any and all Liabilities which may be
imposed upon Buyer or any of its Affiliates under Treas. Regs.
Section 1.1502-6 or any similar provision of any Law.
8.2 Corporate Names. (a) Subject to the provision of Section
8.2(b), Buyer acknowledges that, as between Buyer and Seller, Seller has the
absolute and exclusive proprietary right to all names, marks, trade names,
trademarks, service names and service marks (collectively "Names") incorporating
"Figgie" or any similar Name and to all corporate symbols or logos (collectively
"Logos") incorporating "Figgie" or any similar Name, all right to which and the
goodwill represented thereby and pertaining thereto are being retained by Seller
and are not included in the Assets. Subject to the provisions of Section 8.2(b),
Buyer agrees that it will not, and will cause the Acquired Subsidiaries not to,
use the Name "Figgie" or any similar Name or any Logo incorporating such Name or
any similar Name in connection with the sale of any products or services or
otherwise, and if any of the Assets or any of the assets of the Acquired
Subsidiaries bears either such Name or Logo, Buyer shall or shall cause the
appropriate Acquired Subsidiary, prior to the use or sale of such assets, to
delete such Name or Logo or clearly and prominently indicate that it is no
longer affiliated with Seller or any Affiliate thereof.
(b) For a period of one (1) year from the Closing
Date (the "Window Period"), Buyer shall have the right to (i) use the "Figgie
Packaging System" Name or Logo in connection with the Business and (ii) to use
any assets on hand, including without limitation, any catalogs, invoices or
packaging material, bearing the "Figgie Packaging System" Name or Logo, in each
case without having to remove or obliterate the Name or Logo thereon.
Immediately upon the expiration of the Window Period, Buyer shall cease to use
such Name or Logo and shall remove such Name or Logo from such catalogs,
invoices or packaging material or clearly and prominently indicate that "Figgie
Packaging Systems" is not affiliated with Buyer or any Affiliate thereof.
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8.3 Transition Services. At or prior to Closing, Buyer and
Seller shall enter into a transition services agreement (the "Transition
Agreement"), in form and substance reasonably acceptable to Seller and Buyer,
pursuant to which Seller shall provide to Buyer management information system
services substantially similar to the management information system services
provided to the Business prior to the date hereof, which services are described
on Annex 6 hereto. The Transition Agreement shall be for a term of six (6)
months with an option by Buyer to extend the term for an additional three (3)
months and shall provide for a one-time database separation fee of $35,000 and a
monthly fee of $11,000 and Buyer shall pay the cost of downloading from the VAX.
8.4 Non-Competition. (a) Seller agrees that for a period of
two (2) years following the Closing Date, neither Seller nor any of its
Affiliates will directly or indirectly manage, operate, control or participate
in the ownership, management, operation or control of any business which
manufactures or sells products which are the same as the products manufactured
or sold by the Business as of the Closing Date within those geographical areas
or markets in which Seller presently conducts, or has in the two (2) years prior
to the Closing, conducted the Business. For these purposes, ownership of
securities of a company whose securities are registered under the Securities
Exchange Act of 1934, as amended, not in excess of 10% of any class of such
securities shall not be considered to be competition with the Business. Further,
Seller agrees that for a period of two (2) years following the Closing Date,
neither Seller nor any of its Affiliates will directly or indirectly induce any
person who was an employee of the Business on or after the Closing Date to
terminate such employment relationship or employ such person while such person
is in the employ of the Business or for one (1) year thereafter. The foregoing
covenant not to compete shall not be interpreted either to limit or prohibit
Seller's operation of the remaining portion of the Packaging Business (exclusive
of the Business) in the manner in which it has been conducted in the past, or to
limit or prohibit in any manner whatsoever any transferee of the remaining
portion of the Packaging Business from competing against the Business.
(b) It is the desire and intent of the parties to this
Agreement that the provisions of this Section 8.4 shall be enforced to the
fullest extent permissible under the Laws and public policies applied in each
jurisdiction in which enforcement is sought. If any particular provision or
portion of this Section 8.4 shall be adjudicated to be invalid or unenforceable,
such provision or portion of this Section 8.4 shall be deemed modified so that
it shall be enforced to the greatest extent permissible, such modification to
apply only with respect to the operation of such provision in the particular
jurisdiction with respect to which such adjudication is made.
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(c) The parties acknowledge that damages and remedies at law
for any breach of this Section 8.4 will be inadequate and that Buyer shall be
entitled to seek specific performance and other equitable remedies (including an
injunction) and such other relief as a court may deem appropriate in addition to
any other remedies Buyer may have.
8.5 Separate Agreement for Acquired Subsidiaries. Seller
agrees that Buyer may designate one or more of its Affiliates to be the
transferee of the shares owned by Seller of the Acquired Subsidiaries, and, in
such event, Seller will enter into such separate sale agreement with the
designee as Buyer may reasonably propose; provided, that (i) neither the
designation nor the entry into a separate sale agreement nor the consummation of
the transactions contemplated thereby shall have any adverse consequences to
Seller or any of its Affiliates (including without limitation any adverse tax
consequences or any adverse effect on the ability of Buyer to consummate (or
timely consummate) the transactions contemplated hereby), (ii) the provisions of
such separate sale agreement shall not be inconsistent with this Agreement, and
(iii) neither the designation nor the entry into a separate sale agreement nor
the consummation of the transactions contemplated thereby shall release Buyer of
its obligations hereunder.
8.6 Accounts Receivable. In the event any accounts receivable
of Seller or any Affiliate of Seller with respect to the Business in existence
on the Closing Date and included in the Assets or which are payable to any of
the Acquired Subsidiaries shall remain unpaid beyond six (6) months from the
date on which such account receivable was entered as such on the books and
records of Seller or any Acquired Subsidiary, then within ten (10) days after
Buyer's written notice to Seller specifying that such account receivable has
been outstanding beyond six (6) months, Seller shall pay to Buyer the full
amount of such outstanding account receivable in excess of the reserve for such
account receivable in the Final Balance Sheet and Buyer shall assign such
account receivable to Seller, at Seller's sole cost and expense. Buyer shall
apply all payments received with respect to any accounts receivable to the
oldest outstanding invoice relating to such account, unless the customer
tendering such payment specifies in writing a different invoice which shall not
have been suggested or requested by Buyer. Seller and Buyer acknowledge that
certain accounts receivable are outstanding because of pending warranty repair
claims relating to the equipment covered by such accounts receivable and that,
subject to the limitations imposed by Section 1.3(a)(i)(A)(3), such warranty
repairs are Assumed Liabilities and will be performed by Buyer. Schedule 4.16 of
the Disclosure Schedule sets forth all such accounts receivable specifying the
amount of such account receivable and a description of the pending warranty
claim. Prior to Closing, Schedule 4.16 of the Disclosure Schedule shall be
updated by Seller as necessary to reflect any additional accounts receivable
which are outstanding because of
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pending warranty repair claims. If, after reasonable efforts, Buyer shall not
have completed any such warranty repair and any such account receivable related
thereto remains outstanding beyond the 6-month period referred to above, Seller
shall nevertheless pay to Buyer the full amount of such account receivable in
excess of the reserve for such account receivable in the Final Balance Sheet.
8.7 South Carolina Lease. At or prior to Closing, Buyer or an
Affiliate of Buyer and Seller shall enter into a lease (the "South Carolina
Lease"), in form and substance reasonably acceptable to Seller and Buyer,
pursuant to which Buyer or its Affiliate shall lease a portion of the South
Carolina Real Property to Seller for a one (1) year period, it being understood
that the economic terms of the South Carolina Lease have not yet been agreed
upon and that the parties shall negotiate such terms in good faith and reach
agreement thereon by the Closing Date.
8.8 Allocation of Purchase Price. Buyer and Seller hereby
agree that the Preliminary Purchase Price of the Assets and the consideration
for the Non-Competition Agreement will be allocated pursuant to the mutual
agreement of the parties which agreement the parties will negotiate in good
faith and conclude by the Closing Date. Subject to the requirements of any
applicable Law, all Tax Returns and reports filed by Buyer and Seller shall be
prepared consistently with such allocation. In the event the Final Purchase
Price shall be different than the Preliminary Purchase Price, Buyer and Seller
agree to adjust such allocation to reflect the Final Purchase Price and to file
consistently any Tax Returns and reports required as a result of such
adjustment.
8.9 Seller's Supplemental Disclosure Schedule. Seller may,
from time to time prior to the Closing (but not later than five (5) days prior
to the Closing), by written notice in accordance with this Agreement, supplement
or amend the Disclosure Schedule to correct any matter which would constitute a
breach of any representation and warranty herein contained. If Buyer determines
that any matter disclosed in such supplemental disclosure would impose
additional material burdens or risks upon Buyer upon the consummation of the
transactions contemplated herein, Buyer shall promptly notify Seller of such
matter and Seller shall have a reasonable period of time thereafter to resolve
such matter, using Seller's best efforts, to Buyer's reasonable satisfaction. If
such matter is not resolved to Buyer's reasonable satisfaction within thirty
(30) days after Buyer has notified Seller of such matter, unless Buyer shall
waive resolution of such matter, this Agreement shall be deemed to be terminated
by mutual consent of the parties pursuant to Section 12.1(a). If such matter is
resolved as provided above or if Buyer shall waive resolution of such matter,
this Agreement shall continue in full force and effect and Seller's
representations and warranties shall be deemed supplemented by such additional
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disclosure. The Closing and the Closing Date shall be postponed
as necessary to effect the foregoing provisions.
8.10 Relocation of Assets. Prior to the Closing, Seller shall
cause those Assets listed on Annex 1 as being located in Seller's Cuyahoga
Falls, Ohio facility and all inventory, spare parts, tools, jigs, customer
lists, know-how, manuals, drawings and other assets of the Business located at
the Cuyahoga Falls facility to be delivered to Seller's facility operated at the
South Carolina Real Property. Seller shall, at Buyer's expense, prepare all such
Assets for shipment and shall ship such Assets as directed by and at the expense
of Buyer. Seller shall submit invoices to Buyer in respect of all such
relocation expenses and Buyer shall pay such invoices promptly upon its receipt
thereof.
8.11 South Carolina Environmental Matters. Prior to the
Closing, Seller shall contact officials of the South Carolina Department of
Health and Environmental Control and shall obtain from such officials a
determination as to whether the lagoon located on the South Carolina Real
Property is required to be closed. Seller shall promptly notify Buyer of such
officials' determination and the basis therefor. If such determination requires
closing of the lagoon, Seller shall, at Seller's sole cost and expense, close
the lagoon in accordance with all directives of the applicable Governmental
Bodies, including the timetable for such closure established by such
Governmental Bodies, if any, otherwise such closure shall be completed promptly
after the Closing. The foregoing activities by Seller at the South Carolina Real
Property, if any, shall be conducted and completed by Seller in accordance with
all applicable Laws. Prior to the Closing, Seller shall cause all friable
asbestos in the improvements located at the South Carolina Real Property, if
any, to be removed or encapsulated so that such asbestos shall be nonfriable on
the Closing Date. Such removal or encapsulation shall be in accordance with all
applicable Laws.
8.12 Guadalajara Appraisal. Prior to the date of this
Agreement, Seller and Buyer have delivered to American Appraisal an
authorization, dated September 30, 1994, to undertake the appraisal of the real
property used in the Business in Guadalajara, Mexico and a further instruction
letter, dated on or about the date hereof, clarifying the method of appraisal.
Within fifteen (15) days after the date of this Agreement, Buyer and Seller
shall cause American Appraisal Associates to complete its appraisal of such real
estate in accordance with the original authorization and subsequent letter.
Promptly after receipt of such final appraisal, the parties shall meet to
discuss in good faith the results of such appraisal to determine a mutually
acceptable value for such property for use in calculating the Preliminary
Purchase Price and the Final Purchase Price. The value resulting from such
discussions is herein referred to as the "Guadalajara Value".
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ARTICLE IX
CONDITIONS TO BUYER'S OBLIGATIONS
The obligations of Buyer to purchase the Assets shall be
subject to the satisfaction (or waiver) on or prior to the Closing Date of all
of the following conditions:
9.1 Representations, Warranties and Covenants of Seller.
Seller shall have complied in all material respects with its agreements and
covenants contained herein to be performed on or prior to the Closing Date, and
all the representations and warranties of Seller contained herein shall be true
in all material respects on and as of the Closing Date with the same effect as
though made on and as of the Closing Date. Buyer shall have received a
certificate of Seller (the "Seller's Certificate"), dated as of the Closing Date
and signed by an executive officer of Seller, certifying as to the fulfillment
of the conditions set forth in this Section 9.1.
9.2 No Prohibition. No Law or Order of any court, or
administrative agency or other Governmental Body shall be in effect which
prohibits Buyer from consummating the transactions contemplated hereby.
9.3 Absence of Proceedings. Any waiting period applicable to
the purchase under the HSR Act shall have expired or been terminated, and no
action or proceeding shall be pending by the Department of Justice or Federal
Trade Commission challenging or seeking to enjoin the consummation of the
transactions contemplated herein, and neither Buyer nor Seller shall have been
notified of a present intention by the Assistant Attorney General in charge of
the Antitrust Division of the Department of Justice, or the Federal Trade
Commission (or their respective designees) to commence such an action or
proceeding, and neither Buyer nor Seller shall have been notified by the
Assistant Attorney General in charge of the Antitrust Division of the Department
of Justice or the Federal Trade Commission (or their respective designees) that
an investigation of the transaction is continuing notwithstanding the expiration
or termination of the waiting period applicable to the purchase under the HSR
Act; and there shall not be pending any legal proceeding commenced by any person
or entity in which there is sought any order, injunction, ruling or decree by a
court or administrative agency of competent jurisdiction, which would prohibit
the consummation of the transactions contemplated by this Agreement or require
Buyer to divest or hold separate any portion of the Business or any portion of
the business of Buyer or its Affiliates.
9.4 Italian Antitrust. Buyer shall have received
approval, clearance or an exemption from the applicable
Governmental Body in connection with the antitrust laws of the
Republic of Italy.
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9.5 Title Insurance Policy. Buyer shall have received from a
reputable national title insurance company selected by Buyer and reasonably
acceptable to Seller (the "Title Company") for the South Carolina Real Property
a commitment for an ALTA owner's policy of title insurance (Form B-1970) (the
"Title Policy"), and insuring such property, in the amount of $6,000,000 and
insuring that upon the closing of the transactions described in this Agreement
marketable, fee simple title to such property shall be indefeasibly vested in
Buyer, or its permitted assignee, subject only to the Permitted Exceptions,
which further insures any easements appurtenant to such properties, which
includes a zoning endorsement (Form 3.0) and which deletes the preprinted
survey, parties-in-possession, mechanic's lien and special tax exceptions,
together with all of the other so-called "standard exceptions". The fees,
expenses and premiums for such title commitment, title opinion and any zoning
opinion required in connection with the zoning endorsement issued in connection
therewith, and the Title Policy obtained by Buyer shall be shared equally by
Buyer and Seller.
9.6 Survey. Buyer shall have received from a certified
surveyor selected by Buyer and reasonably acceptable to Seller an ALTA/ACSM
survey of the South Carolina Real Property which is sufficient to cause the
Title Company to delete the standard survey exceptions from the Title Policy and
which otherwise is in form and substance acceptable to Buyer. The fees and
expenses of such surveyor shall be paid be shared equally by Buyer and Seller.
9.7 Third Party Consents. Consents to the assignment of the
Contracts and Permits from Seller or any Affiliate of Seller to Buyer or Buyer's
permitted assignee hereunder shall have been received from the other parties
thereto in form reasonably acceptable to Buyer and which permit Buyer to enjoy
the benefit of such Contracts and Permits without increased cost resulting from
such assignments. Schedule 4.8 of the Disclosure Schedule lists those Contracts
and Permits which require consent to assignment.
9.8 Opinion of Seller's Counsel. Buyer shall have received an
opinion or opinions of counsel for Seller, including the opinion of the General
Counsel of Seller, dated the Closing Date, to the effect that (a) this Agreement
and each of the documents and instruments executed by Seller and/or its
Affiliates which are required to be delivered on or prior to the Closing have
been duly authorized, executed and delivered by Seller and/or its Affiliates, as
the case may be, and (b) that such documents and instruments are valid, binding
and enforceable in accordance with their terms, subject to such assumptions,
limitations, qualifications and exceptions as counsel for Seller shall set forth
in such opinion.
9.9 Delivery of Documents. Buyer shall have received
all of the documents required to be delivered to Buyer on or prior
to the Closing pursuant to this Agreement and such additional
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documents, instruments or items of information reasonably requested by it in
respect of any aspect or consequence of the transactions contemplated hereby.
All corporate and other proceedings, and all documents, instruments and other
legal matters in connection with the transactions contemplated by this Agreement
or by the other agreements referred to herein shall be reasonably satisfactory
in form and substance to Buyer.
ARTICLE X
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to sell, or to cause its Affiliates
to sell, the Assets shall be subject to the satisfaction (or waiver) on or prior
to the Closing Date of all of the following conditions:
10.1 Representations, Warranties and Covenants of Buyer. Buyer
shall have complied in all material respects with its agreements and covenants
contained herein to be performed on or prior to the Closing Date, and all of the
representations and warranties of Buyer contained herein shall be true in all
material respects on and as of the Closing Date with the same effect as though
made on and as of the Closing Date. Seller shall have received a certificate of
Buyer, dated as of the Closing Date and signed by an executive officer of Buyer
(the "Buyer's Certificate"), certifying as to the fulfillment of the conditions
set forth in this Section 10.1.
10.2 No Prohibition. No Law or Order of any court,
administrative agency or other Governmental Body shall be in effect which
prohibits Seller from consummating the transactions contemplated hereby.
10.3 Further Action. All consents, approvals, authorizations,
exemptions and waivers from third parties that shall be required in order to
enable Seller and its Affiliates to consummate the transactions contemplated
hereby shall have been obtained.
10.4 Absence of Proceedings. Any waiting period applicable to
the purchase under the HSR Act shall have expired or been terminated, and no
action or proceeding shall be pending by the Department of Justice or Federal
Trade Commission challenging or seeking to enjoin the consummation of the
transactions contemplated herein, and neither Buyer nor Seller shall have been
notified of a present intention by the Assistant Attorney General in charge of
the Antitrust Division of the Department of Justice, or the Federal Trade
Commission (or their respective designees) to commence such an action or
proceeding, and neither Buyer nor Seller shall have been notified by the
Assistant Attorney General in charge of the Antitrust Division of the Department
of Justice
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or the Federal Trade Commission (or their respective designees) that an
investigation of the transaction is continuing notwithstanding the expiration or
termination of the waiting period applicable to the purchase under the HSR Act;
and there shall not be pending any legal proceeding commenced by any person or
entity in which there is sought any order, injunction, ruling or decree by a
court or administrative agency of competent jurisdiction, which would prohibit
the consummation of the transaction contemplated by this Agreement.
10.5 Opinion of Buyer's Counsel. Seller shall have received an
opinion or opinions of counsel for Buyer, including the opinion of Buyer's
in-house counsel, dated the Closing Date, to the effect that (a) this Agreement
and each of the documents and instruments executed by Buyer and/or its
Affiliates which are required to be delivered on or prior to the Closing have
been duly authorized, executed and delivered by Buyer and/or its Affiliates, as
the case may be, and (b) that such documents and instruments are valid, binding
and enforceable in accordance with their terms, subject to such assumptions,
limitations, qualifications and exceptions as counsel for Buyer shall set forth
in such opinion.
10.6 Italian Antitrust. Buyer shall have received
approval, clearance or an exemption from the applicable
Governmental Body in connection with the antitrust laws of the
Republic of Italy.
10.7 Delivery of Documents. Seller shall have received all of
the documents required to be delivered to Seller on or prior to the Closing
pursuant to this Agreement and such additional documents, instruments or items
of information reasonably requested by it in respect of any aspect or
consequence of the transactions contemplated hereby. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement or by the other
agreements referred to herein shall be reasonably satisfactory in form and
substance to Seller.
ARTICLE XI
EMPLOYMENT AND
EMPLOYEE BENEFIT PLANS AND ARRANGEMENTS
11.1 Offer of Employment.
(a) Except as otherwise provided in this
Article XI, Buyer shall offer employment as of the Closing Date to all of the
Division Employees of the Business employed at Seller's Goose Creek, South
Carolina facility and to such other Division Employees as it may select in its
sole discretion, in each case at a rate of pay and with such benefits as shall
be substantially
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equivalent in the aggregate to such Division Employee's pay and benefits in
effect on the Business Day immediately preceding the Closing Date, provided that
Buyer shall not be required to provide benefits which are equivalent to those
available under the stock option, restricted stock, stock bonus, and employee
stock ownership plans maintained by Seller or any Affiliate of Seller with
respect to the Business. Buyer shall be solely responsible for all compensation
and benefits accruing on or after the Closing Date with respect to Transferred
Employees who were Division Employees. Except as provided in Section 11.6,
Seller shall be solely responsible for all compensation and benefits with
respect to current or former Division Employees who do not become Transferred
Employees. In selecting employees to whom it will offer employment, Buyer
covenants and agrees that it shall not violate any applicable Laws.
(b) Schedule 11.1(b) of the Disclosure Schedule
lists all current employees of the Business on the date hereof, and sets forth
each such employee's current rate of pay, position and status. Not later than
January 10, 1995, Buyer shall provide to Seller a list of all Division Employees
to whom Buyer intends to offer employment in accordance with Section 11.1(a).
Seller shall provide to Buyer as of the Closing Date a statement of all accrued
benefits for such Division Employees, including but not limited to vacation
days, wages and other compensation and benefits under the Assumed Plans.
(c) Notwithstanding the foregoing, effective as of
the Closing Date, Buyer shall make available to all Transferred Employees who
were participating in Seller's group health and medical plans, group health and
medical plan coverage under plans which are substantially equivalent to those
currently enjoyed by such Transferred Employees. Such coverage shall contain no
preexisting condition exclusions or limitations applicable to the Transferred
Employees under the health and medical coverage offered by Buyer and shall not
have a waiting period for such Transferred Employees with respect to eligibility
to enroll and participate. If the employment of a Transferred Employee is
terminated by Buyer on or after the Closing Date, Buyer shall provide such
employee with the health and medical coverage under a "group health plan" within
the meaning of Section 5000(b)(1) of the Code which is required to be provided
to such employee by the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended ("COBRA Coverage"). Buyer shall not be required, however, to provide
any such COBRA Coverage to any current or former employees of the Business who
do not become Transferred Employees.
(d) Effective as of the Closing, Seller shall have
terminated, or shall have caused its Affiliates to terminate, the employment of
each Division Employee (i) to whom Buyer does not intend to offer employment in
accordance with Section 11.1(a) or (ii) who has notified Seller in writing that
he or she will not accept Buyer's offer of employment.
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(e) Seller shall release or shall cause any
Affiliate (except the Acquired Subsidiaries) to release any such employee who
becomes a Transferred Employee from any "covenant not to compete" or similar
agreement between Seller or any of its Affiliates (except the Acquired
Subsidiaries) and such employee, but only with respect to, and to the extent of,
such employee's employment by Buyer or any Affiliate of Buyer in the Business.
11.2 Collective Bargaining and Other Agreements. Except as set
forth on Schedule 11.2 of the Disclosure Schedule, Buyer shall not assume as an
Assumed Liability or be responsible for any obligations of any of Seller, or any
Affiliate of Seller, which arise under any collective bargaining agreements,
employment agreements or consulting agreements applicable to Division Employees.
11.3 Welfare Plans. Seller shall retain as a Retained
Liability and be solely responsible for all claims incurred before the Closing
Date by a Transferred Employee under any Employee Benefit Plan sponsored or
maintained by Seller or any Affiliate of Seller that is an "employee welfare
benefit plan" within the meaning of Section 3(1) of ERISA, except that Seller
shall only retain as a Retained Liability such claims incurred before the
Closing Date by a Transferred Employee under any such Employee Benefit Plan
sponsored by the Acquired Subsidiaries to the extent such claims exceed the
reserve therefor in the Final Balance Sheet.
11.4 Post-retirement Welfare Benefits. Seller shall retain as
a Retained Liability and be solely responsible for any liabilities or
obligations it has to provide any post-employment welfare, health, medical or
life insurance benefits to any current or former Division Employee or any
beneficiary or dependent of such a Division Employee. Buyer shall not assume any
liability with respect to such post-employment benefits and shall not be
required to provide any such post-employment benefits to Transferred Employees
who were Division Employees.
11.5 Credited Service. Buyer shall credit to the Transferred
Employees under all benefit plans, benefit arrangements and compensation
policies and practices of Buyer all previous service recognized by any of
Seller, or any Affiliate of Seller, with respect to such Transferred Employees
under the Employee Benefit Plans and Benefit Arrangements immediately prior to
the Closing Date. Buyer shall credit such service (i) for all purposes other
than the accrual of benefits with respect to Transferred Employees who were
Division Employees and (ii) for all purposes with respect to Transferred
Employees who were Acquired Sub Employees.
11.6 Termination Obligations. Buyer shall be
responsible for any payments that may be required to be made by
Seller under applicable Law as a result of the termination of
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employment of any Division Employee pursuant to Section 11.1(d) as provided
herein. Concurrently with Buyer's delivery to Seller of the list of Division
Employees to which Buyer intends to offer employment in accordance with Section
11.1(a), Buyer shall provide to Seller a schedule of the severance and
termination payments to be made to the Division Employees entitled to such
payments under applicable Law, which schedule shall set forth the identity of
the Division Employees to be paid severance or termination payments and the
payments due to each such employee, which payments shall be determined in
accordance with applicable Law. Thereafter, Buyer shall promptly provide to
Seller such other information as Seller may reasonably request in connection
with such termination and severance payments. When instructed by Buyer, but in
any event not later than the Closing Date, Seller shall pay the amounts to be
paid to such Division Employees in accordance with the schedule provided by
Buyer to Seller, provided that Buyer has theretofore deposited with Seller funds
in an amount equal to Seller's obligations hereunder. Such funds deposited by
Buyer with Seller pursuant to this Section 11.6 shall be used by Seller only in
payment of the termination and severance payments described herein and Seller
shall within ten (10) days after the Closing Date provide evidence reasonably
acceptable to Buyer that all such payments have been made.
11.7 Indemnification.
(a) Except as provided in Section 11.6, Buyer
shall indemnify, defend and hold Seller harmless from and against any Damages
Seller may incur (including reasonable attorneys' fees) with respect to any
claims (i) of Transferred Employees arising out of their employment with Buyer
or any Affiliate of Buyer or, solely with respect to Transferred Employees who
were Acquired Sub Employees, any Acquired Subsidiary, Buyer or Affiliate of
Buyer, (ii) in connection with Liabilities assumed by Buyer under this Article
XI, (iii) based upon termination of employment of Division Employees whose
employment is terminated at the direction of Buyer, and (iv) arising out of any
unlawful acts or omissions of Buyer or its agents in the selection of employees
to whom Buyer shall offer employment. Such indemnification shall be in
accordance with the provisions of Sections 13.2(b) and 13.2(c).
(b) Except as provided in Section 11.6, Seller
shall indemnify, defend and hold Buyer harmless from and against any Damages
Buyer may incur (including reasonable attorneys' fees) with respect to any
claims (i) of Transferred Employees who were Division Employees arising out of
their employment with any of Seller or any Affiliate of Seller, and (ii) in
connection with Liabilities retained by Seller under this Article XI. Such
indemnification shall be in accordance with the provisions of Sections 13.2(a)
and 13.2(c).
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11.8 Certain Employees. Buyer shall have the right at any time
prior to the Closing Date to offer employment to, and to conduct employment
negotiations with, those employees of Seller employed at Seller's Cuyahoga
Falls, Ohio facility and those field service engineers active in the Business
who are identified on Annex 7 hereto; provided, however, in no event shall Buyer
be required to employ or make any offer of employment to any such employee. As
to any such employee who accepts any such offer of employment from Buyer, Seller
agrees to release or to cause any Affiliate (except the Acquired Subsidiaries)
to release such employee from any "covenant not to compete" or similar
agreements by and between Seller or any of its Affiliates (except the Acquired
Subsidiaries) and such employee, but only with respect to, and to the extent of,
such employee's employment by Buyer or any Affiliate of Buyer in the Business.
For the avoidance of doubt, the parties confirm their agreement that, except as
otherwise provided in the last sentence of Section 11.1(a), Buyer shall have no
liabilities of any nature for (a) any individuals listed on Annex 7 who decline
an offer of employment from Buyer or (b) except for those individuals listed on
Annex 7 who become employees of Buyer, any employees of Seller at its Cuyahoga
Falls, Ohio facility or field service engineers even if some of such employees
or engineers have from time to time rendered services to the Business.
ARTICLE XII
TERMINATION PRIOR TO CLOSING
12.1 Termination. This Agreement may be terminated
prior to the Closing:
(a) By the mutual written consent of Buyer and
Seller; or
(b) By either Seller or Buyer in writing, if the
Closing shall not have occurred on or before February 28, 1995 (the "Termination
Date"); provided that if the reason that the Closing shall not have occurred by
the Termination Date is that the conditions set forth in Section 9.3, 9.4, 10.4
or 10.6 shall not have been satisfied or waived (including without limitation
that the waiting period under the HSR Act shall not have expired or been
terminated), either Seller or Buyer may, at its option, by written notice to the
other party on or prior to February 28, 1995, extend the Termination Date to a
mutually agreeable date no later than March 31, 1995 in which case the
Termination Date shall be extended to such mutually agreeable date; or
(c) By either Seller or Buyer in writing, if there
shall have been a material breach by the other party of any of its
representations, warranties, covenants or agreements contained herein and such
breach results in a failure to satisfy a condition
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to the terminating party's obligation to consummate the
transactions provided herein.
12.2 Effect on Obligations. Termination of this Agreement
pursuant to this Article XII shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 13.8 and 13.11 and the last
sentence of Section 6.3; provided, however, that termination pursuant to
paragraph (b) or (c) of Section 12.1 shall not relieve the defaulting or
breaching party from any liability to the other party hereto.
ARTICLE XIII
MISCELLANEOUS
13.1 Survival. The representations and warranties made in any
Section of this Agreement or in any agreement, certificate or other document
executed in connection herewith (an "Ancillary Document", except the limited
warranty deed delivered by Seller, the terms of which shall control the
warranties contained therein) shall survive until 11:59 p.m., Cleveland, Ohio
time on April 30, 1996 and shall thereupon expire together with any right to
indemnification for breach thereof (except to the extent a written notice
asserting a claim for breach of any such representation or warranty shall have
been given prior to such date to the party which made such representation or
warranty, in which case such representation and warranty shall survive, with
respect to such claim only, until such claim is resolved whether or not the
amount of the damages or expenses resulting from such breach has been finally
determined). The foregoing time limitations shall apply only to the
representations and warranties contained in this Agreement. There shall be no
time or other limits on the indemnification obligations of the parties pursuant
to any covenant or agreement contained herein or in any Ancillary Agreement or
arising under Section 13.2(a)(ii), Section 13.2(a)(iii) or Section 13.2(b)(ii).
13.2 Indemnification. (a) If the Closing shall occur, Seller
shall indemnify Buyer and its Affiliates (including the Subsidiaries) and hold
each of them harmless from and against all Damages which are incurred or
suffered by any of them (i) by reason of the breach of any of the
representations or warranties made by Seller herein or in any Ancillary
Document, (ii) by reason of the failure by Seller to perform or comply with any
of the covenants or agreements contained herein (including without limitation
the covenants and agreements contained in Section 1.3(b) with respect to
Retained Liabilities) or in any Ancillary Document to be performed or complied
with by Seller or any of its Affiliates at Seller's direction or behest at or
after the Closing, or (iii) by reason of Seller's failure to comply with any
so-called bulk sales laws of any state. Any recovery by Buyer
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and its Affiliates for indemnification arising out of Section 13.2(a)(i) shall
be limited as follows: (A) Buyer and its Affiliates shall not be entitled to any
recovery unless a claim for indemnification is made in accordance with Sections
13.1 and 13.2(c)(i) and within the time period of survival set forth in Section
13.1; and (B) Buyer and its Affiliates shall not be entitled to recover any
amount for indemnification under (A) above unless and until the amounts which
Buyer and its Affiliates are entitled to recover in respect of such claims
exceeds, in the aggregate, $750,000 (the Deductible"), in which event the entire
amount which Buyer and its Affiliates are entitled to recover in respect of such
claims less the Deductible shall be payable. The Deductible shall not be
applicable to any claim for indemnification relating to any covenant or
agreement contained in this Agreement, including without limitation claims in
respect of Retained Liabilities, or in any Ancillary Document or any claim
relating to indemnification under Section 13.2(a)(iii). The maximum amount
recoverable by Buyer and its Affiliates pursuant to this Section 13.2(a), except
with respect to the Retained Liabilities as to which there shall be no
limitation, shall not, in the aggregate, exceed fifty percent (50%) of the Final
Purchase Price.
(b) If the Closing shall occur, Buyer shall
indemnify Seller and its Affiliates and hold each of them harmless from and
against all Damages which are incurred or suffered by any of them (i) by reason
of the breach by Buyer of any of the representations or warranties made by Buyer
herein or in any Ancillary Document, or (ii) by reason of the failure by Buyer
(or, from and after the Closing, where applicable, any of the Subsidiaries) to
perform or comply with any of the covenants or agreements contained herein
(including without limitation the covenants and agreements contained in Section
1.3(a) with respect to Assumed Liabilities) or in any Ancillary Document to be
performed or complied with by any of them at or after the Closing; provided,
however, that Seller and its Affiliates shall not be entitled to any recovery
unless a claim for indemnification is made in accordance with Sections 13.1 and
13.2(c)(i) and within the time period set forth in Section 13.1.
(c) (i) In the event that any party shall incur or
suffer any Damages in respect of which indemnification may be sought by such
party pursuant to the provisions of this Section 13.2, the party seeking to be
indemnified hereunder (the "Indemnitee") shall assert a claim for
indemnification by written notice (a "Notice") to the party from whom
indemnification is sought (the "Indemnitor") stating the nature and basis of
such claim. In the case of Damages arising by reason of any third party claim,
the Notice shall be given within thirty (30) days of the filing or other written
assertion of any such claim against the Indemnitee, but the failure of the
Indemnitee to give the Notice within such time period shall not relieve the
Indemnitor of
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any liability that the Indemnitor may have to the Indemnitee except to the
extent that the Indemnitor is prejudiced thereby.
(ii) The Indemnitee shall provide to the
Indemnitor on request all information and documentation within the Indemnitee's
possession or control reasonably necessary to support and verify any Damages
which the Indemnitee believes give rise to a claim for indemnification hereunder
and shall give the Indemnitor reasonable access to all premises, books, records
and personnel in the possession or under the control of the Indemnitee which
would have a bearing on such claim.
(iii) In the case of third party claims for
which indemnification is sought, the Indemnitor shall have the option (x) to
conduct any proceedings or negotiations in connection therewith, (y) to take all
other steps to settle or defend any such claim provided that the Indemnitor
shall not settle any such claim without the consent of the Indemnitee if such
settlement would (A) result in the imposition of a criminal fine or penalty on
the Indemnitee, (B) result in the issuance of an injunction restraining future
conduct by the Indemnitee or (C) result in Damages to the Indemnitee in excess
of the amount for which the Indemnitor is liable to indemnify the Indemnitee in
respect of such claim, and (z) to employ counsel to contest any such claim or
liability in the name of the Indemnitee or otherwise. In any event, the
Indemnitee shall be entitled to participate at its own expense and by its own
counsel in any proceedings relating to any third party claim. The Indemnitor
shall, within thirty (30) days of receipt of the Notice, notify the Indemnitee
of its intention to assume the defense of such claim. Until the Indemnitee has
received notice of the Indemnitor's election whether to defend any claim, the
Indemnitee shall take reasonable steps to defend (but may not settle) such
claim. If the Indemnitor shall decline to assume the defense of any such claim,
or shall fail to notify the Indemnitee within thirty (30) days after receipt of
the Notice of the Indemnitor's election to defend such claim, the Indemnitee
shall defend against such claim (provided that the Indemnitee shall not settle
such claim without the consent of the Indemnitor, which consent shall not be
unreasonably withheld). The expenses of all proceedings, contests or lawsuits in
respect of such claims shall be borne by the Indemnitor but only if the
Indemnitor is responsible pursuant hereto to indemnify the Indemnitee in respect
of the third party claim. Regardless of which party shall assume the defense of
the claim, the parties agree to cooperate fully with one another in connection
therewith. In the case of a claim for indemnification made under Section 13.2(a)
or 13.2(b), (a) if (and to the extent) the Indemnitor is responsible pursuant
hereto to indemnify the Indemnitee in respect of the third party claim, then
within ten (10) days after the occurrence of a final nonappealable determination
with respect to such third party claim, the Indemnitor shall pay the Indemnitee,
in immediately available funds, the amount of any Damages (or such portion
thereof as the
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Indemnitor shall be responsible pursuant to the provisions hereof, and (b) in
the event that any Damages incurred by the Indemnitee do not involve payment by
the Indemnitee of a third party claim, then, if (and to the extent) the
Indemnitor is responsible pursuant hereto to indemnify the Indemnitee against
such Damages, the Indemnitor shall within ten (10) days after agreement on the
amount of Damages or the occurrence of a final nonappealable determination of
such amount pay to the Indemnitee, in immediately available funds, the amount of
such Damages (or such portion thereof as the Indemnitor shall be responsible
pursuant to the provisions hereof).
13.3 Interpretive Provisions.
(a) For purposes of this Agreement, the Acquired
Subsidiaries shall be deemed to be Affiliates of Seller prior to the Closing and
Affiliates of Buyer after the Closing. Any reference herein to Seller and its
Affiliates shall be deemed to include a reference to Subsidiaries whether or not
they are specifically referred to.
(b) As used herein, the plural form of any noun
shall include the singular and the singular shall include the plural, unless the
context requires otherwise. Each of the masculine, neuter and feminine forms of
any pronoun shall include all such forms unless the context requires otherwise.
13.4 Entire Agreement. This Agreement (including the
Disclosure Schedule, Exhibits and Annexes), and the
Confidentiality Agreement constitute the sole understanding of the
parties with respect to the subject matter hereof.
13.5 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto. This Agreement may not be assigned
by either party without the prior written consent of the other, except that
Buyer may, at its election and upon five (5) days advance written notice to, but
without the prior consent of Seller, assign to one or more of its Affiliates the
right to purchase and take title to any or all of the Assets, provided that no
such assignment by Buyer shall release Buyer of its obligations hereunder.
13.6 Headings. The headings of the Articles, Sections and
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
hereof.
13.7 Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Agreement may be waived in writing
at any
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time by the party which is entitled to the benefits of such waived terms or
provisions. No waiver of any of the provisions of this Agreement shall be deemed
to or shall constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof.
13.8 Expenses. Except as otherwise provided herein, Seller and
Buyer shall each pay all costs and expenses incurred by it or on its behalf in
connection with this Agreement and the transactions contemplated hereby,
including, without limiting the generality of the foregoing, fees and expenses
of its own financial consultants, accountants and counsel. Each of Seller and
Buyer shall pay one-half of all transfer, stamp and documentary taxes and fees
imposed on the transfer of the Assets or in connection with the transactions
contemplated by this Agreement.
13.9 Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall be
in writing and shall be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by electronic facsimile transmission, cable,
telegram, telex or other standard forms of written telecommunications, by
overnight courier or by registered or certified mail, postage prepaid,
if to Seller to:
Figgie International, Inc.
4420 Sherwin Road
Willoughby, Ohio 44094
Attention: Steven L. Siemborski
Telecopy: (216) 951-1724
with a copy to:
Figgie International, Inc.
4420 Sherwin Road
Willoughby, Ohio 44094
Attention: Mary Reeve, Esq.
Telecopy: (216) 953-2859
and with a copy to:
Calfee, Halter & Griswold
800 Superior Avenue
Suite 1800
Cleveland, Ohio 44114
Attention: Joseph K. Juster, Esq.
Telecopy: (216) 241-0816
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if to Buyer to:
Sasib SpA
Via di Corticella, 8729
40128 Bologna, Italy
Attention: Mr. Mario Maestroni
Telecopy: (051) 529 483
with a copy to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: John P. Dunn, Esq.
Telecopy: (216) 579-0212
or at such other address for a party as shall be specified by like
notice.
13.10 Governing Law. This Agreement shall be construed
in accordance with and governed by the internal laws of the State
of Ohio.
13.11 Public Announcements. Neither Seller nor Buyer shall
make any public statements, including, without limitation, any press releases,
with respect to this Agreement and the transactions contemplated hereby without
the prior written consent of the other party (which consent shall not be
unreasonably withheld) except as may be required by Law. If a public statement
is required to be made by Law, the parties shall consult with each other in
advance as to the contents and timing thereof.
13.12 Bulk Transfer Laws. Subject to Section 13.2(a),
Seller shall not be required to comply with the provisions of any
so-called bulk transfer law in any jurisdiction.
13.13 Jury Waiver. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY SUIT, ACTION,
PROCEEDING, CLAIM, DEFENSE OR COUNTERCLAIM ARISING BETWEEN THE PARTIES HERETO
UNDER OR IN CONNECTION WITH OR RELATING IN ANY WAY TO THIS AGREEMENT.
13.14 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
13.15 Third Party Beneficiaries. Nothing herein expressed or
implied is intended to or shall be construed to confer upon or give any Person,
other than the parties hereto and their successors, permitted assigns and
Affiliates, any rights or remedies under or by reason of this Agreement.
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13.16 Certain Definitions. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Sub Assets" means all of the assets and
properties of the Acquired Subsidiaries.
"Acquired Sub Employees" means all persons employed
by the Acquired Subsidiaries immediately prior to the Closing
Date.
"Acquired Subsidiaries" has the meaning set forth
in the recitals hereof.
"Adjustment Assets" has the meaning set forth in
Section 2.2.
"Affiliate" has the meaning specified in Rule 12b-2
of the General Rules and Regulations promulgated under the Securities and
Exchange Act of 1934, as amended, and the rules and regulations of the United
States Securities and Exchange Commission promulgated thereunder.
"Agreement" has the meaning set forth in the
introductory paragraph.
"Alfa" has the meaning set forth in the recitals
hereof.
"Ancillary Document" has the meaning set forth in
Section 13.1 hereof.
"Andersen" has the meaning set forth in
Section 2.3(a).
"Arbiter" has the meaning set forth in
Section 2.3(c) hereof.
"Assets" has the meaning set forth in Section 1.1
hereof.
"Assumed Liability" has the meaning set forth in
Section 1.3(a) hereof.
"Assumed Plan" has the meaning set forth in Section
4.12 hereof.
"Backlog Contracts" has the meaning set forth in
Section 4.8(a) hereof.
"Base Financial Statements" has the meaning set
forth in Section 4.4 hereof.
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"Benefit Arrangement" has the meaning set forth in
Section 4.12(a) hereof.
"Business" has the meaning set forth in the
recitals hereof.
"Business Day" means any weekday on which
nationally chartered banks in the City of Cleveland, Ohio are open
for business.
"Closing" has the meaning set forth in Section 3.1.
"Closing Balance Sheet" has the meaning set forth
in Section 2.3(a).
"Closing Date" has the meaning set forth in
Section 3.1.
"Closing Date Net Book Value" has the meaning set
forth in Section 2.2.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Confidentiality Agreement" has the meaning set
forth in Section 6.3 hereof.
"Contracts" has the meaning set forth in
Section 4.8 hereof.
"Damages" means all claims, suits, actions,
judgements, losses, injuries, damages, fines, penalties, costs, expenses and
liabilities (including reasonable attorneys' fees, consultants' fees,
professionals' fees and expenses incident to the foregoing), including without
limitation, remediation expenses, environmental damages, response costs
(including without limitation, response costs under 42 U.S.C. ss. 9601 et seq.
or any comparable state, local or international law), disbursements and court
costs whether incurred by a party to this Agreement or a third party claiming
against Buyer (including reasonable attorneys', consultants' and other
professionals' fees and expenses incident to the foregoing).
"Deductible" has the meaning set forth in
Section 13.2(a) hereof.
"Deposit" has the meaning set forth in Section 2.1
hereof.
"Dispute Notice" has the meaning set forth in
Section 2.3(c) hereof.
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"Division Employees" means all persons employed in
the Business immediately prior to the Closing Date other than Acquired Sub
Employees.
"Employee Benefit Plan" has the meaning set forth
in Section 4.12(a) hereof.
"Encumbrance" means any lien, pledge, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Environmental Law" means any law (statutory or
case law), statutes, rules, codes, regulations and ordinances relating to
pollution or protection of the environment, including of those relating to
emissions, discharges, Releases or threatened Releases of pollutants,
contaminants or Hazardous Materials or wastes into ambient air, surface water,
ground water, land or other environmental medium.
"Environmental Liabilities" means any Damages,
costs, expenses, debts or obligations related to, arising from or connected with
Environmental Laws or Hazardous Materials, including without limitation,
remediation expenses or response costs.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Escrow Amount" has the meaning set forth in
Section 2.2 hereof.
"Excluded Assets" has the meaning set forth in
Section 1.2 hereof.
"Figgie Australia" has the meaning set forth in the
recitals hereof.
"Figgie International Mexico" has the meaning set
forth in the recitals hereof.
"Figgie Mexico" has the meaning set forth in the
recitals hereof.
"Figgie UK" has the meaning set forth in the
recitals hereof.
"Final Balance Sheet" has the meaning set forth in
Section 2.3(e) hereof.
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"Final Purchase Price" has the meaning set forth in
Section 2.1 hereof.
"Fixed Price Assets" has the meaning set forth in
Section 2.2 hereof.
"Fixed Price Component" has the meaning set forth
in Section 2.2 hereof.
"Guadalajara Value" has the meaning set forth in
Section 8.12 hereof.
"GAAP" has the meaning set forth in Section 2.3(a).
"Governmental Body" means any government or
governmental or regulatory body, authority, department, commission, board,
bureau, agency, court or instrumentality thereof, or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality thereof, or any court or arbitrator (public or private).
"Health/Safety Law" means (a) the Occupational
Safety and Health Act of 1970 (29 U.S.C. Sections 651 et seq.) as amended
through the Closing Date, and regulations promulgated thereunder; and (b) any
other law relating to the protection of the health and safety of workers in the
workplace.
"Hazardous Material" means (a) any "hazardous
waste" as defined in the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Sections 6901 et seq.), as amended through the Closing Date, and
regulations promulgated thereunder; (b) any "hazardous substance" or "pollutant
or contaminant" as defined in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended through the Closing Date, and regulations promulgated thereunder; (c)
any "hazardous material" as defined in the Occupational Safety and Health Act of
1970 (29 U.S.C. ss. 651 et seq.) as amended through the Closing Date, and
regulations promulgated thereunder; (d) petroleum, and any of its derivatives,
by-products and other petroleum-related hydrocarbons; and (e) asbestos and any
asbestos containing material.
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnitee" has the meaning set forth in
Section 13.2(c) hereof.
"Indemnitor" has the meaning set forth in
Section 13.2(c) hereof.
"Intellectual Property" means the following which
is owned by, issued to or licensed to Seller or any of its
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Affiliates with respect to the Business, along with all income, royalties,
damages and payments due or payable at Closing or thereafter including, without
limitation, damages and payments for past or future infringements or
misappropriations thereof, the right to sue and recover for past infringements
or misappropriation thereof and any and all corresponding rights that, now or
hereafter, may be secured throughout the world: patents, patent applications,
patent disclosures and inventions (whether or not patentable and whether or not
reduced to practice) and any reissue, continuation, continuation-in-part,
revision, extension or reexamination thereof; trademarks, service marks, trade
dress, logos, trade names and corporate names together with all goodwill
associated therewith, and all translations, adaptations, derivations and
combinations of the foregoing; copyrights and copyrightable works; mask works;
and all registrations, applications and renewals for any of the foregoing; trade
secrets and confidential information (including, without limitation, ideas,
formulae, compositions, know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial, business and marketing
plans, sales and promotional literature, and customer and supplier lists and
related information); computer systems and software (including, without
limitation, data and related documentation); other intellectual property rights;
and all copies and tangible embodiments of the foregoing (in whatever form or
medium), in each case including, without limitation, the items set forth on
Schedule 4.7 of the Disclosure Schedule, but in any case not including any
Excluded Asset;
"Interest Rate" has the meaning set forth in
Section 2.3(f) hereof.
"Law" means any federal, state, local or foreign
law (including common law), statute, code, ordinance, rule, binding guidance or
policy, regulation, orders or consent decrees or other requirement or guideline.
"Legal Proceeding" means any judicial,
administrative or arbitral action, suit, proceeding (public or private), claim
or governmental proceeding, investigation, inquiry, complaint, order, proceeding
or claim by any Governmental Body or private party, including, without
limitation, a condemnation, eminent domain or similar proceeding.
"Leased Real Property" has the meaning set forth in
Section 1.1(b) hereof.
"Liabilities" means indebtedness, obligations or
Damages.
"Logos" has the meaning set forth in Section 8.2
hereof.
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"Mojonnier Brazil has the meaning set forth in the
recitals hereof.
"Name" has the meaning set forth in Section 8.2
hereof.
"Notice" has the meaning set forth in
Section 13.2(c) hereof.
"Order" means any order, injunction, judgment,
decree, ruling, writ, assessment or arbitration award.
"Orlandi Agreement" has the meaning set forth in
Section 2.4 hereof.
"Permit" means any written approval, authorization,
consent, franchise, license, permit, variance, waiver or
certificate by any Governmental Body.
"Permitted Exceptions" has the meaning set forth in
Section 4.6 hereof.
"Person" means any individual, corporation,
partnership, firm, joint venture, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"Pre-Closing Taxes" has the meaning set forth in
Section 8.1(a) hereof.
"Preliminary Purchase Price" has the meaning set
forth in Section 2.1 hereof.
"Reduction Percentage" has the meaning set forth in
Section 2.4 hereof.
"Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discharging of
barrels, containers and other closed receptacles containing any Hazardous
Material).
"Retained Liability" has the meaning set forth in
Section 1.3(b) hereof.
"Seller's Knowledge" shall mean the actual
knowledge of Marq Kaufman, the Managing Directors, the Division Presidents and
the General Managers of the Business and each person who reports directly to any
of the foregoing.
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"Selling Subsidiaries" has the meaning set forth in
the recitals hereof.
"South Carolina Real Property" has the meaning set
forth in the recitals hereof.
"South Carolina Lease" has the meaning set forth in
Section 8.7 hereof.
"Straddle Return" has the meaning set forth in
Section 8.1(a) hereof.
"Subsidiaries" means the Acquired Subsidiaries and
the Selling Subsidiaries.
"Subsidiary Shares" has the meaning set forth in
Section 1.1(h) hereof.
"Supply Requirement Contracts" has the meaning set
forth in Section 4.8(a)(iv) hereof.
"Taxes" means any and all taxes based on or
measured by income and any other tax whatsoever (whether federal, state, local
or foreign), including, without limitation, gross receipts, profits, sales, use,
occupation, value added, ad valorem, transfer, franchise, withholding, payroll,
employment, excise, or property taxes, together with any interest, penalties or
additions to tax imposed with respect thereto.
"Taxing Authority" means a Governmental Body acting
with respect to Taxes.
"Tax Returns" means returns, reports, statements,
computations, certificates, schedules, forms and other documents, including
estimated returns, required to be filed with or provided to any Taxing
Authority.
"Termination Date" has the meaning set forth in
Section 12.1(b) hereof.
"Title Company" has the meaning set forth in
Section 9.5 hereof.
"Title Policy" has the meaning set forth in
Section 9.5 hereof.
"Transferred Employees" means all Division
Employees who accept offers of employment or continued employment from Buyer and
all Acquired Sub Employees who continue employment with the applicable Acquired
Subsidiary on or after the Closing Date.
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"Transition Agreement" has the meaning set forth in
Section 8.3 hereof.
"U.S. Assumed Plan" has the meaning set forth in
Section 4.12 hereof.
"Window Period" has the meaning set forth in
Section 8.2(b).
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
FIGGIE INTERNATIONAL INC.
By:
Name:
Title:
SASIB SpA
By:
Name:
Title:
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and
entered into as of the 1ST day of February, 1995, by and among BARRY-WEHMILLER
COMPANY, a Missouri corporation ("B-W"), BARRY-WEHMILLER ACQUISITION CORP., a
Missouri corporation and wholly owned direct subsidiary of B-W (the "Buyer"),
and FIGGIE INTERNATIONAL INC., a Delaware corporation (the "Seller").
RECITALS
WHEREAS, the Seller is engaged in the manufacture and sale of
packaging machinery through the Akron, Ohio unit of its Figgie Packaging Systems
division; and
WHEREAS, the Buyer and the Seller have reached an
understanding pursuant to which the Buyer shall acquire certain of the assets
and business of the Seller relating to such unit and shall assume certain
liabilities of the Seller relating thereto; and
WHEREAS, the Buyer and the Seller anticipate that Clark Realty
Co., Inc. (the "Land Buyer") shall acquire the land and building located at 10
Ascot Parkway, Cuyahoga Falls, Ohio, together with all improvements, additions
and systems attached to or a part thereof (the "Real Property"), owned by Figgie
International Real Estate Inc., a Delaware corporation (the "Land Seller"), and
used in the business to be acquired hereby, pursuant to a Sale Agreement on
terms materially equivalent to those contained in Exhibit A attached hereto (the
"Land Sale Agreement"); and
WHEREAS, each of the parties hereto desires to set forth
certain representations, warranties, covenants and indemnity obligations, and to
establish certain closing conditions, made to induce the others to execute and
deliver this Agreement and to consummate the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Description of Assets. At the Closing (as defined in
Article 5 hereof), subject to the terms and conditions set forth in this
Agreement, the Seller shall sell to the Buyer, and the Buyer shall purchase from
the Seller, the assets of the Akron unit (consisting of the Consolidated
Packaging Machinery, CloseTech International, IAC and Akron Packaging product
lines) of the Figgie Packaging Systems division of the Seller (such unit is
hereinafter referred to as the "Division"), wherever located, including the
following assets of, or used in the business of, the Division (collectively, the
"Assets"), free and clear of all material liens and encumbrances, other than
encumbrances securing the Assumed Liabilities, as hereinafter defined:
<PAGE>
(a) All inventory of raw materials, work-in-process,
shipping materials and supplies and finished goods;
(b) All trade accounts receivable (other than such receivables due from
any other business segment, division, subsidiary or affiliate of Seller) and
employee travel and expense advances (the "Receivables");
(c) All items of machinery, equipment, furniture, fixtures, tools, dies,
jigs and related spare parts and all supplies, together with all manuals and
written warranties relating thereto;
(d) All right, title and interest of the Seller in and to written bids, sales
orders, sales and service contracts, supply contracts, maintenance contracts and
other contract rights (including any amendments thereto) which are set forth on
Schedule 1.1(d) (collectively, "Contract Rights");
(e) All right, title and interest of the Seller in and to all leases of
tangible personal property and real property which are listed or
cross-referenced on Schedule 3.4(b) (collectively, "Leases");
(f) All right, title and interest of the Seller and any affiliate thereof
in and to the names "Akron", "Closetech", "Consolidated", "IAC" and "Capem" and
all trademarks, trade names, patents, copyrights, licenses, franchises,
discoveries and other know-how, and all applications therefor, but excluding the
name "Figgie" and derivatives thereof and the intellectual property rights
relating thereto as set forth in Schedule 1.1(f) (the "Figgie Names");
(g) All designs, models, prototypes, plans, specifications, drawings and
everything related thereto, including but not limited to any of the foregoing
relating to the CTI seamer product line and all derivatives;
(h) All sales materials, catalogs, and advertising materials;
(i) All records and files pertaining to customers and suppliers,
including, without limitation, sales records, correspondence with customers,
customer files and account histories, records of purchases from and
correspondence with suppliers; and
(j) All right, title and interest of the Seller in and to license
agreements with third parties for the sale, distribution or manufacture of
products which were entered into in the ordinary course of the Division's
business.
1.2 Purchase Price. The aggregate consideration to be paid by the Buyer to
the Seller for the Assets shall be paid in full by the assumption of the Assumed
Liabilities, as hereinafter defined.
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1.3 Purchase Price Allocation. The Buyer and the Seller shall,
as soon as practicable following the Closing Date, use their best efforts to
negotiate and agree upon the respective fair market values of the Assets and to
execute a joint certificate reflecting the same. The Assumed Liabilities and all
other capitalizable costs shall be allocated for all reporting purposes
(including financial accounting and federal and state income tax purposes) in
accordance with the individual fair market values of the Assets as set forth on
such joint certificate in a manner consistent with section 1060 of the Code (as
defined in Section 3.3(a)). Neither the Buyer nor the Seller shall take a
position in any Return (as defined in Section 3.3(a)), or examination or other
administrative or judicial proceeding relating to any Return, that is
inconsistent with such allocation.
1.4 Collection of Receivables and Remission. From and after
the Closing, the Buyer shall have the right and authority to collect for its own
account all Receivables and to endorse with the name of the Seller or the
Division any checks or drafts received with respect to any such Receivables and
the Seller agrees promptly to deliver to the Buyer any cash or other property
received directly or indirectly by it with respect to such Receivables,
including any amounts payable as interest, and to offer such assistance as the
Buyer may reasonably request to provide for the termination of existing lockbox
arrangements and to instruct account debtors to forward payments to the Buyer.
If and to the extent any Receivable is to be collected through a draw on a
letter of credit or similar instrument issued for the account of any customer,
Seller shall cooperate with Buyer (a) to assign all of Seller's rights under
such letter of credit or other instrument, where permitted, and/or (b) to ensure
that Buyer obtains the benefit of the proceeds of such letter of credit or other
instrument.
ARTICLE 2
ASSUMPTION OF CERTAIN LIABILITIES
2.1 Assumed Liabilities. Subject to the terms and conditions
set forth in this Agreement, at the Closing the Seller shall transfer and
assign, and the Buyer shall assume, pay and perform subsequent to the Closing
Date, all of the following specified liabilities and obligations of the Seller
with respect to the Division (collectively, the "Assumed Liabilities"):
(a) All trade accounts payable and customer advanced payments which
are set forth on a schedule to be delivered by the Seller and approved by the
Buyer and which were incurred in the ordinary course of the Division's business
and reflected on the books and records of the Division as of the Closing Date
(but excluding such payables and payments due to any other business segment,
division, subsidiary or affiliate of Seller;
(b) All obligations incurred in the ordinary course of business under
the express terms of any of the Contract Rights; and
(c) All obligations incurred in the ordinary course of the Division's
business under the express terms of any of the Leases that the Buyer has not
novated at the Closing. - 3 -
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Notwithstanding the foregoing, the Buyer shall not assume any liability or
obligation under any of the Contract Rights or Leases which is past due or
delinquent as of the Closing Date.
2.2 No Other Liabilities Assumed. Except for the liabilities
and obligations of the Seller to be specifically assumed by the Buyer under
Section 2.1, the Buyer shall not assume, and the Seller shall remain liable for,
any and all liabilities, obligations, claims and commitments of or against the
Seller which are not specifically set forth herein as being expressly assumed by
the Buyer, whether the same are known or unknown, existing, contingent upon
future events or circumstances, accrued, funded, unfunded or otherwise including
without limitation:
(a) Taxes imposed on the Seller;
(b) any liabilities or obligations resulting from any product liability
claims;
(c) any liability or obligation resulting from any formal or informal,
written or unwritten agreement with respect to severance pay, bonus, pension,
health or medical benefit, or any other employee benefit or fringe benefit plan;
(d) obligations under any collective bargaining agreement covering any
employees of the Division;
(e) obligations under agreements and instruments not included within the
Contract Rights or Leases, including without limitation any stock option
arrangements;
(f) liability to governmental entities and/or private persons under
federal, state and local environmental statutes arising from or related to
operations of the Seller prior to the Closing, or the condition of the Assets or
the Real Property at the time of Closing; and
(g) obligations and liabilities of the Seller which do not relate to the
Division.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
The Seller hereby represents and warrants to the Buyer and
B-W as follows as of the date of this Agreement:
3.1 Status.
(a) Corporate Existence and Status. The Seller is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware.
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(b) Qualification. Schedule 3.1(b) lists the jurisdictions in which the
Seller is required to be qualified to do business as a foreign corporation by
reason of the nature of the Division's business as presently conducted. The
Seller is in good standing as a foreign corporation in all such jurisdictions.
(c) Corporate Power. The Seller has the corporate power to own and
lease the Assets that it owns and leases and otherwise to conduct the Division's
business as currently conducted.
(d) Authorization.
(i) The Seller has the right, power and
authority to enter into this Agreement and each other
agreement, instrument or other document required to be
executed by it hereunder (collectively, the "Other
Agreements") and to consummate the sale of the Assets owned by
it and the other transactions contemplated by, and otherwise
to comply with and perform its obligations under, this
Agreement;
(ii) The execution and delivery by the
Seller of this Agreement and the Other Agreements to which it
is a party, and the consummation by the Seller of the sale of
the Assets owned by it and the other transactions contemplated
by, and other compliance with and performance of its
obligations under, this Agreement and the Other Agreements to
which it is a party have been duly authorized by all necessary
corporate action on the part of the Seller; and
(iii) This Agreement and the Other
Agreements to which it is a party constitute the valid and
binding agreements of the Seller that are enforceable against
it in accordance with their respective terms, except to the
extent that such enforceability (A) may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to creditors' rights generally and (B)
may be subject to general principles of equity.
(e) Absence of Violations or Conflicts. To the knowledge of Seller,
except as disclosed in Schedule 3.1(e), the execution and delivery of this
Agreement and the Other Agreements to which it is a party by the Seller and the
consummation by the Seller of the sale of the Assets and the other transactions
contemplated by, or other compliance with or performance under, this Agreement
and the Other Agreements to which it is a party, do not and will not with the
passage of time or giving of notice or both:
(i) constitute a violation of, be in conflict with,
constitute a default or require any payment under, permit a
termination of, require any consent under, or result in the creation
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or imposition of any lien, encumbrance or other adverse claim
or interest upon any of the Assets under (A) its certificate
of incorporation and bylaws, as amended, (B) any judgment,
decree or order of any governmental authority to which the
Seller or any of the Assets are subject or bound, (C) any
applicable law, or (D) any contract, agreement, instrument,
commitment, undertaking or understanding to which the Seller
is a party or to which it or any of the Assets are subject or
bound, except where any such violation, conflict, default,
termination or claim would not have a material adverse effect
on the business of the Division or the ability of the Seller
to perform its obligations under this Agreement; or
(ii) create, or cause the acceleration of
the maturity of, any debt, obligation or liability of the
Seller which is included among the Assumed Liabilities.
(f) No Governmental Consents Required. Except as set forth in
Schedule 3.1(f), no material consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority on the part
of the Seller is required in connection with its execution or delivery of this
Agreement or the Other Agreements to which it is a party or the consummation of
the sale of the Assets and the other transactions contemplated by, or other
compliance with or performance under, this Agreement or Other Agreements by the
Seller.
3.2 Financial Matters.
(a) Balance Sheet. Attached as Schedule 3.2(a) is a copy of the
unaudited balance sheet of the Division as of December 31, 1994 (the "December
Balance Sheet"). The December Balance Sheet is consistent with the books and
records of the Division, and, to the Seller's knowledge, has been prepared in
accordance with generally accepted accounting principles (as appropriate for an
unincorporated division and except as to inventory costing and the absence of
full footnote disclosures), is complete and accurate in all material respects,
and fairly presents the financial position of the Division as of such date.
(b) Capital Leases. Schedule 3.2(b) lists all Leases which are (or
should be) recorded on the December Balance Sheet as capital leases.
(c) Absence of Certain Changes. Except as set forth in
Schedule 3.2(c), since December 31, 1994, there has not been any activity with
respect to the Division other than in the ordinary course of business and,
without limiting the foregoing, there has not been:
(i) any material adverse change in the quantity,
condition or value of the Assets;
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(ii) any damage, destruction or casualty
loss (whether or not covered by insurance) which has been or
will be materially adverse to the Assets;
(iii) any increase in the compensation
payable by the Seller to any employee or agent of the Division
other than routine increases made in the ordinary course of
business consistent with past practice, or any bonus,
incentive compensation, service award, right to severance or
other like benefit, granted, made or accrued, contingently or
otherwise, to or to the credit of any of such employee or
agent, or any employee welfare, pension, retirement or similar
payment or arrangement made or agreed to by the Seller or the
Division with respect to any such employee or agent, other
than pursuant to the existing plans disclosed on Schedule 3.8;
(iv) any sale, assignment or transfer
(including without limitation any collateral assignment or the
granting or permitting of any lien, encumbrance or other
claim) of any asset, property or right of the Division other
than in the ordinary course of business;
(v) any amendment, modification, waiver or
cancellation of any debt owed to, or claim of, the Division or
settlement by the Division of any dispute involving any
payment or other obligation due to or owed by the Division to
be made or performed after the Closing Date;
(vi) any capital expenditure or commitment
to make a capital expenditure (exclusive of expenditures for
repair or maintenance of equipment in the ordinary course of
business) exceeding $25,000 in the aggregate for all such
expenditures or commitments;
(vii) any incurrence of any extraordinary
loss or knowing waiver of any rights of substantial value by
the Seller in connection with an aspect of the Division's
business whether or not in the ordinary course of business;
(viii) any cancellation, termination or
amendment by the Seller of any material contract, agreement,
license or other instrument relating to the Division to which
the Seller is a party or by which it is bound;
(ix) any failure on the part of the Seller to
operate the Division's business in the ordinary course so as to
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preserve its business organization intact in all material
respects, including the services of its key officers and
professional staff and the goodwill of its suppliers,
customers and others having business relations with the
Division; or
(x) any agreement by or commitment of the
Seller to do or permit any of the foregoing.
3.3 Taxes.
(a) Definitions. For purposes of this Agreement:
(i) The term "Code" shall mean the Internal
Revenue Code of 1986, as amended. All citations to the Code or
to the regulations promulgated thereunder shall include any
amendments or any substitute or successor provisions thereto.
(ii) The term "Returns" shall mean,
collectively, (A) all reports, declarations, estimates,
returns, information statements, and similar documents
relating to, or required to be filed in respect of, any Taxes,
and any amendments thereto; and (B) any statements, returns,
reports, or similar documents required to be filed pursuant to
Part III of Subchapter A of Chapter 61 of the Code or pursuant
to any similar income, excise, or other tax provision of
federal, territorial, state, local, or foreign law, and any
amendments thereto; and the term "Return" means any one of the
foregoing Returns.
(iii) The term "Taxes" shall mean (A) all
net income, gross income, gross receipts, sales, use, ad
valorem, franchise, profits, license, lease, service, service
use, withholding, employment, payroll, excise, severance,
transfer, documentary, mortgage, registration, stamp,
occupation, environmental, premium, property, windfall
profits, customs, duties, and other taxes, fees, assessments
or charges of any kind whatever, together with any interest,
penalties and other additions with respect thereto, imposed by
any federal, territorial, state, local or foreign government;
and (B) any penalties, interest, or other additions to tax for
the failure to collect, withhold, or pay over any of the
foregoing, or to accurately file any Return; and the term
"Tax" shall mean any one of the foregoing Taxes.
Notwithstanding the foregoing, however, the terms "Taxes" and
"Tax" shall include only those amounts for which the Buyer or
any affiliate thereof is, or could become, liable in whole or
part (including, without limitation, any obligation in
connection with a duty to collect, withhold, or pay over any
Tax, any obligation to contribute to the
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payment of any Taxes determined on a consolidated, combined,
or unitary basis, any liability as a transferee, or any
liability as a result of any express or implied obligation to
indemnify or pay the Tax obligations of another person).
(b) Returns Filed and Taxes Paid. Except as set forth in Schedule 3.3,
(i) the Seller has duly and timely filed with the appropriate taxing
authorities, all Returns that it is required to file; (ii) each such Return is,
to the Seller's knowledge, true, correct, and complete in all material respects;
(iii) all Taxes known by Seller due with respect to, or shown to be due on, each
such Return (or amendment) or subsequent assessment with regard thereto, have
been timely paid; and (iv) to Seller's knowledge there is no valid basis for the
assessment of any deficiency with regard to any such Return. To Seller's
knowledge, no other Taxes of the Seller are due with respect to any taxable
periods or portions of periods ending on or before the Closing Date. There are
no liens, attachments, or similar encumbrances on any of the Assets with respect
to any Taxes, other than liens for Taxes of the Seller that are not yet due and
payable. Except as set forth in Schedule 3.3, there are no pending or, to the
knowledge of the Seller, threatened audits, investigations, claims, proposals or
assessments for, or relating to, any Taxes, and there are no matters under
discussion between Seller and any governmental authority with respect to Taxes
that could result in any additional amount of Taxes. No extension of a statute
of limitations relating to Taxes is in effect.
(c) Miscellaneous. Except as otherwise set forth in Schedule 3.3, none
of the Assets (i) owned by Seller is property which is required to be treated as
being owned by any other person pursuant to the so-called "safe harbor lease"
provisions of former section 168(f)(8) of the Code; (ii) is "tax-exempt use
property" under Section 168(h) of the Code; or (iii) directly or indirectly
secures any debt the interest on which is tax exempt under section 103(a) of the
Code.
3.4 Real and Tangible Personal Property.
(a) Real and Tangible Personal Property. For purposes of this
Agreement, "Property" or "Properties" collectively refers to those Assets that
are real and tangible personal properties owned by the Seller and used in the
business of the Division. Schedule 3.4(a) lists each of the Properties
(including machinery, equipment, vehicles, office furniture, tools and other
tangible personal property), which has a net book value in excess of $25,000 to
which the Seller holds legal or equitable title (whether or not of record), as
to which it is taking depreciation, or as to which the Seller has rights as a
conditional sales vendor under a conditional sales contract or other title
retention agreement, other than inventory and other property properly expended
for income tax purposes or properly disclosed pursuant to Sections 3.5 and 3.6
of this Agreement. Except as set forth on Schedule 3.4(a): (i) the Seller has
good and marketable title to all of the Properties owned by it as indicated on
Schedule 3.4(a); and (ii) none of the Properties is subject to any lien, claim
or other encumbrance except (A) liens for taxes not yet due and payable, (B)
liens described in the December Balance Sheet, (C) liens imposed by law and
incurred in the ordinary course of business for obligations not yet due and
payable to landlords, carriers, warehousemen, laborers, materialmen and the
like, and
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(D) easements, covenants and other restrictions of record which do not
materially impair the ability of the Division to conduct its business as
presently conducted.
(b) Leases; Subleases. For purposes of this Agreement, "Lease" means
any written lease, sublease or rental agreement (and any related contract,
agreement, commitment, arrangement, undertaking or understanding) and all
amendments, modifications and supplements thereof and waivers and consents
thereunder pursuant to which in connection with the Division's business the
Seller leases, subleases or rents any real or personal property, either as
lessor, lessee, landlord or tenant. Schedule 3.4(b) lists all Leases, true and
complete copies of which have been heretofore delivered or made available to the
Buyer, except those which (i) can be cancelled by the Seller upon 30 or fewer
days' notice without penalty or the acceleration of rentals, (ii) do not grant
an option to purchase the leased property, and (iii) involve an annual rental of
$25,000 or less. With respect to each of the Leases and except as disclosed on
Schedule 3.4(b): (A) neither the Seller nor (to the knowledge of the Seller) any
other party is in default in connection with such Lease; (B) no act or event has
occurred which, with notice or lapse of time or both, would constitute a default
under Lease with respect to the Seller or (to the knowledge of the Seller) any
other party; and (C) the Seller has not given (except as contemplated by Section
2.1(c) hereof in connection with the Buyer's assumption or novation of Leases or
purchase of assets subject to Leases) or received any notice of cancellation or
termination in connection with such Lease.
(c) Condition. Except as set forth in Schedule 3.4(c): (i) the
Properties and the properties subject to a Lease which are material to the
operation of the Division's business are in good repair and operating condition,
normal wear and tear excepted; (ii) the Seller has not received any notice of
violation of, and, to the knowledge of the Seller, is in compliance with, all
applicable building, zoning, land use or other similar statutes, laws,
ordinances, regulations, permits, and health and safety codes in respect of any
of the Properties or any of the properties subject to a Lease (and the
Division's current use thereof does not constitute a nonconforming use); (iii)
none of the Properties and the properties subject to a Lease has ever been used
as a landfill or otherwise been used for the disposal, storage or treatment of
any waste, trash, garbage, industrial by-product, chemical or hazardous
substance of any nature, except chemicals used or to be used in the ordinary
course of business of the Division in compliance with applicable law; (iv) none
of the Properties and the properties subject to a Lease contains asbestos
insulation or electrical equipment containing polychlorinated biphenyls except
in compliance with applicable law identified on Schedule 3.4(c); and (v) Seller
has not received any written recommendations by fire underwriters or rating
boards, any insurance companies or holders of mortgages or other security
interests requiring or recommending any repairs or work to be done with
reference to any of the Properties and the properties subject to a Lease which
remain outstanding.
(d) All Necessary Properties. The Properties and the properties subject
to the Leases (together with all other intangible properties of the Seller
disclosed, or not required to be disclosed, pursuant to Sections 3.4, 3.5 and
3.6 of this Agreement) constitute all of the properties which the Seller uses in
connection with the operation of the Division's business as presently conducted.
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(e) Accounts Receivable and Security. The Receivables, except to the
extent of the allowance for doubtful accounts contained in the December Balance
Sheet, of the Seller as reflected on the December Balance Sheet and the accounts
receivable reflected on the books of the Division: (i) are valid, existing and
represent monies due the Seller as a result of transactions in the ordinary
course of business, including but not limited to amounts attributable to goods
sold and delivered or services rendered; and (ii) to Seller's knowledge, except
as set forth on Schedule 3.4(e), are subject to no refunds or other adjustments
or to any defenses, rights of set-off, assignments, restrictions, security
interests, encumbrances or conditions which have been asserted by third parties
on or affecting any thereof. Except to the extent set forth in clause (ii) of
the immediately preceding sentence, Seller makes no representation as to the
collectibility of any Receivable or the adequacy of the allowance for doubtful
accounts with respect thereto contained in the December Balance Sheet. Schedule
3.4(e) contains a true and complete list of all letters of credit and similar
instruments securing any of the Receivables as to which the Seller or the
Division is the beneficiary.
(f) Inventories. The composition, quality, types and quantities of the
inventories reflected on the December Balance Sheet, and those reflected on the
books of the Division, are materially consistent with the composition, quality,
types and quantities of inventories maintained by the Division in the two years
preceding the date of this Agreement. Except as set forth in Schedule 3.4(f),
(i) the Seller holds no inventories for use by the Division of any other person
on consignment, and (ii) no other person is in possession of any of the
inventories of the Seller.
3.5 Intellectual Property; Patents; Trademarks, Trade Names.
(a) The term "Intellectual Property Rights" shall mean all patents,
patent applications and patent disclosures; all inventions (whether or not
patentable and whether or not reduced to practice); (except as set forth on
Schedule 1.1(f)) all trademarks, service marks, trade dress, trade names and
corporate names and all the goodwill associated therewith; all registered and
unregistered statutory and common law copyrights; all registrations,
applications and renewals for any of the foregoing; all trade secrets,
confidential information, ideas, formulae, know-how, manufacturing and
production processes and techniques, research information, specifications,
designs, plans, improvements, proposals, technical and computer data,
documentation and software, financial, business and marketing plans, customer
and supplier lists and related information, marketing materials and all other
intellectual property rights; in each case to the extent the foregoing relate to
items used by the Division (without regard to whether any other person may have
rights of use with respect thereto).
(b) Schedule 3.5 contains a true and complete list of all patented or
registered Intellectual Property Rights or any pending patent applications or
applications for the registration of Intellectual Property Rights. Schedule 3.5
contains a complete and accurate list of (i) all trade or corporate names used
by the Division; (ii) all computer software owned by the Division; and (iii) all
licenses and other rights granted by the Division to any third party with
respect to computer software rights and all licenses (other than so-called
"execute by opening" software licenses) and other rights granted by any third
party to the Division with respect to computer software rights, together with a
description of the subject matter licensed.
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(c) Except as set forth on Schedule 3.5, (i) the Seller owns and
possesses, all right, title and interest in and to, free and clear of any
encumbrances, or has a valid, enforceable and effective license to use, all of
the Intellectual Property Rights used in the operation of the business of the
Division as presently conducted; (ii) during the two (2) years preceding the
date of this Agreement, no claim by any third party contesting the validity,
enforceability, use or ownership of any Intellectual Property Rights has been
made or, to the Seller's knowledge, threatened and no such claim is currently
outstanding; (iii) during the two (2) years preceding the date of this
Agreement, the Division has not received any notice of any infringement or
misappropriation by any third party with respect to the Intellectual Property
Rights, nor has the Division received any claims alleging infringement or
misappropriation of any intellectual property rights of any third party; and
(iv) to the Seller's knowledge, the Division has not infringed, misappropriated
or otherwise conflicted with any intellectual property rights of any third
party, nor is it aware of any infringement, misappropriation or conflict which
will occur as a result of the continued operation of its business as conducted.
3.6 Loans and Contracts.
(a) Indebtedness. Schedule 3.6(a) sets forth (i) a complete and accurate
list or description of all instruments or other documents ("Debt Instruments")
relating to any direct or indirect indebtedness for borrowed money of the Seller
with respect to the Division, as well as indebtedness by way of industrial
development bonds, capital leases, lease-purchase arrangements, guarantees,
undertakings on which others rely in extending credit and all conditional sales
contracts, chattel mortgages and other security arrangements with respect to
personal property used or owned by the Seller in connection with the Division's
business and (ii) a list of all loans of money to officers or employees or
shareholders of the Seller (excluding travel and similar advances in the
ordinary course of business).
(b) Other Contracts. Schedule 3.6(b) lists each Contract Right of the
type listed below (but such list shall not include Leases, Intellectual Property
Rights, Debt Instruments, Insurance Policies and employee-related matters of the
Seller disclosed elsewhere in this Agreement):
(i) for the purchase or rental of materials,
inventory and supplies by the Seller entered into in the
ordinary course of business which individually exceed $25,000
and which are not reasonably expected to be fully performed
within 30 days of their respective dates;
(ii) for the purchase of services by the
Seller entered into in the ordinary course of business which
are not reasonably expected to be fully performed within 30
days of their respective dates;
(iii) that were entered into in the ordinary
course of business and involve, or are reasonably expected to
involve, an amount in excess of $25,000 and which are not
reasonably
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expected to be fully performed within 30 days of their respective
dates;
(iv) for matters not in the ordinary course of
business of the Division;
(v) making the Seller liable, by guaranty,
suretyship agreement, indemnification agreement, contribution
agreement or otherwise, upon or with respect to, or obligating
it in any way to provide funds in respect of, or obligating it
to guarantee, serve as surety for or assume, any debt,
dividend or other liability or obligation of any person,
corporation, association, partnership or other entity (except
endorsements made in the ordinary course of business in
connection with the deposit of items for collection);
(vi) granting a power of attorney;
(vii)relating to participation in a cooperative,
partnership, joint venture or limited liability company;
(viii) imposing confidentiality requirements;
(ix) restricting or limiting the freedom of
the Seller to compete in any line of business, except for
limitations stipulated in intellectual property agreements;
(x) involving any hedge arrangement against
currency or interest rate fluctuations; or
(xi) involving any letters of credit.
True and complete copies of all Contract Rights (as amended) required to be
disclosed in Schedule 3.6(b) have been delivered or made available to the Buyer.
(c) Insurance. All insurance policies for which the Seller is a
beneficiary or named insured (including comprehensive general liability,
personal and professional liability, comprehensive general casualty and extended
coverage, business interruption, automobile, boiler and machinery, fire and
lightning, marine, endowment, life, and worker's compensation) to the extent
such policies relate to the Division ("Insurance Policies") are listed in
Schedule 3.6(c) in the form of a complete and accurate schedule (including the
type of policy, the policy number, the limits of coverage, the carrier, the
annual premium and the expiration date), and true and complete copies of such
policies have been provided or made available to the Buyer.
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(d) Status. Except as disclosed on Schedule 3.6(d): (i) neither the
Seller nor (to the knowledge of the Seller) any other party is in default in
connection with any Debt Instrument, Contract Right or Insurance Policy; (ii) no
act or event has occurred which, with notice or lapse of time or both, would
constitute a default under any Debt Instrument, Contract Right or Insurance
Policy, except as to Contract Rights or Insurance Policies where such default
would not have a material adverse effect on the Assets or the business of the
Division; (iii) the Seller has not received or given any notice of acceleration,
cancellation or termination in connection with any Debt Instrument, Contract
Right or Insurance Policy.
3.7 Employment Relationships. Schedule 3.7 contains a true and
complete list of all of the employees of the Division as of the date of this
Agreement, setting forth each employee's compensation, date of hire and whether
or not contributions are made for him under the employee benefit plans, programs
and arrangements described in Section 3.8. Except as disclosed pursuant to
Schedule 3.7 or Section 3.8, the Seller has no obligations, contingent or
otherwise to any such employees: (i) under any employment contract, agreement,
commitment, undertaking, understanding, plan, program, policy or arrangement;
(ii) under any bonus, incentive or deferred compensation contract, agreement,
commitment, undertaking, understanding, plan, program, policy or arrangement
(including one for severance or other payments conditioned upon a change of
control of the Seller); (iii) under any pension, profit-sharing, stock purchase
or any other such plan, program or arrangement; or (iv) under any arrangement
that has resulted or could result in the payment of any "excess parachute
payment" as defined in Section 280G of the Code (without regard to subsection
(b)(4) thereof).
3.8 Employee Benefit Plans. Attached as Schedule 3.8 hereto is
a complete list of each "employee welfare benefit plan" as defined in Section
3(1) of the Employee Retirement Income Security Act of 1974 ("ERISA")
(collectively, the "Employee Welfare Plans"), each "employee pension benefit
plan" as defined in Section 3(2) of ERISA (collectively, the "Employee Pension
Plans"), and all deferred compensation arrangements in which any of the
employees of the Division are participants. Each of the Employee Welfare Plans
and Employee Pension Plans is maintained in material compliance with the
applicable provisions of ERISA, the Code and any other applicable laws. Neither
the execution, delivery and performance of this Agreement nor the consummation
of the transactions herein or therein contemplated will cause the Buyer or any
affiliate thereof to be liable to any person pursuant to the terms of the
Employee Pension Plans, the Employee Welfare Plans or ERISA. The Seller is not a
party to any pending or, to the Seller's knowledge, threatened action, claim
suit or proceeding by any person or governmental instrumentality concerning any
Employee Pension Plan or Employee Welfare Plan which relates to the Division or
its employees. All payments due from the Seller (on account of employment
contracts or otherwise) for Employee Pension Plans and Employee Welfare Plans
have been paid for all periods ended on or prior to the date hereof, and for the
period from the date hereof through the Closing Date, shall be paid by the
Seller.
3.9 Labor Relations. With respect to the Division, except as described in
Schedule 3.9: (a) the Seller is in material compliance with all federal, state,
local and other applicable law respecting employment and employment practices,
terms and conditions of employment and wages and hours; (b) there is no unfair
labor practice, complaint, charge or
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other matter against or involving the Seller pending or, to the Seller's
knowledge, threatened before any governmental authority; (c) there is no labor
strike, dispute, organizing effort, slow down, stoppage or other material labor
difficulty pending, involving or, to the Seller's knowledge, threatened, against
or affecting the Seller; (d) to the Seller's knowledge, no representation
question exists respecting the employees of the Seller; (e) no grievance which
is reasonably expected to have an adverse effect on the business of the Division
nor any arbitration proceeding arising out of or under collective bargaining
agreements is pending, and to the Seller's knowledge no claim therefor exists;
and (f) there is no collective bargaining agreement which is binding on the
Seller. During the six month period ending on the date of this Agreement, no
more than twenty (20) employees of the Division have suffered an "employment
loss" as such quoted term is defined in the Worker Adjustment and Retraining
Notification Act ("WARN Act").
3.10 Litigation. With respect to the Division, except as
disclosed in Schedule 3.10, the Seller is not (i) engaged in, a party to,
subject to or, to the Seller's knowledge, threatened with any claim, legal or
equitable action, or other proceeding (whether as plaintiff, defendant or
otherwise and regardless of the forum or the nature of the opposing party); (ii)
to the knowledge of the Seller, subject to any unasserted claim, the assertion
of which is likely and which, if asserted, will seek damages, an injunction or
other relief against the Seller which claim individually or collectively with
such other unasserted claims if made would have a material adverse effect on the
Assets or the business of the Division; or (iii) a party to or subject to any
judgment, order or decree against it or the Assets. Except as set forth in
Schedule 3.10, there has been no reservation of rights by any insurance carrier,
and no such reservation, to the Seller's knowledge, is threatened, concerning
the coverage of the Seller with respect to any matter required to be disclosed
pursuant to this Section 3.10.
3.11 Compliance with Laws. With respect to the Division, except as set
forth --------------------
in Schedule 3.11:
-------------
(a) Generally. The Seller is (and during the preceding five years has
been) in compliance with all applicable law (including those involving
antitrust, unfair competition, trade regulation, antipollution, environmental,
employment, safety, health and food and drug matters) the noncompliance with
which would have a material adverse effect on the Assets or the business of the
Division.
(b) Charges or Violations. The Seller is not (and during the preceding
five years has not been) charged with, in receipt of any notice or warning of,
or under investigation with respect to, any failure or alleged failure to comply
with any provision of any applicable law, the noncompliance with which would
have a material adverse effect on the Assets or the business of the Division.
(c) Permits. Without limiting the foregoing: (i) the Seller has all
material occupancy certificates and other material licenses, permits and
certificates ("Permits") required in connection with its ownership, possession,
use, occupancy or operation of any of the Properties owned, leased or used by
the Division, all of which are listed in Schedule 3.11; (ii) all of the Permits
are in full force and effect; (iii) the Seller is (and has been) in material
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compliance with the Permits; and (iv) none of the Permits will be affected by,
or require the consent of any party by reason of, the sale of the Assets or the
other transactions contemplated by this Agreement.
(d) Environmental and Safety Requirements.
(i) Except as set forth on Schedule 3.11,
the Seller has not received any oral or written notice of, and
has no reason to believe there is, any existing or pending
violation, citation, claim or complaint relating to the
business of the Division or any facility owned or operated by
the Division arising under any federal environmental law,
including but not limited to the Resource Conservation and
Recovery Act (also known as the Solid Waste Disposal Act), the
Comprehensive Environmental Response Compensation and
Liability Act, the Superfund Amendments and Reauthorization
Act, the Toxic Substances Control Act, the Safe Drinking Water
Act, the Federal Water Pollution Control Act (Clean Water
Act), the Clean Air Act and antipollution, waste control and
disposal, worker health and safety and environmental
protection laws, including common law, of any governmental
authority, and all regulations and standards enacted pursuant
thereto and all permits and authorizations issued in
connection therewith (collectively, "Environmental and Safety
Requirements").
(ii) No toxic or hazardous substances have
been generated, transported, treated, stored, disposed of on
or from or otherwise deposited in or on or allowed to emanate
from any such facility (irrespective of whether such
substances remain at the facility or were transferred to or
otherwise disposed of off-site), including the surface waters
and subsurface waters thereof, except in compliance with
applicable law as described on Schedule 3.11. Schedule 3.11
identifies the location, type and contents of all underground
tanks at any facility owned or operated by the Seller relating
to the Division. The Seller has delivered to the Buyer true
and complete copies of all closure reports with respect to
underground storage tanks removed from any such facility.
3.12 Transactions with Affiliates. Except as disclosed in
Schedule 3.12, no shareholder, officer or director of the Seller, or any
"affiliate" or "associate" (as such terms are defined in the rules and
regulations of the Securities and Exchange Commission under the Securities Act
of 1933, as amended) of any of the foregoing:
(a) is a party to any lease, sublease, contract, agreement, commitment,
understanding or other arrangement of any kind whatsoever, involving any such
person and the Division which is not disclosed in Schedule 3.12, or
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(b) owns directly or indirectly, in whole or in part, any property that
the Division uses or otherwise has rights in respect of, or
(c) has any cause of action or other claim whatsoever against, or owes
any amount to, the Division
other than (i) for compensation (including fringe benefits) to officers and
employees disclosed pursuant to Section 3.7 and for reimbursement of ordinary
and necessary expenses incurred in connection with employment by the Seller,
(ii) for rights under the employee benefit plans disclosed pursuant to Section
3.8, and (iii) as otherwise disclosed pursuant to this Agreement.
3.13 Commissions. No person, firm or corporation has asserted
or is entitled to any commission or broker's or finder's fee in connection with
the sale of the Assets or any of the other transactions contemplated by this
Agreement by reason of any act or omission of the Seller or any person
purporting to act on its behalf.
3.14 Disclosures Generally. To the Seller's knowledge, no
representation or warranty by the Seller in this Agreement or in any Exhibit,
Schedule, certificate or other agreement, instrument or document furnished or to
be furnished to the Buyer pursuant to this Agreement or in connection with the
sale of the Assets or any of the other transactions contemplated by this
Agreement contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact, necessary to make the statements
herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER AND B-W
The Buyer and B-W hereby jointly represent and warrant to the
Seller as follows as of the date of this Agreement:
4.1 Status.
(a) Corporate Existence and Status. The Buyer and B-W each is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Missouri.
(b) Authorization.
(i) The Buyer and B-W each has the right,
power and authority to enter into this Agreement and each
other agreement, instrument or other document required to be
executed by it hereunder (collectively, the "Other
Agreements") and to consummate the purchase of the Assets and
the other transactions
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contemplated by, and otherwise to comply with and perform its
obligations under, this Agreement;
(ii) The execution and delivery by each of
the Buyer and B-W of this Agreement and the Other Agreements
to which it is a party, and the consummation by the Buyer of
the purchase of the Assets and the other transactions
contemplated by, and other compliance with and performance of
each of the Buyer's and B-W's obligations under, this
Agreement and the Other Agreements to which it is a party have
been duly authorized by all necessary corporate action on the
part of each of the Buyer and B- W; and
(iii) This Agreement and the Other
Agreements to which it is a party constitute the valid and
binding agreements of each of the Buyer and B-W that are
enforceable against it in accordance with their respective
terms, except to the extent that such enforceability (A) may
be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar law relating to creditors' rights
generally and (B) may be subject to general principles of
equity.
(c) Absence of Violations or Conflicts. Except as disclosed in Schedule
4.1(c), the execution and delivery of this Agreement and the Other Agreements to
which it is a party by each of the Buyer and B-W and the consummation by the
Buyer of the purchase of the Assets and the other transactions contemplated by,
or other compliance with or performance by each of the Buyer and B-W under, this
Agreement and the Other Agreements to which it is a party, do not and will not
with the passage of time or giving of notice or both, constitute a violation of,
be in conflict with, or require any consent under, (i) the articles of
incorporation and bylaws (as amended) of B-W or the Buyer, (ii) any judgment,
decree or order of any governmental authority to which the Buyer or B-W or any
of its properties are subject or bound, (iii) any applicable law, or (iv) any
contract, agreement, instrument, commitment, undertaking or understanding to
which the Buyer or B-W is a party or to which either of them or any of its
assets or properties are subject or bound, except where any such violation,
conflict, default, termination or claim would not have a material adverse effect
on the ability of the Buyer or B-W to perform its obligations under this
Agreement.
(d) No Governmental Consents Required. Except as set forth in
Schedule 4.1(d), no consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority on the part
of the Buyer or B-W is required in connection with its execution or delivery of
this Agreement or the Other Agreements to which it is a party or the
consummation of the purchase of the Assets and the other transactions
contemplated by, or other compliance with or performance under, this Agreement
or such Other Agreements by the Buyer or B-W.
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4.2 Commissions. No person, firm or corporation has asserted
or is entitled to any commission or broker's or finder's fee in connection with
the sale of the Assets or any of the other transactions contemplated by this
Agreement by reason of any act or omission of the Buyer or B-W.
4.3 Disclosures Generally. To Buyer's and B-W's knowledge, no
representation or warranty by the Buyer or B-W in this Agreement or in any
Exhibit, Schedule, certificate or other agreement, instrument or document
furnished or to be furnished to the Seller pursuant to this Agreement or in
connection with the purchase of the Assets or any of the other transactions
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact, necessary to
make the statements herein or therein not misleading.
4.4 Financial Statements.
(a) B-W has delivered to the Seller correct and complete copies of the
audited balance sheets of B-W as of July 31, 1994, 1993 and 1992, and the
related audited statements of operations and cash flows for the years then
ended, together with the notes thereto and the other financial information
included therewith (collectively, the "B-W Financial Statements").
(b) The B-W Financial Statements are accurate and complete in all
material respects, consistent with the books and records of B-W, (ii) have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated, and (iii) fairly present
the financial position, results of operations and cash flows of B-W at the
respective dates thereof and for the periods therein indicated.
ARTICLE 5
CLOSING AND CLOSING DATE
The preclosing and closing (collectively, "Closing") of the
sale of Assets and other transactions contemplated by this Agreement shall take
place in Cleveland, Ohio, commencing at 9:00 a.m. local time on February 17,
1995, ("Closing Date"), or a business day subsequent thereto designated by the
Buyer and the Seller following satisfaction or waiver of all conditions to
Closing set forth herein. The parties agree and acknowledge that time is of the
essence of this Agreement, and that cooperation among the parties with respect
to the Buyer's due diligence and the satisfaction of each party's conditions to
Closing will be essential to consummating the sale of Assets and Real Property
by such date. For all purposes, the Closing shall be deemed to be effective as
of 11:59 p.m. (Cleveland, Ohio time) on the Closing Date.
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ARTICLE 6
COVENANTS OF SELLER
6.1 Conduct of Business. From the date hereof to the Closing
Date, except for transactions which are expressly approved in writing by the
Buyer, the Seller shall refrain from:
(a) Subjecting any of the Assets to any lien, encumbrance or other
claim of any kind, exclusive of liens permitted by this Agreement;
(b) Except for sales of inventory in the ordinary course of business,
selling, assigning, transferring or otherwise disposing of any of the Assets and
Properties;
(c) Modifying, amending, altering or terminating (whether by written
or oral agreement, or any manner of action or inaction) any of the Debt
Instruments, Leases, Intellectual Property Rights, Contract Rights or Insurance
Policies, or entering into any such arrangement which is outside of the ordinary
course of business or which involves the payment or receipt by the Seller of an
amount in excess of $25,000; and/or
(d) Taking or permitting any other action that, if taken or permitted
immediately prior to the execution of this Agreement, would constitute a breach
of or an exception to the representations and warranties in Section 3.2(c)
hereof.
6.2 Affirmative Covenants. From the date hereof to the Closing Date, the
Seller shall with respect to the Division:
(a) Maintain property and liability insurance with respect to the
Division in amounts and with coverage at least as great as the amounts and
coverage in effect on the date of this Agreement;
(b) Maintain, consistent with past practice, the properties of the
Division and the Real Property in good repair, order and condition, reasonable
wear and tear excepted, and use its best efforts to preserve its possession and
control of all of such properties;
(c) Use reasonable efforts (excluding compensation increases) to keep
in faithful service the employees of the Division;
(d) Maintain the books, accounts and records of the Division in a
manner consistent with past practice and with sound business practices;
(e) Allow, at all reasonable times, the Buyer's employees, attorneys,
auditors, accountants and other authorized representatives, free and full access
(during normal business hours and so as not to interrupt normal operations) to
the Real Property and the facilities, plants, properties, books, records,
documents and correspondence of the Seller relating
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to the Division, in order that the Buyer may have full opportunity to make
such investigation as it may desire of the business of the Division;
(f) Comply with all applicable law relating to the Real Property and
the conduct of the Division's business, and conduct the Division's business in
such a manner so that on the Closing Date the representations and warranties
contained in this Agreement shall be true as though such representations and
warranties were made on and as of such date, except for changes permitted or
contemplated by the terms of this Agreement;
(g) Provide the Buyer with (i) prompt written notice of any material
adverse change in the Assets, operations, Assumed Liabilities or business of the
Division or in the condition of the Real Property, and (ii) monthly financial
statements of the Division on a timely basis;
(h) Maintain in inventory quantities of goods, supplies and materials
which (A) as to raw materials and work-in-process, are sufficient to allow the
Buyer to continue to operate the business of the Division after the Closing Date
free of any unusual shortage of such items, and (B) as to finished goods, are
consistent with past practice and with quantities of finished goods maintained
at December 31, 1994;
(i) Pay the liabilities and obligations relating to the Division in
accordance with their respective terms as the same shall become due and payable;
and (j) Operate the business of the Division only in the ordinary course so
as to preserve its business organization intact, the goodwill of its suppliers,
customers and others having business relations with the Seller.
6.3 Obligations Concerning Employees. On or prior to the
Closing Date, the Seller shall notify all of the Division's employees that
certain assets of the Division are being sold to the Buyer, that all employees
to be hired by the Buyer will be terminated from the employment of the Seller
effective as of Closing, and that any decisions by the Buyer regarding its
hiring procedures or the hiring of the Division's employees will be communicated
to the employees by the Buyer. The Seller shall comply with all provisions of
federal and state law relating to the continuation of health insurance benefits
for terminated employees. Except with the prior written consent of the Buyer,
the Seller shall not cause any of the Division's employees to suffer an
"employment loss" as defined in the WARN Act. If any employees of the Division
voluntarily terminate their employment with the Seller, Seller shall use all
reasonable efforts to deliver to such employees a letter advising them of their
obligations with respect to trade secrets and other confidential information, as
well as any noncompetition or other contractual commitments (if applicable) of
such employees.
6.4 Roster of Employees. On or prior to the Closing Date, the
Seller shall deliver to the Buyer an updated version of Schedule 3.7 with
respect to its employees and their compensation and benefits.
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6.5 Final Payroll. No later than the first regular payroll
date of Seller after the Closing Date (or prior thereto, if required by Ohio
law), the Seller shall issue to all of the Division's employees payroll checks,
dated as of the Closing Date, for all salary wages, accrued vacation and similar
compensation (net of usual withholdings) owned to such employees for their
services rendered through the Closing Date.
6.6 Consents of Certain Lessors. The Seller shall support and
cooperate with the Buyer in negotiating with the lessors of the leased assets
referenced in Section 2.1(c), and shall offer all reasonable assistance
requested by the Buyer (exclusive of any financial assistance) in connection
therewith.
6.7 Confidentiality/Non-Competition Agreements. The Seller
shall assign to Buyer all of Seller's right, title and interest in and to all
confidentiality and noncompetition agreements with any, present or former
employee of the Division (it being understood that Seller makes no
representation as to the assignability thereof).
6.8 Due Diligence.
(a) Generally. The Seller hereby authorizes the Buyer to continue its
due diligence examination of the assets, liabilities, books and records of the
Seller relating to the business of the Division and to conduct the pre-Closing
audit described in Section 6.8(b). The Seller shall (i) make available and
assemble at all reasonable times during the Division's normal business hours all
records, Leases, Debt Instruments, Contract Rights, Insurance Policies,
Intellectual Property Rights and other documents and data related to the
Seller's assets and liabilities, (ii) allow the Buyer and its authorized
representatives to make physical inspections of the Real Property and buildings
located thereon, and (iii) reasonably cooperate with the Buyer's other due
diligence requirements. The Buyer may hire legal, actuarial, accounting and
other professionals to assist it in its due diligence review, and such
representatives shall have reasonable access to the Seller's records and
facilities during normal business hours.
(b) Audit. The Buyer shall be entitled to conduct an audit, at the
Buyer's expense, of the Division as of a date preceding the Closing Date for the
purposes of verifying the Seller's representations and verifying the assets and
liabilities of the Division.
(c) Environmental Assessment. The Buyer shall have the right at the
Buyer's expense to hire an engineering firm to conduct such environmental
assessments of the business of the Division and the Real Property as the Buyer
shall deem appropriate.
6.9 Consents and Closing Conditions. The Seller shall use its
best efforts (a) to obtain such consents from third parties and to take other
actions as may be appropriate in order to fulfill the closing conditions
contained herein which are reasonably within its control, and (b) to cause the
representations and warranties in Article 3 to be true and correct on and as of
the Closing Date. Seller shall notify Buyer promptly if, at any time prior to
Closing, any facts come to the Seller's attention which indicate that any of
such representations or warranties are or may be untrue on the date hereof or at
such time.
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6.10 Performance of Land Sale Agreement. The Seller shall cause Land Seller
duly to perform the Land Seller's obligations under the Land Sale Agreement in
accordance with its terms.
6.11 Certain Assets in Possession of Others. From and after
the Closing Date, if Buyer determines that certain assets of the Division
purchased pursuant to this Agreement (including without limitation drawings,
technical documents and specifications, and customer lists) are in the
possession of any current or former affiliate or division of Seller (or any
transferee thereof), Buyer may notify Seller in writing of such fact. Seller
promptly shall commence all reasonable actions (exclusive of legal proceedings)
appropriate to cause any affiliate or division (or transferee) in possession of
such assets to transfer possession thereof to Buyer. If Buyer so requests in
writing, Seller shall assign to Buyer all rights and causes of action held by
Seller against any such person, in order for Buyer to have recourse directly
against the party in possession of such assets. Seller has delivered to Buyer
true and complete copies of all agreements, certificates and other documents by
which (a) any current or former affiliate or division of Seller (or transferee)
has certified that it has returned all properties of the Division which are part
of the Assets being sold pursuant to this Agreement, and (b) any other purchaser
of assets of the Figgie Packaging Systems division of Seller has agreed to
surrender possession of any of the Assets.
ARTICLE 7
COVENANTS OF BUYER AND B-W
7.1 Consents and Closing Conditions. The Buyer and B-W each
shall use its best efforts (a) to obtain such consents from third parties and to
take other actions as may be required in order to fulfill the closing conditions
contained herein which are reasonably within its control, and (b) to cause the
representations and warranties of the Buyer and B-W in Article 4 to be true and
correct on and as of the Closing Date.
7.2 Transfer Taxes. The Buyer shall be responsible for paying
any and all state and local sales, use or other transfer tax attributable to the
transfer of the Assets; provided that the Seller shall cooperate with the Buyer
to the extent necessary to qualify for any statutory or regulatory exemption.
7.3 Confidentiality of Information. Prior to the Closing Date,
neither the Buyer nor B-W nor any of their respective employees, agents,
auditors, attorneys and other authorized representatives shall without the
Seller's prior written consent, communicate or divulge to any person or entity
or use for their benefit any information, other than information becoming public
other than by the Buyer's or B-W's action, concerning any confidential business
information possessed, owned or used by the Seller that may be communicated to,
acquired by or learned by the Buyer or B-W pursuant to this Agreement or the
Buyer's or B-W's investigations contemplated hereby.
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7.4 Employees. Effective as of the Closing Date, the Buyer
shall continue the operations of the Division in its present facility generally
as they are presently conducted and offer employment to a substantial number of
the then current employees of the Division. Such employees shall be eligible to
participate in the benefit plans which are generally available to employees of
B-W and its subsidiaries. Within a reasonable time after the execution of this
Agreement (and in any event by February 8, 1995), the Buyer shall deliver to the
Seller a true and complete list (certified by an officer of Buyer) of all
employees of the Division to whom Buyer intends to make offers of full time
employment with Buyer.
7.5 Access to Records. After the Closing Date and upon
reasonable prior notice to the Buyer, which notice must demonstrate to the
reasonable satisfaction of the Buyer a legal or business necessity for access to
the records of the Division, the Buyer shall permit the Seller, at the Seller's
expense during normal business hours and so as not to interrupt normal
operations, to have reasonable access to the records and former employees of the
Division. Buyer hereby acknowledges that access for purposes of consummating the
sale of those product lines of the Figgie Packaging Systems division that are
not the subject of this Agreement, for purposes of preparing tax returns, and
for purposes of conducting pending or threatened litigation with respect to
certain matters that have been disclosed to the Buyer in writing at the time of
execution hereof, shall demonstrate conclusively, upon Seller's request for
access for such purposes, a legal or business necessity.
7.6 Land Sale Agreement. If the Land Buyer shall not have
entered into the Land Sale Agreement on or before February 8, 1995, then B-W (or
a subsidiary thereof reasonably satisfactory to the Seller) shall, if the Seller
so requests, enter into the Land Sale Agreement as the "Land Buyer" thereunder.
If the Land Buyer named in Exhibit A does enter into the Land Sale Agreement on
or before such date, then B-W hereby undertakes to perform all obligations of
the Land Buyer under the Land Sale Agreement as its primary obligations if and
to the extent such named Land Buyer fails to perform the same.
ARTICLE 8
TAX MATTERS
8.1 Payment of Taxes. The Seller shall timely pay, before the
same shall become delinquent and before penalties accrue thereon, all Taxes
(including any Taxes incurred in connection with the transactions contemplated
by this Agreement, if and to the extent such Taxes are the responsibility of the
Seller) (a) shown (or to Seller's knowledge required to be shown) on any Return
filed (or to Seller's knowledge required to be filed) by the Seller before, on
or after the Closing Date, or (b) that become due from or payable by the Seller
before, on or after the Closing Date. This Section 8.1 shall not apply with
regard to any Tax to the extent that the Assets cannot be made subject to a lien
for such Tax and the Buyer (and its successors, assigns, and affiliates) cannot
be made liable for such Tax. Each party shall be responsible for filing Forms
W-2 with respect to the 1995 taxable year in accordance with the "Standard
Procedure" described in Rev. Proc. 84-77, 1984-2 C.B. 753. The responsibility
for all other information returns shall be allocated similarly.
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8.2 Cooperation and Records Retention. From time to time, the
Seller and the Buyer shall permit reasonable access, and shall cause their
respective accountants and other representatives to permit reasonable access to
each other, the information that they or their accountants or other
representatives have within their control and that may be reasonably necessary
in connection with the preparation of any Return or the examination by any
taxing authority or other administrative or judicial proceeding relating to any
Return. The Seller and the Buyer shall retain or cause to be retained, until the
applicable statutes of limitations (including any extensions) have expired,
copies of all Returns for all tax periods beginning before the Closing Date,
together with supporting work schedules and other records or information that
may be relevant to such Returns.
8.3 Tax Elections. No new elections with respect to Taxes, or
any changes in current elections with respect to Taxes, affecting the Assets
shall be made by the Seller after the date of this Agreement without the prior
written consent of the Buyer.
ARTICLE 9
BUYER'S CONDITIONS TO CLOSING
The obligation of the Buyer to consummate the purchase of
Assets, the assumption of Assumed Liabilities and the other transactions
contemplated by this Agreement shall be subject to the fulfillment to the
Buyer's reasonable satisfaction of each of the following conditions:
9.1 Continued Truth of Warranties. The representations and warranties of
the Seller in Article 3 hereof shall be true and correct in all material
respects on the Closing Date as if made on such date. 9.2 Performance of
Covenants. The Seller shall have performed
all covenants and obligations and complied with all conditions required by this
Agreement or to be performed or complied with by it on or prior to the Closing
Date.
9.3 Permits and Consents. The parties hereto shall have
secured all appropriate orders, consents, approvals and clearances, in form and
substance satisfactory to the Buyer, by and from all third parties, including
but not limited to governmental authorities, whose order, consent and approval
or clearance is required by contract or applicable law for the consummation of
the sale of the Assets and the other transactions herein contemplated; and all
applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 ("HSR Act") shall have expired.
9.4 Due Diligence. The Buyer and its employees, attorneys, accountants and
other agents shall have been permitted to conduct a full investigation of the
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assets, liabilities and business of the Seller with respect to the Division
as provided in Section 6.8, and
(a) no facts shall have come to the attention of the Buyer which indicate
a reduction in Working Capital (from that reflected on the December Balance
Sheet) and/or the existence of a defect or liability affecting the business of
the Division or the Assets or Real Property which in the reasonable judgment of
the Buyer does or will result in or represent a reduction, loss or potential
liability which, in the aggregate, exceeds $500,000; and
(b) the Buyer shall have confirmed the material accuracy of all
representations and warranties of the Seller set forth herein, except for
inaccuracies which are remedied to the Buyer's reasonable satisfaction prior to
Closing.
The term "Working Capital" shall mean an amount equal to the excess of (y) all
current assets which are part of the Assets, over (z) all current liabilities
which are part of the Assumed Liabilities. The Buyer shall give written notice
to the Seller prior to Closing with reasonable promptness if the Buyer discovers
any inaccuracy in the Seller's representations and warranties contained herein.
9.5 Agreements with Lessors. The Buyer shall have reached
agreements reasonably satisfactory to Buyer with Machine Tool Finance
Corporation ("MTF") for the assumption of Leases, or the purchase of the
properties subject thereto, under which MTF is the lessor.
9.6 Absence of Claims. There shall not be any material
litigation or claim pending or, to the Seller's knowledge, threatened against
the Division or the Seller with respect to the business of the Division.
9.7 Real Property Matters. The Land Buyer and the Land Seller
shall close the Land Sale Agreement in accordance with its terms simultaneously
with the Closing hereunder, it being understood that any breach by the Land
Buyer of its obligations under the Land Sale Agreement shall not excuse the
Buyer's performance hereunder.
9.8 Releases. The condition to Closing set forth in Section 10.6 shall have
been satisfied or waived by the Seller.
9.9 Closing Documents. The Seller shall have delivered all documents
required to be delivered by it at Closing, as more specifically set forth
in Article 11, in each case in form and substance satisfactory to the Buyer.
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ARTICLE 10
SELLER'S CONDITIONS TO CLOSING
The obligation of the Seller to consummate the sale of the
Assets and the other transactions contemplated by this Agreement shall be
subject to the fulfillment to the Seller's reasonable satisfaction of the
following conditions:
10.1 Continued Truth of Warranties. The representations and
warranties of the Buyer and B-W herein contained shall be true on and as of the
Closing Date with the same force and effect as though made as of such date,
except for any variations permitted by this Agreement.
10.2 Performance of Covenants. The Buyer and B-W each shall
have performed all covenants and obligations and complied with all conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
10.3 Permits and Consents. The parties hereto shall have
secured all appropriate orders, consents, approvals and clearances, in form and
substance reasonably satisfactory to the Seller, by and from all third parties,
including but not limited to governmental authorities, whose order, consent,
approval or clearance is required by contract or applicable law for the
consummation of the sale of the Assets and the other transactions herein
contemplated; and all applicable waiting periods under the HSR Act shall have
expired.
10.4 Real Property Matters. The Land Buyer and the Land Seller
shall close the Land Sale Agreement simultaneously with the Closing hereunder,
it being understood that any breach by the Land Seller of its obligations under
the Land Sale Agreement shall not excuse the Seller's performance hereunder.
10.5 Assumption Agreement for Assumed Liabilities. The Buyer
and B-W (or the BWG Subsidiary contemplated by Section 14.4) shall have entered
into an assignment and assumption agreement pursuant to which the Buyer (or the
BWG Subsidiary) shall assume the Assumed Liabilities. B-W hereby undertakes to
perform all obligations of the Buyer under the Assumed Liabilities, as the
primary obligations of B-W, if and to the extent the Buyer fails to do so.
10.6 Closing Documents. Each of the Buyer and B-W shall have
delivered all documents required to be delivered by it at Closing, as more
specifically set forth in Article 11, in each case in form and substance
reasonably satisfactory to the Seller.
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ARTICLE 11
DOCUMENTS TO BE DELIVERED AT CLOSING
11.1 Documents to be Delivered by Seller. At the Closing, the Seller shall:
(a) Execute and deliver to the Buyer (or its assigns as permitted by
Section 14.4) any and all instruments of sale, assignment and transfer and other
documents reasonably requested by the Buyer in order to effect the transfer of
the Assets to the Buyer, to effect the assumption of the Assumed Liabilities by
the Buyer (or such assigns), or otherwise to facilitate the transactions
contemplated hereby, such instruments to include, but not be limited to:
(i) assignments of patents, trademarks,
tradenames, copyrights and all applications and licenses
therefor, in form suitable for recording with any applicable
registration authority (or accompanied by a limited power of
attorney reasonably satisfactory to the Buyer), and all other
Intellectual Property Rights of the Seller relating to the
Division, including without limitation plant patent documents,
assumed or fictitious names, corporate names, franchises,
discoveries and other know- how;
(ii) duly endorsed certificates of title to
vehicles included within the Assets, together with any
appropriate affidavit with respect to the sale price thereof
or the odometer reading of such vehicle;
(iii) assignment and assumption agreements
with respect to the Contract Rights to be acquired by the
Buyer hereunder, in form reasonably satisfactory to the Buyer,
the Seller and any third party whose consent is required to
effectively assign such Contract Right to the Buyer;
(iv) an assumption agreement with respect to the
Assumed Liabilities;
(v) assignments of all letters of credit and
similar instruments securing any of the Receivables with
respect to which the Seller is beneficiary, together with the
originals of such letters of credit and other instruments and
a power of attorney in favor of Buyer, authorizing Buyer to
sign on behalf of Seller in connection with draws thereunder;
(vi) a blanket bill of sale and assignment covering
the Assets, conveying good and marketable title to the Assets to
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the Buyer, and containing "further assurances" language
obligating the Seller to execute other appropriate instruments
after the Closing in order to confirm the Buyer's title to and
possession of such Assets;
(vii) such other documents, including
instruments of sale, transfer and assignment transferring,
assigning and conveying the Assets being purchased (and the
rights described in Section 6.7) as shall be reasonably
requested by the Buyer to permit the Buyer to evidence the
transfer of any of the Assets or to vest in the Buyer good,
marketable, indefeasible and recordable title to the Assets,
free and clear of all liens, claims and encumbrances of third
parties (other than as permitted hereby).
(b) Deliver to the Buyer "bring-down" certificates of the Seller's chief
financial officer, and certificates of incumbency and copies of the resolutions
adopted by the Board of Directors of Seller, authorizing the execution and
delivery of this Agreement and the consummation of the sale of the Assets and
the other transactions contemplated hereby, duly certified as of the Closing
Date by the Secretary or an Assistant Secretary of the Seller;
(c) Deliver to the Buyer certificates of good standing or their
equivalent, dated not more than ten days prior to the Closing Date, attesting to
the good standing of the Seller as a corporation under the laws of its state of
incorporation and each other jurisdiction listed on Schedule 3.1(b);
(d) Deliver to the Buyer Tax clearance certificates from all appropriate
Tax authorities in form reasonably satisfactory to the Buyer in order to relieve
the Buyer of any withholding obligations under applicable law;
(e) Cause the Land Seller to deliver to Buyer the excess proceeds from
the sale of the Real Property to the Land Buyer, as set forth in a letter, dated
as of February 1, 1995, from the Land Seller to the Buyer;
(f) Deliver to the Buyer evidence that all amounts due to and from the
Division by the Seller and any of its affiliates have been paid in full;
(g) To the extent any consents or approvals shall be necessary to any
of the transactions herein contemplated, or to the sale of Assets, deliver to
the Buyer upon request copies of all such consents or approvals as obtained by
the Seller.
11.2 Documents to be Delivered by Buyer and/or B-W. At the Closing:
(a) The Buyer and (where appropriate) B-W shall execute and deliver
to the Seller any and all documents identified in Section 11.1(a), as specified;
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(b) The Buyer and B-W shall deliver to the Seller a "bring-down"
certificate of each of the Buyer's and B-W's chief financial officer, and a
certificate of incumbency and copies of the resolutions adopted by the Board of
Directors of each of the Buyer and B-W, authorizing the execution and delivery
of this Agreement and the consummation of the purchase of Assets and the other
transactions contemplated hereby, duly certified as of the Closing Date by the
Secretary or an Assistant Secretary of each of the Buyer and B-W;
(c) The Buyer and B-W shall deliver to the Seller a certificate of good
standing or its equivalent, dated not more than ten days prior to the Closing
Date, attesting to the good standing of each of the Buyer and B-W as a
corporation under the laws of the State of Missouri;
(d) The Buyer and B-W shall deliver to the Seller an undertaking by
Barry-Wehmiller Group Inc. ("Parent") to indemnify the Seller from and against
any of the Assumed Liabilities which relate to the Leases identified on Schedule
14.4, such undertaking to be in form and substance reasonably satisfactory to
the Seller; and
(e) To the extent any consents or approvals shall be necessary to any
of the transactions herein contemplated, or to the sale of Assets, the Buyer
shall deliver to the Seller upon request copies of all such consents or
approvals as obtained by the Buyer.
ARTICLE 12
INDEMNIFICATION AND SURVIVAL
12.1 General Indemnification.
(a) By Seller. Subject to the provisions of this Article 12, by execution
of this Agreement, the Seller agrees to indemnify the Buyer, B-W and their
respective successors and assigns and hold them harmless against and in respect
of:
(i) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from any misrepresentation, breach or
inaccuracy of any representation or warranty by the Seller
made or contained in Section 3.1(a), 3.1(c), 3.1(d), 3.1(e),
3.1(f), 3.12 and 3.13, and the last sentence of Section
3.4(a), or in any Schedule relating specifically to such
Sections, or in any certificate or other document (excluding
any certificate to the effect that representations and
warranties in this Agreement are true on the Closing Date)
executed and delivered to the Buyer or B-W at the Closing
pursuant to this Agreement or the transactions contemplated
herein;
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(ii) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from any breach or non-performance of any
covenant or obligation of the Seller made or contained in this
Agreement or in any certificate or document executed and
delivered to the Buyer or B-W at the Closing pursuant to this
Agreement or the transactions contemplated herein;
(iii) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) relating to any violation of, noncompliance with, or
obligation under Environmental and Safety Requirements, which
violation, noncompliance or obligation arises from or relates
to either the Division's operations prior to the Closing, or
the condition of the Assets or Real Property at the time of
the Closing;
(iv) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from (A) the parties' noncompliance with the
bulk transfer laws of any jurisdiction, and (B) all other
liabilities and obligations directly or indirectly arising
from or relating to acts or failures to act by the Seller
prior to the Closing (including but not limited to obligations
relating to Taxes), except only the Assumed Liabilities; and
(iv) any and all costs, expenses and all
other actual damages incurred by the Buyer or B-W in remedying
any breach, misrepresentation, non-performance, inaccuracy or
other matter described above, or in enforcing its right of
indemnification hereunder, including, by way of illustration
and not limitation, all legal and accounting fees, other
professional expenses and all filing fees, and collection
costs incident thereto and all such fees, costs and expenses
incurred in defending claims which, if successfully
prosecuted, would have resulted in Damages (as defined
herein).
(b) By Buyer and B-W. Subject to the provisions of this Article 12,
by execution of this Agreement, the Buyer and B-W jointly and severally agree to
indemnify the Seller and its successors and assigns and hold them harmless
against and in respect of:
(i) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from any misrepresentation, breach or
inaccuracy of any representation or warranty by the Buyer made
or contained in Section 4.1(a), 4.1(b), 4.1(c), 4.1(d), 4.2 or
4.3, or in any Schedule relating specifically
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to such Sections, or in any certificate or other document
(excluding any certificate to the effect that representations
and warranties in this Agreement are true on the Closing Date)
executed and delivered to the Seller at the Closing pursuant
to this Agreement or the transactions contemplated herein;
(ii) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from any breach or non-performance of any
covenant or obligation of the Buyer made or contained in this
Agreement or in any certificate or document executed and
delivered to the Seller at the Closing pursuant to this
Agreement or the transactions contemplated herein;
(iii) any and all loss, liability, cost,
expense or damage (including judgments and settlement
payments) incurred by them incident to, arising in connection
with or resulting from any of the Assumed Liabilities
(regardless of whether any of the same may be novated);
(iv) provided the Seller has complied with
its obligations under the third sentence of Section 6.3, any
and all loss, liability, cost, expense or damage (including
judgments and settlement payments) incurred by them incident
to, arising in connection with or resulting from any "plant
closing" or "mass layoff" (as respectively defined in the WARN
Act) which results from the Buyer's failure to offer
employment to all of the Division's employees effective as of
the Closing Date; and
(v) any and all costs, expenses and all
other actual damages incurred by the Seller in claiming,
contesting or remedying any breach, misrepresentation,
non-performance, inaccuracy or other matter described above,
or in enforcing their right of indemnification hereunder,
including, by way of illustration and not limitation, all
legal and accounting fees, other professional expenses and all
filing fees, and collection costs incident thereto and all
such fees, costs and expenses incurred in defending claims
which, if successfully prosecuted would have resulted in
Damages (as defined herein).
(c) Damages. Any and all of the items set forth in Sections 12.1(a) and
12.1(b) for which a party is entitled to be indemnified hereunder are called
"Damages."
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12.2 Notice of, and Procedures for, Collecting Indemnification.
(a) Initial Claim Notice. When a party becomes aware of a situation
which may result in Damages for which it would be entitled to be indemnified
hereunder, such party (the "Indemnitee") shall submit a written notice (the
"Initial Claim Notice") to the other party (the "Indemnitor") to such effect
with reasonable promptness after it first becomes aware of such matter and shall
furnish the Indemnitor with such information as it has available demonstrating
its right or possible right to receive indemnity. If the potential claim is
predicated on, or later results in, the filing by a third party of any action at
law or in equity (a "Third Party Claim"), the Indemnitee shall provide the
Indemnitor with a supplemental Initial Claim Notice not later than ten (10) days
prior to the date on which a responsive pleading must be filed, and shall also
furnish a copy of such claim (if made in writing) and of all documents received
from the third party in support of such claim. Every Initial Claim Notice shall,
if feasible, contain a reasonable estimate by the Indemnitee of the losses,
costs, liabilities and expenses (including, but not limited to, costs and
expenses of litigation and attorneys' fees) which the Indemnitee may incur. In
addition, each Initial Claim Notice shall name, when known, the person or
persons making the assertions which are the basis for such claim. Failure by the
Indemnitee to deliver an Initial Claim Notice or an update thereof in a timely
manner shall not relieve the Indemnitor of any of its obligations under this
Agreement except to the extent that actual monetary prejudice to the Indemnitor
can be demonstrated.
(b) Rights of Indemnitor. If, prior to the expiration of thirty (30) days
from the mailing of an Initial Claim Notice (the "Claim Answer Period"), the
Indemnitor shall request in writing that such claim not be paid, the same shall
not be paid, and the Indemnitor shall settle, compromise or litigate in good
faith such claim, and employ attorneys of its choice to do so; provided,
however, that the Indemnitee shall not be required to refrain from paying any
claim which has matured by court judgment or decree, unless appeal is taken
therefrom and proper appeal bond posted by the Indemnitor, nor shall it be
required to refrain from paying any claim where such action would result in the
foreclosure of a lien upon any of its assets or a default in a lease or other
contract except a lease or other contract which is the subject of the dispute.
If the Indemnitor elects to settle, compromise or litigate such claim, all
reasonable expenses, including but not limited to all amounts paid in settlement
or to satisfy judgments or awards and reasonable attorney's fees and costs,
incurred by the Indemnitor in settling, compromising or litigating such claim
shall be secured to the reasonable satisfaction of the Indemnitee. The
Indemnitee shall cooperate fully to make available to the Indemnitor and its
attorneys, representatives and agents, all pertinent information under its
control. The Indemnitee shall have the right to elect to settle or compromise
all other contested claims with respect to which the Indemnitor has not, within
the Claim Answer Period, acknowledged in writing (i) liability therefor, and
(ii) its election to assume full responsibility for the settlement, compromise,
litigation and payment of such claim.
(c) Final Claims Statement. At such time as Damages for which the
Indemnitor is liable hereunder are incurred by the Indemnitee by actual payment
thereof or by entry of a final judgment, the Indemnitee shall forward a Final
Claims Statement to the Indemnitor setting forth the amount of such Damages in
reasonable detail on an itemized basis. The Indemnitee shall supplement the
Final Claims Statement with such supporting proof of loss
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(e.g. vouchers, cancelled checks, accounting summaries, judgments, settlement
agreement, etc.) as the Indemnitor may reasonably request in writing within
thirty (30) days after receipt of a Final Claims Statement. All amounts
reflected on Final Claims Statements shall be paid promptly by the Indemnitor to
the Indemnitee.
12.3 Survival. Except for the representations and warranties
of Seller which are identified in Section 12.1(a)(i), and the representations
and warranties of Buyer and B-W identified in Section 12.1(b)(i) (all of which
shall survive the Closing), the representations and warranties of the parties
contained in this Agreement shall expire at the time of the Closing.
ARTICLE 13
TERMINATION OF AGREEMENT
13.1 Termination. Anything in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of the Buyer, B-W and the Seller;
(b) upon written notice from the Buyer to the Seller if any of the
conditions precedent to the Buyer's or B-W's obligations hereunder shall have
become incapable of fulfillment through no fault of the Buyer or B-W;
(c) upon written notice from the Seller to the Buyer if any of the
conditions precedent to the Seller's obligations hereunder shall have become
incapable of fulfillment through no fault of the Seller or the Land Seller;
(d) upon written notice from any party to the other parties hereto if the
Closing does not occur by February 28, 1995 (unless the failure to consummate
the purchase and sale of the Assets by such date shall be due to the action or
failure to act of the party seeking to terminate this Agreement or any affiliate
thereof).
13.2 Effect of Termination. If this Agreement is terminated
and the transactions contemplated hereby are abandoned pursuant to Section 13.1,
then this Agreement shall become null and void and of no effect, except for the
provisions of this Article 13 and Article 14 (relating to, among other things,
notices, contract construction and effect and confidentiality); provided,
however, that such termination shall not affect the right of any party (a) to
bring an action against another party for a breach occurring prior to the
termination or for a wrongful termination, (b) to bring an action based on a
misrepresentation or breach of warranty in Section 3.13 or 4.2, or (c) to be
indemnified under Article 12 with respect to any Damages attributable to such
breach or misrepresentation.
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ARTICLE 14
MISCELLANEOUS
14.1 Notices. Any notices or other communications required or
permitted hereunder (including, by way of illustration and not limitation, any
notice permitted or required under Article 12 hereof) to any party hereto shall
be sufficiently given when delivered in person, or when by certified or
registered mail, postage prepaid, or one business day after dispatch of such
notice with an overnight delivery service, or when telecopied if an answer back
is received by the sender, in each case addressed as follows:
In the case of the Buyer and B-W:
Barry-Wehmiller Company
8020 Forsyth Boulevard
St. Louis, Missouri 63105
Attn: Timothy J. Sullivan, Vice President and Chief Financial
Officer
Telecopy: (314) 862-8858
and a copy to:
Thompson & Mitchell
One Mercantile Center
St. Louis, Missouri 63101
Attn: Ronald E. Haglof, Esq.
Telecopy: (314) 342-1717
In the case of the Seller:
Figgie International Inc.
4420 Sherwin Road
Willoughby, Ohio 44094
Attn: Steven L. Siemborski
Telecopy: (216) 951-1724
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<PAGE>
with a copy to:
Mary E. Reeve, Esq.
(at the same address)
and a copy to:
Calfee, Halter & Griswold
800 Superior Avenue, Suite 1800
Cleveland, Ohio 44114
Attn: Joseph K. Juster, Esq.
Telecopy: (216) 241-0816
or such substituted address or attention as any party shall have given notice to
the others in writing in the manner set forth in this Section 14.1.
14.2 Amendment. This Agreement may be amended or modified in
whole or in part only by an agreement in writing executed by all parties hereto
and making specific reference to this Agreement.
14.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
14.4 Binding on Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by and against the
parties hereto and their respective successors and assigns in accordance with
the terms hereof. The Seller may not assign its interest under this Agreement on
or prior to the Closing Date without the prior written consent of the Buyer. The
Buyer may designate Barry-Wehmiller Equipment, Inc., a subsidiary of the Parent
("BWG Subsidiary"), to acquire (by assumption or novation) any of the Leases
identified on Schedule 14.4 and to assume the obligations of the Seller
thereunder, in which case the Buyer and B-W shall have no liability with respect
to such Leases and obligations thereunder, provided the undertaking in Section
11.2(d) is furnished to the Seller. The Buyer otherwise may not assign its
interest under this Agreement on or prior to the Closing Date without the prior
written consent of the Seller. Any party may assign its rights under this
Agreement after the Closing Date, but such assignment shall not relieve the
assigning party of its obligations hereunder.
14.5 Severability. In the event that any one or more of the
provisions contained in this Agreement or any application thereof shall be
invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions of this Agreement and any other
application thereof shall not in any way be affected or impaired thereby;
provided, however, that to the extent permitted by applicable law, any invalid,
illegal, or unenforceable provision may be considered for the purpose of
determining the intent of the parties in connection with the other provisions of
this Agreement.
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14.6 Publicity. Any public announcements concerning the
transaction contemplated by this Agreement shall be jointly planned and
simultaneously released by the Buyer and the Seller, and neither of them shall
act in this regard without the prior written approval of the other, which
approval shall not be unreasonably withheld.
14.7 Headings. The headings in the sections and subsections of
this Agreement and in the Schedules are inserted for convenience only and in no
way alter, amend, modify, limit or restrict the contractual obligations of the
parties.
14.8 List of Exhibits and Schedules. As mentioned in this Agreement, there
are attached hereto or delivered herewith, the following Exhibit and Schedules:
EXHIBIT
Section
Exhibit Document Reference
A Form of Land Sale Agreement Recitals
SCHEDULES
Schedule
No. Schedule Caption
1.1(d)Contract Rights
1.1(f)Figgie Names
3.1(b)Foreign Qualifications
3.1(e)Violations or Conflicts
3.1(f)Government Consents
3.2(a)December Balance Sheet
3.2(b)Undisclosed Liabilities
3.2(c)Capital Leases
3.2(d)Certain Changes
3.3 Tax Matters
3.4(a)Properties and Title Exceptions
3.4(b)Leases
3.4(c)Condition of Assets
3.4(f)Inventory
3.5 Intellectual Property Rights
3.6(a)Debt Instruments
3.6(b)Contracts
3.6(c)Insurance
3.6(d)Status
3.7 Employee List, Employment Contracts
3.8 Pension and Welfare Plans
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3.9 Labor Relation
3.10 Litigation
3.11 Compliance With Laws, Permits and Environmental Matters
3.12 Transactions with Affiliates
4.1(c)Violations or Conflicts
4.1(d)Government Consents
14.4 Certain Leases
Each of the foregoing Exhibits and Schedules is incorporated herein by this
reference and expressly made a part hereof.
14.9 Expenses. Except to the extent otherwise provided in this
Agreement, each of the Seller and the Buyer shall bear its own expenses incurred
in connection with this Agreement and the transactions herein contemplated,
including, but not limited to, legal and accounting fees and expenses.
14.10 Waivers. The parties may, by written agreement, (a)
extend the time for the performance of any of the obligations or other acts of
the parties hereto, (b) waive any inaccuracies in the representations contained
in this Agreement or in any document delivered pursuant to this Agreement, (c)
waive compliance with, or modify, any of the covenants or conditions contained
in this Agreement, and (d) waive or modify performance of any of the obligations
of any of the parties hereto; provided, that no such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall operate as a waiver of, or an estoppel with respect to, any subsequent
insistence upon such strict compliance other than with respect to the matter so
waived or modified.
14.11 Entire Agreement; Law Governing. All prior negotiations
and agreements between the parties hereto are superseded by this Agreement, and
there are no representations, warranties, understandings or agreements other
than those expressly set forth herein or in an Exhibit or Schedule delivered
pursuant hereto, except as modified in writing concurrently herewith or
subsequent hereto. This Agreement shall be governed by and construed and
interpreted according to the internal laws of the State of Missouri, determined
without reference to conflicts of law principles.
[The balance of this page has been left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives on the day and
year first above written.
BARRY-WEHMILLER ACQUISITION CORP.
By
,
(Name, Title)
BARRY-WEHMILLER COMPANY
By
,
(Name, Title)
FIGGIE INTERNATIONAL INC.
By
,
(Name, Title)
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<PAGE>
ASSET PURCHASE AGREEMENT
AUTHOR'S NAME: NVARSAM
CLIENT NUMBER: 5016 BARRY-WEHMILLER CO.
MATTER NUMBER: 70589 FIGGIE INC.
FILESHARE ITEM ID: 950030069 VERSION ID: 10
--------- --
FILENAME: FIGGIE.AGM
TYPIST USERS NAME: caustin
TODAY'S DATE: February 1, 1995
DUPED FROM 942760074
DO NOT DISCARD THIS PAGE
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