<PAGE>
December 4, 1996
Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madame:
On behalf of Oneida Ltd. I transmit for filing the following Form 8-K.
Please do not hesitate to contact me at (315) 361-3694 if you have any questions
or concerns.
Very truly yours,
/s/ ERIN L. MARKEY
Erin L. Markey
Corporate Attorney
Oneida Ltd.
163-181 Kenwood Ave.
Oneida, NY 13421
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 26, 1996
ONEIDA LTD.
(Exact name of Registrant as specified in its charter)
NEW YORK 1-5452 15-0405700
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation)
ONEIDA NEW YORK 13421
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (315) 361-3000
Former name or former address, if changed since last report N/A
<PAGE>
ITEM 5 OTHER EVENTS
The information required by this item is incorporated by reference to a
press release and the Stock Purchase Agreement, both dated November 26, 1996,
which are attached as exhibits to this Form.
EXHIBITS EXHIBIT 2
Stock Purchase Agreement by and among Camden Acquisition Corporation,
Camden Wire Co., Inc. and Oneida Ltd. dated November 26, 1996.
EXHIBIT 99.1
Press Release dated November 26, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONEIDA LTD.
By: /s/ CATHERINE H. SUTTMEIER
Catherine H. Suttmeier
Vice President, Secretary and
General Counsel
Dated: December 4, 1996
<PAGE>
EXHIBIT 2
STOCK PURCHASE AGREEMENT
by and among
CAMDEN ACQUISITION CORPORATION,
CAMDEN WIRE CO., INC.
and
ONEIDA LTD.
November 26, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
PURCHASE AND SALE OF SHARES; PAYMENT OF COMPANY
OBLIGATIONS 1
1.1 Purchase and Sale of the Shares 1
1.2 Determination and Payment of Purchase Price 1
1.3 Payment of Inter-company Debt 4
ARTICLE II
THE CLOSING 4
2.1 The Closing 4
2.2 Deliveries at the Closing 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER 4
3.1 Corporate Organization 5
3.2 Corporate Authority; Absence of Conflicts 5
3.3 Outstanding Capital Stock; Title to Shares 6
3.4 Financial Statements 6
3.5 Absence of Undisclosed Liabilities 7
3.6 Absence of Material Adverse Changes 7
3.7 Real Property 9
3.8 Tangible Personal Property 10
3.9 Accounts Receivable 11
3.10 Accounts Payable 12
3.11 Inventory 12
3.12 Backlog 12
3.13 Computer Software 12
3.14 Material and Affiliated Contracts 13
3.15 Compliance with Laws 14
3.16 Legal Proceedings 14
3.17 Ability to Conduct the Business 15
3.18 Labor Matters 15
3.19 Employee Benefit Pans 17
3.20 Environmental Matters 19
3.21 Products 21
3.22 Tax Matters 22
3.23 Insurance 23
3.24 Minute Books; Stock Record Books 23
<PAGE>
3.25 Brokers' or Finders' Fees 24
3.26 Material Customers and Suppliers 24
3.27 Bank Accounts; Powers of Attorney 24
3.28 Books and Records 25
3.29 Sales Representatives and Other Sales
Agents/Sales Offices 25
3.30 Transaction Expenses 25
3.31 Schedules 25
3.32 Reliance 25
3.33 Fairness Opinion 26
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER 26
4.1 Organization and Corporate Power 26
4.2 Corporate Authority; Absence of Conflicts 26
4.3 No Investigation 27
4.4 Securities Act of 1933 27
4.5 Reliance 27
4.6 Financing 27
4.7 Brokers' or Finders' Fees 27
ARTICLE V
AGREEMENTS OF THE PARTIES RELATED TO TRANSACTIONS 28
5.1 Full Access 28
5.2 Preservation of Business 28
5.3 Negative Covenants of Seller 28
5.4 Third Party Consents 30
5.5 Delivery of Schedules and Other Material 30
5.6 Tax Matters 30
5.7 Transfer Taxes 31
5.8 Best Efforts and Certain Filings 31
5.9 Industrial Revenue Bonds 32
5.10 Insurance 32
5.11 Workers' Compensation 32
5.12 Use of Seller's Name 32
5.13 Third-Party Offers 33
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER 33
6.1 Representations and Covenants 33
6.2 Closing Certificate 33
6.3 Legal Opinion 34
6.4 Injunction 34
6.5 Lender's Consent 34
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6.6 HSR Act 34
6.7 Company IRBs 34
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER 34
7.1 Representations and Covenants 34
7.2 Closing Certificate 35
7.3 Legal Opinion 35
7.4 Injunction 35
7.5 Material Adverse Change 35
7.6 Directors Resignations 35
7.7 FIRPTA Affidavit 35
7.8 Bank Accounts/Powers of Attorney 36
7.9 Schedules 36
7.10 HSR Act 36
7.11 Selected Material Contracts and Permits, etc. 36
7.12 Seller Indebtedness 36
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION 37
8.1 Survival of Representations and Warranties 37
8.2 Seller's Agreement to Indemnify 37
8.3 Buyer's Agreement to Indemnify 38
8.4 Notification of Claims and Definitive Resolutions 38
8.5 Special Indemnification for Tax Liabilities 40
8.6 Limitations on Indemnification 42
8.7 Exclusive Remedy 43
ARTICLE IX
CERTAIN COVENANTS 43
9.1 Access by Seller 43
9.2 Maintenance of Records 43
ARTICLE X
MISCELLANEOUS 44
10.1 Expenses 44
10.2 Brokers 44
10.3 Notices 44
10.4 Successors and Assigns 45
10.5 Entire Agreement and Modification 45
10.6 Section and Other Headings 46
10.7 Governing Law 46
10.8 Counterparts 46
<PAGE>
10.9 Further Assurances 46
10.10 Severability 46
10.11 Confidentiality 46
10.12 No Third Party Beneficiaries 47
10.13 Termination by Buyer 47
10.14 Termination by Seller 47
10.15 Guaranty 47
<PAGE>
Schedules
Schedule Description Ref. Page #
3.1(a) Jurisdictions in which the Company is 4
Qualified to Transact Business as a
Foreign Corporation and is in Good Standing
3.1(b) Subsidiaries 5
3.4 Financial Statements 6
3.5 Undisclosed Liabilities 7
3.6 Material Adverse Changes 7
3.7(a),(b),(d),(f) Real Property 9-10
3.8(a), (b) Tangible Personal Property Subject 10-11
to Encumbrances
3.11 Inventory 12
3.14(a), (b), (c) Material and Affiliated Contracts 13-14
3.16 Litigation 14
3.18(b), (c), (e) Labor Matters 15-16
3.19(b), c),(d),(e) Employee Benefit Plans 17-18
3.20 Environmental Matters 19
3.21 Products Liability Claims 21
3.22(b), (d), (f) Tax Matters 21-22
3.23 Insurance 23
<PAGE>
3.26(a), (b) Material Customers and Suppliers 23-24
3.27 Bank Accounts; Powers of Attorney 24
3.28 Books and Records 24
3.29 Sales Representatives 25
<PAGE>
Exhibits
A Opinion of Cohen Swados Wright Hanifin Bradford & Brett, LLP,
Counsel to Buyer
B Opinion of Catherine H. Suttmeier, General Counsel to the
Company and Seller
C FIRPTA Affidavit
D Resolution Memorandum
E Guaranty
<PAGE>
Location of Defined Terms
Defined Term Section Page
Affiliate 8.5(b) 40
Agreement Preamble 1
Benefit Plan 3.19(a) 17
Buyer Preamble 1
Buyer Indemnity Claim 8.2 37
Closing 2.1 4
Closing Balance Sheet 1.2(b) 2
Closing Date 2.1 4
Closing Date Payment 1.2(a) 2
Code 3.22(h) 23
Common Control Entity 3.19(d) 18
Company Preamble 1
Company IRBs 5.9 32
Competitive Proposal 5.13 33
Costs 8.5(d) 40
Definitively Resolved 8.4(c) 39
Dispute Notice 1.2(c)(i) 2
Employee 3.18(a) 15
Encumbrance 3.7(b) 9
Environmental Law 3.20(l) 20
ERISA 3.19(a) 17
Final Resolution 8.5(f) 41
Former Employee 3.18(a) 15
<PAGE>
Hazardous Substance 3.20(k) 21
HSR Act 3.2(b) 6
INA 3.18(e) 17
Instrument 3.2(b) 6
Latest Balance Sheet 3.4(b) 7
Latest Financial Statements 3.4(b) 7
Leased Real Property 3.7(a) 9
Material Adverse Effect 3.5 14
Material Contracts 3.14(b) 14
Material Customer 3.26(a) 24
Material Disputed Items 1.2(c)(i) 2
Material Permits 7.11 36
Material Supplier 3.26(b) 24
Neutral Accountants 1.2(c)(ii) 3
Other Real Property Interests 3.7(a) 9
Owned Real Property 3.7(a) 9
Parties' Accountants 1.2(c)(ii) 2
PBGC 3.19(d) 18
Permitted Liens 3.7(b) 9
Person 3.1(b) 5
Purchase Price 1.1 1
Real Property 3.7(a) 9
Related Party 3.14(b) 13
Resolution Memorandum 8.4(b) 39
Schedule Delivery Date 5.5 30
Selected Material Contracts 7.11 36
Seller Preamble 1
<PAGE>
Seller's Accountants 1.2(b) 2
Seller Indemnity Claim 8.3 38
Shares Preamble 1
Tax 3.22(a) 21
Tax Claim Termination Date 8.1(a) 37
Tax / ERISA Claim 8.1(a) 37
Tax Liability 8.5(c) 40
Tax Recoupment 8.5(i) 42
Third Party Claim 8.4(d) 39
Total Stockholders' Equity 1.1 1
<PAGE>
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of the ____ day of November,
1996, by and among Camden Acquisition Corporation, a New York corporation
("Buyer"), Camden Wire Co., Inc., a New York corporation (the "Company"), and
Oneida Ltd., a New York corporation ("Seller"), recites as a preamble the
following:
I. Seller owns, beneficially and of record, all of the issued and
outstanding shares (the "Shares") of common stock, no par value, of the
Company.
II. Buyer desires to purchase the Shares from Seller, and Seller desires
to sell the Shares to Buyer, upon the terms and subject to the conditions of
this Agreement.
NOW, THEREFORE, in view of the premises and in consideration of the
agreements and mutual covenants contained in this Agreement, the parties
intending to be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES; PAYMENT OF COMPANY OBLIGATIONS
1.1 Purchase and Sale of the Shares.
At the Closing (as hereinafter defined), Seller shall assign, transfer and
deliver to Buyer, and Buyer shall purchase and accept from Seller, the Shares,
for an aggregate purchase price (the "Purchase Price") equal to the Total
Stockholders' Equity of the Company on the Closing Date (as hereinafter defined)
as shown on the Closing Balance Sheet (as hereinafter defined); for all purposes
of this Agreement the term "Total Stockholders' Equity," as of any date, shall
mean an amount determined in accordance with generally accepted accounting
principles applied on a basis consistent with the accounting principles and
practices applied in the preparation of the 1996 Balance Sheet (as hereinafter
defined), and is intended to correspond with the line on the 1996 Balance Sheet
designated as Total Stockholders' Equity.
1.2 Determination and Payment of Purchase Price
The Purchase Price shall be determined and paid as follows:
(a) On the Closing Date, Buyer shall pay to Seller an amount equal to the
Total Stockholders' Equity of the Company reflected on the regularly prepared
financial statements of the Company as of the last day of the most recent fiscal
month of the Company, or if financial
<PAGE>
statements of the Company are not available on the Closing Date for the most
recent fiscal month of the Company, for the next preceding fiscal month (the
"Closing Date Payment").
The Purchase Price shall be subject to adjustment after the Closing Date as
follows:
(b) As soon as practicable after the Closing Date, but in any event not
more than ninety (90) days after the Closing Date, Seller shall cause Coopers &
Lybrand, independent public accountants to be retained by the Seller for this
purpose ("Seller's Accountants"), to audit and issue their report on the balance
sheet of the Company as at the Closing Date (the "Closing Balance Sheet"). The
Closing Balance Sheet shall be accompanied by a certificate of the Seller's
Accountants stating the Total Stockholders' Equity of the Company as of the
Closing Date as computed by them and certifying (i) that the Closing Balance
Sheet has been prepared in accordance with generally accepted accounting
principles applied in a manner consistent with the past practices of the
Company, and (ii) the Closing Balance Sheet fairly presents the financial
condition of the Company as of the Closing Date.
(c) Upon receipt of the Closing Balance Sheet and the certificate of
Seller's Accountants described in subsection (b), Buyer shall have thirty (30)
days within which to review the same and register any objections, provided that
Buyer may object to the Closing Balance Sheet only on the basis that the Closing
Balance Sheet (i) was not prepared in accordance with generally accepted
accounting principles applied on a basis consistent with those principles used
in preparing the 1996 Balance Sheet, or (ii) was not based on the application of
generally accepted auditing standards. If Buyer does not object to any portion
of the Closing Balance Sheet or such certificate within 30 days, it shall
countersign such certificate and the Closing Balance Sheet shall be deemed to
have been finally determined as the amount set forth therein. In the event that
Buyer or Buyer's accountants ("Buyer's Accountants") shall dispute any item
contained in the Closing Balance Sheet, or whether the computations set forth
in the Closing Certificate have been made in accordance with the requirements of
this Section 1.2, the following procedures will apply:
(i) Within thirty (30) days of receipt of the Closing Balance
Sheet, Buyer shall give written notice (the "Dispute Notice") to Seller setting
forth in reasonable detail the basis for any such dispute or controversy and, to
the extent practicable, the specific items in dispute and a good faith estimate
of the amount thereof. Buyer shall not be entitled to dispute any single item
unless the item involves $50,000 or more. If the aggregate amount of the items
in dispute (each of which involves at least $50,000) is in excess of $500,000,
all such items (the "Material Disputed Items") shall be resolved in accordance
with the remaining paragraphs of this subsection (c).
(ii) Upon receipt of a Dispute Notice by Seller involving
Material Disputed Items, Buyer's Accountants, on behalf of Buyer, and the
Seller's Accountants, on behalf of the Seller (such accountants being
hereinafter collectively referred to as the "Parties' Accountants"), shall
promptly commence good faith negotiations with a view to resolving the Material
Disputed Items (and, if necessary, whether any item identified in a Dispute
<PAGE>
Notice involves $50,000 or more) and, in connection with such negotiations
Seller's Accountants shall provide access to its workpapers to Buyer's
Accountants. If such dispute or controversy shall not have been resolved by
mutual agreement of the parties or the Parties' Accountants within thirty (30)
days after Seller's receipt of the Dispute Notice, Buyer and Seller shall
jointly appoint, within ten (10) days thereafter, the Rochester, New York office
of Peat Marwick or such other firm of accountants as the parties may agree (the
"Neutral Accountants"), to resolve such Material Disputed Items.
(iii) The Neutral Accountants shall make their determination as
to such Material Disputed Items within thirty (30) days after their appointment.
The Neutral Accountants shall act as arbitrators, and shall proceed to resolve
all Material Disputed Items in accordance with generally accepted accounting
principles applied on a basis consistent with those used in preparing the
1996 Balance Sheet. In resolving such Material Disputed Items, the Neutral
Arbitrators may follow such procedures as the Neutral Accountants deem
appropriate, including requesting written or oral explanations, submissions or
information from the parties. The determination of the Neutral Accountants
shall be a final determination of the Material Disputed Items, binding and
conclusive as between Buyer and the Seller absent fraud or manifest error.
The respective fees and disbursements of the Parties' Accountants under this
section 1.2(c) shall be borne by the party that retained such firm. The fees
and disbursements of the Neutral Accountants shall be apportioned between Buyer
and the Seller as part of the determination of the relevant dispute or
controversy, in such manner as the Neutral Accountants shall deem equitable in
light of the issues raised and the degree to which each party shall have
prevailed on each such issue, it being the parties' intention that the
prevailing party should not bear such costs.
(d) The Closing Balance Sheet shall be deemed finally settled for
purposes of this Section 1.2 upon the earlier of (i) Buyer's failure to deliver
a Dispute Notice within thirty (30) days after receipt of the Closing Balance
Sheet, (ii) resolution of all Material Disputed Items by agreement of the
parties or the Parties' Accountants as provided in Section 1.2(c)(ii) above, or
(iii) resolution of all Material Disputed Items by the Neutral Accountants as
provided in Section 1.2(c)(iii) above. Once the Closing Balance Sheet is deemed
finally settled, the Closing Balance Sheet shall be revised to reflect all
Material Disputed Items agreed to by the parties or resolved by the Neutral
Arbitrators. The amount of the Purchase Price shall be re-calculated based
upon the Total Stockholders' Equity as reflected on the revised Closing Balance
Sheet. If the Closing Date Payment is less than the Total Stockholders' Equity
as reflected on the revised Closing Balance Sheet, Buyer shall pay such
difference, without interest, within ten (10) days after settlement of the
revised Closing Balance Sheet. If the Closing Date Payment is greater than the
Total Stockholders' Equity as reflected on the revised Closing Balance Sheet,
Seller shall refund such excess, without interest, within ten (10) days after
settlement of the revised Closing Balance Sheet.
<PAGE>
1.3 Payment of Inter-company Debt
At the Closing, Buyer shall take all action necessary to cause the Company
to pay to Seller all inter-company debt and inter-company payables owed by the
Company to Seller as of the Closing Date, which shall be paid simultaneously
with the Purchase Price at the Closing, subject to adjustments in accordance
with the determination of the Closing Balance Sheet.
ARTICLE II
THE CLOSING
2.1 The Closing
The consummation of the transactions contemplated at Article I (the
"Closing") shall take place at the offices of Bond, Schoeneck & King, LLP on
January 17, 1997 or on such other date or at such other place as the Buyer and
Seller shall agree to in writing. The day of closing is referred to herein
as the "Closing Date."
2.2 Deliveries at the Closing
(a) At the Closing, Buyer shall pay to Seller the amounts described in
sections 1.2(a) and 1.3 by wire or electronic funds transfer in immediately
available funds to accounts designated in written instructions delivered by
Seller to Buyer not less than three (3) business days before the Closing Date.
(b) Simultaneously, Seller shall deliver to Buyer certificates (i)
evidencing the Shares, duly endorsed for transfer or accompanied by duly
executed stock powers assigning such Shares in blank, and with signature(s)
guaranteed, in proper form for transfer and with any applicable stock transfer
stamps affixed, and (ii) evidence satisfactory to Buyer that all inter-company
debt of the Company to Seller is discharged in full by the payment required by
Section 1.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER
Subject to the delivery of Schedules on the Schedule Delivery Date as
provided at Sections 5.5 and 7.9 below, the Company and Seller hereby jointly
and severally make the representations and warranties set forth in this Article
III, each of which is true and correct as of the date hereof (except that with
respect to representations and warranties referencing Schedules and other
materials to be delivered pursuant to Sections 5.5 and 7.9, such
representations and warranties
<PAGE>
shall be made as of the Schedule Delivery Date) and each of which will be true
and correct as of the Closing Date:
3.1 Corporate Organization.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, and has all requisite
corporate power and authority to own, lease and operate the properties and
assets it now owns, leases or operates and to carry on its business as presently
conducted or proposed to be conducted pursuant to existing plans. The Company
is duly qualified to transact business as a foreign corporation and is in good
standing in each of the jurisdictions set forth in Schedule 3.1(a), which are
the only jurisdictions where such qualification is required by reason of the
nature or location of the properties and assets owned, leased or operated by it
or the business conducted by it. The Company will deliver to Buyer on or before
the Schedule Delivery Date complete and correct copies of its Certificate of
Incorporation, as amended to date (certified by the competent authority of the
state of incorporation of the Company within thirty (30) days of the date
hereof), and its By-Laws, as amended to date (certified by the Secretary of
the Company within thirty (30) days of the date hereof). Neither the
Certificate of Incorporation nor the By-Laws of the Company will have been
amended since the respective dates f certification thereof, nor will any
action have been taken for the purpose of effecting any amendment of such
instruments. The minute books and stock record books of the Company shall be
delivered to Buyer at the Closing.
(b) The Company has no subsidiaries and does not own, of record or
beneficially, directly or indirectly, any equity or other proprietary interest,
or right to acquire any such interest, contingent or otherwise, in any other
corporation, partnership, joint venture, limited liability company, business
enterprise or other entity of any nature whatsoever (a "Person").
3.2 Corporate Authority; Absence of Conflicts
(a) Each of Seller and the Company has full corporate power and authority
to execute, deliver and perform this Agreement. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly approved by the Boards of Directors of Seller and the Company, and no
other corporate actions on the part of Seller or the Company are necessary to
authorize and approve the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of Seller and the Company and constitutes
the valid and binding agreement of each of Seller and the Company,
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization and similar laws of general
applicability relating to or affecting creditors' rights.
(b) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, nor compliance with the
terms hereof, will (i) conflict with or result in a breach of the Certificate of
Incorporation or By-laws of Seller or the Company, nor
<PAGE>
(ii) except as set forth on Schedule 3.14(c) attached hereto, violate, conflict
with or result in a breach of or default (or be any event which with the lapse
of time or the giving of notice or both would constitute an event of default)
under any of the terms, conditions or provisions of any material agreement,
understanding, arrangement, commitment, indenture, contract, lease, sublease,
loan agreement, note, or other document or instrument to which Seller or the
Company is a party or by which they are bound or to which they or their assets
are subject (individually, an "Instrument" and collectively, the
"Instruments"), nor (iii) accelerate or give to others any interests or
rights, including rights of acceleration, termination, modification or
cancellation, under any Instrument or in or with respect to the business or
assets of Seller or the Company, nor (iv) result in the creation of any
Encumbrance (as hereinafter defined) on the assets, capital stock or properties
of Seller or the Company nor (v) conflict with, violate or result in a breach
of or constitute a default under any law, statute, rule, judgment, order,
decree, injunction, ruling or regulation of any government, governmental
agency, authority or instrumentality, court or arbitration tribunal to which
Seller or the Company or any of their assets or properties are subject, nor
(vi) require Seller or the Company to give notice to, or obtain an
authorization, approval, order, license, franchise, declaration or consent of,
or make a filing with, any third party, including, any foreign, federal, state,
county, local or other governmental or regulatory body, other than such filings
as are required under the Hart-Scott-Rodino Antitrust Improvements Acts of 1976,
as amended (the "HSR Act").
3.3 Outstanding Capital Stock; Title to Shares
(a) The authorized capital stock of the Company consists of 1,000 shares
of common stock, no par value, of which one (1.0) Share is issued and
outstanding, which one (1) Share is owned, beneficially and of record, by
Seller. No other class of capital stock of the Company is authorized or
outstanding. All of the issued and outstanding Shares are duly authorized and
are validly issued, fully paid and nonassessable, and none of such Shares have
been issued in violation of any preemptive rights of shareholders. The Shares
constitute all of the issued and outstanding shares of capital stock of the
Company.
(b) Seller is the beneficial and record owner of all of the Shares, free
and clear of any Encumbrances. There are no agreements, arrangements or
understandings (including, without limitation, options or rights of first
refusal) to which Seller is a party relating to the purchase, sale or other
disposition of the Shares or any interest therein.
(c) There is no outstanding right, subscription, warrant, call, unsatisfied
preemptive right, option or other agreement of any kind to purchase or otherwise
to receive from the Company or Seller any shares of the capital stock or any
other security of the Company, and there is no outstanding security of any kind
convertible into such capital stock.
3.4 Financial Statements.
Attached hereto as Schedule 3.4 are the following financial statements:
<PAGE>
(a) The balance sheet of the Company as of January 27, 1996 (the "1996
Balance Sheet"), and the related statements of income, retained earnings and
cash flows for the year then ended (the "1996 Financial Statements");
(b) The balance sheet of the Company as of October 26, 1996 (the "Latest
Balance Sheet") and the related statements of income, retained earnings and
cash flows for the nine-month period then ended (the "Latest Financial
Statements");
(c) The statements of income, retained earnings and cash flows for the
quarterly periods ended October 26, 1996, July 27, 1996 and April 27, 1996; and
(d) The balance sheets of the Company as of January 28, 1995 and January
29, 1994, and the related statements of income, retained earnings and cash flows
for the years then ended.
Each of the said financial statements (i) fairly presents the financial
position, results of operations and cash flows of the Company for the respective
periods stated therein, (ii) has been prepared from and is consistent with the
books and records of the Company, (iii) is complete and correct in all material
respects, and (iv) has been prepared in accordance with generally accepted
accounting principles, consistently applied (in each case, as part of a
consolidated group) subject, in the case of the Latest Financial Statements and
the quarterly financial statements described in subsection (c), to normal year
end adjustments. No notes are included in the financial statements.
3.5 Absence of Undisclosed Liabilities.
Except as set forth in Schedule 3.5, the Company does not have any
liabilities or obligations of any nature, whether accrued, absolute, contingent,
unliquidated or otherwise, whether due or to become due and whether arising out
of transactions entered into or any condition or state of facts existing on or
prior to the date hereof, which would in accordance with generally accepted
accounting principles be reflected on a balance sheet, other than (a)
liabilities and obligations set forth on the Latest Balance Sheet, and (b)
liabilities and obligations which have arisen after the date of the Latest
Balance Sheet in the ordinary course of business, all of which are properly
reflected in the books and records of the Company and which will not,
individually or in the aggregate, have a material adverse effect on the
business, assets, liabilities, financial condition, results of operations or
operations of the Company (a "Material Adverse Effect").
3.6 Absence of Material Adverse Changes.
Except as set forth in Schedule 3.6 hereto, since the date of the Latest
Balance Sheet, the Company has carried on its business in the ordinary course
and consistent with past practice. Except as set forth in Schedule 3.6 hereto,
since the date of the Latest Balance Sheet (except as set forth in subsection
(l) of this Section 3.6) the Company has not:
<PAGE>
(a) incurred any obligation or liability (whether absolute, accrued,
contingent or otherwise), except in the ordinary course of business and
consistent with past practice;
(b) discharged or satisfied any Encumbrance (as hereinafter defined), or
paid any obligation or liability, absolute, accrued, contingent, or otherwise,
whether due or to become due, other than obligations or liabilities incurred in
the ordinary course of the Company's business;
(c) suffered any damage, destruction or loss of physical property or goods
resulting in costs or expenses to the Company in excess of $100,000, whether or
not covered by insurance;
(d) mortgaged, pledged or subjected to any lien, charge or other
Encumbrance any of its assets, tangible or intangible, except for "Permitted
Liens" as that term is hereinafter defined or as set forth in one of the
Schedules hereto;
(e) sold or transferred any of its assets or canceled or compromised any
of its debts, except, in each such case, in the ordinary course of business and
consistent with past practice, or waived any claims or rights of a material
nature;
(f) leased, licensed or granted to any person or entity any rights in any
of its assets or properties except in the ordinary course of business;
(g) experienced any material adverse change in its financial condition,
results of operations, cash flows, assets, liabilities, businesses, prospects,
or operations;
(h) experienced any material adverse change in its relationship with any of
its employees, salesmen, distributors, or independent contractors;
(i) made any capital expenditures or capital additions or betterments in
excess of an aggregate of Five Hundred Thousand Dollars ($500,000);
(j) revalued any of its assets;
(k) entered into any material transaction, contract or commitment of a kind
required to be disclosed on one of the Schedules, except as disclosed on one of
the Schedules hereto;
(l) since the date of the 1996 Balance Sheet, made any change in any
accounting principle or practice or in its method of applying any such principle
or practice;
(m) made any distributions (however characterized and whether payable in
cash or additional shares of stock) in respect of any shares of its capital
stock or declared or paid any dividends in a manner inconsistent with the
Company's customary practices with respect to dividends;
<PAGE>
(n) repurchased or redeemed any shares of its capital stock;
(o) entered into any agreement to do any of the foregoing; or
(p) issued any additional shares of its capital stock or granted any
options, warrants or other rights to purchase, or any securities convertible
into or exchangeable for, shares of its capital stock.
3.7 Real Property.
(a) Schedule 3.7(a) sets forth a complete list and summary description of
(i) all real property owned by the Company (the "Owned Real Property"), (ii) all
real property leased or subleased by the Company (the "Leased Real Property"),
and (iii) all other rights or interests of the Company in real property (the
"Other Real Property Interests") (the Owned Real Property, the Leased
Real Property and the Other Real Property Interests are collectively referred to
herein as the "Real Property"). On or before the Schedule Delivery Date, Seller
shall deliver to Buyer true and correct copies of all leases, subleases,
abstracts of title, surveys, title opinions and title insurance policies in
Seller's or the Company's possession relating to all of the Real Property.
None of the Real Property reflected in the 1996 Balance Sheet or the Latest
Balance Sheet has been disposed of, and no real property has been acquired by
the Company since the date of the Latest Balance Sheet.
(b) Except for (i) liens disclosed in Schedule 3.7(b), (ii) liens for
current taxes not yet delinquent, (iii) covenants, conditions and restrictions
of record, all of which are reflected in the title documents, and none of which
materially impair the use of such property in the manner currently used or
impair the ability of the Company to deliver good and marketable title to
such Real Property, and (iv) any mechanic's, workmen's, repairmen's,
materialmen's, contractor's, warehousemen's, carrier's, supplier's or vendor's
lien, if payment is not yet due (the "Permitted Liens"), the Company has good
and marketable title in fee simple to all Owned Real Property, and a valid
leasehold interest in all Leased Real Property, free and clear of any
mortgage, pledge, security interest, lien, claim, charge, conditional sales
contract, restriction, reservation, option, right of first refusal, or other
encumbrance of any nature whatsoever (collectively, "Encumbrances"). Except as
set forth on Schedule 3.7(b), the Company has good and marketable title to all
structures, plants, leasehold improvements, systems, fixtures and other property
located on or about any of the Leased Real Property which are owned by the
Company, as reflected in the Latest Balance Sheet, free of any Encumbrances,
except for Permitted Liens and none of such assets is subject to any agreement,
arrangement or understanding for their use by any person other than the Company.
(c) Each of the leases and subleases relating to the Leased Real Property
is in full force and effect, there is no default by the Company (or to the best
knowledge of the Company or Seller, by the lessor) under any such lease or
sublease, and each such lease and sublease will
<PAGE>
remain in full force and effect following the Closing without any modification
in the rights or obligations of the parties under any such lease or sublease.
(d) Except as set forth in Schedule 3.7(d), no work has been performed on
or with respect to or in connection with any of the Real Property that
would cause such Real Property to become subject to any mechanic's,
materialmen's, workmen's, repairmen's, carrier's or similar liens aggregating in
excess of $100,000.
(e) To the best of Seller's and the Company's knowledge, the structures,
plants, improvements, systems and fixtures (including, without limitation,
storage tanks or other impoundment vessels, whether above or below ground)
located on each such parcel of Real Property comply in all material respects
with all Federal, state and local laws, ordinances, rules, regulations and
similar governmental and regulatory requirements, and are in good operating
condition and repair, ordinary wear and tear excepted. To the best of Seller's
and the Company's knowledge, each such parcel of Real Property (in view of the
purposes for which it is currently used) conforms in all material respects with
all covenants or restrictions of record and conforms with all applicable
building codes and zoning requirements and, to the best knowledge of Seller and
the Company, there is no proposed change in any such governmental or regulatory
requirements or in any such zoning requirements. All existing electrical,
plumbing, fire sprinkler, lighting, air conditioning, heating, ventilation,
elevator and other mechanical systems located in or about the Real Property are
in good operating condition and repair (ordinary wear and tear excepted), except
for defects or deficiencies which would not have a Material Adverse Effect.
(f) The Other Real Property Interests include all easements, rights-of-way
and similar rights necessary to conduct the Company's business as presently
conducted and to use all of its Real Property as currently used, including,
without limitation, easements and licenses for pipelines, power lines, water
lines, roadways and other access. Schedule 3.7(f) correctly lists and describes
all such easements and rights and all agreements and other instruments
(including any amendments) relating thereto which are not recorded. All material
easements and rights are valid, binding in favor of the Company and in full
force and effect; any amounts due and payable thereon to date have been paid or
have been fully accrued for in the Latest Balance Sheet or in the books and
records of the Company for periods after the date of the Latest Balance Sheet,
as applicable; neither the Company nor (to the best knowledge of the Company
and the Seller) any other party thereto is in default thereunder; and there
exists no event or condition affecting the Company or (to the best knowledge of
the Company and Seller) any other party thereto, which, with the passage of
time or notice or both, would constitute a default thereunder. No material
easement or right will be breached by, nor will any party thereto be given a
right of termination as a result of, the transactions contemplated by this
Agreement.
3.8 Tangible Personal Property.
(a) The Company has good and marketable title to all of the equipment,
machinery, motor vehicles, inventories, supplies, furniture and fixtures and
other tangible personal
<PAGE>
property owned by the Company, free and clear of any Encumbrance of any kind or
nature whatsoever except as set forth in Schedule 3.8(a) and except for
Permitted Liens. All items of equipment, machinery, vehicles, furniture,
fixtures and other tangible personal property currently owned or used by the
Company as of the date hereof are in good operating condition and repair,
ordinary wear and tear excepted (except for defects or deficiencies which
would not have a Material Adverse Effect), are physically located at or about
the Company's place of business and are owned outright by the Company or
validly leased under leases set forth in Schedule 3.8(b). None of such
personal property is subject to any agreement, arrangement or understanding for
its use by any person other than the Company. The maintenance and operation of
such personal property complies with all applicable laws, regulations,
ordinances, contractual commitments and obligations, except for such
noncompliance as would not have a Material Adverse Effect. Except as set
forth in Schedule 3.8(a), no item of tangible personal property owned or used
by the Company as of the date hereof is subject to any conditional sale
agreement, installment sale agreement or title retention or security
agreement or arrangement of any kind. As to each item of personal property
subject to any such agreement or arrangement, Schedule 3.8(a) sets forth a
brief description of the property in question and the amount and repayment
terms of the underlying obligation. Schedule 3.8(a) sets forth a complete and
correct fixed asset list of the Company dated October 26, 1996.
(b) Schedule 3.8(b) sets forth a complete and correct list and summary
description of all material tangible personal property leases to which the
Company is a party, together with a brief description of the property
leased. On or before the Schedule Delivery Date, the Company will make
available to Buyer complete and correct copies of each lease (and any
amendments thereto) listed in Schedule 3.8(b). Except as set forth in
Schedule 3.8(b): (i) each such lease is in full force and effect; (ii) all
lease payments due to date on any such lease have been paid, and neither the
Company nor (to the best knowledge of the Company and Seller) any other party
is in default under any such lease, and no event has occurred which constitutes,
or with the lapse of time or the giving of notice or both would constitute, a
default by the Company or (to the best knowledge of the Company and Seller)
any other party under such lease; and (iii) there are no disputes or
disagreements between the Company and any other party with respect to any such
lease.
3.9 Accounts Receivable.
The accounts receivable reflected on the Latest Balance Sheet are, and the
accounts and notes receivable of the Company created from and after the date of
the Latest Balance Sheet to the Closing Date will be, free and clear of any
Encumbrance. All accounts receivable of the Company (i) arose from bona fide
sales of goods or services in the ordinary course of business and consistent
with past practice; (ii) are accurately and fairly reflected on the Latest
Balance Sheet or, with respect to accounts receivable of the Company created
after the date thereof and through the date of this Agreement are accurately
and fairly reflected in the books and records of the Company, and (iii)
are fully collectible, without offset or counterclaim, net of reserves,
within ninety (90) days.
<PAGE>
3.10 Accounts Payable.
All accounts payable to the Company (i) arose from bona fide purchases in
the ordinary course of business and consistent with past practice, and (ii) are
accurately and fairly reflected on the Latest Balance Sheet or, with respect to
accounts payable of the Company created after the date thereof and through the
date hereof, are accurately and fairly reflected in the books and records of
the Company.
3.11 Inventory.
The inventory of the Company consists only of items of a quality and
quantity useful or saleable in the ordinary course of business of the Company.
The inventories as reflected on the 1996 Balance Sheet and the Latest Balance
Sheet are valued at the lower of cost (determined by the LIFO method of
accounting) or market value, subject, in the case of the inventories reflected
in the Latest Balance Sheet, to the computation of LIFO reserves at year end.
The inventory on hand on the date of this Agreement (and on the Closing Date)
was (or will be) purchased at prices and in quantities consistent with the
Company's custom in the ordinary course of business. Schedule 3.11 sets forth a
list of each location of inventory of the Company, and a list and summary
description of any agreements, including processing agreements and consignment
agreements, applicable to such inventory.
3.12 Backlog.
All outstanding customer purchase orders for products of the Company have
been entered at prices and upon terms and conditions consistent with the normal
practices of the Company, and, to the best knowledge of Seller and the Company,
the completion of such orders will not have a Material Adverse Effect. The
Company and Seller have not been informed by any customer that any material
order included in its backlog is likely to be canceled or terminated prior
to its completion.
3.13 Computer Software.
All computer software programs (excluding noncustomized computer
software available to the Company on an over-the-counter basis through normal
commercial channels) used by the Company in the conduct of its business are
owned or licensed by the Company free and clear of Encumbrances, except for
Permitted Liens, and to the best of Seller's and the Company's knowledge do not
infringe any copyright, trade secret, or trademark of any other person.
<PAGE>
3.14 Material and Affiliated Contracts.
(a) Except as set forth in Schedule 3.14(a), the Company is not a party to,
or subject to:
(i) any contract, arrangement or understanding, or series of related
contracts, arrangements or understandings, which involves annual expenditures
or receipts by the Company of more than $100,000 or which provides for
performance, regardless of amounts, over a period in excess of six months after
the date of such contract, arrangement or commitment;
(ii) any license agreement, whether as licensor or licensee;
(iii) any agreement with suppliers or customers for discounts or
allowances;
(iv) any note, bond, indenture, credit facility, mortgage, security
agreement or other instrument or document relating to or evidencing
indebtedness for money borrowed or a security interest in or mortgage on the
assets of the Company;
(v) any warranty, indemnity or guaranty issued by the Company (other
than customary product warranties provided by the Company in the ordinary
course of business, which will be provided to Buyer pursuant to Section 3.21);
(vi) any contract, arrangement or understanding granting to any person
the right to use any property or property right of the Company, including any
lease;
(vii) any contract, arrangement or understanding restricting the
right of the Company to engage in any business activity or to compete with any
business;
(viii) any joint venture contracts;
(ix) any agreement granting to others the right to manufacture or
distribute products of the Company;
(x) any other material contract, arrangement or understanding not made
in the ordinary course of business and consistent with past practice; or
(xi) any outstanding offer or commitment to enter into any contract or
arrangement of the nature described in subsections (i) through (x) of this
section 3.14(a).
(b) Schedule 3.14(b) contains an accurate and complete list and description
of all agreements, arrangements and understandings (including outstanding
indebtedness) which are currently in effect between the Company or the Seller
and any of the following (each, a "Related
<PAGE>
Party") and which involve a value of $10,000 or more: (i) each director and
officer of the Company; (ii) the spouses, children, grandchildren, siblings,
parents, grandparents, uncles, aunts, nieces, nephews or first cousins of any
director or officer of the Company or their spouses (collectively, "near
relatives"); (iii) any trust for the benefit of any director or officer of the
Company or any of their respective near relatives, and (iv) any corporation,
partnership, joint venture or other entity owned or controlled by any director
or officer of the Company or any of their respective near relatives.
(The contracts, arrangements and understanding described in Schedule 3.14(a) and
Schedule 3.14(b) are collectively referred to herein as "Material Contracts").
(c) On or before the Schedule Delivery Date, the Seller shall deliver to
Buyer complete and correct copies of each written Material Contract (and any
amendments thereto), and Schedule 3.14(a) and Schedule 3.14(b) contain
accurate summary descriptions of all oral material contracts. Except as set
forth in Schedule 3.14(c): (i) each contract to which the Company is a party or
by which it is bound is in full force and effect; (ii) neither the Company
nor, to the best of Seller's and the Company's knowledge, any other party is in
default under any such contract, and no event has occurred which constitutes,
or which with the lapse of time or the giving of notice or both would
constitute, a default by the Company or, to the best of Seller's and the
Company's knowledge, by any other party under such contract; and (iii) there are
no disputes or disagreements between the Company and any other party with
respect to any such contract.
3.15 Compliance with Laws.
To the best of Seller's and the Company's knowledge, the Company is
complying and has complied in all material respects with all laws, statutes,
rules, regulations, codes and, ordinances, and has secured all necessary permits
and authorizations and licenses issued by, federal, state, local and foreign
agencies and authorities, applicable to its business, properties and operations,
or to which the Company may be subject or which are applicable to the
operations, business or assets of the Company except for such permits and
authorizations, the absence of which would not have a Material Adverse
Effect. Neither the Company nor Seller has received any notice alleging any
such violation nor, to the best of Seller's and the Company's knowledge is there
any inquiry, investigation or proceedings relating thereto.
3.16 Legal Proceedings
Except as set forth in Schedule 3.16 hereto, there are no suits, actions,
proceedings (including, without limitation, arbitral and administrative
proceedings), claims or governmental investigations or audits pending or, to the
best of Seller's and the Company's knowledge, threatened against the Company
or its properties, assets or business, or pending or, to the best of Seller's
and the Company's knowledge, threatened against, relating to or involving any
of the officers, directors, Employees or agents of the Company in connection
with the business of the Company. There are no such suits, actions, proceedings,
claims, or investigations pending or, to the best of
<PAGE>
Seller's and the Company's knowledge, threatened, challenging the validity or
propriety of, or otherwise relating to or involving, this Agreement or the
transactions contemplated hereby. Except as set forth in Schedule 3.16,
there is no judgment, order, writ, injunction, decree or award (whether
issued by a court, an arbitrator, a governmental body or agency thereof or
otherwise) to which the Company is a party, or involving the property, assets or
business of the Company, which is unsatisfied or which requires continuing
compliance therewith by the Company.
3.17 Ability to Conduct the Business.
There is no agreement, arrangement or understanding to which the Company is
a party, nor any judgment, order, writ, injunction or decree of any court or
any governmental body or agency thereof directed at the Company or in which the
Company is named nor, to the best knowledge of the Company and Seller, any
other judgment, order, writ, injunction or decree, that could (in any such
case) prevent the use by the Company of its properties and assets or the conduct
by the Company of its business as of the date hereof. To the best of Seller's
and the Company's knowledge, the Company has in force, and has complied in all
material respects with all of the conditions and requirements imposed by, all
permits, licenses, exemptions, consents, authorizations and approvals used in
or required for the conduct of its business as presently conducted. Neither
the Company nor Seller has received any notice of, and neither the Company
nor Seller has any knowledge of, any intention on the part of any
appropriate authority to cancel, revoke or modify, or any inquiries,
proceedings or investigations the purpose or possible outcome of which is
the cancellation, revocation or modification of any such permit, license,
exemption, consent, authorization or approval.
3.18 Labor Matters.
(a) No union is certified as collective bargaining agent to represent any
Employee of the Company, and Seller and the Company have no knowledge of any
representation campaign which is currently under way. The Company is not (a)
a party to, involved in or threatened by any labor dispute, unfair labor
practice charge, labor arbitration proceeding or grievance proceeding, (b)
currently negotiating any collective bargaining agreement or (c) aware of any
threatened strike or filing with the National Labor Relations Board by any
employee or employee group seeking recognition as a collective bargaining
representative or unit, work stoppage or slowdown, picketing or controversy
involving employees or former employees of the Company (hereafter referred to
as "Employees" and "Former Employees", respectively).
(b) Schedule 3.18(b) also sets forth the names of all directors and
officers of the Company (whether or not such persons are Employees or Former
Employees), together with the respective term of office and titles for each
such person and all remuneration payable to any such officers and directors
who are not Employees. The Company agrees to deliver to Buyer, on or before the
Schedule Delivery Date, a statement, certified by an appropriate officer of the
Company, setting forth: (i) with respect to each officer or director of the
Company, such person's date of birth, date of
<PAGE>
employment, the current salary and commission terms of such person, the date
and amount of such person's most recent salary increase, the amount of any
bonuses or other cash compensation (other than regular salary or commissions)
paid since February 1, 1993 to such person and a description of all
compensation arrangements currently applicable to such person, and (ii) with
respect to all other Employees, their date of birth, date of employment, and
compensation for fiscal years 1996 and 1995.
(c) Except as set forth on Schedule 3.18(c), subject to normal year-end
adjustments, the Company has accrued or reflected on the Latest Balance Sheet,
and will accrue or reflect on its books and records, all obligations for
salaries, vacations, medical, severance and other benefits and other
compensation of any kind with respect to its Employees and any of its
Former Employees, to the extent required by generally accepted accounting
principles, including, but not limited to, vacation pay, sick pay, medical,
death, and disability benefits, severance, bonuses, incentive, and pension,
retirement, profit sharing or other types of deferred compensation, and all
commissions and other fees payable to salespeople, sales representatives and
other agents. Except as set forth in Schedule 3.18(c) there are no
outstanding loans from the Company to any Employee except normal Employee
advances in the ordinary course of business. Complete and correct copies of all
written agreements with or concerning Employees and all employment policies,
and all amendments and supplements thereto, will be delivered to Buyer, and
a list of all such agreements and policies, whether written or oral is set
forth on Schedule 3.18(c).
(d) Since January 27, 1996, the Company has not (i) except in the ordinary
course of business and consistent with past practice, increased the salary
or other compensation payable or to become payable to or for the benefit of any
of the Employees or Former Employees, (ii) provided any of the Employees
with any increased security or tenure of employment, (iii) increased the
amounts payable to any of the Employees upon the termination of any such
person's employment or (iv) adopted, amended, or revised the terms of any
Benefit Plan (as hereinafter defined) with respect to the benefits granted
to or for the benefit of any of the Employees or Former Employees thereunder.
(e) To the best of Seller's and the Company's knowledge, the Company has
complied in all material respects with all laws, statutes, rules, and
regulations applicable with respect to Employees in each of the jurisdictions in
which it operates and/or does business. In particular, to the best of Seller's
and the Company's knowledge, the Company has complied with all Federal and
state laws, statutes, rules and regulations applicable to discriminatory
employment practices (including, without limitation, discrimination based on
race, age, handicap, sex or sexual preference or sexual harassment, in
particular with respect to employment, equal pay and/or discharge), workplace
safety, (including rules and regulations of the Occupational Safety and Health
Administration), workers' compensation, payment of minimum wages and overtime
rates, immigration, or otherwise relating to the conduct of employers with
respect to employees or prospective employees, except where the failure to so
comply will not have a Material Adverse Effect. There have been no claims
made or threatened thereunder against the Company arising out of, relating to
or alleging any violation of any of the foregoing, except for claims which
are no longer
<PAGE>
pending or which are set forth on Schedule 3.18(e). The Company has complied
in all material respects with the employment eligibility verification form
requirements under the Immigration and Naturalization Act, as amended ("INA"),
in recruiting, hiring, reviewing and documenting prospective employees for
employment eligibility verification purposes and the Company has complied in
all material respects with the paperwork provisions and anti-discrimination
provisions of the INA. The Company has obtained and maintained the employee
records and I-9 forms in proper order as required by law. To the best of
Seller's and the Company's knowledge, the Company is not currently employing
any workers unauthorized to work in the United States.
3.19 Employee Benefit Plans.
(a) For purposes of this Agreement, "Benefit Plan" means and includes (i)
any "employee benefit plan", within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), without regard to
any exemption or exclusion therefrom under Department of Labor regulations,
and (ii) any deferred compensation agreement, defined benefit and defined
contribution plan, stock ownership plan, consulting or employment agreement,
executive compensation plan, bonus plan, incentive compensation plan or
arrangement, supplemental retirement plan or arrangement, agreement with respect
to temporary employees, vacation pay, sickness, disability or death benefit
plan (whether provided through insurance, on a funded or unfunded basis or
otherwise), retiree medical or life insurance plan, employee stock option or
stock purchase plan, severance pay, termination or salary continuation plan,
arrangement or practice, and (iii) each other employee benefit plan, program or
arrangement, which at any time has been maintained or contributed to by the
Company for the benefit of or relating to any of the Employees or Former
Employees and which is or remains legally binding on the Company or in respect
of which the Company has any liability or obligation, whether imposed by a
government program or run by any Governmental administration or agency, or
whether written or oral.
(b) Schedule 3.19(b) sets forth a complete and correct list of each Benefit
Plan.
(c) The Company will not incur any liability under any severance
agreement, deferred compensation agreement, employment agreement or similar
agreement solely as a result of the consummation of the transactions
contemplated by this Agreement. Except as set forth in Schedule 3.19(c),
the Company is not sponsoring or contributing to , and since January 1, 1991
has not sponsored or contributed to, any Benefit Plan which is an
"employee pension benefit plan," as defined in section 3(2) of ERISA, or
which is subject to Title IV of ERISA or to section 412 of the Code. No Benefit
Plan is a "voluntary employees beneficiary association" (within the meaning of
section 501(c)(9) of the Code) and there are no other "welfare benefit
funds" relating to Employees or Former Employees within the meaning of section
419 of the Code. No event or condition exists with respect to any Benefit
Plan that could subject the Company to any tax under section 4980B of the Code
or, for plan years beginning before January 1, 1989, section 162(k) of the
Code. With respect to each Benefit Plan, on or before the Schedule Delivery
Date, the Seller shall deliver to Buyer complete and correct copies of the
following documents, where applicable: (i) the annual
<PAGE>
reports (Form 5500 series), together with schedules, as required, filed with
the IRS, and any financial statements and opinions required by section
103(a)(3) of ERISA for the three (3) most recent plan years, (ii) the most
recent determination letter issued by the IRS, (iii) the most recent
summary plan description and all modifications, as well as all other
descriptions distributed to Employees or set forth in any manuals or other
documents, (iv) the text of the Benefit Plan and of any trust, insurance or
annuity contracts maintained in connection therewith, (v) the actuarial
reports, if any, relating to any Benefit Plan for the three (3) most recent
plan years, (vi) the most recent actuarial valuation, study or estimate of any
retiree medical plan or supplemental retirement benefit plan; and (vii) the
most recent statement of plan assets for each Benefit Plan that is intended
to meet the requirements of section 401(a) of the Code.
(d) Since January 1, 1990 neither the Company nor any corporation or
other trade or business under common control with the Company (as determined
pursuant to section 414(b), (c), (m) or (o) of the Code) (a "Common Control
Entity") has maintained or contributed to or in any way directly or indirectly
has any liability (whether contingent or otherwise) with respect to any
"multi-employer plan", within the meaning of section 3(37) or 4001(a)(3) of
ERISA, or, except as set forth in Schedule 3.19(d), any other plan which is
subject to Title IV of ERISA. No proceedings by the Pension Benefit
Guaranty Corporation (the "PBGC") to terminate any Benefit Plan have been
instituted or threatened; no event has occurred or condition exists which
constitutes grounds for the PBGC to so terminate any Benefit Plan; neither the
Company nor any Common Control Entity is a party to or has any liability under
any agreement imposing secondary liability on it as a seller of the assets of a
business in accordance with section 4204 of ERISA or under any other provision
of Title IV of ERISA; no contingent or other liability with respect to which
the Company has, had or could have any liability under section 4063 or 4069 or
other provision of Title IV of ERISA to the PBGC or to any Benefit Plan; and no
assets of the Company are subject to a lien under sections 4064 or 4068 of
ERISA. All contributions required to be made to or with respect to each Benefit
Plan with respect to the service of Employees, Former Employees or other
individuals with the Company prior to the date hereof have been made or have
been accrued for in the Latest Balance Sheet or in the books and records of
the Company for periods after the date of the Latest Balance Sheet, as
applicable.
(e) Except as set forth on Schedule 3.19(e), none of the Benefit Plans
has been subject to a "reportable event," within the meaning of section 4043 of
ERISA (whether or not waived); to the best of Seller's and the Company's
knowledge, there have been no "prohibited transactions", within the meaning of
section 406 of ERISA or section 4975 of the Code; to the best of Seller's and
the Company's knowledge, each Benefit Plan has, in all material respects,
been administered to date in accordance with the applicable provisions
of ERISA, the Code and applicable law and with the terms and provisions of
all documents, contracts or agreements pursuant to which such Benefit Plan is
maintained; all reports and information required to be filed with the
Department of Labor, the IRS, the PBGC or plan participants or beneficiaries
with respect to any Benefit Plan have been timely filed; there is no dispute,
arbitration, claim, suit, or grievance, pending or, to the best knowledge of
the Company and the Seller, threatened, involving a Benefit Plan (other than
routine claims for benefits), and, to the best knowledge of the Company and the
Seller, there is no
<PAGE>
basis for such a claim; none of the Benefit Plans nor, to the best of Seller's
and the Company's knowledge, any fiduciary thereof (in such person's
capacity as such) has been the direct or indirect subject of an order or, to
the knowledge of the Company and the Seller, an investigation by a
governmental or quasi-governmental agency, there are no matters pending as to
which the Company has received notice before the IRS, the Department of
Labor, the PBGC or any other domestic or foreign governmental agency with
respect to a Benefit Plan; there have been no claims, or notice of claims, filed
under any fiduciary liability insurance policy covering any Benefit Plan, and
there has not been and there will not be any "excess parachute payment" (as
that term is defined in section 280G of the Code) to any of the Employees
prior to the Closing or as the result of the transactions contemplated by
this Agreement. To the best of Seller's and the Company's knowledge, no
event or set of conditions exists which would subject the Company to any Tax
under sections 4972, 4974-76, 4979, 4980, 4980B, 4999 or 5000 of the Code.
3.20 Environmental Matters.
(a) There are no actions, investigations, inquiries (written or oral) or
other proceedings, rulings, orders or citations pending, or to the best
knowledge of Seller and the Company, threatened by government officials with
respect to the Company as the result of any actual or alleged failure of the
Company to comply with any requirement of any Environmental Laws (as that
term is defined in subsection (l) below). Schedule 3.20 contains a complete
list of all solid waste dumps and hazardous waste disposal, treatment and
storage facilities which are presently or formerly were used by the Company for
disposal of hazardous waste as that term is used in the RCRA (as hereinafter
defined) during the past seven years. On or prior to the Schedule Delivery
Date, the Company shall deliver to Buyer true and correct copies of all
hazardous waste manifests issued by it at any time since January 1,
1994.
Except as disclosed on Schedule 3.20:
(b) To the best of Seller's and the Company's knowledge, the Company has
received all permits and approvals, has kept all records, and has made all
filings required by applicable Federal, state, or local laws with respect to
emissions of Hazardous Substances into the environment (including solids,
liquids, and gases) at the Real Property and the proper disposal of such
materials (including solid waste materials).
(c) To the best of Seller's and the Company's knowledge, the
Company and all operations thereof are currently in compliance in all
material respects with all applicable Environmental Laws.
(d) To the best of Seller's and the Company's knowledge, neither the
Company nor its operations nor its property is the subject of any Federal,
state, or local investigation or inquiry evaluating whether any remedial action
is needed to respond to a release of any Hazardous Substances into the
environment, and there is no basis for any such investigation or inquiry.
<PAGE>
(e) Since January 1, 1994, the Company has not filed, nor has it been
required to file, any notice under Federal, state or local laws indicating
past or present treatment, storage, or disposal of hazardous waste as defined
under 40 C.F.R. Parts 260-270 or any state equivalent or reporting a spill or
release of a contaminant at, on or under or about the Real Property.
(f) On or before the Schedule Delivery Date, Seller will furnish Buyer with
a summary description of the Company's activities with respect to the
generation, transportation, treatment, storage or disposal of Hazardous
Substances, as defined in subsection 3.20(l), and Seller and the Company will
make available to Buyer all reports, inventories and plans in the possession
of Seller or the Company relating to same.
(g) To the best of Seller's and the Company's knowledge, since the
effective date of any Environmental Law (if applicable), the Company has not
disposed of or released any Hazardous Substance in or on the ground or into the
groundwaters of its Real Property, except the disposal of or release of
Hazardous Substances which (i) are permitted by law, (ii) have been remediated
in accordance with applicable law (provided that any remediation effected
pursuant to any judicial or administrative order or consent decree or as a
result of any governmental investigation, inquiry request, order or decree
since January 1, 1980 is summarily described in Schedule 3.20(g), hereto), or
(iii) would not have a Material Adverse Effect.
(h) No underground storage tanks or surface impoundments used for the
storage of Hazardous Substances are located at, on, or under the Real Property.
(i) No lien in favor of any governmental authority for (i) any liability
under any Environmental Laws or (ii) damages arising from or costs incurred by
such governmental authority in response to a release of a contaminant into the
environment has been filed or attached to the real property of the Company.
(j) Since January 1, 1994, the Company and its Real Properties have
been found to be in substantial compliance with applicable Environmental Laws
following all inspections conducted by applicable regulatory bodies in
connection with the matters described in this section.
(k) To the best of Seller's and the Company's knowledge, except as
disclosed in Schedule 3.20(k), none of the Real Property is located in an
area identified by an agency or department of Federal, state or local
governments, or identified by the Company or the Seller, as having special
flood or mudslide hazards or wetlands.
(l) For purposes of this Agreement, the term "Environmental Laws" shall
mean all applicable Federal, state and local laws, regulations or ordinances
relative to air quality, water quality, solid waste management, hazardous or
toxic substances or the protection of health, safety or the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601 et seq.),
the Hazardous Material Transportation Act (49 U.S.C. 1801 et seq.), the
Federal Water Pollution Control Act (33
<PAGE>
U.S.C. 1251 et seq.), the Resource Conservation and Recovery Act of 1976, as
amended (42 U.S.C. 6901 et. seq.) ("RCRA"), the Clean Air Act, as amended (42
U.S.C. 7401 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C. 136 et seq.), and the Clean Water Act of 1977, as amended
(33 U.S.C. 1251 et seq.), as these laws may have been amended or supplemented
through the Closing Date, and any analogous state or local statutes and the
regulations promulgated pursuant thereto. For purposes of this Agreement, the
term "Hazardous Substance" shall mean any product, substance, chemical,
contaminant, pollutant, effluent, waste or other material whose presence,
nature, quantity and/or concentration, use, manufacture, disposal,
transportation, emission, discharge, spill, release or effect, either by
itself or in combination with other material located on any of the Real
Properties, is either (i) regulated or monitored by any governmental
authority, or (ii) defined or listed in, or otherwise classified pursuant to,
any statute, law, ordinance, rule or regulation (or any proposed statute,
law, ordinance, rule or regulation) as "hazardous substances," "hazardous
materials," "hazardous wastes," "infectious wastes" or "toxic substances".
Hazardous Substances shall include, but not be limited to: (i)(A) any
"hazardous substance" as defined in the Comprehensive Environmental Response,
Compensation and Liability Act, (B) any "regulated substance" as defined in
the Solid Waste Disposal Act or (C) any substance subject to regulation
pursuant to the Toxic Substances Control Act, as such laws are now in effect or
may be amended through the Closing Date and any rule, regulation or
administrative or judicial policy statement, guideline, order or decision under
such laws, (ii) petroleum and refined petroleum products, (iii) asbestos and
asbestos-containing products, (iv) flammable explosives, (v) radioactive
materials, (vi) radon and (vii) any other substance that is regulated or
classified as hazardous or toxic under any Federal, state or local law, statute,
ordinance, rule or regulation.
3.21 Products.
On or prior to the Schedule Delivery Date, the Company will deliver to
Buyer copies of all standard and other warranties which are currently extended
or which have previously been extended by the Company with respect to products
sold by the Company and for which the Company may have continuing liability or
obligations as of the date hereof. Except as disclosed on Schedule 3.21,
there are no pending claims, and Seller and the Company know of no basis for
any claims, based on defective products, violation of product warranties,
violation of product packaging or labeling requirements or similar claims with
respect to any products manufactured or sold by the Company or delivered to
customers on or prior to the date hereof, nor have the Company or Seller
received any notices from any person threatening any such claim, except for
product returns in the ordinary course of business which in the aggregate do not
have a Material Adverse Effect. All product warranties extended by the Company
are in compliance with applicable law.
<PAGE>
3.22 Tax Matters.
(a) For purposes of this Agreement, the terms "Tax" and "Taxes" shall
mean and include any and all Federal, state, local, foreign or other taxes,
assessments, Social Security obligations, deficiencies, fees, export or import
duties, or other governmental charges, including, without limitation, income,
gross receipts, ad valorem, value added, excise, real or personal property,
sales, use, license, and franchise taxes and any installment payment for taxes
and contributions or other amounts determined to be payable in the nature of
a Tax with respect to compensation paid to directors, officers, employees or
independent contractors, from time to time imposed by or required to be paid
by the Company to any governmental authority (including penalties and
additions to tax thereon, penalties for failure to file a return or report, and
interest on any of the foregoing) and any amount payable by the Company
pursuant to any tax-sharing agreement or similar agreement with respect to any
of the foregoing.
(b) All returns and reports relating to Taxes or otherwise required under
applicable tax laws which were required to be filed by or with respect to the
Company on or before the date hereof (after giving effect to applicable
extensions) have been duly and timely filed and all such returns and reports
are complete and correct in all material respects. All Taxes imposed on or
with respect to the Company which have become due and payable on or before the
date hereof (including, but not limited to, estimated payments of Federal
income taxes) have been paid in a timely manner by the Company and there is
no liability (and no basis for any liability) for Taxes with respect to the
Company which has not been (in the case of Taxes which have become due and
payable) paid or (in the case of Taxes which are not yet due and payable)
accrued on the books of the Company. Except as set forth on Schedule 3.22(b)
hereto, there are no actions or proceedings which are currently pending or, to
the best of Seller's and the Company's knowledge, threatened against the
Company by any governmental authority for the assessment or collection of
Taxes; no claim for the assessment or collection of Taxes has been asserted
or, to the best of Seller's and the Company's knowledge, threatened against the
Company; and there are no matters under discussion by the Company or Seller
with any governmental authority regarding claims for the assessment or
collection of Taxes against the Company. There are no agreements, waivers or
applications by the Company for an extension of time for the assessment or
payment of any Taxes. There are no Tax liens on any of the assets of the
Company (other than any lien for current Taxes not yet due and payable). True
and complete copies of all Tax returns, reports and other Tax filings of the
Company which have been filed for any periods since January 31, 1989 will be
provided to Buyer upon request.
(c) All Federal, state and local income tax returns of the Company with
respect to the taxable period through the year ended January, 1987 have been
examined and closed.
(d) Except as set forth in Schedule 3.22(d), within the past ten years,
the Company has not been a member of any affiliated group of corporations (as
defined in section 1504(a) of the Code) which has filed consolidated Tax
returns. For purposes of this section 3.22(d), the term
<PAGE>
"Company" shall be deemed to include the Company, any subsidiaries of the
Company or any predecessors of the Company or any of its subsidiaries.
(e) The Company has not made, is not obligated to make, and is not a party
to any agreement that under any circumstances could obligate it to make,
payments the deductibility of which would be prohibited under section 280G of
the Code.
(f) Except as set forth in Schedule 3.22(f), the Company has not taken any
action which would have the effect of deferring its tax liability from any
taxable period ending on or before the Closing Date to any taxable period
ending after the Closing Date, except for ordinary tax planning of the
Company consistent with its historical practices in the ordinary course of
business.
(g) The Company has at no time during the five (5) years preceding the
date of this Agreement been a "United States real property holding
corporation," within the meaning of section 897(c)(2) of the Code, and the
Shares do not constitute "United States real property interests", within the
meaning of section 897(c)(1) of the Code.
(h) The Company has not, with regard to any assets or property held,
acquired or to be acquired by the Company, filed a consent to the application
of section 341(f) of the Internal Revenue Code of 1986, as amended (the
"Code").
3.23 Insurance.
Schedule 3.23 hereto sets forth a complete and correct list and brief
summary description of all insurance policies carried by, or covering, the
Company with respect to its business. Complete and correct copies of each such
policy will be made available to Buyer upon request. All such policies are in
full force and effect, and no notice of cancellation has been given with respect
to any such policy. All premiums due thereon have been paid in a timely manner.
Except as set forth on Schedule 3.23, there are no pending claims or to the
best knowledge of Seller and the Company, threatened claims, under any of
the Company's insurance policies.
3.24 Minute Books; Stock Record Books.
True and correct copies of the Company's minute books and stock record
book will be provided to Buyer on or prior to the Schedule Delivery Date.
The minute books of the Company contain true and complete originals or copies
of all minutes of meetings of and actions by the stockholders, Board of
Directors and all committees of the Board of Directors of the Company, and
accurately reflect in all material respects all corporate actions of the
Company which are required by law to be passed upon by the Board of Directors or
shareholders of the Company. The stock record book accurately reflects all
transactions in shares of the Company's stock.
<PAGE>
3.25 Brokers' or Finders' Fees.
No agent, broker, investment banker, or other person or firm acting on
behalf of Seller is or will be entitled to any broker's or finder's fee or any
other commission or similar fee directly or indirectly from any of the parties
in connection with any of the transactions contemplated by this Agreement.
3.26 Material Customers and Suppliers.
(a) Schedule 3.26(a) sets forth a complete and correct list of the ten (10)
largest customers of the Company (in terms of amounts invoiced to such customers
during the fiscal year of the Company ended January 27, 1996), and a similar
list for the nine month period ending October 26, 1996 (each, a "Material
Customer") showing the total amount invoiced to each such customer for the
period in question. Except as set forth and described in Schedule
3.26(a), no Material Customer has given the Company any notice terminating,
suspending or reducing in any material respect, or specifying an
intention to terminate, suspend or reduce in any respect in the future, or
otherwise reflecting an adverse change in, the business relationship between
such customer and the Company; and there has not been any adverse change in the
business relationship of the Company with any such customer since the date of
the 1996 Financial Statements. No customer other than a Material Customer
accounted for more than five percent (5%) of the Company's gross sales during
the past three fiscal years.
(b) Schedule 3.26(b) sets forth a complete and correct list of the ten
(10) largest suppliers of the Company (in terms of amounts purchased from
such suppliers during the fiscal year of the Company ended January 27, 1996),
and a similar list for the nine month period ending October 26, 1996
(each, a "Material Supplier") showing the total amount purchased from
each such Material Supplier for the period in question. Schedule 3.26(b)
also correctly identifies all current outstanding purchase orders of the
Company for goods or services with an aggregate value of $100,000 or more.
Except as set forth in Schedule 3.26(b), no supplier identified in Schedule
3.26(b) has given the Company any notice terminating, suspending or reducing
in any respect, or specifying an intention to terminate, suspend or reduce
in any respect in the future, or otherwise reflecting an adverse change in,
the business relationship between such supplier and the Company and there
has not been any adverse change in the business relationship of the Company with
any such supplier since the date of the 1996 Financial Statements.
3.27 Bank Accounts; Powers of Attorney.
Schedule 3.27 sets forth a complete and correct list showing: (i) all banks
in which the Company maintains a bank account or safe deposit box (collectively,
"Bank Accounts"), together with, as to each such Bank Account, the account
number, the names of all signatories thereof and the authorized powers of
each such signatory and, with respect to each such safe deposit box, the
number thereof and the names of all persons having access thereto; and (ii) the
names of all persons
<PAGE>
holding powers of attorney from the Company (true and correct copies thereof to
be delivered to Buyer on or before the Schedule Delivery Date).
3.28 Books and Records.
Except as set forth on Schedule 3.28, all of the records, data,
information, databases, systems and controls maintained, operated or used by
the Company or in connection with the conduct or administration of its
business (including all means of access thereto and therefrom) are located on
the premises of the Company and are under the exclusive ownership or direct
control of the Company.
3.29 Sales Representatives and Other Sales Agents/Sales Offices Schedule
3.29 hereto sets forth a complete and correct list of the names and
addresses of each sales representative or other sales agent currently engaged by
the Company who is not an Employee, and a summary description of the territory
assigned to each such person (noting whether such territory is exclusive or non-
exclusive). Schedule 3.29 also sets forth a list of all agreements between the
Company and any such person, complete and correct copies of which agreements
will be delivered to Buyer.
3.30 Transaction Expenses.
The Company has not incurred or paid, and will not prior to the Closing
Date incur or pay, expenses relating to or arising out of the sale of the Shares
or the transactions contemplated by this Agreement, including, without
limitation, fees and expenses of counsel, accountants, and investment
bankers.
3.31 Schedules.
Disclosures made in any Schedule apply to all of the representations
and warranties made in this Article III and shall not be limited to any
particular paragraphs in relation to which they may appear. No schedule,
certificate or certified information delivered or to be delivered by the
Company or Seller pursuant to this Agreement, or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state any material fact necessary
to make the statements contained therein not misleading.
3.32 Reliance.
The representations and warranties of the Company and the Seller made in
Article III of this Agreement are made by the Company and the Seller with
the knowledge and expectation that Buyer is relying thereon in entering
into, and performing its respective obligations under, this Agreement, and
the same shall not be affected in any respect whatsoever by any
investigation
<PAGE>
heretofore or hereafter conducted by or on behalf of Buyer, whether in
contemplation of this Agreement or otherwise.
3.33 Fairness Opinion.
The Board of Directors of Seller has received an opinion of an independent
investment banking firm retained by Seller to the effect that the consideration
to be received by Seller under this Agreement is fair to Seller from a Financial
point of view.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Corporate Power.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York, and is duly qualified to do
business as a foreign corporation and is in good standing in all jurisdictions
where the failure so to qualify would have a material adverse effect on Buyer.
Buyer has full corporate power and authority to own, lease and operate
the properties and assets which it currently owns, leases or operates and to
carry on its business as presently conducted or proposed to be conducted
pursuant to existing plans. Buyer has full corporate power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby.
4.2 Corporate Authority; Absence of Conflicts.
(a) The execution and delivery of this Agreement, and the consummation of
the transactions contemplated hereby have been duly approved by the Board of
Directors of Buyer, and no other corporate actions on the part of Buyer are
necessary to approve and authorize the execution and delivery of this
Agreement, or the consummation of the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Buyer and
constitutes a valid and legally binding agreement of Buyer, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(b) The execution and delivery of this Agreement by Buyer, consummation of
the transactions herein contemplated and compliance with the terms of this
Agreement will not conflict with or violate any provision of the Certificate
of Incorporation or any By-Law of Buyer; nor do such actions constitute a
default of or require the consent or approval under any agreement or
instrument to which Buyer is a party or by which Buyer's assets are bound,
or require Buyer to
<PAGE>
obtain the approval or consent of any foreign, Federal, state, county, local or
other governmental or regulatory body, other than such filings as are required
under the HSR Act and except for the consent of Buyer's lender(s), nor will
such actions violate any applicable law, rule, regulation,
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, presently applicable to Buyer.
4.3 No Investigation.
There exists no legal proceeding or investigation by any governmental or
regulatory authority, or any request for information or action by any
third party, known to Buyer which could result in the institution of legal
proceedings to prohibit or restrain the consummation or performance of this
Agreement or the transactions contemplated hereby.
4.4 Securities Act of 1933.
Buyer is acquiring the Shares solely for its own account and for the
purpose of investment only and not with a view to any distribution thereof.
Buyer acknowledges that the Shares are not registered under the Securities Act
of 1933, as amended, and that such Shares may not be transferred or sold except
pursuant to the registration provisions of such Act or pursuant to an
applicable exemption therefrom and pursuant to applicable state securities
laws and regulations.
4.5 Reliance.
The representations and warranties of Buyer made in this Article IV are
made by Buyer with the knowledge and expectation that the Company and Seller
are relying thereon in entering into, and performing their obligations under,
this Agreement, and the same shall not be affected in any respect
whatsoever by any investigation heretofore or hereafter conducted by or on
behalf of the Company or Seller, whether in contemplation of this Agreement or
otherwise.
4.6 Financing.
At all times after the conditions precedent to Buyer's obligations set
forth in Section 7.9 hereof have been satisfied or waived, Buyer will have
sufficient cash or financing available to pay at Closing the amounts required
to be paid under Sections 1.2 and 1.3 hereof.
4.7 Brokers' or Finders' Fees.
No agent, broker, investment banker, or other person or firm acting
on behalf of Buyer is or will be entitled to any broker's or finder's fee or
any other commission or similar fee directly or indirectly from any of the
parties in connection with any of the transactions contemplated by this
Agreement.
<PAGE>
ARTICLE V
AGREEMENTS OF THE PARTIES RELATED TO TRANSACTIONS
5.1 Full Access.
The Company shall afford to Buyer, its counsel, accountants and other
representatives reasonable access, during normal business hours to, and the
Company shall disclose and make reasonably available to them (with the right
to make copies), all of the books and records of the Company relating to the
ownership of the properties, operations, financial condition, assets,
obligations and liabilities of the Company, and the Company shall afford Buyer,
its counsel, accountants and other representatives with reasonable access to the
facilities and properties of the Company and to the officers and directors of
the Company.
5.2 Preservation of Business.
From the date hereof through the Closing Date, the Company shall and the
Seller shall cause the Company to conduct its business consistent with past
business practices, and use their best efforts to preserve the Company's
business organizations intact, keep available the services of its present
relationships with key employees, consultants and agents, maintain its present
material suppliers, customers, and others having material business
relationships with it and preserve their goodwill.
5.3 Negative Covenants of Seller.
The Company and Seller covenant and agree that from and after the date
hereof through the Closing Date, the Company shall not, except with the
prior written consent of Buyer, or except as directly related to the completion
of the transactions contemplated by this Agreement:
(a) Issue or sell any of its shares of capital stock or other
securities, or propose or effect a split or reclassification of its outstanding
capital stock or a recapitalization;
(b) Mortgage, pledge or otherwise encumber any properties or assets, or
dispose of, or make any agreement with respect to the mortgage, pledge, sale,
transfer or disposition of, any properties or assets except in the ordinary
course of business;
(c) Make any capital commitment or expenditure of more than $250,000, in
the aggregate, or incur or become liable for any other obligation or liability
except (i) obligations or liabilities in the ordinary course of business and
(ii) expenditures approved by the Board of Directors of the Company;
<PAGE>
(d) Declare or pay any dividends, whether in cash, securities or
other property in a manner inconsistent with the Company's customary
practices with respect to dividends, or distribute any assets to Seller or
purchase, redeem or acquire any shares of capital stock;
(e) Adjust in any way, either directly or indirectly, the compensation or
benefits paid or payable to (i) any officer, director, or executive, or (ii)
any other Employee of the Company if outside the ordinary course of business;
(f) Borrow or agree to borrow any funds or incur, or assume or become
subject to, whether directly or by way of guarantee or otherwise, any
obligation or liability (absolute or contingent), except obligations and
liabilities incurred in the ordinary course of business and consistent with past
practice;
(g) Pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and consistent
with past practice of liabilities or obligations reflected or reserved against
in the Latest Balance Sheet or incurred in the ordinary course of business
and consistent with past practice since the date of the Latest Balance Sheet;
(h) Prepay any obligation having a fixed maturity of more than 90 days
from the date such obligation was issued or incurred except in the ordinary
course of business;
(i) Pay, loan or advance any amount to, or sell transfer or lease any
properties or assets to, or enter into any agreement or arrangement with, any
of its officers or directors or any affiliate, associate or near relative
of any of its officers or directors;
(j) Except in the ordinary course of business consistent with past
practice, write down the value of any inventory or write off as uncollectible
any notes or accounts receivable;
(k) Cancel any debts or waive any claims or rights of substantial
value, other than in the ordinary course of business consistent with past
practice;
(l) Dispose of or permit to lapse any rights to the use of any patent,
trademark, trade name, copyright or other intangible asset, or dispose of or
disclose to any person any trade secret, formula, process or know-how not
theretofore a matter of public knowledge;
(m) Change any of the banking or safe deposit arrangements described in
Schedule 3.27 hereto, except in the ordinary course of business;
(n) Grant or extend any power of attorney or act, as guarantor, surety,
cosigner, endorser, co-maker, indemnitor or otherwise, in respect of the
obligation of any person, corporation, partnership, joint venture,
association, organization or other entity; or
<PAGE>
(o) Agree, whether in writing or otherwise, to do any of the foregoing.
5.4 Third Party Consents.
Seller and the Company shall use their best efforts to obtain at the
earliest practicable date all consents of third parties necessary to the
consummation of the transactions contemplated hereby, the absence of which
would have a Material Adverse Effect, and will provide to Buyer copies of
each such consent promptly after it is obtained.
5.5 Delivery of Schedules and Other Material.
Seller shall provide to Buyer each of the Schedules required hereunder,
setting forth all of the information required to be set forth thereon, and any
documents or instruments referred to in any Schedule, not later than seventeen
(17) days after the date of this Agreement (the "Schedule Delivery Date").
From time to time after the date any such Schedule is provided but in any event
not later than the Closing Date, the Company will promptly supplement or amend
the Schedules hereto with respect to any matter which, if it existed or
occurred on or prior to the date any such Schedule was provided, would have
been required to be set forth or described in any such Schedule or which
is necessary to correct any information set forth in any such Schedule
which has been rendered inaccurate thereby; provided, however, that no
supplement or amendment to any such Schedule shall have any effect for the
purpose of determining whether any breach of this Agreement existed
prior to such supplement or amendment or whether the condition set forth
in section 7.1 of this Agreement has been satisfied.
5.6 Tax Matters.
(a) Seller shall prepare and file or cause to be prepared and filed on or
before the relevant due dates therefor (after giving effect to all applicable
extensions) all Federal, state, local and foreign Tax returns and reports of
the Company attributable to any taxable period ending on or prior to the
Closing Date, accompanied by the full and complete payment of all Taxes due
with respect to such periods. Any Tax refunds received by the Company
attributable to periods prior to the Closing shall belong to Seller and shall
be promptly remitted to Seller upon receipt.
(b) Buyer shall prepare and file or cause to be prepared and filed on or
before the relevant due dates therefor (after giving effect to all applicable
extensions) all Federal, state, local and foreign Tax returns and reports of the
Company attributable to any taxable periods ending after the Closing Date,
accompanied by the full and complete payment of all Taxes due with respect to
such periods.
(c) During the period between the Closing Date and the Tax Claim
Termination Date (as hereinafter defined), Seller shall provide reasonable
access during normal business hours to the books and records of Seller,
including work papers, to the extent such access is reasonably requested in
writing in advance by the Buyer for purposes of responding to any
inquiry, audit or
<PAGE>
proceeding involving the Tax Returns of the Company for the periods ending
prior to the Closing Date. After the Closing, Seller shall make available to
Buyer all work papers, records of estimated tax payments and Tax Returns as
have been used or filed for the fiscal year of the Company commencing prior
to the Closing.
(d) Buyer shall not, and after the Closing shall not permit the Company
to, amend any Tax return, report or filing with respect to Tax periods
prior to the Closing without Seller's prior written consent. At Seller's
request and expense, Buyer shall, and shall cause the Company to, file an
amendment to a Tax return, report or filing made with respect to Tax periods
prior to the Closing, provided that Seller shall pay any additional
Taxes resulting from such amended filing, and provided further that Seller
shall be entitled to receive any refund resulting from such amended filing.
Following the Closing, Buyer shall not, and shall not permit the Company to,
make any elections or changes in accounting methods if such elections or
changes will affect the Tax liabilities of the Company or the Seller for a
Tax period ending on or prior to the Closing Date, except as required by law
after written notice to Seller.
(e) The parties agree not to make any election or deemed election under
Section 338(g) or 338(h)(10) of the Code or any similar provision under state
law with respect to the transactions contemplated by this Agreement.
5.7 Transfer Taxes.
Buyer shall be responsible for, and shall pay or reimburse promptly when
and if due, all applicable sales, transfer, excise, use, documentary stamps or
any other similar Taxes which may be imposed on or made payable in any
jurisdiction, or by any authority, in connection with or arising from the
consummation of the transactions contemplated by this Agreement. Buyer shall
prepare and file all appropriate sales, transfer, excise, use, documentary
stamps and other tax returns and other documents due in connection with the
transactions contemplated hereunder. For purposes of paying any New York real
property transfer tax resulting from the transactions contemplated hereby, the
parties agree that the amount of the Purchase Price allocable to the Company's
Real Property shall be the book value thereof at the Closing Date.
5.8 Best Efforts and Certain Filings.
Subject to the terms and conditions of this Agreement, Buyer and Seller
will use their best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or desirable to consummate
the transactions contemplated by this Agreement and to maintain the accuracy of
their representations and warranties hereunder. Each of Seller and the Company
will not take, agree to take or knowingly permit to be taken any action to do
or knowingly permit to be done anything in the conduct of the business of the
Company, or otherwise, which would be contrary to or in breach of any of the
terms or provisions of this Agreement.
<PAGE>
5.9 Industrial Revenue Bonds.
Seller agrees to cooperate with Buyer in Buyer's efforts to ensure that
the 1985 City of Pine Bluff Industrial Revenue Bonds and the 1996 City of El
Paso Industrial Revenue Bonds issued on behalf of the Company (collectively,
the "Company IRBs") will remain in force and effect following the Closing,
upon the terms and conditions as presently are in effect but without
any liability of Seller subsequent to the Closing. The parties shall use their
best efforts to secure Seller's release from any liability under the Company
IRBs after the Closing.
5.10 Insurance.
All insurance (other than group health and workers' compensation
programs) covering the property, and employees of the Company is provided
through Seller, and the Company is charged by Seller for its insurance
cost. All such insurance coverage provided through policies maintained by
Seller shall terminate at the Closing, and any return premiums received upon
termination shall be retained by or paid over to Seller upon receipt. Buyer
shall be responsible, at the cost of Buyer or the Company, for procuring
replacement insurance coverage following the Closing.
5.11 Workers' Compensation.
Workers' compensation and disability benefits for Employees of the Company
are provided through a self-insured plan sponsored by the Seller and
administered by a third-party administrator. Coverage for workers' compensation
benefits for Employees of the Company under Seller's self-insured plan shall be
terminated as of the Closing. On or prior to the Closing, Buyer shall make all
necessary arrangements (including, but without limitation, posting one or more
surety bonds and/or letters of credit in amounts required by applicable
regulations) to implement its own self-insured workers' compensation program
for Employees of the Company or to procure an insurance policy providing
workers' compensation benefits for Employees of the Company. From and after the
Closing, neither Seller nor Seller's self-insured workers' compensation
program shall have any further obligations with respect to workers'
compensation or disability benefits or claims by Employees or Former
Employees of the Company, including, without limitation, claims or benefits
arising out of injuries or occurrences prior to the Closing.
5.12 Use of Seller's Name.
Within 30 days after the Closing, Buyer shall cause the Company to
discontinue use of and destroy any signs, letterhead, promotional materials,
business forms and other documents bearing the name or logo of Seller or
which in any way indicate a continuing affiliation between the Company and
Seller.
<PAGE>
5.13 Third-Party Offers.
Seller and the Company shall not, nor shall Seller or the Company
authorize or permit any subsidiary or any of its or a subsidiary's
respective officers, directors, employees, investment bankers, attorneys or
other advisors or representatives to, (i) solicit or initiate any Competitive
Proposal (as defined below) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, a Competitive Proposal; provided, however, that prior to the Closing Date,
if the Board of Directors of Seller concludes, after consultations with
counsel, that failure to take such action would reasonably be expected to
violate its fiduciary duties to Seller's shareholders under applicable law,
Seller may, in response to an unsolicited Competitive Proposal (A) furnish
information with respect to the Company to the party making such
Competitive Proposal and to its representatives, counsel and advisors pursuant
to a confidentiality agreement with such party containing provisions
substantially equivalent to those contained in the confidentiality agreement
dated October 14, 1996 between Buyer and Seller, (B) provide the party making
such Competitive Proposal and its representatives, counsel and advisors
reasonable access to the facilities and key employees of the Company, and (C)
participate in negotiations regarding such Competitive Proposal. Upon the
furnishing of information with respect to the Company to any party making a
Competitive Proposal, Seller shall promptly notify Buyer in writing of its
receipt of a Competitive Proposal, and shall indicate in such notice the
material terms and conditions of such Competitive Proposal. For purposes of
this Agreement, Competitive Proposal means a proposal from any person to
acquire all or a substantial part of the assets of the Company or more than
50% of the equity securities of the Company or any merger, consolidation or
business combination involving the Company, other than the transactions
contemplated by this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligations of Seller hereunder are subject to the fulfillment of
the following conditions, any one of which may be waived in writing by Seller:
6.1 Representations and Covenants.
All representations and warranties of Buyer contained herein shall be true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date. Buyer
shall have performed and complied with all covenants and agreements contained
herein and required to be performed or complied in all material respects with
by it on or prior to the Closing Date.
6.2 Closing Certificate.
Buyer shall have delivered to Seller a certificate signed by its President
or a Vice President, dated as of the Closing Date, to the effect set forth in
section 6.1.
<PAGE>
6.3 Legal Opinion.
Seller shall have received the opinion of Cohen Swados Wright Hanifin
Bradford & Brett, LLP, counsel for Buyer, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit A.
6.4 Injunction.
No order or decree prohibiting or restraining the consummation of this
Agreement shall have been issued by any court or governmental or regulatory
body. There shall not have been instituted any litigation, proceeding or
investigation by a governmental body or regulatory or administrative agency to
restrain or prohibit the consummation of the transactions contemplated by this
Agreement.
6.5 Lender's Consent.
Seller shall have received the consent of its senior lenders to the
consummation of the transactions contemplated hereby.
6.6 HSR Act.
The waiting period under the HSR Act shall have expired or been earlier
terminated without objection of the U.S. Department of Justice.
6.7 Company IRBs
If the parties shall have been unable to secure Seller's release from
liability pursuant to Section 5.9, Buyer shall (or shall have caused the
Company to) have furnished one or more letters of credit or otherwise
have provided indemnification reasonably satisfactory to Seller to protect
Seller against any liability after the Closing Date in connection with the
Company IRBs.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to enter into and complete the Closing is subject
to the fulfillment on or before the Closing Date of each of the following
conditions, any one of which may be waived in writing by Buyer:
7.1 Representations and Covenants.
All representations and warranties of Seller contained herein shall be true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though made
<PAGE>
on and as of the Closing Date. Seller shall have performed and complied in
all material respects with all covenants and agreements contained herein and
required to be performed or complied with by it on or prior to the Closing
Date.
7.2 Closing Certificate.
Seller shall have delivered to Buyer a certificate signed by it or on its
behalf dated as of the Closing Date, to the effect set forth in section 7.1.
7.3 Legal Opinion.
Buyer shall have received the favorable opinion of Catherine H. Suttmeier,
General Counsel for the Company and Seller dated as of the Closing Date, in
substantially the form attached hereto as Exhibit B.
7.4 Injunction.
No order, decree, statute, rule or regulation prohibiting or restraining the
consummation of this Agreement shall have been issued by any court or
governmental or regulatory body. There shall not have been instituted, and
there shall not have been any bona fide written threat after the date hereof
of any litigation, proceeding or investigation by a government body or
regulatory or administrative agency to restrain or prohibit the consummation
of the transactions contemplated by this Agreement.
7.5 Material Adverse Change.
The Company shall not have suffered any material adverse change in its
business or financial condition since October 26, 1996, including, without
limitation (i) any loss or notice of loss of any Material Customer or Material
Supplier as those terms are herein defined, or (ii) any loss on account of
fire, flood, accident, strike or other calamity which has or reasonably may
have a Material Adverse Effect.
7.6 Directors Resignations.
Buyer shall have received the written resignation of each of the directors
of the Company effective as of the Closing Date.
7.7 FIRPTA Affidavit.
Buyer shall have received an affidavit from the Seller in the form of
Exhibit C attached hereto that the Company is not, and has not been at any time
during the five (5) year period preceding the date of this Agreement been, a
United States real property holding corporation under the Foreign Investment in
Real Property Tax Act of 1980.
<PAGE>
7.8 Bank Accounts/Powers of Attorney.
Any changes of signatories to Company bank accounts or cancellation of
powers of attorney requested by Buyer shall have been made effective as of the
Closing.
7.9 Schedules.
On or before the Schedule Delivery Date, Seller shall have provided to
Buyer each of the Schedules identified in this Agreement, containing all of
the information required to be set forth thereon, and all other documents and
information required to be disclosed or delivered on or before the Schedule
Delivery Date. Buyer in its reasonable discretion shall have found the
information set forth on such Schedules and such other documents and information
to be satisfactory; provided that if on or before the thirtieth (30th) day after
the date of this Agreement, or the eighteenth (18th) day after the delivery or
disclosure of any Schedule, document, or information, whichever is later,
Buyer shall not have notified Seller that any of such Schedules or materials
is unsatisfactory to it, the conditions set forth in this Section 7.9 shall be
deemed to have been waived.
7.10 HSR Act.
The waiting period under the HSR Act shall have expired or been earlier
terminated without objection of the U.S. Department of Justice.
7.11 Selected Material Contracts and Permits, etc.
The completion of the transactions contemplated at Article I of this
Agreement shall not impair the ability of the Company to enforce or continue
to receive the benefits provided to it under (i) any contract, agreement or
arrangement described at paragraph (i), (ii), (iv) or (viii) of subsection
3.14(a) ("Selected Material Contracts"), or (ii) any material permits,
licenses, exemptions, consents, authorizations and approvals ("Material
Permits"), upon the consummation of the transactions contemplated by this
Agreement. and all consents necessary to preserve the Company's continuing
ability to enforce or receive the benefits pursuant to each Selected
Material Contract and Material Permit shall have been obtained by the Company
or Seller.
7.12 Seller Indebtedness.
Seller shall have caused the Company to be released from any liability (as a
guarantor, co-maker or otherwise) with respect to the indebtedness of Seller.
<PAGE>
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
8.1 Survival of Representations and Warranties.
All representations, warranties, obligations, covenants and agreements of
the parties contained herein, or in any Schedule or Exhibit hereto, and the
rights of the parties to seek indemnification with respect thereto, shall
survive the Closing and, except in respect of any claims for indemnification as
to which notice shall have been duly given prior to the relevant expiration date
set forth below (or in the case of the representations set forth in section 3.3,
or claims for indemnification arising therefrom, which shall have an indefinite
duration), shall expire on the following dates:
(a) in the case of Buyer Indemnity Claims as defined in section 8.2
below based in whole or in part on a breach of the representations and
warranties set forth in section 3.19 or 3.22 ("Tax/ERISA Claims"), the day
(the "Tax Claim Termination Date") which is the forty-fifth (45th) day
following the third (3rd) anniversary of the earliest date on which all of the
Company's Tax returns for its fiscal year ending on the Closing Date have been
duly filed; provided, however, that if any governmental entity shall
commence an audit of the Company on or before the Tax Claim Termination Date
with respect to any taxable periods of the Company ending on or before the
Closing Date, Buyer shall have the right to assert a Buyer Indemnity Claim
hereunder at any time on or before the Tax Claim Termination Date for the
estimated amount of all Tax Liabilities and Costs (as those terms are
hereinafter defined) which could potentially be assessed or otherwise be
asserted by such governmental entity in connection with such audit;
(b) in the case of all other Buyer Indemnity Claims, the later or May
31, 1998 or the end of the sixteenth calendar month after the Closing Date; and
(c) in the case of any Seller Indemnity Claim, the later or May 31, 1998
or the end of the sixteenth calendar month after the Closing Date.
8.2 Seller's Agreement to Indemnify.
Seller shall defend, indemnify and hold harmless Buyer and the Company
from and against any Buyer Indemnity Claims arising under this Agreement. For
purposes of this Agreement, the term "Buyer Indemnity Claim" shall mean (i)
any Tax Liability or Cost (as defined in section 8.5), or (ii) any loss,
damage, deficiency, claim, liability, obligation, suit, action, proceeding,
demand, assessment, judgment, fee, cost or expense of any nature whatsoever
(including, without limitation, all interest and penalties in connection
with the foregoing and all out-of-pocket costs and expenses incident to the
investigation, settlement or disposal of any of the foregoing, including,
without limitation, reasonable fees and disbursements of accountants and
counsel) arising out of, based upon or resulting from (A) any breach of any
representation and warranty of the Company or
<PAGE>
Seller which is contained in this Agreement or the certificate delivered
under Section 7.2 of this Agreement, or (B) any breach or nonfulfillment of, or
any failure to perform, any of the covenants, agreements or undertakings of the
Company or the Seller which are contained in or made pursuant to this
Agreement; provided, however, that Buyer shall be entitled to indemnification
for Buyer Indemnity Claims under subsection (ii) of this section 8.2 only to the
extent that the aggregate amount of all Buyer Indemnity Claims which have been
Definitively Resolved (as that term is hereinafter defined) in favor of
Buyer under the terms of this Agreement shall exceed $1,000,000 and only to
the extent of such excess. Any payments made by Seller hereunder with respect
to a Buyer Indemnity Claim shall be deemed to be a reduction of the Purchase
Price.
8.3 Buyer's Agreement to Indemnify.
Buyer hereby agrees to indemnify and hold the Seller harmless from, and to
reimburse the Seller for any Seller Indemnity Claims (as that term is
hereinafter defined) arising under the terms and conditions of this Agreement.
For purposes of this Agreement, the term "Seller Indemnity Claim" shall
mean any loss, damage, deficiency, claim, liability, obligation, suit, action,
proceeding, demand, assessment, judgment, fee, cost or expense of any nature
whatsoever (including, without limitation, all interest and penalties in
connection with the foregoing and all out-of-pocket costs and expenses incident
to the investigation, settlement or other disposal of any of the foregoing,
including, without limitation, reasonable fees and disbursements of accountants
and counsel) arising out of, based upon or resulting from (i) any breach of any
representation and warranty of Buyer which is contained in this Agreement or
any certificate or other instrument or document delivered pursuant hereto, or
(ii) any breach or nonfulfillment of, or failure to perform, any of the
covenants, agreements or undertakings of Buyer contained in or made pursuant to
the terms and conditions of this Agreement.
8.4 Notification of Claims and Definitive Resolutions.
(a) Subject to the provisions of section 8.5 below, upon the occurrence of
an event which constitutes or is claimed to constitute a Buyer Indemnity
Claim or a Seller Indemnity Claim, as applicable, such party shall provide the
indemnifying party or parties with prompt written notice of such event
and shall otherwise make available to the indemnifying party all relevant
information which is material to the claim and which is in the possession of
the indemnified party but in no event later than the time period set forth in
Section 8.1. (For all purposes of this section 8.4, in the case of Seller
"indemnified party" or "indemnifying party" refers to Seller and not the
Company). Following receipt of a notice of any such indemnity claim asserted
under this section 8.4(a), the indemnifying party shall have sixty (60) days
(or such longer period as may be agreed in writing by the indemnified party)
to make such initial investigation of the claim as the indemnifying party deems
necessary or desirable. For the purpose of such investigation, the
indemnified party shall make available to the indemnifying party any books
and records relied upon by it to substantiate the claim. At or prior to the
expiration of such sixty-day period (or any extension thereof which shall
have been agreed to by the
<PAGE>
indemnified party in writing), the indemnifying party shall notify the
indemnified party as to whether or not it disputes the indemnified party's
claim in whole or in part.
(b) If the indemnifying party does not dispute the indemnified
party's claim, the two shall execute a memorandum (hereinafter referred to
as a "Resolution Memorandum"), in the form of Exhibit D hereto, which shall
recite the amount of the Buyer Indemnity Claim or Seller Indemnity Claim. If
the indemnifying party notifies the indemnified party within 60 days that it
disputes such claim, then, for a period not to exceed 30 days following receipt
of such notice from the indemnifying party, the parties shall confer with one
another and endeavor in good faith to resolve any dispute regarding the claim.
If the parties reach an agreement regarding the existence and amount of the
Buyer Indemnity Claim or Seller Indemnity Claim, the parties shall execute a
Resolution Memorandum as aforesaid.
(c) For purposes of this Agreement, a Buyer Indemnity Claim
or Seller Indemnity Claim shall be deemed to have been "Definitively
Resolved" when (i) a Resolution Memorandum has been signed by Buyer and Seller;
or (ii) there is a decision, judgment, decree or other order by any court of
competent jurisdiction, which disposes of all or part of a Buyer Indemnity
Claim or Seller Indemnity Claim, which decision, judgment, decree or other
order is not appealable or with respect to which the time for appeal has
expired, or (iii) a period of sixty (60) days has expired since notice of a
Buyer Indemnity Claim or Seller Indemnity Claim has been delivered to the
indemnifying party and the indemnifying party has not notified the
indemnified party that it disputes such claim. Upon the Definitive Resolution
of a Buyer Indemnity Claim in favor of Buyer, the amount of such claim shall
be paid by Seller to Buyer within thirty (30) days, subject to the provisions
of section 8.2(ii) hereinabove.
(d) If any indemnity claim asserted under section 8.4(a) involves the
claim of any third party (a "Third-Party Claim"), the indemnifying party shall
have the right to elect to join in the defense, settlement, adjustment or
compromise of any such Third-Party Claim, and to employ counsel to assist
such indemnifying party in connection with the handling of such claim, at the
sole expense of the indemnifying party, and no such claim shall be
settled, adjusted or compromised, or the defense thereof terminated,
without the prior consent of the indemnifying party unless and until the
indemnifying party shall have failed, after the lapse of a reasonable period
of time, but in no event more than thirty (30) days after written notice to
it of the Third-Party Claim, to join in the defense, settlement, adjustment
or compromise of the same. An indemnified party's failure to give timely
notice or to furnish the indemnifying party with any relevant data and
documents in connection with any Third-Party Claim shall not constitute a
defense (in part or in whole) to any claim for indemnification by such party,
except and only to the extent that such failure shall result in any material
prejudice to the indemnifying party. If so desired by any indemnifying party,
such party may elect, at such party's sole expense, to assume control of
the defense, settlement, adjustment or compromise of any Third-Party Claim,
insofar as such claim relates to the liability of the indemnifying party,
provided that such indemnifying party shall obtain the consent of all
indemnified parties before entering into any settlement, adjustment or
compromise of such claim, or ceasing to defend against such claim, if as a
result
<PAGE>
thereof, or pursuant thereto, there would be imposed on an indemnified party
any liability or obligation not covered by the indemnity obligations of the
indemnifying parties under this Agreement (including, without limitation, any
injunctive relief or other remedy).
8.5 Special Indemnification for Tax Liabilities.
(a) Seller shall indemnify and hold harmless Buyer, the Company and
each Affiliate (as that term is hereinafter defined) of Buyer, from and
against the payment of any and all Tax Liabilities (as that term is
hereinafter defined). Except as may otherwise be expressly provided for in
this Agreement, the term "Buyer Indemnity Claims" shall be deemed to include
all claims for Tax Liabilities.
(b) For purposes of this section 8.5, the term "Affiliate" shall mean any
corporation or other entity which is, directly or indirectly, controlled by
Buyer, or any successor in interest to, or transferee of, Buyer, as the case
may be, as determined from time to time, including, without limitation, the
Company and any successor in interest to, the Company.
(c) For purposes of this Agreement, the term "Tax Liabilities" shall
mean and include any and all liabilities for Taxes which are or shall be
incurred by the Company (or by Buyer with respect to the Company) with respect
to any taxable year or any other period prior to the Closing, other than Taxes
for which provision was made on the Closing Balance Sheet.
(d) In the event the indemnitee receives notice of a claim made by any
Federal, state, local, foreign or other governmental authority which, if
successful, would result in an obligation to indemnify pursuant to this
section 8.5 (hereinafter, referred to as a "claim"), the indemnitee shall
give prompt notice to Seller of the same in writing but in no event later than
the time period specified in Section 8.1(a)), specifying in reasonable detail
the basis of such claim, and the facts pertaining thereto, and shall not make
payment of the Taxes claimed for at least 30 days after the giving of such
notice. Seller shall have the right to control the defense of any such
claim, subject in all cases to its obligation to indemnify Buyer and the
Company with respect to Tax Liabilities. If Seller wishes the indemnitee to
contest such claim, Seller shall, within 30 days after notice by the indemnitee
to Seller of such claim, or, if earlier, the period required by law, request
that such claim be contested. If the indemnitee agrees to do so, it shall
contest the claim; provided, if the indemnitee so requests, Seller shall
first furnish an opinion of independent tax counsel selected by Seller and
reasonably satisfactory to the indemnitee, that there is a reasonable defense to
the claim, and Seller shall agree to pay the indemnitee from time to time on
demand, an amount which shall be equal to all costs and expenses which the
indemnitee may incur in connection with contesting such claim, including,
without limitation, fees and disbursements of attorneys, accountants and
other experts (hereinafter referred to as the "Costs"). If indemnitee chooses
not to contest the claim, Seller shall have the right to do so; provided, that
Buyer shall (and shall cause the Company to) cooperate with and assist
Seller, at Seller's expense, in contesting such claim. If any such claim
shall be made by the IRS or other governmental authority and Seller shall have
requested the indemnitee to contest such claim, as above provided,
<PAGE>
and shall have duly complied with all of the terms of this section 8.5, the
indemnitee hereby agrees to consult with Seller in good faith with respect to
the actions to be taken by the indemnitee in connection with contesting any
such claim; provided, however, that in determining the actions to be taken
by the indemnitee, the overall tax and other interests of the indemnitee and its
Affiliates shall be taken into account; and provided further that; (i) the
indemnitee may either pay the Taxes claimed and sue for a refund in the
appropriate court of proper jurisdiction, as the Seller shall elect, or contest
such claim without first paying the Taxes claimed, and (ii) if the Seller
requests the indemnitee to pay the taxes claimed and then seek a refund, the
indemnitee will be provided with sufficient funds by Seller, on an interest-
free basis, to pay the full amount of such Taxes. The indemnitee agrees to
notify Seller in a timely manner in writing of any action taken or proposed to
be taken from time to time by the governmental authority with respect to such
claim, and to make available to Seller any relevant information relating to
such claim which may be particularly within the knowledge of Buyer or any
Affiliate and to otherwise cooperate with Seller in good faith in order to
contest effectively any such claim. For the purpose of all dealings with
Buyer or other indemnitee hereunder, Seller shall act exclusively through one
designated counsel, and the indemnitee is hereby authorized by the Seller to
deal with such designated counsel.
(e) Any liability of the Seller under this section 8.5 shall become fixed
upon a Final Resolution of the liability of the indemnitee and any amounts
due to Buyer or other indemnitee under this section 8.5 shall be paid within
30 days after such Final Resolution subject to the limitations in Section 8.2.
An indemnitee's failure to give timely notice or to provide copies of documents
or to furnish relevant data in connection with any such claim shall not
constitute a defense (in whole or in part) to such claim for indemnification
for such indemnitee, except to the extent such failure or delay results in
prejudice to Seller.
(f) For purposes of this section 8.5, a "Final Resolution" shall be deemed
to occur with respect to a proposed or other adjustment when (i) there is a
decision, judgment, decree or other order by any court of competent
jurisdiction, which decision, judgment, decree or other order has become
final with respect to the indemnitee (i.e., all allowable appeals taken
pursuant to this section 8.5 have been exhausted by either party to the
action), (ii) there is a closing agreement made under section 7121 of the Code
binding in respect of the indemnitee or other administrative settlement with the
IRS or other government authority, (iii) the time for instituting a claim
for refund in respect of the indemnitee has expired, or, if a claim was
filed, the time for instituting suit with respect thereto has expired or
(iv) the Taxes which are the subject of a proposed or other adjustment are
paid, and, pursuant to written agreement between Seller and Buyer or other
indemnitee, no claim for refund is filed, and no other contest of such proposed
or other adjustment is made.
(g) Upon a Final Resolution, the Seller shall become obligated for
any payment, as provided above (less any amounts already advanced to the
indemnitee as provided above), and the indemnitee shall become obligated to
pay to Seller any refund (including interest thereon, to the extent actually
paid by the relevant governmental authority) received or credited with respect
<PAGE>
to such claim (plus any amounts advanced to the indemnitee, as provided
above, not depleted in satisfaction of the obligations of the Seller to the
indemnitee). The obligations of the indemnitee and the Seller shall first be
set off against each other and any difference owing by either party shall be
paid within 30 days after such final determination.
(h) If any such claim referred to in subsection 8.5(d) hereof shall be
made by any Federal, state, local, foreign or other governmental authority
and Seller, after having received notice thereof, shall have failed (i) to
request the indemnitee to contest or not to contest such claim, as above
provided, or (ii) to comply with any of the other material terms of this
section 8.5, Seller shall become obligated to pay the indemnitee upon a Final
Resolution, an amount which shall be equal to the Taxes which ultimately
are paid as a result of contesting such claim and, from time to time upon
demand, the costs which the indemnitee may incur in connection with contesting
such claim.
(i) In the event that Seller pays a Tax Liability pursuant to this Section
8.5 which arises from the disallowance in one fiscal year of a deduction or
tax credit, which payment results in a reduction of the Federal or state income
tax liability of the Company (or the consolidated group of which the
Company is a member) for one of the first four (4) tax periods beginning after
the Closing Date (a "Tax Recoupment"), Buyer or the Company shall pay to the
Seller an amount equal to the Tax Recoupment, within 30 days after Final
Resolution of all Buyer Indemnity Claims with respect to Tax Liabilities or,
with respect to Tax Recoupments arising during the fourth tax period beginning
after the Closing, within 30 days after the filing of the federal and state
income tax returns for such period.
8.6 Limitations on Indemnification.
Notwithstanding anything in this Agreement to the contrary, Seller shall
have no obligation to indemnify the Buyer or the Company for a Buyer
Indemnity Claim to the extent the matter giving rise to such claim (a)
relates to any matter which is provided for, reserved or otherwise taken
into account in the Closing Balance Sheet, (b) relates to any loss to the
extent Buyer or the Company is covered by insurance, (c) arises or is increased
as a result of any change in the basis or method of application or calculation
of, or an increase in rates of, taxation after the Closing Date or the
passing of any legislation or any change in generally accepted accounting
principles after the Closing Date, or (d) arises or is increased as a
result of a change in Environmental Law after the Closing Date. The amount
of any indemnification required to be paid by Seller under this Article VIII
shall be reduced by the amount by which the Federal or state income tax of the
Company (or the consolidated group of which the Company is a member) is actually
reduced due to a reduction of its net income for the tax period in which the
liability or obligation giving rise to the indemnification is satisfied by the
Company. In no event shall the liability of Seller under this Article VIII
exceed the Purchase Price.
<PAGE>
8.7 Exclusive Remedy.
After the Closing, the indemnification provisions of this Agreement shall
constitute the sole and exclusive remedy of Buyer for any breach by Seller
or Company of any representation or warranty or covenant contained in this
Agreement Buyer shall not be entitled to assert against Seller any claim for
damages, indemnification or otherwise relating to the transactions under this
Agreement except pursuant and subject to the provisions of this Article VIII.
Without limiting the generality of the foregoing, Buyer agrees that the
rights accorded to it by Section 8.2 are the sole and exclusive remedy against
Seller with respect to all liabilities under any Environmental Laws. Buyer
(on its own behalf and on behalf of the Company after the Closing), and its
successors and assigns hereby waive any right to seek contribution or
other recovery from Seller or any of its affiliates under any
Environmental Law, and Buyer unconditionally releases Seller from any and all
claims, demands and causes of actions that it may now have or in the future
have against Seller for recovery under any Environmental Law except
pursuant to Section 8.2 hereof.
ARTICLE IX
CERTAIN COVENANTS
9.1 Access by Seller.
The Company shall, from and after the Closing Date, provide reasonable
access to Seller (and to the Seller's Accountants for purposes of preparation
and audit of the Closing Balance Sheet and the preparation or audit of the Tax
returns of the Company for the period ending on or prior to the Closing
Date) during normal business hours, to the books and records and personnel
of the Company, to the extent that such access is reasonably requested in
writing in advance by Seller.
9.2 Maintenance of Records.
Buyer shall cause the Company to maintain all books and records of the
Company existing as of the Closing Date for a period of ten years after the
Closing and shall not destroy such books and records during such period
without giving Seller sixty (60) days prior written notice.
ARTICLE X
MISCELLANEOUS
10.1 Expenses.
Seller shall be responsible for the expenses which Seller and the Company
incur in connection with the transactions provided for herein or contemplated
hereby including, without
<PAGE>
limitation, the fees and expenses of counsel, accountants and investment
bankers, and Seller shall not cause or permit the Company to pay or be
liable for such costs. Buyer shall bear the expenses which it incurs in
connection with the transactions provided for herein or contemplated hereby,
including the fees and expenses of its counsel and accountants; provided,
however, that in the event of a termination of this Agreement by Seller
pursuant to Section 10.14(b), upon receipt of a statement setting forth in
reasonable detail all reasonable actual and out-of-pocket expenses incurred by
Buyer in connection with the transactions provided for herein or contemplated
hereby, Seller shall reimburse Buyer for all such
expenses. The fees for filing of pre-merger notification reports under the HSR
Act shall be paid by Buyer.
10.2 Brokers.
Neither Buyer nor Seller nor the Company has employed a finder or
broker or other person entitled to a commission or fee in respect of this
Agreement and the transactions contemplated hereby.
10.3 Notices.
Any notice, request, demand or other communication given by any party
under this Agreement (each a "notice") shall be in writing, may be given by
a party or its legal counsel, and shall be deemed to be duly given (i) when
personally delivered, or (ii) upon delivery by United States Express Mail or
similar overnight courier service which provides evidence of delivery, or (iii)
when five days have elapsed after its transmittal by registered or
certified mail, postage prepaid, return receipt requested, addressed to
the party to whom directed at that party's address as it appears below or
another address of which that party has given written notice to the other
parties hereto, or (iv) when transmitted by telex (or equivalent service),
the sender having received the answer back of the addressee, or (v) when
delivered by facsimile transmission if a copy thereof is also delivered in
person or by overnight courier. Notices of address change shall be effective
only upon receipt notwithstanding the provisions of the foregoing sentence.
<PAGE>
(a) Notice to Buyer shall be sufficient if given to:
Camden Acquisition Corporation
111 West Second Street
Jamestown, NY 14702
Attention: R. Quintus Anderson, Chairman
Facsimile: (716) 664-6057
With a copy to:
Cohen Swados Wright Hanifin Bradford & Brett LLP
70 Niagara Street
Buffalo, NY 14202
Attention: Douglas G. Kirkpatrick, Esq.
Facsimile: (716) 856-5228
(b) Notice to Seller or the Company (prior to Closing) shall be sufficient
if given to:
Oneida, Ltd.
Kenwood Avenue
Oneida, New York 13421
Attn: Catherine H. Suttmeier, General Counsel
Facsimile: (315) 361-3700
10.4 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns. This Agreement or any
part thereof, may not be assigned without the prior written consent of the
other party, which consent may be withheld in the sole discretion of the other
party.
10.5 Entire Agreement and Modification.
This Agreement, the Schedules to be provided hereunder, Exhibits hereto
and agreements executed concurrently herewith (all of which are incorporated by
reference into and considered part of this Agreement) supersede all prior
agreements and understandings between the parties or any of their respective
affiliates (written or oral) relating to the subject matter of this Agreement
and are intended to be the entire and complete statement of the terms of the
agreement between the parties, and may be amended or modified only by a written
instrument executed by the parties. The waiver by one party of any breach of
this Agreement by any other party shall not be considered to be a waiver of
any succeeding breach (whether of a similar or a dissimilar nature) of
<PAGE>
any such provision or other provision or a waiver of any such provision
itself. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto.
10.6 Section and Other Headings.
The section and other headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.7 Governing Law.
This Agreement and the respective rights, duties and obligations of the
parties hereunder, shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the conflicts of laws
provisions thereof.
10.8 Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, and such counterparts shall together
constitute one and the same instrument.
10.9 Further Assurances.
Each of the parties shall, at any time and from time-to-time after the
Closing Date and at the expense of the other parties but without further
consideration, execute and deliver such further instruments, assignments or
documents and other papers and take such further actions as may be reasonably
required to carry out the provisions hereof and the transactions
contemplated hereby. Each party shall use its reasonable efforts to fulfill
or obtain the fulfillment of the conditions to the Closing.
10.10 Severability.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition and unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
<PAGE>
10.11 Confidentiality.
Seller and Buyer agree to keep the terms of this Agreement and any
amendments to it or transactions arising from it confidential except as required
by applicable securities laws or to discharge the obligation of each of the
parties to file submissions and data with respect to the proposed
transaction pursuant to the HSR Act or as otherwise agreed by the parties.
10.12 No Third Party Beneficiaries.
Neither this Agreement nor any provision hereof is intended to confer upon
any person (other than the parties hereto) any rights or remedies hereunder.
10.13 Termination by Buyer.
If Seller fails to comply with Section 2.2(b) or to satisfy any of the
conditions to Closing specified in Article VII at or prior to January 25,
1997, and such failure is not waived in writing by Buyer, then Buyer may,
without liability of Buyer to any party, terminate this Agreement, provided
Buyer has satisfied (or stood ready to satisfy) all of Seller's conditions to
Closing specified in Article VI, or such conditions have otherwise been
satisfied or waived, by written notice to Buyer.
10.14 Termination by Seller.
(a) If Buyer fails to comply with Section 2.2(a) or to satisfy in all
material respects any of the conditions to Closing specified in Article VI at or
prior to January 25, 1997, and such failure is not waived in writing by
Seller, then Seller may, without liability of Seller to any party, terminate
this Agreement, provided Seller has satisfied (or stood ready to satisfy) all
of Buyer's conditions to Closing specified in Article VII, or such conditions
have otherwise been satisfied or waived, by written notice to Seller; and
(b) Seller may terminate this Agreement if Seller or the Company enters
into a definitive agreement providing for the implementation of a
Competitive Proposal, provided that Seller shall have given Buyer at least
five (5) business days prior written notice of its intent to terminate.
10.15 Guaranty.
Contemporaneously with the execution and delivery of this Agreement,
Buyer is delivering to Seller a Guaranty Agreement in the form of Exhibit E
annexed hereto executed by Aarque Capital Corporation, the ultimate parent
corporation of Buyer, guaranteeing the prompt payment and performance of all
Buyer's obligations under this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
ONEIDA LTD.
By: /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman
CAMDEN WIRE CO., INC.
By: /s/ William D. Matthews
Name: William D. Matthews
Title: Chairman
CAMDEN ACQUISITION CORPORATION
By: /s/ R. Quintus Anderson
Name: R. Quintus Anderson
Title: Chairman
<PAGE>
Exhibit A
[Letterhead of Cohen Swados Wright Hanifin Bradford & Brett, LLP]
___________, 1997
Oneida Limited
Kenwood Avenue
Oneida, New York 13421
Camden Wire Company, Inc.
12 Masonic Avenue
Camden, New York
Dear Sir or Madam:
We have acted as counsel to Camden Acquisition Corporation, a New York
corporation (the "Buyer"), in connection with the proposed purchase of
all of the issued and outstanding shares of common stock of Camden Wire Co.,
Inc., a New York corporation (the "Company") from Oneida Ltd., a New York
corporation (the "Seller"), pursuant to a Stock Purchase Agreement dated as
of November ___, 1996 by and among Buyer, the Company, and Seller (the
"Stock Purchase Agreement"). We also have acted as counsel to Aarque Capital
Corporation, a New York corporation (the "Guarantor") in connection with
the execution and delivery of a Guaranty Agreement dated as of November ___,
1996 (the "Guaranty"), guaranteeing the performance of Buyer's obligations
under the Stock Purchase Agreement. This opinion is being rendered
pursuant to Section 6.3 of the Stock Purchase Agreement. Capitalized terms not
otherwise defined herein are used herein as defined in the Stock Purchase
Agreement.
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction of (i) the Stock Purchase Agreement;
(ii) the Guaranty; (iii) the Resolution adopted by the Board of Directors
of Buyer relating to the approval of the Stock Purchase Agreement and
the transactions completed thereby; (iv) the Certificate of Incorporation and
By-Laws of Buyer; and (v) such other documents as we have deemed necessary
or appropriate as a basis for the opinions set forth below. In our
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as original documents, the conformity to
original documents of all documents submitted to us as certified or
photostatic copies and the authenticity
<PAGE>
of the originals of all such non-original documents. As to certain matters
of fact material to this opinion, we have relied upon certificates of officers
of Buyer and certificates of public officials. We have assumed the accuracy of
the material factual information contained in all such certificates.
Based upon the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion that:
1. Each of Buyer and Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
2. Each of Buyer and Guarantor has full corporate power and authority to
enter into the Stock Purchase Agreement and the Guaranty, respectively, and
to consummate the transactions contemplated thereby. The Stock Purchase
Agreement has been duly authorized, executed and delivered by Buyer and
constitutes the valid and binding agreement of Buyer, enforceable against Buyer
in accordance with its terms. The Guaranty has been duly authorized, executed
and delivered by Guarantor and constitutes the valid and binding agreement of
Guarantor, enforceable against Guarantor in accordance with its terms.
3. Neither the execution and delivery of the Stock Purchase Agreement by
Buyer, the execution and delivery of the Guaranty by Guarantor, nor the
consummation of the transactions contemplated thereby will violate any
provision of the Certificate of Incorporation or By-Laws of Buyer or
Guarantor or, to the best of our knowledge after reasonable investigation,
(i) constitute a breach or default under any agreement or instrument to which
Buyer or Guarantor is a party, (ii) conflict with, violate or result in a
breach of any law, statute, rule, judgment, order, decree, injunction,
filing or regulation of any government, governmental agency, authority or
<PAGE>
instrumentality, court or arbitration tribunal to which Buyer or Guarantor
or any of their properties are subject, or (iii) require Buyer or Guarantor to
give notice to or obtain the authorization, approval or consent of or make
a filing with any third party, including any foreign, Federal, state,
county, local or other governmental body other than filings required under the
HSR Act.
4. There is no suit, claim, action, litigation, or proceeding pending, or,
to the best of our knowledge after reasonable investigation, threatened
against Buyer which seeks to enjoin or prevent the performance of the terms
and conditions of the Stock Purchase Agreement or the consummation of the
transactions contemplated thereby.
The opinion set forth in paragraph 2 with respect to enforceability
is subject to applicable bankruptcy, insolvency, conservatorship, receivership,
reorganization, moratorium, fraudulent conveyance, and similar state or
Federal laws or equitable principles relating to or affecting creditors'
rights generally and to the application of general equitable principles in
any legal or equitable proceeding involving the enforcement of any of the
provisions of the Stock Purchase Agreement.
We are admitted to the Bar of State of New York, and we express no
opinion as to the laws of any jurisdictions other than the laws of the United
States and the laws of the State of New York.
This opinion is furnished only to you, solely in connection with the Stock
Purchase Agreement and the consummation of the transactions contemplated
thereby, and may not be
<PAGE>
otherwise used by you, published, circulated, quoted, or otherwise referred to
by you nor relied upon in any respect by any other person or party or for any
other purpose, without our prior written consent.
Very truly yours,
<PAGE>
Exhibit B
[Letterhead of Catherine H. Suttmeier]
___________, 1997
Camden Acquisition Corporation
111 West Second Street
Jamestown, NY 14702
Dear Sir or Madam:
I am General Counsel of Oneida Ltd., a New York corporation (the "Seller"),
and have acted as counsel to the Seller and Camden Wire Co., Inc. (the
"Company"), in connection with the proposed purchase of all of the issued and
outstanding shares of common stock of the Company (the "Shares") by Camden
Acquisition Corporation, a New York corporation (the "Buyer"), pursuant to a
Stock Purchase Agreement dated November ____, 1996 by and among Seller, the
Company, and Buyer (the "Stock Purchase Agreement"). This opinion is being
rendered pursuant to Section 7.3 of the Stock Purchase Agreement. Capitalized
terms not otherwise defined herein are used herein as defined in the Stock
Purchase Agreement.
In rendering this opinion, I have examined originals or copies
certified or otherwise identified to my satisfaction of (i) the Stock Purchase
Agreement; (ii) the Resolutions adopted by the Boards of Directors of Seller
and the Company relating to the approval and adoption of the Stock Purchase
Agreement and the transactions contemplated thereby; (iii) the Certificates
of Incorporation and By-Laws of Seller and the Company, as amended to date; and
(iv) such other documents as I have deemed necessary or appropriate as a basis
for the opinions set forth below. In my examination, I have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as original documents, the conformity to original documents of all documents
submitted as certified or photostatic copies and the authenticity of the
originals of all such non-original documents. As to certain matters of
fact material to this opinion, I have relied upon certificates of officers
of Seller and
<PAGE>
the Company and certificates of public officials. I have assumed the accuracy
of the material factual information contained in all such certificates.
I am admitted to the Bar of the State of New York and no opinion is
expressed herein as to the laws of any jurisdictions other than the laws of the
United States and the laws of the State of New York.
Based upon the foregoing and on my examination of such questions of
law as I have considered necessary or appropriate, I am of the opinion that:
1. Seller and the Company are duly organized, validly existing and in good
standing under the laws of the State of New York, and, based solely upon the
certificates of good standing or qualification described on Attachment I,
hereto, the Company is duly qualified to do business and is in good standing
as a foreign corporation in each of the jurisdictions set forth on Schedule
3.1(a) of the Stock Purchase Agreement.
2. The Company has all requisite corporate power and authority to own, hold,
lease and operate its assets and properties as now owned, held, leased and
operated and to conduct its business as now conducted. To the best of my
knowledge, the Company has in full force and effect all necessary licenses,
permits and similar evidences of authority required to conduct the business
presently conducted by it in each jurisdiction in which such business is
conducted and the consummation of the transactions contemplated by the Stock
Purchase Agreement will not result in any change or modification in, or cause
any termination or cancellation of, any such license, permit or authorization,
except as set forth in any Schedule to the Stock Purchase Agreement.
<PAGE>
3. Seller and the Company have full corporate power and authority to
execute and deliver the Stock Purchase Agreement and to consummate the
transactions contemplated thereby. The Board of Directors of each of Seller and
the Company have duly approved and have duly authorized the execution and
delivery of the Stock Purchase Agreement and the consummation of the
transactions contemplated thereby, and no other corporate proceedings on the
part of either Seller or the Company are necessary to approve and authorize the
execution or delivery of the Stock Purchase Agreement or the consummation
of the transactions contemplated thereby. The Stock Purchase Agreement has
been duly executed and delivered by both Seller and the Company and constitutes
the valid and binding agreement of Seller and the Company, enforceable
against Seller and the Company in accordance with its terms.
4. Seller is the beneficial and record owner of all of the Shares, free
and clear of any Encumbrances. All of the Shares are duly authorized and are
validly issued, and are fully paid and nonassessable.
5. The execution and delivery of the Stock Purchase Agreement and the
consummation of the transactions contemplated thereby will not: (i) violate or
conflict with any provision of the Certificates of Incorporation or By-
Laws of Seller or the Company; or, to the best of my knowledge after
reasonable investigation: (ii) except as disclosed on Schedule 3.14(c) to the
Stock Purchase Agreement, violate, conflict with or result in a breach of or
default (or be any event with which the lapse of time or the giving of
notice or both would constitute an event of default) under any of the terms,
conditions or provisions of any Instrument; (iii) except as disclosed on
one of the Schedules, accelerate or give to others any interests, including
rights of acceleration, modification or cancellation, under any Instrument or
in or with respect to the business or assets of Seller or the Company; (iv)
result in the creation of any Encumbrance on the assets, capital stock or
properties or the Company; (v) except as set forth on one of the Schedules,
conflict with, violate or result in
<PAGE>
a breach of or constitute a default under any law, statute, rule, judgment,
order, decree, injunction, filing or regulation of any government,
governmental agency, authority or instrumentality, court or arbitration
tribunal to which Seller or the Company or any of their assets or property are
subject, or require Seller or the Company to give notice to, or obtain an
authorization, approval, order, license, franchise, declaration or consent, or
make a filing with, any third party, including any foreign, Federal, state,
county, local or other governmental or regulatory body, other than such filings
as are required under the HSR Act.
6. Except as set forth in Schedule 3.16 to the Stock Purchase Agreement, there
are no suits, actions, proceedings, including, without limitation, arbitral
and administrative proceedings, claims or governmental investigations or
audits pending or, to the best of my knowledge after reasonable investigation,
threatened against the Company or its properties, assets or business or
pending or, to the best of my knowledge after reasonable investigation,
threatened against, relating to or involving any of the officers, directors,
Employees or agents of the Company in connection with the business of the
Company, including, without limitation, any suit, action, proceeding, claim or
investigation challenging the validity or propriety of, or otherwise involving
the Stock Purchase Agreement or the transactions contemplated thereby. To
the best of my knowledge, except as set forth on Schedule 3.16 to the Stock
Purchase Agreement, there is no judgment, order, writ, injunction, decree,
or award (whether issued by a court, an arbitrator, a governmental body or
agency thereof, or otherwise) to which the Company is a party or involving
the property, assets, or business of the Company, which is unsatisfied or which
requires continuing compliance therewith by the Company.
The opinion set forth in paragraph 3 with respect to enforceability
is subject to applicable bankruptcy, insolvency, conservatorship, receivership,
reorganization, moratorium, fraudulent conveyance and similar state or
Federal laws or equitable principles relating to or affecting creditors'
<PAGE>
rights generally, and to the application of general equitable principles in
any legal or equitable proceeding involving the enforcement of any of the
provisions of the Stock Purchase Agreement.
This opinion is furnished only to you, solely in connection with the Stock
Purchase Agreement and the consummation of the transactions contemplated
thereby and may not be otherwise used by you, published, circulated, quoted, or
otherwise referred to by you nor relied upon by any other person or party or
for any other purpose, without my prior written consent.
Very truly yours,
<PAGE>
Exhibit C
AFFIDAVIT
STATE OF NEW YORK )
) ss:
COUNTY OF _____________ )
The undersigned, as an officer of Oneida Ltd., hereby swears, affirms and
certifies the following to be true relative to the sale of the capital stock
of Camden Wire Co., Inc., a wholly-owned subsidiary of Oneida Ltd., to Camden
Acquisition Corporation:
The capital stock of Camden Wire Co., Inc. is not, and has not been at any
time during the period specified under section 897 of the Internal Revenue Code
of 1986, as amended (the "Code"), a United States real property interest
within the meaning of sections 897 and 1445 of the Code, and Camden Wire
Co., Inc. is not, and has not been at any time during such period, a
United States real property holding corporation within the meaning of
sections 897 and 1445 of the Code.
This Affidavit is given under penalties of perjury in order to comply with
Sections 897 and 1445 of the Code.
ONEIDA LTD.
Date:_________
By:______________________________
Name:____________________________
Title:_____________________________
The foregoing affidavit was acknowledged and sworn to before me this ___
day of November, 1996 by _________________________, _____________, of Oneida
Ltd., a New York corporation, on behalf of said corporation.
________________________________
Notary Public
My Commission Expires: ___________
<PAGE>
Exhibit D
RESOLUTION MEMORANDUM
This Resolution Memorandum is made pursuant to section ____of the Stock
Purchase Agreement dated as of November ___, 1996 (the "Stock Purchase
Agreement") by and among Oneida, Ltd. ("Seller"); Camden Wire Co., Inc. (the
"Company"); and Camden Acquisition Company (Buyer).
(Check and complete one)
________ Seller and Buyer have reached final agreement as to the amount of
the Buyer Indemnity Claim (as defined in section 8.2 of the Stock Purchase
Agreement) incurred by Buyer as a result of the events or circumstances
described in the notice of indemnity claim attached hereto. The parties agree
that the amount of the Buyer Indemnity Claim is $_____________ and that the
same shall be paid by Seller to Buyer within thirty (30) days of the date of
this Resolution Memorandum, subject to the provisions of clause (ii) of section
8.2 of the Stock Purchase Agreement.
________ Seller and Buyer have reached final agreement as to the amount of
the Seller Indemnity Claim (as defined in section 8.3 of the Stock Purchase
Agreement) incurred by Seller as a result of the events or circumstances
described in the notice of indemnity claim attached hereto. The parties agree
that the amount of the Seller Indemnity Claim is $_____________ and that the
same shall be paid by Buyer to Seller within thirty (30) days of the date of
this Resolution Memorandum.
[BUYER] ONEIDA LTD.
By:______________________________ By:_______________________________
Name:____________________________ Name:_____________________________
Title:_____________________________ Title:______________________________
<PAGE>
EXHIBIT E
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of November 26, 1996, is made by AARQUE
CAPITAL CORPORATION, a New York corporation ("Guarantor"), in favor of
ONEIDA LTD., a New York corporation ("Seller").
RECITALS
A. Seller, Camden Wire Co., Inc., a New York corporation ("Company"), and
Camden Acquisition Corporation, a New York corporation ("Buyer"), have
executed a Stock Purchase Agreement dated as of November 26, 1996 (the
"Agreement") providing for the sale by Seller to Buyer of all the outstanding
capital stock of the Company.
B. Guarantor is the parent and sole common stockholder of Buyer. In
order to induce Seller to enter into and perform the obligations under the
Agreement, Guarantor agrees to execute and deliver this Guaranty Agreement.
NOW, THEREFORE, in consideration of the premises and of the sale of the
Stock by Seller to Buyer, and for other good and valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties agree
as follows:
1. Guaranty. Guarantor hereby guarantees to Seller that all obligations of
Buyer under the Agreement, including, without limitation, the obligation of
Buyer to pay the Purchase Price at the Closing (as such terms are defined
in the Agreement) and Buyer's obligation to indemnify Seller for a
breach of any covenant or representation and warranty made by Buyer in
the Agreement (the "Obligations"), shall duly and punctually be paid or
performed when and as the same shall become due and payable or be required to
be performed in accordance with the provisions of the Agreement. This
guaranty is an absolute, unconditional, present and continuing guaranty
and, with respect to any and all payments included in the Obligations,
constitutes a guaranty of payment and not of collectibility.
2. No Impairment. The Obligations of Guarantor under Section 1 hereof are to
remain in full force and effect without regard to, and are not to be released,
discharged or in any way impaired by: (a) any amendment of or waiver with
respect to the Agreement; (b) any extension, indulgence or other action or
inaction by Seller or Buyer in respect of the payment or performance of any
of the Obligations; (c) any exercise or nonexercise by Seller or Buyer of any
right, remedy, power or privilege in respect of this Guaranty Agreement or the
Agreement; (d) any bankruptcy, insolvency, reorganization or similar
proceeding involving or affecting Seller or Buyer.
<PAGE>
3. Representations and Warranties of Guarantor. Guarantor represents and
warrants to Seller as follows:
(a) Guarantor is the holder of all of the common stock of Buyer and is
duly organized and validly existing under the laws of the State of New York and
has the full corporate power, authority and legal right to enter into and
perform this Guaranty Agreement.
(b) The execution and delivery of this Guaranty Agreement will not result
in the breach of any term or provision of or constitute a default under, or
result in the creation of any mortgage, lien, pledge, charge, security
interest or other encumbrance in respect of the assets of Guarantor under,
any trust, deed, indenture, mortgage or other agreement or instrument to which
Guarantor is a party or by which Guarantor or its properties may be bound or
affected, or result in a breach of or default under or conflict with any
judgment, order, writ, injunction or decree of any court or national, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, binding on Guarantor.
(c) There are no actions, suits or proceedings pending or, to Guarantor's
knowledge, threatened against Guarantor in respect of or which may have any
effect on its ability to enter into or perform this Guaranty.
(d) No authorization, consent or approval of, or filing with, any
government or governmental department, body or instrument or any other
person is required to authorize, or is required in connection with, the
valid execution, delivery or performance by Guarantor of this Guaranty
Agreement.
4. Successors and Assigns. This Guaranty Agreement may not be assigned by
Guarantor without the prior written consent of Seller and shall inure to the
benefit of and be enforceable by Seller, its successors and assigns.
5. Miscellaneous. Neither this Guaranty Agreement nor any of its terms may be
changed, waived, discharged or terminated except by one or more written
instruments signed by Guarantor and Seller. This Guaranty Agreement shall
be construed and enforced in accordance with and governed by the laws of the
State of New York. The headings in this Guaranty Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to be
duly executed and delivered as of the day and year first above written.
AARQUE CAPITAL CORPORATION
By: /s/ R. Quintus Anderson
Title: Chairman
<PAGE>
EXHIBIT 99.1
For Immediate Release: Contact: David A. Gymburch (315) 361-3271
November 26, 1996 Corporate Public Relations
http://www.prnewswire.com (Co. News section)
ONEIDA LTD. TO SELL CAMDEN WIRE SUBSIDIARY;
ONEIDA ANNOUNCES THIRD QUARTER EARNINGS AND DIVIDENDS
Oneida, N.Y. - Oneida Ltd. (NYSE/OCQ) today announced an agreement to sell for
cash all the outstanding stock of Camden Wire Co. Inc., a wholly owned
subsidiary, to a subsidiary of The Aarque Companies of Jamestown, N.Y.
The transaction involves a cash payment to Oneida of approximately $35.2 million
and the assumption of Oneida's guarantee on $15.5 million in Camden Wire debt,
for a total of approximately $51 million. This amount is subject to a post-
closing adjustment to reflect changes, if any, in Camden Wire's book value.
Closing of the transaction is subject to certain conditions being satisfied, but
it is expected to be completed before Oneida's current fiscal year concludes
January 25, 1997, Oneida Chairman William D. Matthews said.
Aarque was founded by R. Quintus Anderson, a member of the Oneida Ltd. Board of
Directors. Aarque, a diversified metal fabricating firm, consists of several
operating companies including Kardex Systems and Cold Metal Products Co.
Also today, Oneida reported improved earnings from continuing operations,
excluding Camden Wire results, of 47 cents per share for the 1996 third quarter
compared to 42 cents a year ago. For the first nine months of Oneida's fiscal
year, earnings from continuing operations totaled 98 cents per share, up from 90
cents per share for the same period in 1995. Oneida's 1996 third quarter net
income from continuing operations was $5,306,000 on sales of $101,280,000 for
the three months ended October 26, up from net income of $4,740,000 on sales
of $100,627,000 in last year's third quarter. The 1996 year-to-date net income
from continuing operations was $10,929,000 on sales of $270,477,000, an increase
over 1995 nine-month net income of $10,002,000 on sales of $270,275,000.
The Camden Wire sale is part of Oneida's strategy to focus on its tableware
operations, Mr. Matthews said, noting Oneida's recent acquisition of Rego China.
Oneida is the world's largest manufacturer of stainless steel and silverplated
flatware for the consumer and foodservice tableware industries, and is also a
major marketer of commercial dinnerware. Oneida has owned Camden Wire since
1977. In the 1995 fiscal year, Camden accounted for approximately $149 million
of Oneida's total sales of nearly $514 million.
In other action, the Board of Directors of Oneida Ltd. declared the regular
quarterly dividends of 13 cents per share on the common stock and 37-1/2 cents
per share on the preferred stock, both payable December 30, 1996 to
stockholders of record as of the close of business December 13, 1996. This
will be the 244th consecutive cash dividend paid on common shares, covering the
last 61 years.
