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 March 14, 2000
SPARTECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-5911 43-0761773
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
120 S. Central Avenue, Suite 1700, Clayton, Missouri 63105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (314) 721-4242
SPARTECH CORPORATION
FORM 8-K
Item 2. Acquisition or Disposition of Assets
On February 28, 2000, Spartech Corporation completed the acquisition of
substantially all the assets of High Performance Plastics, Inc. ("HPP") an
indirect subsidiary of Uniroyal Technology Corporation. The acquisition of HPP
expands Spartech's production capacity with nine additional manufacturing
facilities located throughout North America.
HPP operates two business divisions, Royalite, a manufacturer of
thermoplastic sheet with three operating locations and Polycast, a manufacturer
and processor of cell cast acrylic with six operating locations. Royalite
specialty sheet products are engineered to exhibit specific performance-
enhancing attributes such as flame and smoke retardancy, static dissipation and
conductivity, weatherability and temperature resistance, and buoyancy. Royalite
products are supplied to the mass transportation, aircraft, computer and
electronic equipment, computer chip and electronic packaging, marine and
recreational vehicle, and other personal and commercial watersport markets.
Polycast employs cell cast processing, which can be a preferred processing
method for certain thick, optical-quality acrylic sheet applications. End
markets for this unit include commercial and military aerospace applications,
specialty sheet for various niche markets, general-purpose acrylic sheet, and
rods and tubes. The Company intends to use the property, plant, equipment, and
other assets in the same manner as HPP.
The total consideration for the acquisition of HPP was approximately $216
million in cash, subject to adjustment upon final determination of HPP's working
capital. The acquisition was funded through the Company's new $250 million bank
credit facility provided by a group of banks led by Bank of America, N.A.
SPARTECH CORPORATION
FORM 8-K
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
At present, it is impractical for the Company to provide required financial
statements for the acquired businesses, but such financial statements will be
filed by an amendment to this report within 60 days after the time for filing
this report.
(b) Pro forma financial information.
At present, it is impractical for the Company to provide required pro forma
financial information relative to the acquired businesses, but such financial
information will be filed by an amendment to this report within 60 days after
the time for filing this report.
(c) Exhibits.
2 Asset Purchase Agreement dated December 24, 1999 (Exclusive of exhibits
and schedules referred to in said agreement, copies of which will be
filed with the Commission on request).
99 Spartech press release dated February 29, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
SPARTECH CORPORATION
Date March 14, 2000 By /S/ Randy C. Martin
Randy C. Martin
Vice President-Finance and
Chief Financial Officer
ASSET PURCHASE AGREEMENT
Between
SPARTECH CORPORATION
as Buyer,
HIGH PERFORMANCE PLASTICS, INC
as Seller,
UNIROYAL HPP HOLDINGS, INC.
and
UNIROYAL TECHNOLOGY CORPORATION
Dated December 24, 1999
TABLE OF CONTENTS
ARTICLE 1. PURCHASE AND SALE OF ASSETS 1
1.1 Agreement to Purchase and Sell 1
1.2 Amount of Purchase Price 1
1.3 Determination of Estimated Purchase Price 1
1.4 Payment of Purchase Price 2
1.5 Determination of Net Working Capital and Final Purchase Price 2
1.6 Adjustment for Uncollected Receivables 3
1.7 Reconciliation of Accounts 3
ARTICLE 2. REPRESENTATIONS AND WARRANTIES 3
2.1 Representations and Warranties of Seller, Holdings and Uniroyal 3
(1) Incorporation and Power 4
(2) Due Authorization 4
(3) Enforceability of Obligations 4
(4) Title to and Sufficiency of Purchased Assets 4
(5) Real Property 4
(6) Leased Premises 5
(7) Personal Property 6
(8) Personal Property Leases 6
(9) Contracts 6
(10) Receivables 7
(11) Payables 7
(12) Inventories 7
(13) Intellectual Property 7
(14) Data Processing 8
(15) Licences and Permits 9
(16) Consents and Approvals 9
(17) Notices 9
(18) Absence of Conflicting Agreements 9
(19) Litigation 9
(20) Insurance 9
(21) Environmental Matters 9
(22) Employees 11
(23) Collective Agreements 11
(24) Employee Plans 12
(25) Bonuses 13
(26) Customers and Suppliers 13
(27) Tax Withholding 13
(28) Financial Statements 13
(29) Brokerage Fees 13
(30) Operating and Maintenance History 13
(31) Compliance with Applicable Laws 14
(32) Warranty Claims 14
(33) Ordinary Course 14
(34) Seller's Subsidiaries 14
2.2 Representations and Warranties of Buyer 14
(1) Incorporation and Power 14
(2) Due Authorization 14
(3) Enforceability of Obligations 14
(4) Brokerage Fees 14
2.3 Survival of Representations and Warranties 14
ARTICLE 3. INTERIM PERIOD 15
3.1 Due Diligence Investigations 15
3.2 Authorizations 15
3.3 Confidentiality 15
3.4 Public Announcements 16
3.5 Risk of Loss 16
3.6 Conduct of Business During Interim Period 17
3.7 Exclusive Dealings 17
3.8 Consents and Approvals 17
3.9 Regulatory Approvals 17
3.10 Updates to Information 17
3.11 Viplex/Happel Consolidation 18
ARTICLE 4. CONDITIONS OF CLOSING 18
4.1 Conditions to Buyer's Obligation to Close 18
4.2 Conditions to Seller's Obligation to Close 19
4.3 Effect of Failure to Close 20
ARTICLE 5. CLOSING ARRANGEMENTS 20
5.1 Closing 20
5.2 Seller's Closing Deliveries 20
5.3 Buyer's Closing Deliveries 21
5.4 Possession 21
5.5 Non-Transferable and Non-Assignable Assets 21
ARTICLE 6. INDEMNIFICATION 22
6.1 Indemnity by Seller 22
6.2 Indemnity by Buyer 22
6.3 Limitations 23
6.4 Notice of Claim 23
6.5 Direct Claims 23
6.6 Third Party Claims 24
6.7 Interest on Claims 24
6.8 Calculation of Payment 24
ARTICLE 7. OTHER MATTERS 24
7.1 Settlement by Seller 24
7.2 Excluded Assets 25
7.3 Payment of Excluded Liabilities 25
7.4 Covenant Not to Compete 25
7.5 Further Assurances; Parent Company Guarantee 25
7.6 Bulk Sales Legislation 25
7.7 Hiring of Employees 25
7.8 Data Processing 27
7.9 FTC Investigation 27
7.10 Environmental Investigation and Remediation 27
ARTICLE 8. MISCELLANEOUS PROVISIONS 29
8.1 Interpretation 29
8.2 Expenses 29
8.3 Notices 30
8.4 Pre-Termination Dispute Resolution 30
8.5 Entire Agreement 31
8.6 Waiver 31
8.7 Severability 31
8.8 Injunctive Relief. 31
8.9 Governing Law 31
8.10 Successors and Assigns 31
8.11 No Third-Party Beneficiaries 31
8.12 Counterparts 32
APPENDIX A - Exhibits and Schedules A-I
APPENDIX B - Glossary B-I
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of the 24th day of December, 1999 is
made between Spartech Corporation, a Delaware corporation ("Buyer"), and High
Performance Plastics, Inc., a Delaware corporation ("Seller"), Uniroyal HPP
Holdings, Inc., a Delaware corporation ("Holdings"), and Uniroyal Technology
Corporation, a Delaware corporation ("Uniroyal").
WHEREAS, Seller carries on the Business and is willing to sell the Purchased
Assets to Buyer, and Buyer is willing to purchase the Purchased Assets and to
assume the Assumed Liabilities, all on the terms and subject to the conditions
set out in this Agreement; and
WHEREAS, Holdings owns all of the capital stock of Seller, and Uniroyal owns
all of the capital stock of Holdings, and Buyer is therefore requiring that
Holdings and Uniroyal become parties to this Agreement; and in consideration of
their interest in Seller and the benefits to be derived by them from the
transactions set forth herein, Holdings and Uniroyal are willing to become
parties to this Agreement;
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1. PURCHASE AND SALE OF ASSETS
1.1 Agreement to Purchase and Sell . At the Closing, subject to the terms
and conditions of this Agreement, Seller shall sell and Buyer shall purchase the
Purchased Assets; and Buyer shall assume the Assumed Liabilities. Buyer shall
not purchase any of the Excluded Assets nor assume any liability which is not an
Assumed Liability. The Purchased Assets shall be transferred to Buyer free and
clear of any and all Liens other than Permitted Liens.
1.2 Amount of Purchase Price . The purchase price payable by Buyer to
Seller for the Purchased Assets (the "Purchase Price") shall be equal to the sum
of:
(i) Two Hundred Seventeen Million Five Hundred Thousand Dollars
($217,500,000); plus
(ii) Any amount by which Seller's Net Working Capital as of the
Effective Time exceeds Seller's Net Working Capital as of September
26, 1999; less
(iii) Any amount by which Seller's Net Working Capital as of September
26, 1999 exceeds Seller's Net Working Capital as of the Effective
Time; less
(iv) The amount of any capital expenditures related to the Polycast
Consolidation which have not been made as of the Effective Time.
The Purchase Price shall also be subject to any other adjustments provided for
herein.
1.3 Determination of Estimated Purchase Price . As of a date selected by
Seller which is not less than ten (10) days prior to the Closing Date, Seller
shall prepare its best estimate of the amount which would be the Purchase Price
if the Closing had occurred on such selected date, based on the information
reasonably available to Seller at the time of such estimated calculation (the
"Estimated Purchase Price"), and shall provide Buyer not less than ten (10) days
prior to the Closing Date with a written report reflecting such estimated
calculation, together with supporting documentation.
1.4 Payment of Purchase Price . The Purchase Price shall be paid as
follows:
(i) The Estimated Purchase Price, less $5,000,000, shall be paid to or
as directed by Seller at the Closing, by wire transfer or transfers
to such accounts as Seller may direct. Seller shall provide Buyer
with account information for all wire recipients at least two
Business Days before the Closing Date.
(ii) The balance of the Purchase Price (subject to any subsequent
adjustments provided for herein) shall be paid to or as directed by
Seller, by wire transfer or transfers to such accounts as Seller may
direct (on at least two Business Days' notice to Buyer), not more
than two Business Days after the final determination of the Purchase
Price in accordance with Section 1.5. If the Purchase Price as
finally determined is more than $5,000,000 below the Estimated
Purchase Price, Seller shall remit the difference to Buyer by wire
transfer to such account as Buyer may direct (on at least two
Business Days' notice to Buyer), not more than two Business Days
after the final determination of the Purchase Price.
1.5 Determination of Net Working Capital and Final Purchase Price .
(a) Except as may be otherwise expressly provided for in this Agreement, the
determinations of Net Working Capital and the resulting final determination of
the Purchase Price shall be made consistent with the following procedures:
(i) Inventories as of the Effective Time shall be based on an actual
physical inventory count and valuation of each item of inventory,
conducted by representatives of Seller (assisted by the Transferred
Employees) during the two days immediately after the Closing Date.
Representatives of Buyer shall be allowed to attend and participate
in verifying and reviewing the physical count and valuation of all
items. Inventories shall be valued according to Seller's historical
valuation standards, which approximate the lower of cost or market
on a first-in, first-out basis consistent with prior periods, and
shall be net of all appropriate valuation reserves (including but
not necessarily limited to obsolescence, write-down, variance and
replacement and adjustment reserves), which shall be at least as
sufficient at the Closing Date as at September 26, 1999. Each Party
shall bear its own costs and expenses incurred in connection with
the physical inventory count and valuation.
(ii) Current Assets shall not include any deferred taxes or other
deferred costs or any book vs. tax adjustments.
(iii) A reserve for doubtful accounts will be established consistent
with Seller's actual knowledge at Closing and otherwise consistent
with Seller's historical experience, but the reserve shall not be a
lower percentage of accounts receivable than the percentage which
the reserve reflected in Seller's September 26, 1999 audited
financial statements bears to Seller's September 26, 1999 accounts
receivable.
(iv) Prepaid insurance will not be included unless the underlying
policies are assumed by Buyer.
(v) Customer-Owned Inventory shall be reflected on a schedule to the
Closing Report; and the Closing Report shall reflect a liability in
an amount equal to the excess (if any) of (A) the amount of Customer-
Owned Inventory which should be in Seller's possession at the
Closing Date, based on all available information, over (B) the
Customer-Owned Inventory on hand at the Closing Date as shown on
such schedule.
(vi) Net Working Capital shall reflect prepaid or accrued rent and
other lease payments, and prorations of utilities and similar items
with respect to the Premises Leases customarily prorated in sales of
real property or assignments of leases, with Seller responsible for
such items through the Closing Date and Buyer responsible for such
items after the Closing Date.
(b) As soon as practicable, and in any event within 60 days after the
Closing Date, Seller shall prepare and deliver to Buyer a statement (the
"Closing Report") showing in line item detail, with supporting schedules, the
calculations of Net Working Capital as of September 26, 1999 and as of the
Effective Time and the resulting final calculation of the Purchase Price
(subject to Section 1.6 and any indemnification payments under Article 6).
(c) Until the date of delivery of the Closing Report, Buyer will give Seller
and its agents and representatives such assistance and access to the Books and
Records as Seller and its agents and representatives may reasonably request in
order to enable them to prepare the Closing Report.
(d) The Closing Report shall be conclusive of the amount of Net Working
Capital and the receipts and disbursements of funds made in respect of the
Purchased Assets and the Assumed Liabilities on the Closing Date, and shall be
final and binding upon the Parties unless Buyer gives to Seller a notice of
objection to any matter stated in the Closing Report not later than 30 days
after the date on which the Closing Report was delivered to Buyer.
(e) If Buyer gives a notice of objection pursuant to Section 1.5(d), then
Seller and Buyer shall consult with each other with respect to the objection.
If they are unable to reach agreement within 15 days after the notice of
objection has been given, then the dispute shall be resolved by the national
accounting firm of Ernst & Young LLP (the "Accountant"). The resolution of the
dispute by the Accountant will be final and binding on the Parties. The fees
and expenses of the Accountant, unless otherwise agreed by the Parties, will be
borne equally by Seller and Buyer.
1.6 Adjustment for Uncollected Receivables .
(a) Buyer shall use reasonable commercial efforts to collect the purchased
Receivables for a period of 90 days after the Closing Date. Unless otherwise
specified by the debtor, any amounts collected by Buyer from an account debtor
shall be applied to the debtor's oldest invoice first.
(b) Subject to the limitations set out in Section 1.6(c), any purchased
Receivables not fully collected by Buyer by 90 days after the Closing Date shall
thereupon, unless Buyer and Seller agree otherwise, be reassigned to Seller for
a price equal to the full face value of such Receivables on the Closing Date
less any amounts collected in respect thereof and less any unused reserve for
doubtful accounts taken into account in determining Net Working Capital. The
Purchase Price shall be reduced by the price of the reassigned Receivables and
either the reduction shall be accounted for in the final settlement pursuant to
Section 1.4, if that has not yet occurred, or if that settlement has occurred
the amount of the reduction shall be refunded to Buyer in the same manner
provided in Section 1.4(ii). All reassigned Receivables shall become the
property of Seller, and Buyer shall deliver to Seller promptly after receipt
thereof by Buyer any payments received by Buyer on account of any reassigned
Receivable.
(c) Seller shall not be required to repurchase pursuant to Section 1.6(b)
Receivables having, in the aggregate, a face amount exceeding the sum of
$200,000 plus the unused reserve for doubtful accounts.
1.7 Reconciliation of Accounts . The Parties agree that, conditional upon
the Closing, the benefits from the Purchased Assets and liability for costs
arising from the Assumed Liabilities shall be deemed to have passed to Buyer as
of the Effective Time. Receipts and disbursements received and made on the
Effective Date shall be for the account of Seller. Seller shall record and keep
accounts of all such receipts and disbursements.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller, Holdings and Uniroyal . As a
material inducement to Buyer entering into this Agreement and completing the
transactions contemplated by this Agreement and acknowledging that Buyer is
entering into this Agreement in reliance upon the representations and warranties
set out in this Section 2.1, Seller, Holdings and Uniroyal jointly and severally
represent and warrant to Buyer as follows:
(1) Incorporation and Power . Seller is a corporation duly organized and
validly existing under the corporation laws of the State of Delaware. Seller is
duly qualified to carry on the Business in every jurisdiction in which the
nature of the Business requires such qualification and in which failure to be
qualified could have a material adverse effect on the Business or the Purchased
Assets. Seller has filed all annual registration, franchise tax or similar
reports required to be filed under the laws of the jurisdictions of its
incorporation and qualification. Seller has the requisite corporate power and
authority to own and operate the Business, to enter into this Agreement and all
the other agreements and instruments to be executed by it as contemplated by
this Agreement (the "Related Documents") and to carry out its obligations under
this Agreement and the Related Documents. Schedule 2.1(1) contains a copy of
Seller's Certificate of Incorporation, certified by the Secretary of State of
Delaware, a copy of Seller's Bylaws as currently in effect, certified as true,
complete and correct by Seller's Secretary, and lists of Seller's officers and
directors, certified true, complete and correct by Seller's President and
Secretary. Holdings is the sole owner of Seller's capital stock, and Uniroyal
is the sole owner of Holdings' capital stock.
(2) Due Authorization . The execution and delivery of this Agreement
and the Related Documents and the completion of the transactions contemplated by
this Agreement and the Related Documents have been duly authorized by all
required votes or written consents of the boards of directors of Seller,
Holdings and Uniroyal and of the shareholders of Seller and Holdings. No vote
or written consent of the shareholders of Uniroyal is required to approve or
validate the transactions contemplated by this Agreement or the Related
Documents.
(3) Enforceability of Obligations . This Agreement constitutes, and when
executed as contemplated by this Agreement the Related Documents to be executed
by Seller, Holdings or Uniroyal will constitute, valid and binding obligations
of Seller, Holdings and Uniroyal enforceable against each of them in accordance
with their respective terms.
(4) Title to and Sufficiency of Purchased Assets . Except as set out on
Schedule 2.1(4), Seller has valid and marketable title to all the Purchased
Assets, free and clear of any and all Liens except Permitted Liens. Schedule
2.1(4) also lists or otherwise identifies with reasonable particularity all
Purchased Assets which are subject to Liens which will be discharged at Closing
together with the Person holding each such Lien. Except for the Excluded
Assets, the Purchased Assets together with the rights being acquired by Buyer
under the Assigned Contracts include all assets associated with the Business as
currently conducted. Schedule 2.1(4) sets out a complete and accurate list of
all locations where Purchased Assets are located, including a brief description
of the Purchased Assets at each location. Other than this Agreement, there is
no agreement, option or other right or privilege outstanding in favor of any
Person for the purchase from Seller of the Business or of any of the Purchased
Assets outside the ordinary course of the Business.
(5) Real Property .
(i) Schedule 2.1(5) lists each parcel of Real Property, including the
street address and a general description of the use thereof in the
Business, and the interest owned therein if less than fee simple
absolute. Seller has good and marketable title to the Real Property
free and clear of all Liens except Permitted Liens.
(ii) Except as set out in Schedule 2.1(5), the Real Property and the
current use thereof by Seller comply with Applicable Law in all
material respects, and no notice of violation of any Applicable Law
or of any covenant, restriction or easement affecting the Real
Property or with respect to the use or occupancy of the Real
Property has been given by any governmental authority having
jurisdiction over the Real Property or by any other Person entitled
to enforce the same.
(iii) There are no existing or, to the Best Knowledge of Seller, any
proposed or contemplated condemnation proceedings that would result
in the taking of all or any part of the Real Property or that would
adversely affect the current use of the Real Property.
(iv) To the Best Knowledge of Seller, the Improvements on each parcel
of Real Property are located wholly within the boundaries of such
parcel, and do not encroach upon any registered or unregistered
easement or right-of-way affecting the Real Property; and to the
Best Knowledge of Seller, there is no encroachment onto the Real
Property by buildings or improvements owned by the owners of
adjoining lands.
(v) To the Best Knowledge of Seller, the Improvements on each parcel of
Real Property have been constructed in a good and workmanlike manner
in compliance with Applicable Law, all amounts for labor and
materials relating to the construction and repair of the
Improvements have been paid in full, and except for Permitted Liens
no one has a right to file a construction, mechanics or similar lien
in respect of the payment of such amounts.
(vi) With respect to each parcel of Real Property, all Taxes with
respect to the Real Property which are due have been paid in full,
and there are no local improvement charges or special levies
outstanding in respect of the Real Property nor has Seller received
any notice of proposed local improvement charges or special levies.
(vii) To the Best Knowledge of Seller, all utilities required for the
normal operation of the Business from the Real Property connect into
the Real Property in accordance with valid registered easements and
are sufficient for the operation of the Real Property for purposes
of the Business.
(viii) None of the Real Property or the Improvements thereon has been
designated as a historic site or building pursuant to Applicable
Law, and to the Best Knowledge of Seller the Real Property is not
designated for regulation by any conservation authority pursuant to
Applicable Law.
(6) Leased Premises .
(i) Schedule 2.1(6) lists each of the Leased Premises, including the
street address and a general description of the use thereof in the
Business.
(ii) Schedule 2.1(6) also includes a copy of each of the Premises
Leases, together with all amendments thereto. Each Premises Lease
is in full force and effect, unamended by oral or written agreement
except as set out in Schedule 2.1(6), and Seller is entitled to the
full benefit and advantage of such Premises Lease in accordance with
the terms thereof. Each Premises Lease is in good standing and
there has not been any material default, or any act or omission
which upon notice or with the passage of time or both would
constitute a material default, under any Premises Lease nor is there
any dispute between Seller and any landlord under any of the
Premises Leases. None of the Premises Leases has been assigned by
Seller in favor of any Person and Seller has full right, title and
authority to assign the Premises Leases to Buyer subject to the
consents of the lessors as set out in Exhibit 2.1(16).
(iii) Except as set out in Schedule 2.1(6), the current uses of the
Leased Premises by Seller comply with Applicable Law in all material
respects. No notice of violation of any Applicable Law or of any
covenant, restriction or easement affecting the Leased Premises or
with respect to the use or occupancy of the Leased Premises has been
given to Seller by any governmental authority having jurisdiction
over the Leased Premises or by any other Person entitled to enforce
the same.
(iv) To the Best Knowledge of Seller, there are no existing or
proposed or contemplated condemnation proceedings that would result
in the taking of all or any part of the Leased Premises or that
would adversely affect the current use of the Leased Premises.
(v) To the Best Knowledge of Seller, the Improvements occupied by Seller
in any Leased Premises have been constructed in a good and
workmanlike manner in compliance with Applicable Law, all amounts
for labor and materials relating to the construction and repair of
such Improvements have been paid in full, and except for Permitted
Liens no one has a right to file a construction, builders, mechanics
or similar lien against such Improvements.
(vi) To the Best Knowledge of Seller, all Taxes with respect to the
Leased Premises which are due have been paid in full, and there are
no local improvement charges or special levies outstanding in
respect of the Leased Premises nor has Seller received any notice of
proposed local improvement charges or special levies.
(vii) To the Best Knowledge of Seller, all utilities required for the
normal operation of the Business from the Leased Premises connect
into the Leased Premises through adjoining public highways or, if
they pass through adjoining private land, do so in accordance with
valid registered easements and are sufficient for the operation of
the Leased Premises for purposes of the Business.
(viii) To the Best Knowledge of Seller, none of the Improvements has
been designated as an historical site or building pursuant to
Applicable Law, and none of the Leased Premises are designated for
regulation by any conservation authority pursuant to Applicable Law.
(7) Personal Property . Schedule 2.1(7) lists, by location, each item of
Personal Property which as of November 28, 1999 had a book value in the
accounting records of Seller of more than $25,000 or is otherwise material to
the Business. All Personal Property is in good operating condition and repair,
ordinary wear and tear excepted.
(8) Personal Property Leases . Schedule 2.1(8):
(i) Lists all of the Personal Property Leases, the lessor thereof, and the
property subject thereto;
(ii) Specifically identifies all of the Financing Leases (all of which
will be paid off by the Closing);
(iii) Specifically and separately identifies all of the other Personal
Property Leases which cannot be terminated by Seller without liability
at any time upon less than 30 days' notice or which involve payment by
Seller in the future of more than $25,000, and
(iv) Includes a copy of each of such Personal Property Leases which is
not a Financing Lease.
Each Personal Property Lease is in full force and effect and has not been
amended except as set out in Schedule 2.1(8), and Seller is entitled to the full
benefit and advantage of each Personal Property Lease in accordance with its
terms. Each Personal Property Lease is in good standing and there has not been
any default by any party under any Personal Property Lease nor any dispute
between Seller and any other party under any Personal Property Lease.
(9) Contracts . Schedule 2.1(9):
(i) Lists and briefly describes all Material Contracts not included in
Schedule 2.1(6), Schedule 2.1(8), Schedule 2.1(22) or Schedule 2.1(23),
provided that individual purchase or release orders need not be listed
if they are subject to a blanket purchase or supply agreement which is
listed and described;
(ii) Separately lists and briefly describes all Excluded Contracts; and
(iii) Includes a copy of each written Material Contract, including all
amendments thereto, and a written description of the material terms of
any oral Material Contract, including all amendments thereto.
Seller is not in default (and to the Best Knowledge of Seller there has not been
a default by any other party) under any Material Contract, and to the Best
Knowledge of Seller there has not occurred any event which, with a lapse of time
or giving of notice, or both, would constitute such a default. Except as set
out in Schedule 2.1(9), each Material Contract is in full force and effect,
unamended by written or oral agreement, and Seller is entitled to the full
benefit and advantage of each Material Contract in accordance with the terms of
each Material Contract. There are no open purchase or sales orders other than
those entered into in the ordinary course of the Business.
(10) Receivables . Schedule 2.1(10) is a list of all Receivables by
debtor, due date or aging, and dollar amount, as of November 28, 1999, which
list will be updated at Closing to a specified date not more than ten (10) days
prior to the Closing Date. All Receivables are valid obligations which arose in
the usual, ordinary and customary course of business. Except as set out in
Schedule 2.1(10), none of the Receivables is due from an Affiliate or other
Person with whom Seller does not deal at arm's length. To the Best Knowledge of
Seller, the amounts of Receivables set out in Seller's books are not overstated
and there exist no facts or circumstances (other than general economic
conditions) which could reasonably be expected to result in any material
increase in the uncollectability of the Receivables if pursued with good faith
diligent efforts. Schedule 2.1(10) also lists all Seller's known bad debts.
(11) Payables . Schedule 2.1(11) is a list of (i) all trade accounts
payable and (ii) all other accounts payable, by creditor, due date or aging, and
dollar amount, as of November 28, 1999, which list will be updated at Closing to
a specified date not more than ten (10) days prior to the Closing Date. All
accounts payable are valid obligations which arose in the usual, ordinary and
customary course of business, and except as set out in Schedule 2.1(11), to the
Best Knowledge of Seller the accounts payable are not subject to any known
defenses, set-offs or counterclaims. Schedule 2.1(11) also lists separately (i)
all accounts payable that are due to an Affiliate and (ii) all accounts payable
that are due to any other Person other than an Affiliate with whom Seller does
not deal at arm's length. To the Best Knowledge of Seller, the amounts of
accounts payable set out in Seller's books are not understated. No failure by
Seller to pay its accounts payable in full will subject Buyer to claims under
any bulk sales laws, cause any creditor of Seller to attempt to induce Buyer to
pay any such unpaid account payable to such creditor as a condition of such
creditor's willingness to continue doing business with such creditor after the
Closing, or otherwise interfere with or adversely affect Buyer's conduct of the
Business after the Effective Time.
(12) Inventories . Except as set out in Schedule 2.1(12), the
Inventories consist of items of a quality and quantity usable and saleable in
the ordinary course of business and are valued in accordance with GAAP. All
items included in the Inventories are owned by Seller. No items included in the
Inventories are held by Seller on consignment from others or have been pledged
as collateral except pursuant to Permitted Liens.
(13) Intellectual Property .
(i) Schedule 2.1(13) lists all issued patents, patents pending, and
registered and unregistered trade names and trademarks Related to
the Business, and all other registrations and applications for
registration of the Intellectual Property, by jurisdiction and with
applicable filing, renewal and expiration dates and other payment
due dates. All the registrations and applications for registration
of the Intellectual Property are valid and subsisting in good
standing and are recorded in the name of Seller. No application for
registration of any of the Intellectual Property currently used in
the Business has been rejected. No registration of any of the
Intellectual Property currently used in the Business has been
terminated or has lapsed or expired.
(ii) Except as set out in Schedule 2.1(13), Seller is the only owner
of the Intellectual Property and is entitled to the exclusive and
uninterrupted use of the Intellectual Property without payment of
any royalty or other fees. No shareholder, officer, director or
employee of Seller or any third party has any right, title or
interest in any of the Intellectual Property.
(iii) Seller has diligently protected its legal rights to the
exclusive use of the Intellectual Property.
(iv) All of Seller's permissions and licenses currently in effect to
use the industrial or intellectual property of other Persons in the
Business are disclosed in Schedule 2.1(13). Seller is not currently
permitting or licensing any Person to use any of the Intellectual
Property except as disclosed in Schedule 2.1(13). All licenses
referred to in Schedule 2.1(13) are in full force and effect and
neither Seller nor the other party is in default of its obligations.
(v) Except as set out in Schedule 2.1(13): (A) no Person has challenged
the validity of any registrations for the Intellectual Property or
Seller's rights to any of the Intellectual Property, (B) to the Best
Knowledge of Seller, neither the use of the Intellectual Property
nor the conduct of the Business has infringed or currently infringes
upon the industrial or intellectual property rights of any other
Person, (C) to the Best Knowledge of Seller, no other Person has
infringed Seller's rights to the Intellectual Property, and (D)
there is no governmental prohibition or restriction on the use of
the Intellectual Property.
(14) Data Processing . Schedule 2.1(14) sets out:
(i) A brief description of Seller's computer equipment and associated
peripheral devices and the related operating and application systems
and other software owned, leased or licensed by Seller and used by
it in connection with the Business other than off-the-shelf personal
computer software subject to transferable licenses (together, the
"Data Processing System");
(ii) A description of the ownership, management and control of the
Data Processing System and the employment of the staff related
thereto as among Seller, Holdings and Uniroyal, and a description of
any agreement or arrangement between Seller and Holdings or Uniroyal
pertaining to the use, management, control or staffing of the Data
Processing System, including a copy of all written agreements; and
(iii) A list of all other agreements or arrangements, including
warranties, leases and licenses and any agreement or arrangement
with any other Person, relating to the Data Processing System.
Except as set out in Schedule 2.1(14), Holdings and Uniroyal do not own or
have any interest in the Data Processing System. The Data Processing
System adequately meets the data processing needs of the Business and
operations of Seller as presently conducted. Seller has taken
appropriate action by instruction, agreement or otherwise with its
Employees or other persons permitted access to system application
programs and data files used in the Data Processing System to protect
against unauthorized access, use, copying, modification, theft and
destruction of such programs and files, including the use of login
passwords to access system application programs and data files used in
the Data Processing System. Seller has arranged for back-up data
processing services adequate to meet the data processing needs of the
Business in the event the Data Processing System or any of its
components is rendered temporarily or permanently inoperative as a
result of a natural or other disaster, as described in Schedule 2.1(14).
The Data Processing System has been tested for "Year 2000" compliance,
the results of which testing are set out in Schedule 2.1(14), and to the
Best Knowledge of Seller, except as set out in Schedule 2.1(14) the Data
Processing System is "Year 2000" compliant. Seller has received no
information that any of the principal customers, suppliers, utilities or
transportation service providers of the Business anticipates any
material "Year 2000"-related delays or interruptions in such Person's
business, or in such Person's ability to carry on its normal business
with Seller with respect to the Business, as a result of the "Year 2000"
transition. Seller has not experienced any "Year 2000"-related delays or
interruptions in the Business which have had any material adverse effect
on the Business or the Purchased Assets.
(15) Licenses and Permits . Schedule 2.1(15) lists all the Licenses and
Permits and identifies the ones that by their terms are not transferable.
Seller holds all Licenses and Permits free and clear of any and all Liens. All
Licenses and Permits, including details as to whether or not such Licenses and
Permits are transferable, are described in Schedule 2.1(15). Such rights are in
full force and effect, and to the Best Knowledge of Seller, Seller is not in
violation of any term or provision or requirement of any such Licenses and
Permits, and no Person has threatened to revoke, amend or impose any condition
in respect of, or commenced proceedings to revoke, amend or impose conditions in
respect of, any License or Permit.
(16) Consents and Approvals . Except for the Consents and Approvals
listed in Schedule 2.1(16), no consent of or approval by any Person is required
in connection with the execution and delivery of this Agreement or the
completion of the transactions contemplated by this Agreement.
(17) Notices . Except for the notices listed in Schedule 2.1(17), the
notices required to secure the Consents and Approvals listed in Schedule
2.1(16), and the required notification under the HSR Act, no notice is required
to be delivered by Seller to any Person by Seller in connection with the
execution and delivery of this Agreement or the completion of the transactions
contemplated by this Agreement.
(18) Absence of Conflicting Agreements . The execution, delivery and
performance of this Agreement by Seller and the completion (with any required
Consents and Approvals) of the transactions contemplated by this Agreement do
not and will not result in or constitute any of the following:
(i) A default, breach or violation, or an event that with notice or
lapse of time or both would be a default, breach or violation, of
any of the terms, conditions or provisions of Seller's certificate
of incorporation or by-laws or of any Contract or License or Permit,
none of which defaults, breaches or violations would, either singly
or in the aggregate, have a material adverse effect on the Business
or the Purchased Assets;
(ii) Any event which, pursuant to the terms of any Contract or
License or Permit, causes any right or interest of Seller to come to
an end or be amended in any way that is detrimental to the Business
in any material respect or entitles any other Person to terminate or
amend any such right or interest in any material respect;
(iii) The creation, imposition or foreclosure of any Lien on any
Purchased Asset; or
(iv) The violation of any Applicable Law applicable to or affecting
Seller.
(19) Litigation . Schedule 2.1(19) lists and briefly describes the
nature of any action, suit, proceeding, claim, application, complaint or
investigation in any court or before any arbitrator or before or by any
regulatory body or governmental or non-governmental body pending, or to the Best
Knowledge of Seller threatened, by or against Seller or Holdings or Uniroyal
Related to the Business or affecting the Condition of the Business or the
transactions contemplated by this Agreement. To the Best Knowledge of Seller,
except as set out on Schedule 2.1(19) there is no factual or legal basis which
could give rise to any action, suit, proceeding, claim, application, complaint
or investigation which if pending or threatened at the date hereof would be
required to be disclosed on Schedule 2.1(19).
(20) Insurance . A list of the policies of insurance Related to the
Business and related to the Purchased Assets, with coverage limits and
deductibles, is set out in Schedule 2.1(20). All such policies are in full
force and effect and Seller is not in default, whether as to the payment of
premium or otherwise, under the terms of such policies.
(21) Environmental Matters . Except as set out in Schedule 2.1(21):
(i) The Business has been and is currently carried on by Seller, and the
Purchased Assets and Leased Premises have been and are currently
used by Seller, in compliance with all Environmental Laws in all
material respects.
(ii) Seller has not used any machinery, equipment or facility
included in the Purchased Assets or otherwise on or in any Real
Property or Leased Premises, or permitted the Real Property or
Leased Premises to be used, to generate, manufacture, refine, treat,
transport, store, handle, dispose of, transfer, produce or process
any Hazardous Substance except in compliance with all Environmental
Laws in all material respects.
(iii) Seller is not, and has not been, subject to any proceedings
alleging the violation of any Environmental Law in relation to the
Business or the Purchased Assets and no part of the Business or the
Purchased Assets is the subject of any proceedings to evaluate
whether any remedial action is needed to respond to the Release or
presence of a Hazardous Substance on the Real Property or the Leased
Premises.
(iv) There are no circumstances that could reasonably be expected to
give rise to any civil or criminal proceedings or liability
regarding (A) the Release by Seller or presence of a Hazardous
Substance brought by Seller onto lands used in or related to the
Business and the Purchased Assets or, to the Best Knowledge of
Seller, on lands where Seller has disposed or arranged for the
disposal of materials arising from the conduct of the Business or
(B) the violation of any Environmental Law by Seller, its Employees,
agents or, to the Best Knowledge of Seller, others for whom it is
responsible in relation to the Business.
(v) The Environmental Permits listed in Schedule 2.1(21) constitute all
Environmental Permits which are required for the operation of the
Business, including any machinery, equipment or facility
constituting the assets of the Business, as it is presently being
conducted. The Environmental Permits presently held are valid and
in full force and effect, and no violations thereof have been
experienced, noted, or recorded, and no proceedings are pending or
threatened to revoke or limit any of them.
(vi) All Hazardous Substances disposed of, treated or stored by
Seller on lands owned or occupied by Seller or, to the Best
Knowledge of Seller, off-site of such lands, have been disposed of,
treated and stored in compliance with all Environmental Laws in all
material respects.
(vii) There are no proceedings, nor, to the Best Knowledge of Seller,
any circumstances or material facts which could, if true, give rise
to any proceedings, in which it is alleged that Seller or any
previous owner of the Real Property or the Business is potentially
responsible for a domestic or foreign federal, provincial, state,
municipal or local clean-up or remediation of lands contaminated
with Hazardous Substances or for any other remedial or corrective
action under an Environmental Law.
(viii) To the Best Knowledge of Seller, there are no proceedings, nor
any circumstances or material facts which could, if true, give rise
to any proceedings, in which it is alleged that the owner of the
Leased Premises or any previous lessee of the Leased Premises is
potentially responsible for a domestic or foreign federal,
provincial, state, municipal or local clean-up or remediation of the
Leased Premises as a result of contamination with Hazardous
Substances or for any other remedial or corrective action under an
Environmental Law.
(ix) Seller has maintained all environmental and operating documents
and records Related to the Business and the Purchased Assets in the
manner and for the time periods required by any Environmental Law.
(x) Schedule 2.1(21) lists every environmental audit which Seller or, to
the Best Knowledge of Seller, any third party (other than Buyer) has
ever conducted of the Business or the Purchased Assets, and Seller
has provided to Buyer copies of all environmental audits in its
possession relating to the Business or the Purchased Assets (for
purposes of this Section, an environmental audit includes any
evaluation, assessment, review or study performed at the request of
or on behalf of Seller, a prospective purchaser of the Business or
the Purchased Assets, a court or governmental authority).
(xi) There are no underground storage tanks located on the Real
Property or, to the Best Knowledge of Seller, on the Leased
Premises.
(xii) For purposes of the representations and warranties made in
Sections 2.1(21)(i) through 2.1(21)(x), the term "Seller" shall
include Holdings and Uniroyal (and any predecessors by merger) with
respect to all periods of time in which either of them or any of
their Affiliates conducted the Business or occupied the Real
Property or the Leased Premises.
(22) Employees .
(a) Schedule 2.1(22) lists:
(i) All the Employees of Seller as of the date of this Agreement; the
work location, age, position, status, length of service or date of
hire and current salary or wage rate, respectively; the salary or
wages, bonus and other compensation (separately itemized) paid to
each of them for fiscal 1999; and whether each is employed under a
collective bargaining agreement; and
(ii) All the employees of Holdings or Uniroyal who perform services
for Seller, a description of such services, and the approximate
percentage of the employee's working time devoted to such services.
(b) Except as set out in Schedule 2.1(22), Seller is not a party to or
bound by any contracts or requirements of Applicable Law in respect of any
Employee, including:
(i) Any contracts or arrangements for the employment or statutory re-
employment of any Employee; or
(ii) Any bonus, deferred compensation, profit sharing, pension,
retirement, medical insurance, or other plans or arrangements
providing employee benefits, except for the Employee Plans.
(23) Collective Bargaining Agreements . Schedule 2.1(23) includes a copy
of every collective bargaining agreement, contract or legally binding commitment
to any trade union or employee organization or group in respect of or affecting
Employees to which Seller is a party. Except as set out in Schedule 2.1(23):
(i) Seller is not currently engaged in any labor negotiation;
(ii) Seller is not a party to any application, complaint or other
proceeding under any statute regarding collective bargaining;
(iii) the Business is not engaged in any unfair labor practice and
there is no complaint regarding any alleged unfair labor practice
pending or threatened against Seller;
(iv) there is no strike, labor dispute, work slowdown or stoppage
pending or, to the Best Knowledge of Seller, threatened against the
Business;
(v) there is no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement pending or, to the Best
Knowledge of Seller, threatened against the Business;
(vi) the Business has not experienced any material unscheduled work
stoppage since January 1, 1994; and
(vii) Seller is not the subject of any union organization effort.
(24) Employee Plans . Schedule 2.1(24) lists all the employee benefit,
health, welfare, supplemental unemployment benefit, bonus, pension, profit
sharing, 401(k), deferred compensation, stock compensation, stock purchase,
retirement, post-retirement, medical, dental, retiree medical or dental, legal,
disability and similar plans or arrangements or practices relating to Employees
or former Employees which are currently maintained or were maintained at any
time since September 28, 1997 (the "Employee Plans"). Schedule 2.1(24) includes
a copy of each written Employee Plan (and, in the case of any unwritten Employee
Plan, a description thereof) and the most recent summary plan description for
each Employee Plan if any such description was required. Except as set out in
Schedule 2.1(24):
(i) All of the Employee Plans are and have been established, registered,
qualified, invested and administered, in all material respects, in
accordance with all Laws applicable to the Employee Plans, including
without limitation ERISA ("Applicable Employee Benefit Laws"), and
each Employee Plan which is intended to be qualified under Section
401(a) of the Code satisfies the formal requirements for such
qualification, except that no representation is made with respect to
any formal qualification requirement for which the remedial
amendment period under Section 401(b)of the Code has not yet
expired.
(ii) All obligations regarding the Employee Plans have been
satisfied, there are no outstanding defaults or violations by any
party to any Employee Plan and no Taxes, penalties or fees are owing
under any of the Employee Plans.
(iii) All contributions or premiums required to be made by Seller
under the terms of each Employee Plan or by Applicable Employee
Benefit Laws have been made in a timely fashion in accordance with
Applicable Employee Benefit Laws and the terms of the Employee
Plans, and all required contributions or premiums due with respect
to each Employee Plan will be paid in a timely manner.
(iv) There have been no improper withdrawals, applications or
transfers of assets from any Employee Plan or the trusts or other
funding media relating thereto, and neither Seller nor any of its
agents has been in breach of any fiduciary obligation with respect
to the administration of the Employee Plans or the trusts or other
funding media relating thereto.
(v) To the Best Knowledge of Seller, no Employee Plan has incurred any
material accumulated funding deficiency within the meaning of
Section 302 of ERISA, whether or not waived. To the Best Knowledge
of Seller, no Employee Plan nor any trust created thereunder nor any
trustee or administrator thereof has engaged in a prohibited
transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code for which an exception is not available.
(vi) No Employee Plan, nor any related trust or other funding medium
thereunder, is subject to any pending investigation, examination or
other proceeding, action or claim initiated by any governmental
agency or instrumentality, or by any other party (other than routine
claims for benefits), and there exists no state of facts which after
notice or lapse of time or both could reasonably be expected to give
rise to any such investigation, examination or other proceeding,
action or claim.
(vii) All filings required by ERISA and the Code as to each Employee
Plan have been timely filed, and all notices and disclosures to
participants in the Employee Plans required by ERISA or the Code
have been timely provided.
(viii) Neither Seller nor any other Person that, together with Seller,
would be treated as a single employer under Section 414 of the Code,
has ever established, maintained or contributed to, or otherwise
participated in, any multiemployer plan as defined in Section
3(37)(A) of Title I of ERISA.
(ix) None of the Employee Plans provides benefits to retired
employees or to the beneficiaries or dependants of retired
employees.
(x) No improvements to any Employee Plan have been promised and no
amendments or improvements to an Employee Plan will be made or
promised before the Effective Time.
(25) Bonuses . Schedule 2.1(25) sets out (separately) all bonuses, fees
or other compensation in excess of normal salary or wages (i) paid for fiscal
1998, (ii) paid for fiscal 1999, and (iii) payable but not yet paid for fiscal
1999, to each of the Employees. Except as set out in Schedule 2.1(25), since
September 27, 1998 Seller has not paid any bonus, fee, or other compensation to
any Person other than salaries, wages or bonuses paid or payable to Seller's
Employees in the ordinary course of business in accordance with current
compensation levels and practices as set out in Schedule 2.1(22) and Schedule
2.1(24).
(26) Customers and Suppliers . Schedule 2.1(26) lists the ten largest
customers and the ten largest suppliers of the Business (or such additional
customers or suppliers of the Business which were sufficient to constitute at
least 10% or more of total sales or purchases, as the case may be) for the 12-
month period ended September 26, 1999, and the aggregate amount which each
customer was invoiced and each supplier was paid during such period. To the
Best Knowledge of Seller, no such customer or supplier intends to cease doing
business with Seller or to change in any material manner any existing
arrangement with Seller Related to the Business for the purchase or supply of
any products or services or is considering doing so.
(27) Tax Withholding . Seller has timely withheld (and will timely
withhold), all Taxes required to be withheld from Employees' compensation, and
has remitted (and will remit) all amounts withheld and the employer's share of
all OASDI and Medicare Taxes to the appropriate authorities within the
prescribed times.
(28) Financial Statements . Seller has furnished Buyer with the audited
financial statements of Seller for each of the fiscal years ended September 29,
1996, September 28, 1997, and September 27, 1998, and preliminary unaudited
financial statements of Seller for the year ended September 26, 1999,
(collectively, the "Financial Statements"), as well as access to Seller's
accountants' work papers related thereto. Prior to the Closing, Seller will
furnish Buyer, as soon as available, with copies of the audited financial
statements of Seller for the year ended September 26, 1999 and any unaudited
financial statements of Seller for any interim periods, each of which shall when
provided be included in the Financial Statements. The balance sheets contained
in such Financial Statements fairly present in all material respects the
financial position of Seller as of their respective dates and the statements of
operations, retained earnings and cash flows contained in the Financial
Statements fairly present in all material respects the results of operations for
the periods indicated, in each case on a basis consistent with prior periods.
(29) Brokerage Fees . No Person will have any claim against Buyer for a
broker's commission, finder's fee or any like payment in respect of the purchase
and sale of the Purchased Assets or any other matters contemplated by this
Agreement, as a result of any agreement or understanding with Seller, Holdings
or Uniroyal.
(30) Operating and Maintenance History . Seller has made available to
Buyer all existing data regarding the operating and maintenance history of the
Purchased Assets.
(31) Compliance with Applicable Laws . Seller has operated and is
operating the Business in compliance with Applicable Laws in all material
respects.
(32) Warranty Claims . Copies of all written product warranties given by
Seller in the past five years, with effective dates of use, are attached as
Schedule 2.1(32). Product warranty claims against Seller have historically not
been material in amount, and no such claims will be made as to products
manufactured by Seller before the Effective Time in an aggregate amount
exceeding any warranty reserve on the Closing Report plus any amounts reimbursed
to Buyer under applicable insurance policies.
(33) Ordinary Course . Except as set out in Schedule 2.1(33), since
September 26, 1999 Seller has operated the Business only in the ordinary course
consistent with past practices.
(34) Seller's Subsidiaries . Seller has no Subsidiaries.
2.2 Representations and Warranties of Buyer . Buyer represents and warrants
to each of Seller, Holdings and Uniroyal as follows:
(1) Incorporation and Power . Buyer is a corporation duly organized and
validly existing under the General Corporation Law of Delaware. Buyer has all
necessary corporate power and authority to enter into this Agreement and the
Related Documents and to carry out its obligations under this Agreement and the
Related Documents.
(2) Due Authorization . The execution and delivery of this Agreement and the
Related Documents and the completion of the transactions contemplated by this
Agreement and the Related Documents have been duly authorized by all necessary
corporate action on the part of Buyer.
(3) Enforceability of Obligations . This Agreement constitutes, and when
executed as contemplated by this Agreement the Related Documents to be executed
by Buyer will constitute, valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms.
(4) Brokerage Fees . No Person will have any claim against Seller, Holdings
or Uniroyal for a broker's commission, finder's fee or any like payment in
respect of the purchase and sale of the Purchased Assets or any other matters
contemplated by this Agreement, as a result of any agreement or understanding
with Buyer.
2.3 Survival of Representations and Warranties .
(a) Notwithstanding the Closing and any inspection or inquiries made by or
on behalf of Buyer, the representations and warranties of Seller contained in
Section 2.1 or any other certificate or instrument delivered at Closing pursuant
to this Agreement shall survive the Closing and continue in full force and
effect for the benefit of Buyer for a period of two (2) years after the Closing
Date, after which time Seller shall be released from all obligations in respect
of such representations and warranties except with respect to any Claims with
respect to which a Notice of Claim has been given by Buyer before the expiration
of such period; provided that:
(i) The representations and warranties of Seller set out in Section 2.1
which relate to warranties on products manufactured by Seller shall
survive for a period ending not later than the expiration of any
applicable statutes of limitations applicable to actions for breach
of such warranties;
(ii) To the extent that the untruth of a representation or warranty
by Seller is occasioned by facts which also constitute the breach of
a representation, warranty or covenant made to Seller by a third
party (including but not limited to a Person from which Seller
acquired Purchased Assets), such representation or warranty by
Seller shall survive for a period not less than the remainder of the
period during which Seller has recourse against the third party for
the third party's breach; and
(iii) There shall be no time limit (other than as provided by
applicable statutes of limitations) on the representations and
warranties of Seller which relate to: the corporate status of
Seller, Holdings and Uniroyal; the due authorization of this
Agreement by Seller, Holdings, Uniroyal and their respective
shareholders; the enforceability of Seller's, Holdings' and
Uniroyal's obligations under this Agreement; tax matters;
environmental matters; pension matters; or the title of any Person
to any property (whether real or personal, tangible or intangible).
(b) Notwithstanding the Closing and any inspection or inquiries made by or
on behalf of Seller, the representations and warranties of Buyer contained in
Section 2.2 or any other certificate or instrument delivered pursuant to this
Agreement shall survive the Closing and continue in full force and effect for
the benefit of Seller for a period of two (2) years after the Closing Date,
after which time Buyer shall be released from all obligations in respect of such
representations and warranties except with respect to any Claims asserted by
Seller in writing (setting out in reasonable detail the nature of the Claim and
the appropriate amount thereof) before the expiration of such period; provided
that there shall be no time limit (other than as imposed by applicable statutes
of limitations) on the representations and warranties of Buyer set out in
Section 2.2 which relate to the corporate status of Buyer, the due authorization
of this Agreement by Buyer and the enforceability of Buyer's obligations under
this Agreement.
ARTICLE 3. INTERIM PERIOD
3.1 Due Diligence Investigations . Until the Closing, Buyer and its
representatives and advisers shall be permitted to make such investigations,
inspections, surveys or tests of the properties and assets of Seller, its
predecessor companies and its Affiliates and of their respective financial and
legal condition as Buyer deems necessary or desirable to familiarize itself with
such properties, assets and other matters. Without limiting the generality of
the foregoing, Buyer shall, during normal business hours, be permitted complete
access to all documents relating to information scheduled or required to be
disclosed under this Agreement, the Employees, premises, books, minute books,
contracts, documents, data, soil test reports, environmental reports, surveys,
inspection reports, records regarding suppliers, customers and regulators, any
other reports prepared by advisers and other records of Seller, its predecessor
companies and its Affiliates (and Seller shall provide photocopies to Buyer of
all such written information and documents as may be reasonably requested by
Buyer). Any such investigations, inspections, surveys or tests shall not,
however, affect or mitigate the representations and warranties of Seller under
this Agreement which shall continue in full force and effect as provided under
this Agreement unless Buyer has knowledge of a breach thereof and fails to
notify Seller.
3.2 Authorizations . Seller shall execute and deliver any authorizations
required to permit the investigations, inspections, surveys or tests described
in Section 3.1.
3.3 Confidentiality .
(a) Each Party shall hold in strictest confidence and not use in any manner,
other than as expressly contemplated by this Agreement, any Confidential
Information of the other Party; provided that a Party may disclose Confidential
Information to its Representatives who need to know such information for the
purpose of assisting such Party with respect to this Agreement, who have been
informed by such Party of the confidential nature of the Confidential
Information, and who either agree in writing to hold such Confidential
Information confidential or who are in an employment or other relationship with
such Party in which such obligation is implicit.
(b) Section 3.3(a) shall not apply to the disclosure of any Confidential
Information where such disclosure is required by Applicable Law. In that case,
the Party required to disclose, or whose Representative is required to disclose,
shall, as soon as possible in the circumstances, notify the other Party of the
requirement. Upon receiving such notification, the other Party may take any
reasonable action to challenge the requirement, and the affected Party shall, or
shall cause the applicable Representative to, at the expense of the other Party,
assist the other Party in taking such reasonable action.
(c) Following any termination of this Agreement, each Party shall, and shall
cause each of its Representatives to, promptly upon a request from the other
Party, return to the requesting Party all copies of any tangible items (other
than this Agreement), if any, which are or which contain Confidential
Information of the requesting Party, without retaining any copies, extracts or
other reproductions in whole or in part thereof; provided that if the Party so
obligated to return Confidential Information or its Representatives have
prepared summaries or analyses containing or concerning any Confidential
Information or made confidential notations on copies of Confidential
Information, then such Party may, instead of returning the summaries or analyses
or copies on which confidential notations have been made, destroy them (except
for an archival copy) and provide a certificate to that effect to the requesting
Party.
(d) The existing Secrecy Agreement between Buyer and Uniroyal dated October
19, 1999 shall remain in effect according to its terms until the Closing, and
thereafter with respect to information not included in the Purchased Assets and
the Business.
3.4 Public Announcements .
(a) The parties will discuss the timing of, and will give each other a
reasonable opportunity to review and comment on the substance of, any press
release or other public disclosure pertaining to this Agreement or the
transactions contemplated hereby, including those contemplated below. The
Parties will cooperate with each other to coordinate all disclosures to the
Employees and all press releases or written statements for general circulation.
(b) Except with the prior approval of the other Parties as to timing and
substance, which approval will not be unreasonably withheld or delayed, no Party
shall make any public announcement regarding this Agreement or the transactions
contemplated by this Agreement prior to the Effective Time except as provided in
this Section 3.4.
(c) Except as set forth below, the Parties agree not to disclose publicly
the terms of this Agreement prior to the Closing. The Parties agree that Seller
and Buyer will publicly disclose the existence of this Agreement by appropriate
press releases promptly after its execution, without disclosing its specific
terms, and
Seller and Buyer each agree to provide the other with a draft copy of the
proposed release for review and comment. It is also understood and agreed that
the Agreement will need to be filed with the Federal Trade Commission and the
Department of Justice in order to comply with the HSR Act.
(d) Uniroyal and Buyer will each give the other a reasonable opportunity to
review and comment on any description of the transaction in such Party's Form 10
- -K for fiscal 1999, and any reference to the non-filing Party therein shall be
subject to the approval of the non-filing Party, which approval shall not
unreasonably be withheld.
(e) If a Party deems it necessary, in the judgment of its legal counsel, to
disclose any of the terms of this Agreement before the Closing in order to
comply with its obligations as a public company or otherwise in order to comply
with Applicable Law, it will use its best efforts to promptly advise the other
Parties and to discuss with the other Parties the timing, nature and substance
of the disclosure.
(f) The Parties agree that the terms of this Agreement will be publicly
disclosed after Closing through their separate filings of Form 8-K with the
Securities and Exchange Commission.
3.5 Risk of Loss . The Purchased Assets shall be at the risk of Seller
until the Effective Time. Until the Effective Time, Seller shall maintain in
force all the policies of property damage insurance under which any of the
Purchased Assets is insured. If before the Effective Time any of the Purchased
Assets is lost, damaged or destroyed and the loss, damage or destruction
constitutes a Material Adverse Change, then:
(i) Buyer may terminate this Agreement in accordance with the provisions
of Section 4.3; or
(ii) Buyer may require Seller to assign to Buyer the proceeds of any
insurance payable as a result of the occurrence of such loss, damage
or destruction and to reduce the Purchase Price by the amount of the
replacement cost of the Purchased Assets which were lost, damaged or
destroyed less the amount of any proceeds of insurance payable as a
result of the occurrence.
3.6 Conduct of Business During Interim Period . During the Interim Period,
except as Buyer may otherwise consent, Seller shall:
(i) Carry on the Business in the normal course and only in the normal
course, except as otherwise contemplated by this Agreement;
(ii) Not make any material change in its customary operating methods,
or create or discharge Receivables or Liabilities or acquire or
dispose of Purchased Assets except in the ordinary course of the
Business;
(iii) Not acquire or dispose of any fixed assets having a value of
more than $50,000 (except as already planned pursuant to the
Polycast Consolidation), or make any commitment to do so, without
the approval of Buyer;
(iv) Maintain and keep the Purchased Assets in good repair (normal
wear and tear excepted), and maintain insurance with respect to the
Purchased Assets and business in accordance with past practice;
(v) Use reasonable efforts to preserve for Buyer the good will of
Seller's suppliers, customers, landlords, Employees and others
having a business relationship with the Business;
(vi) Notify Buyer immediately of any Material Adverse Change and of
any breach of any representation, warranty or covenant in this
Agreement, and supplement the Schedules to this Agreement promptly
as required to correct any errors therein or to reflect any changes
in the information required to be set out therein; and
(vii) Not commit any act or omission that would cause a breach of any
representation, warranty or covenant contained in this Agreement.
3.7 Exclusive Dealings . During the Interim Period, Seller, Holdings and
Uniroyal shall not take any action, directly or indirectly, to encourage,
initiate or engage in discussions or negotiations with, or provide any
information to any Person, other than Buyer and its designated and authorized
representatives, concerning any sale, transfer, assignment, license, merger or
similar transaction involving a change in ownership or control of Seller, the
Business or the Purchased Assets except as contemplated by this Agreement.
Seller shall notify Buyer promptly if any such discussions or negotiations are
sought or if any proposal for a sale, transfer, assignment, license, merger or
similar transaction affecting the Business is received or being considered.
3.8 Consents and Approvals . Seller shall use its best efforts to obtain
all Consents and Approvals before the Closing Date at Seller's expense; and
Buyer will cooperate with Seller in these efforts.
3.9 Regulatory Approvals . Buyer and Seller will promptly make all required
filings under the HSR Act. Seller shall cooperate with Buyer and render all
necessary assistance required by Buyer, at Buyer's expense, in connection with
any application, notification or filing required of Buyer or in connection with
Buyer's application for any Licenses and Permits which may be required in order
for Buyer to be able to carry on the Business after the Effective Time.
3.10 Updates to Information . Seller shall update on or before the
Closing, by written amendment or supplement, any of the Schedules referred to in
this Agreement and any other disclosures from Seller to Buyer, as soon as
reasonably possible after new or conflicting information comes to the attention
of Seller.
3.11 Viplex/Happel Consolidation . Seller shall advise Buyer fully as
to its plans to consolidate the operations of its Viplex and Happel Marine
operations, and shall not take any action to further consolidate such operations
without Buyer's consent, which shall not be withheld or delayed unreasonably in
light of Buyer's plans for the Business.
ARTICLE 4. CONDITIONS OF CLOSING
4.1 Conditions to Buyer's Obligation to Close . Buyer shall not be obliged
to complete the purchase and sale of the Purchased Assets pursuant to this
Agreement unless, at or before the Closing, each of the following conditions has
been satisfied, it being understood that the following conditions are included
for the exclusive benefit of Buyer and may be waived, in whole or in part, in
writing by Buyer at any time; and Seller agrees with Buyer to take all such
actions, steps and proceedings as are reasonably within its control as may be
necessary to ensure that the following conditions are satisfied at or before the
Closing:
(i) Representations and Warranties. The representations and warranties
of Seller in Section 2.1 shall be true and correct in all material
respects as of the time of execution hereof and at the Closing as
though made at the Effective Time.
(ii) Seller's Compliance. Seller shall have performed and complied
in all material respects with all of the terms and conditions in
this Agreement on its part to be performed or complied with at or
before Closing and shall have executed and delivered or caused to
have been executed and delivered to Buyer at the Closing all the
documents contemplated in Section 5.2 or elsewhere in this
Agreement.
(iii) Changes to Schedules. Any material supplements, amendments or
corrections to the Schedules hereto made after the date hereof shall
be reasonably acceptable to Buyer; provided that any such Schedule
shall be deemed acceptable unless Buyer notifies Seller of its
objection within ten (10) days after its receipt of such Schedule or
by the completion of the Closing, whichever occurs first.
(iv) Due Diligence Investigation. Buyer shall have conducted and
completed its investigation of Seller, the Business and the
Purchased Assets, and as a result of its investigations carried out
pursuant to Section 3.1:
(A) Buyer shall be satisfied with the results of any environmental
or safety audit of the Business or its properties and with any
survey of the Leased Premises commissioned by Buyer, and in
particular (without limitation) the parties shall have agreed to
Buyer's reasonable satisfaction upon procedures for the further
investigation, and/or remediation, and/or allocation of
remediation costs, related to any risks identified in any such
audit or survey; and
(B) Buyer shall be satisfied with the results of its other due
diligence investigations, provided that Buyer will promptly, and
in any event within ten (10) days after discovery, advise Seller
of any due diligence results to which Buyer objects or with
which Buyer is dissatisfied, and shall give Seller a reasonable
opportunity to respond to such objection or attempt to remedy
the cause of such dissatisfaction.
(v) Material Adverse Change. During the Interim Period, there shall
have been no Material Adverse Change.
(vi) No Litigation. There shall be no litigation or proceedings
pending or threatened against either of the Parties or against any
of their respective Affiliates or any of their respective directors
or officers:
(A) For the purpose of enjoining, preventing or restraining the
completion of the transactions contemplated hereby or otherwise
claiming that such completion is improper, and which in the
written opinion of outside legal counsel for Buyer would more
likely than not survive a motion to dismiss; or
(B) Which the Chief Executive Officer of Buyer certifies, based on
his information and belief, would (if successful) materially and
adversely affect the right of Buyer to acquire or retain the
Purchased Assets or to continue the operations of the Business
after Closing, or would, in the judgment of such Chief Executive
Officer, make the completion of the transactions contemplated by
this Agreement inadvisable.
(vii) Consents and Approvals. All the material Consents and Approvals
shall have been obtained. The waiting period (and any extension
thereof) under the HSR Act applicable to the transactions
contemplated hereby shall have expired or been terminated.
(viii) Permits. Buyer shall have no reason to believe that Buyer will
not receive all necessary building, environmental and other permits
required to operate the Business in compliance with all Applicable
Law effective as of the Effective Time in all material respects.
(ix) Title Insurance. Commitments for owners' policies of title
insurance with respect to the Real Property shall have been issued
to Buyer, on an ALTA standard form with only such exceptions as are
either Permitted Liens or are otherwise reasonably satisfactory to
Buyer, in such amounts as shall be reasonably determined by Buyer
not to exceed the fair market value of the respective properties.
(x) Collective Bargaining Agreements. Each union party to a collective
bargaining agreement described in Schedule 2.1(23) shall have agreed
to Buyer's assumption of the agreement without change except as to
employee benefit plans, which will be those offered by Buyer. The
collective bargaining agreement with employees at Seller's Stamford,
Connecticut facility shall have been extended to April, 2001 on
substantially the same terms as in the current agreement set out in
Schedule 2.1(23) except for a $.65 per hour pay increase and
prescription drug card coverage with a $750 individual/$1,500 family
maximum.
(xi) No Financing Leases. All Financing Leases shall be paid up by
Seller and title to the subject property shall have been transferred
to Seller or shall be transferable directly to Buyer free and clear
of all Liens subject only to the lessor's receipt of payment in a
stated amount as set out in a payoff letter;
(xii) No Liens. All indebtedness of the Business to Seller's
commercial lenders shall have been paid off, and the Purchased
Assets shall be free and clear of all Liens other than Permitted
Liens on Real Property.
4.2 Conditions to Seller's Obligation to Close . Seller shall not be
obliged to complete the transactions contemplated by this Agreement unless, at
or before the Closing, each of the following conditions has been satisfied, it
being understood that the following conditions are included for the exclusive
benefit of Seller, and may be waived, in whole or in part, in writing by Seller
at any time; and Buyer agrees with Seller to take all such actions, steps and
proceedings within Buyer's reasonable control as may be necessary to ensure that
the following conditions are satisfied at or before the Closing:
(i) Representations and Warranties. The representations and warranties
of Buyer in Section 2.2 shall be true and correct in all material
respects as of the time of execution hereof and at the Closing as
though made at the Effective Time.
(ii) Buyer's Compliance. Buyer shall have performed and complied in
all material respects with all of the terms and conditions in this
Agreement on its part to be performed or complied with at or before
the Closing and shall have executed and delivered or caused to have
been executed and delivered to Seller at the Closing all the
documents contemplated in Section 5.3 or elsewhere in this
Agreement.
(iii) No Litigation. There shall be no litigation or proceedings
pending or threatened against either of the Parties or against any
of their respective Affiliates or any of their respective directors
or officers for the purpose of enjoining, preventing or restraining
the completion of the transactions contemplated hereby or otherwise
claiming that such completion is improper, and which in the written
opinion of outside legal counsel for Seller would more likely than
not survive a motion to dismiss.
(iv) Consents and Approvals. All the material Consents and Approvals
shall have been obtained. The waiting period (and any extension
thereof) under the HSR Act applicable to the transactions
contemplated hereby shall have expired or been terminated.
4.3 Effect of Failure to Close . If any condition in Section 4.1 or Section
4.2 shall not have been fulfilled at or before the Closing, or if the Closing
has not occurred by March 31, 2000, then the Party entitled to the benefit of
such condition may, in its sole discretion, without limiting any rights or
remedies available to Seller at law or in equity, either:
(i) Terminate this Agreement by notice to the other Party, subject to
compliance with Section 8.4, in which event the Parties shall be
released from all obligations under this Agreement; or
(ii) Waive compliance with any such condition or extend or defer the
Closing in order to permit compliance, without prejudice to its
right of termination in the event of non-fulfillment of any other
condition;
provided that a Party's completion of the Closing shall constitute a waiver of
all unsatisfied conditions to such Party's obligation to close.
ARTICLE 5. CLOSING ARRANGEMENTS
5.1 Closing . The Closing shall take place at 9:00 a.m. local time on
February 15, 2000 or such earlier or later date as may be agreed upon in writing
by Seller and Buyer (the "Closing Date"), at Seller's executive offices in
Sarasota, Florida or such other place as may be agreed orally or in writing by
Seller and Buyer. If Seller or Buyer notifies the other Parties that despite
its diligent efforts it will be unable to close on the Closing Date as then
fixed, specifying the reason therefor, then the Closing Date will be extended
for one week or such lesser period as is specified in the notice, subject to
possible termination of this Agreement as set out in Section 4.3.
5.2 Seller's Closing Deliveries . At the Closing, Seller shall deliver or
cause to be delivered to Buyer the following documents:
(i) A Bill of Sale substantially in the form of Exhibit A and an
Assignment and Assumption Agreement substantially in the form of
Exhibit B, duly executed by Seller, together with such other bills
of sale or instruments of conveyance, assignment or transfer as may
be reasonably required by Buyer;
(ii) A certificate of the Chairman and Chief Executive Officer of
Seller or the Vice Chairman of Seller dated as of the Closing Date
as to compliance with Seller's representations, warranties and
covenants, substantially in the form of Exhibit C;
(iii) A certificate of the Secretary or other authorized officer of
Seller as to compliance with corporate requirements, substantially
in the form of Exhibit D;
(iv) An opinion of Seller's Counsel, substantially in the form of
Exhibit E;
(v) Copies of all written Consents and Approvals to the transactions
contemplated by this Agreement, in form and substance reasonably
satisfactory to Buyer;
(vi) Payoff letters, releases or other evidence reasonably
satisfactory to Buyer as to the release (or agreement to release
upon receipt of payment) of all Liens against the Purchased Assets
which are to be released at or before the Closing; and
(vii) Such other deeds of conveyance, bills of sale, assurances,
transfers, assignments, consents, agreements, documents and
instruments as are required to evidence satisfaction of the
conditions set out in Section 4.1 or as may be reasonably required
by Buyer to complete the transactions provided for in this
Agreement.
5.3 Buyer's Closing Deliveries . At the Closing, Buyer shall deliver or
cause to be delivered to Seller the following documents and payments:
(i) An Assignment and Assumption Agreement substantially in the form of
Exhibit B, duly executed by Buyer;
(ii) A certificate of the President or Executive Vice President of
Buyer dated as of the Closing Date as to compliance with Buyer's
representations, warranties and covenants, substantially in the form
of Exhibit F;
(iii) A certificate of the Secretary or other authorized officer of
Buyer as to compliance with corporate requirements, substantially in
the form of Exhibit G;
(iv) An opinion of Buyer's Counsel, substantially in the form of
Exhibit H;
(v) The payments provided in Section 1.4 to be made at Closing; and
(vi) Such other assurances, agreements, documents and instruments as
are required to evidence satisfaction of the conditions set out in
Section 4.2 or as may be reasonably required by Seller to complete
the transactions provided for in this Agreement.
5.4 Possession . On the Closing Date, Seller shall deliver or cause to be
delivered to Buyer possession of the Purchased Assets.
5.5 Non-Transferable and Non-Assignable Assets . To the extent that any of
the Purchased Assets to be transferred to Buyer, or any claim, right or benefit
arising under or resulting from such Purchased Assets (a "Right") is not capable
of being transferred without the approval, consent or waiver of any third
Person, or if the transfer of a Right would constitute a breach of any
obligation under, or a violation of, any Assigned Contract or Applicable Law
unless the approval, consent or waiver of such third Person is obtained, then,
except as expressly otherwise provided in this Agreement and without limiting
the rights and remedies of Buyer contained elsewhere in this Agreement, this
Agreement shall not constitute an agreement to transfer such Right unless and
until such approval, consent or waiver has been obtained. Until all such Rights
are transferred to Buyer, Seller shall:
(i) Maintain its existence and hold the Rights in trust for Buyer;
(ii) Comply with the terms and provisions of the Rights as agent for
Buyer at Buyer's cost and for Buyer's benefit;
(iii) Cooperate with Buyer in any reasonable and lawful arrangements
designed to provide the benefits of such Rights to Buyer; and
(iv) Enforce, at the request of Buyer and at the expense and for the
account of Buyer, any rights of Seller arising from such Rights
against any third Person, including the right to elect to terminate
any such rights in accordance with the terms of such rights upon the
written direction of Buyer.
In order that the full value of the Rights may be realized for the benefit of
Buyer, Seller shall, at the request and expense and under the direction of
Buyer, in the name of Seller or otherwise as Buyer may specify, take all such
action and do or cause to be done all such things as are, in the opinion of
Buyer, reasonably necessary in order that the obligations of Seller under such
Rights may be performed in such manner that the value of such Rights is
preserved and inures to the benefit of Buyer, and that any moneys due and
payable and to become due and payable to Buyer in and under the Rights are
received by Buyer. Seller shall promptly pay to Buyer all moneys collected by
or paid to Seller in respect of every such Right. Buyer shall indemnify and
hold Seller harmless from and against any claim or liability under or in respect
of such Rights arising because of any action of Seller taken pursuant to this
Section 5.5.
ARTICLE 6. INDEMNIFICATION
6.1 Indemnity by Seller . Seller shall indemnify and hold harmless Buyer,
its directors, officers, employees, agents, representatives and Buyer's
Affiliates and their respective directors, officers and employees, in respect of
any claim, demand, action, cause of action, damage, loss, cost, liability or
expense including reasonable attorneys' fees (hereinafter referred to as a
"Claim") which may be made or brought against an Indemnified Party or which it
may suffer or incur directly or indirectly as a result of, in respect of or
arising out of:
(i) Any material incorrectness in or breach of any representation or
warranty of Seller contained in this Agreement or in any other
agreement, certificate or instrument executed and delivered pursuant
to this Agreement, unless Buyer was aware of the incorrectness or
breach before completion of the Closing; or
(ii) Any material breach or non-fulfillment of any covenant or
agreement on the part of Seller under this Agreement or under any
other agreement, certificate or instrument executed and delivered
pursuant to this Agreement, unless Buyer was aware of the breach or
non-fulfillment before the completion of the Closing; or
(iii) Any liability not described in Section 6.1(i) or Section 6.1(ii)
arising out of Seller's conduct of the Business or ownership of the
Purchased Assets prior to the Effective Time, other than an Assumed
Liability.
6.2 Indemnity by Buyer . Buyer shall indemnify and hold harmless Seller,
its directors, officers, employees, agents, representatives and Seller's
Affiliates and their respective directors, officers and employees, in respect of
any Claim which may be made or brought against an Indemnified Party or which it
may suffer or incur directly or indirectly as a result of in respect of or
arising out of:
(i) Any material incorrectness in or breach of any representation or
warranty of Buyer contained in this Agreement or in any other
agreement, certificate or instrument executed and delivered pursuant
to this Agreement, unless Seller was aware of the incorrectness or
breach before completion of the Closing; or
(ii) Any material breach or non-fulfillment of any covenant or
agreement on the part of Buyer under this Agreement or under any
other agreement, certificate or instrument executed and delivered
pursuant to this Agreement, unless Seller was aware of the breach or
non-fulfillment before the completion of the Closing; or
(iii) Any Assumed Liability, and any liability not described in
Section 6.2(i) or Section 6.2(ii) arising out of Buyer's conduct of
the Business or ownership of the Purchased Assets after the
Effective Time.
6.3 Limitations .
(a) An Indemnifying Party shall have no obligation for indemnification
pursuant to Section 6.1(i) or Section 6.2(i) unless and until the accumulated
aggregate amount of Claims against the Indemnifying Party exceeds a threshold of
$100,000, but if such threshold is met all Claims shall be recoverable; provided
that the $100,000 threshold shall not apply to
(i) Any individual Claim in excess of $25,000, or
(ii) Any Claim to the extent that Seller has a right of indemnity for
such Claim against a third party which is not subject to a
threshold, or
(iv) Any Claim by Buyer arising from a breach of Sections 2.1(1),
2.1(2), 2.1(3), 2.1(4) or 2.1(29), or
(v) Any Claim by Seller arising from a breach of Section 2.2,
all of which Claims shall nevertheless count toward the $100,000 threshold.
(b) Seller shall have no obligation to indemnify Buyer from and against a
breach by Seller if and to the extent that such breach resulted in an adjustment
to the Purchase Price as provided for in Section 1.5 or Section 1.6, or, except
as otherwise set out in Section 7.9, for any amount in excess of $25,000,000.
6.4 Notice of Claim . If an Indemnified Party becomes aware of a Claim in
respect of which indemnification is provided for pursuant to either of Section
6.1 or 6.2, as the case may be, the Indemnified Party shall promptly give
written notice of the Claim (a "Notice of Claim") to the Indemnifying Party.
Such notice shall specify whether the Claim arises as a result of a claim by a
Person against the Indemnified Party (a "Third Party Claim") or whether the
Claim does not so arise (a "Direct Claim"), and shall also specify in reasonable
detail (to the extent that the information is available):
(i) The nature of and claimed factual basis for the Claim; and
(ii) The amount or approximate amount of the Claim, if and to the
extent known.
If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive a Notice of Claim in time effectively to contest the determination of
any liability susceptible of being contested, then the liability of the
Indemnifying Party to the Indemnified Party under this Article 6 shall be
reduced by the amount of any losses incurred by the Indemnifying Party resulting
from the Indemnified Party's failure to give such Notice of Claim on a timely
basis.
6.5 Direct Claims . In the case of a Direct Claim, the Indemnifying Party
shall have 30 days from receipt of the Notice of Claim within which to make such
investigation of the Claim as the Indemnifying Party considers necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both Parties
agree at or before the expiration of such 30-day period (or any mutually agreed
upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in such manner as the Parties may agree or shall be
determined by a court of competent jurisdiction.
6.6 Third Party Claims .
(a) In the case of a Third Party Claim, the Indemnifying Party shall have
the right, at its expense, to participate in or assume control of the
negotiation, settlement or defense of the Claim. The Indemnified Party shall
have the right to participate in the negotiation, settlement or defense of such
Third Party Claim and to retain counsel to act on its behalf, provided that the
fees and disbursements of such counsel shall be paid by the Indemnified Party
unless the Indemnifying Party consents to the retention of such counsel at its
expense or unless the named parties to any action or proceeding include both the
Indemnifying Party and the Indemnified Party and a representation of both the
Indemnifying Party and the Indemnified Party by the same counsel would be
inappropriate due to a conflict of interest between them. The Indemnified Party
shall co-operate with the Indemnifying Party so as to permit the Indemnifying
Party to conduct such negotiation, settlement and defense and for this purpose
shall preserve all relevant documents in relation to the Third Party Claim,
allow the Indemnifying Party access on reasonable notice to inspect and take
copies of all such documents and require its personnel to provide such
statements as the Indemnifying Party may reasonably require and to attend and
give evidence at any trial or hearing in respect of the Third Party Claim. If,
having elected to assume control of the negotiation, settlement or defense of
the Third Party Claim, the Indemnifying Party thereafter fails to conduct such
negotiation, settlement or defense with reasonable diligence, then the
Indemnified Party shall be entitled, after ten (10) days' notice to the
Indemnifying Party, to assume such control and the Indemnifying Party shall be
bound by the results obtained by the Indemnified Party with respect to such
Third Party Claim.
(b) If the Indemnifying Party fails to assume control of the defense of any
Third Party Claim, the Indemnified Party shall have the exclusive right to
contest, settle or pay the amount claimed. Whether or not the Indemnifying
Party assumes control of the negotiation, settlement or defense of any Third
Party Claim, the Indemnifying Party shall not settle any Third Party Claim
without the written consent of the Indemnified Party, which consent shall not be
unreasonably withheld or delayed; provided, however, that the liability of the
Indemnifying Party shall be limited to the proposed settlement amount if any
such consent is not obtained for any reason within a reasonable time after the
request therefor.
6.7 Interest on Claims . The amount of any Claim submitted under Section
6.1 or Section 6.2 as damages or by way of indemnification shall bear interest
from and including the date any Indemnified Party is required to make payment in
respect thereof at the Prime Rate calculated from and including such date to but
excluding the date reimbursement of such Claim by the Indemnifying Party is
made, and the amount of such interest shall be deemed to be part of such Claim.
6.8 Calculation of Payment . The amount of indemnification against any
Claim submitted under Section 6.1 or 6.2 shall be determined after giving effect
to any insurance recoveries, Tax savings and recoveries from Third Parties,
shall be increased by an amount equal to any Taxes payable in respect of such
amount., and shall also be adjusted if and to the extent applicable for any net
income tax impact on the Indemnified Party of both paying the Claim and
receiving the indemnity payment.
ARTICLE 7. OTHER MATTERS
7.1 Settlement by Seller . On or before the Closing Date, Seller shall pay
or otherwise settle with each of its Employees and independent sales
representatives all salaries, commissions, bonuses, and other amounts that may
become payable to or receivable by such Employees for all periods before the
Effective Time. Buyer will not assume any liability for salaries, wages,
Employee Plan contributions or benefits or other cash payment to or for the
benefit of Employees or independent sales representatives on account of service
before the Closing, except that Buyer will assume Seller's liability incurred in
the ordinary course of business before the Effective Time for unreimbursed
business expenses or for accrued vacation or pay in lieu of vacation, but only
with respect to Transferred Employees (which matters shall be fully accrued as
Liabilities on Seller's balance sheet for purposes of calculating Net Working
Capital).
7.2 Excluded Assets . Unless provided otherwise herein, Seller shall at its
own expense remove all tangible assets which are Excluded Assets or which are
subject to Excluded Contracts, if any, from the premises of the Business within
ten (10) days following the Closing Date, in such a manner as not to disrupt
Buyer's conduct of the Business.
7.3 Payment of Excluded Liabilities . Seller shall pay in full in a timely
manner all Liabilities of Seller other than the Assumed Liabilities which are
not otherwise paid as set out herein.
7.4 Covenant Not to Compete . Each of Seller, Holdings and Uniroyal hereby
agrees that for a period of five (5) years after the Closing Date, it will not
directly or indirectly, as a partner, joint venturer, employer, consultant,
shareholder, principal, manager, agent or otherwise, own, manage, operate, join,
control or participate in the ownership, management, operation or control of any
business, whether in corporate, limited liability company or partnership form or
otherwise, which in any way engages in North America in
(i) The business of extruding plastic sheets, or casting acrylic sheets,
blocks, rods or tubes, or stretching, finishing, coating or
laminating any plastic sheet or acrylic products, or any other
business carried on by Seller at the date hereof or at the Closing
Date; or
(ii) The business of extruding plastic sheets or profile products, or
injection molding plastic products, or compounding plastic resins,
color concentrates or other additives, or any other business carried
on by Buyer at the date hereof;
provided, however, that nothing herein shall be construed to prevent Seller,
Holdings and Uniroyal from holding collectively not more than 5% of the shares
in any company whose shares are quoted on any stock exchange, even though that
company carries on activities which would violate one or more of the foregoing
provisions if carried on by Seller, Holdings or Uniroyal. Seller, holdings and
Uniroyal acknowledge and agree that in view of the nature of the Business and
the Purchased Assets and the business objectives of Buyer in acquiring them and
the consideration paid to Seller therefor, the scope of business, territorial
and time limitations contained in this Section 7.4 are reasonable and properly
required for the adequate protection of Buyer. The Parties intend for the
covenants of this Section 7.4 to be enforceable to the maximum extent permitted
by law but to be severable, and if any reviewing court deems any of such
covenants to be unenforceable or invalid, such determination shall not affect
the enforceability of any other covenants herein; further, in the event of any
such determination the Parties authorize such court to reform the unenforceable
or invalid provisions and to impose such restrictions as reformed, as it deems
reasonable.
7.5 Further Assurances; Parent Company Guarantee . Each Party shall
promptly do, execute, deliver or cause to be done, executed and delivered all
further acts, documents and things in connection with this Agreement that the
other Party may reasonably require, for the purposes of giving effect to this
Agreement. Holdings and Uniroyal agree to use their reasonable best efforts,
both individually and as shareholders, to cause Seller to perform its covenants
hereunder, and jointly and severally guarantee the full and timely performance
of this Agreement by their respective subsidiaries.
7.6 Bulk Sales Legislation . Seller and Buyer hereby waive compliance with
any applicable bulk sales legislation.
7.7 Hiring of Employees .
(a) Buyer shall offer employment to all Employees of Seller covered under
any of the collective bargaining agreements listed in Schedule 2.1(23)
('Bargaining Employees") and currently and actively employed in the Business,
effective as of the Effective Time. Buyer may, but need not, offer employment
to any or all Employees of Seller other than Bargaining Employees and to any or
all employees of Holdings or Uniroyal a majority of whose working time (as set
out on Schedule 2.1(22)) is devoted to services for Seller, in each case on such
terms as Buyer deems acceptable, subject to the provisions of this Agreement.
Seller shall use its best efforts to assist Buyer in securing the employment of
those Employees whom Buyer wishes to hire, subject to the requirements of this
Section 7.7. Transferred Employees shall be deemed to have resigned their
employment with Seller as of the Effective Date.
(b) Buyer will advise Seller as promptly as practicable of the Employees it
does not intend to hire.
(c) Except as otherwise required by a collective bargaining agreement, a
Transferred Employee who is on a leave of absence from Seller on the Effective
Date shall not be eligible to participate in Buyer's medical plan until such
Transferred Employee's leave of absence terminates and he or she commences
employment duties for Buyer, a Transferred Employee who is hospitalized or
otherwise institutionalized for medical reasons on the Effective Date shall not
be eligible to participate in Buyer's medical plan until such Transferred
Employee is discharged from care and he or she commences employment duties for
Buyer, and a dependent of a Transferred Employee who is hospitalized or
otherwise institutionalized for medical reasons on the Effective Date shall not
be eligible to participate in Buyer's medical plan until such dependent is
discharged from care. Buyer shall provide all welfare benefits incurred after
the Effective Time for all Transferred Employees who are Bargaining Employees
according to the applicable collective bargaining agreement. Seller shall be
responsible for all welfare benefits for Transferred Employees that are incurred
prior to the Effective Time.
(d) Buyer's employee benefit plans shall provide, for eligibility and
vesting purposes, that the employment of the Transferred Employees with Seller
shall be credited as employment with Buyer (but employment with Seller's
predecessors shall be credited only if and to the extent Seller has credited
such employment for Seller's own benefit plans).
(e) If Seller pays severance or termination payments or payments in lieu of
accrued vacation to a Transferred Employee, Buyer shall not be required to carry
over the vacation accrual for such Transferred Employee. Transferred Employees
who are disabled at the Effective Time shall continue to receive disability
benefits from Seller or pursuant to a Seller disability plan until such employee
recovers from disability or is re-employed by Buyer.
(f) Except as otherwise provided in this Section 7.7, Buyer shall have no
liability to employees of Seller or Transferred Employees for events or
occurrences which take place or arise prior to Closing or for:
(i) Any obligations and claims under the Employee Plans;
(ii) Any failure to withhold or remit Taxes;
(iii) Any claims for worker's compensation benefits by employees or
former employees;
(iv) Any claims against Seller for discriminatory employment
practices; or
(v) Except as provided in paragraph 7.7(h), any obligations Seller has
to its Employees or their dependents under sections 601 through 609
of Title I of ERISA ("COBRA"), including such obligations relating
to Transferred Employees and their dependents.
(g) Seller and Buyer will work together to enable Transferred Employees to
transfer appropriate portions of their accounts under applicable defined
contribution Benefit Plans to corresponding defined contribution benefit plans
of Buyer after the Closing.
(h) All benefits to which any Employee or his or her qualifying
beneficiaries may be entitled under COBRA for qualifying events occurring prior
to the Effective Time shall be provided for Transferred Employees and their
qualifying beneficiaries by Buyer and for all other Employees and their
qualifying beneficiaries by Seller.
(i) Except to the extent of the Assumed Liabilities, nothing in this
Agreement shall cause Buyer to have any liability under or responsibility for or
with respect to any Employee Plan.
(j) Seller, Holdings or Uniroyal will not solicit for employment any
Transferred Employee for two (2) years after the Effective Date without Buyer's
prior written consent; provided that they may solicit for employment any
Transferred Employee whose employment is terminated by Buyer or who is
responding to a general advertisement not targeted to the Transferred Employee.
For purposes of this Section 7.7(i), a Transferred Employee's employment by
Buyer shall be deemed to have been terminated by Buyer if the Transferred
Employee's continued employment is made subject to relocation of his or her
place of employment by more than 50 miles or subject to a material reduction in
compensation or benefits.
7.8 Data Processing . Seller agrees to provide Buyer with access to and the
use of Seller's existing data processing and payroll processing facilities,
equipment, software and personnel during a post-Closing transition period of up
to two years, at a cost which will not exceed Seller's incremental out-of-pocket
cost of providing such services. The manner and operational procedures for
implementing this covenant will be determined by the Parties in a timely manner
from time to time as required.
7.9 FTC Investigation .
(a) Seller will use its best efforts to obtain FTC approval of the proposed
sale to American Technical Plastics of Seller's colored cell-cast acrylic rod
and tube business, carried on by Seller at the Stirling Facility, and to
consummate the sale prior to the Closing. In such event, the assets of that
business will be Excluded Assets.
(b) In addition (and whether or not the above sale is consummated), Seller
will also endeavor to resolve the investigation currently pending at the FTC
regarding the Townsend/Glasflex Business in light of the sale to American
Technical Plastics and by attempting to convince FTC staff that (i) new
competitors and the reduced market share of Townsend/Glasflex obviate the FTC's
concerns, and (ii) there are other products that compete effectively with clear
cell-cast acrylic tubes.
(c) If by the Closing Date the FTC has not approved the sale described in
Section 7.9(a) and the matter described in Section 7.9(b) has not been resolved,
then following the Closing, to the extent required in order to obtain resolution
of such FTC investigation Buyer agrees to either divest a portion of the
Townsend/Glasflex Business in coordination with the FTC or sell the small tubes
portion of the Townsend/Glasflex Business to Seller (which may then operate such
business at the Stirling Facility notwithstanding Section 7.4).
(d) Any portion of the rod & tube business not acquired by Buyer or
subsequently divested by Buyer to resolve the FTC investigation will result in a
Purchase Price reduction, as follows:
(i) (Annual sales divested times gross margin) less direct costs of sales =
operating income contribution; and
(ii) Operating income contribution times 7.0 = value of business divested
or not acquired; and
(iii) Value of business divested or not acquired less net proceeds to
Buyer of divestiture (if any) = Purchase Price reduction.
7.10 Environmental Investigation and Remediation .
(a) Stamford Property.
(i) Before the Closing, Seller will do further "Phase II"-type
investigations (core and groundwater samples, etc.) at Seller's
Stamford, Connecticut Real Property and Improvements thereon (the
"Stamford Property") reasonably satisfactory to Buyer, for the purpose
of defining the extent and magnitude of potential environmental
contamination resulting from all documented historical site events (i.e.
including not just oil migration but on-site spills, leakages, fires,
etc.). It is understood that additional issues may emerge as a result
of the investigation which need to be addressed.
(ii) Seller will remediate at its expense all identified contamination at
the Stamford Property, except as agreed to by the parties, and will do
what is required for ECAF approval of title transfer.
(iii) If remediation is not completed by the Closing (as the Parties agree
is likely), then Buyer will lease the Stamford Property from Seller, on
a triple-net basis at nominal rent, for 25 years from the Effective
Date, with an option to purchase the property at a nominal price when
remediation is completed (during the term of the lease).
(iv) Seller shall indemnify and hold harmless Buyer, its directors,
officers, employees, agents, representatives and Buyer's affiliates and
their respective directors, officers and employees in respect of any
Claim which may be made or brought against an Indemnified Party or which
it may suffer or incur directly or indirectly as a result of in respect
of or arising out of environmental contamination to the Stamford
Property arising prior to the Closing. This indemnity will not be
subject to any basket, cap or time limitation.
(b) Hackensack Property.
(i) Before the Closing, Seller will do further "Phase II"-type investigation
(core and groundwater samples, etc.) at Seller's Hackensack, New Jersey
Real Property and Improvements thereon (the "Hackensack Property")
reasonably satisfactory to Buyer, for the purpose of defining the extent
and magnitude of potential environmental contamination resulting from
all documented historical site events (i.e. including not just MMA
spills but UST removal, leakages, fires, etc.) It is understood that
additional issues may emerge as a result of the investigation which need
to be addressed.
(ii) Seller will remediate at its expense all identified contamination at
the Hackensack Property, except as agreed to by the parties, and will do
what is required for ISRA approval of title transfer.
(iii) If remediation is not completed by the Closing (as the Parties agree
is likely), then Buyer will lease the Hackensack Property from Seller,
on a triple-net basis at nominal rent, for 25 years from the Effective
Date, with an option to purchase the property at a nominal price when
remediation is completed (during the term of the lease).
(iv) Seller shall indemnify and hold harmless Buyer, its directors,
officers, employees, agents, representatives and Buyer's affiliates and
their respective directors, officers and employees in respect of any
Claim which may be made or brought against an Indemnified Party or which
it may suffer or incur directly or indirectly as a result of in respect
of or arising out of environmental contamination to the Hackensack
Property arising prior to the Closing. This indemnity will not be
subject to any basket, cap or time limitation.
(c) Warsaw Property.
(i) Before the Closing, Seller will have the pond/retention basin on
Seller's Warsaw, Indiana Real Property (the "Warsaw Property") sampled,
and investigate the known UST or underground spill reservoir, for the
purpose of defining the extent and magnitude of any potential soil or
groundwater contamination. If any contamination is found, Seller will
clean up the affected areas. Buyer will have reasonable input on the
extent of sampling, the reported results, and the cleanup plans.
(ii) Seller shall indemnify and hold harmless Buyer, its directors,
officers, employees, agents, representatives and Buyer's affiliates and
their respective directors, officers and employees in respect of any
Claim which may be made or brought against an Indemnified Party or which
it may suffer or incur directly or indirectly as a result of in respect
of or arising out of environmental contamination to the Warsaw Property
arising prior to the Closing. This indemnity will not be subject to any
basket, cap or time limitation.
(d) Rome Property.
(i) Before the Closing, Seller will have Seller's Rome, Georgia Real
Property (the "Rome Property") sampled, for the purpose of defining the
extent and magnitude of any potential soil or groundwater contamination
that may exist from the disposal of waste oil on the site. If any
contamination is found, Seller will clean up the affected areas. Buyer
will have reasonable input on the extent of sampling, the reported
results, and the cleanup plans.
(ii) Seller shall indemnify and hold harmless Buyer, its directors,
officers, employees, agents, representatives and Buyer's affiliates and
their respective directors, officers and employees in respect of any
Claim which may be made or brought against an Indemnified Party or which
it may suffer or incur directly or indirectly as a result of in respect
of or arising out of environmental contamination to the Rome Property
arising prior to the Closing. This indemnity will not be subject to any
basket, cap or time limitation.
(e) Pleasant Hill Property.
(i) Seller will use reasonable best efforts to cause the lessor of the
Leased Premises in Pleasant Hill, Iowa (the "Pleasant Hill Site") to
extend the lease of the Pleasant Hill Site to 2025 at the same rent and
with the same purchase option.
(ii) If the lease is not extended, or if ongoing remediation at the
Pleasant Hill Site substantially impairs Buyer's business operations at
the Pleasant Hill Site, Seller will reimburse Buyer for the costs of
relocating the Pleasant Hill operations, up to $750,000.
(iii) Seller shall indemnify and hold harmless Buyer, its directors,
officers, employees, agents, representatives and Buyer's affiliates and
their respective directors, officers and employees in respect of any
Claim which may be made or brought against an Indemnified Party or which
it may suffer or incur directly or indirectly as a result of in respect
of or arising out of environmental contamination to the Pleasant Hill
Site arising prior to the Closing. This indemnity will not be subject
to any basket, cap or time limitation.
ARTICLE 8. MISCELLANEOUS PROVISIONS
8.1 Interpretation .
(a) In this Agreement, capitalized terms shall have the meanings set out in
Appendix B hereto, unless the context requires otherwise.
(b) The division of this Agreement into Articles and Sections, the insertion
of headings, and the provision of any table of contents are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
(c) Unless the context requires otherwise, words importing the singular
include the plural and vice versa and words importing gender include
all genders.
(d) If any payment is required to be made or other action is required to be
taken pursuant to this Agreement on a day which is not a Business Day,
then such payment or action shall be made or taken on the next Business
Day, but interest, if applicable, shall continue to accrue until the
date of payment.
(e) Unless the context requires otherwise, references in this Agreement to
Sections, Exhibits or Schedules are to Sections, Exhibits or Schedules
of this Agreement. The Exhibits and Schedules to this Agreement are
listed following the signature page hereof and incorporated herein
by reference.
8.2 Expenses . Each Party shall be responsible for its own legal and other
expenses incurred in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the transactions contemplated by
this Agreement and for the payment of any broker's commission, finder's fee or
like payment payable by it in respect of the purchase and sale of the Purchased
Assets pursuant to this Agreement. The costs of title reports, title insurance,
title company closing services, transfer excise taxes, and similar expenses
shall be allocated equally between Buyer and Seller.
8.3 Notices . Any notice or other communication required or permitted to be
given or made under this Agreement shall be in writing and shall be delivered
personally or sent by prepaid overnight courier service, by certified mail,
return receipt requested, or by fax, in each case to the applicable address set
out below:
If to Seller, Holdings
or Uniroyal, to: Uniroyal Technology Corporation
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236-5568
Attention: Howard R. Curd, Chairman of the
Board and Chief Executive Officer
Fax: (941) 361-2214
with a copy to: Uniroyal Technology Corporation
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236-5568
Attention: Oliver J. Janney, Vice President,
General Counsel and Secretary
Fax: (941) 361-2214
If to Buyer, to: Spartech Corporation
120 South Central Avenue, Suite 1700
Clayton, Missouri 63105
Attention: Bradley B. Buechler, Chairman of the
Board, President and Chief Executive Officer
Fax: (314) 721-1447
with a copy to: Spartech Corporation
120 South Central Avenue, Suite 1700
Clayton, Missouri 63105
Attention: Jeffrey D. Fisher, Vice President
and General Counsel
Fax: (314) 721-1543
(b) Such notice or other communication shall be deemed to be effectively
given or made only if received, as evidenced by receipt, fax confirmation or
other proof of delivery, and shall be deemed to have been given or made, and
received:
(i) On the day of delivery, if delivered personally, by courier service
or by mail; or
(ii) On the day of faxing, provided that such day is a Business Day
and the transmission is completed before 5:00 p.m. local time at the
place of receipt on such day; otherwise, on the next following
Business Day.
(d) Either Party may from time to time change its address under this Section
8.3 by notice to the other Party given in the manner provided by this Section
8.3.
8.4 Pre-Termination Dispute Resolution . If any Party determines that there
is a reasonable likelihood that:
(i) One or more of the conditions to such Party's or any other Party's
obligation to complete the transactions described herein cannot or
will not be met in a timely manner, or
(ii) Such Party will not be able to complete its own obligation to
complete the transactions described herein or will otherwise
materially breach its obligations hereunder, or
(iii) Any other Party has committed or will commit a material breach
of its obligations hereunder;
then the Party making such determination shall promptly notify the other Parties
of its determination, stating the condition which may not be met or the breach
which has occurred or may occur, and describing generally the reason or reasons
therefor. Thereupon, the Parties will as promptly as practicable discuss the
matter among themselves and diligently endeavor to reach mutual agreement on
procedures or covenants which will either permit the condition to be met or
waived or the breach to be cured. This Agreement may not be terminated on
account of the failure of such condition or by reason of such breach unless and
until the Parties have diligently attempted to reach an acceptable solution
pursuant to this Section over a period of at least ten (10) days following the
initial notification, during which time the Parties' respective Chief Executive
Officers shall have met in person for such purpose at least once. Provided,
that nothing in this Section shall require a Party to waive a condition or
remedy or to incur expense on account of another party's breach.
8.5 Entire Agreement . Except as specifically set out in this Agreement and
except for the Non-Solicitation Agreement between Buyer, Seller and Uniroyal
dated December 8, 1999, this Agreement constitutes the entire agreement between
the Parties pertaining to the subject matter of this Agreement and supersedes
all prior agreements, understandings, negotiations and discussions between the
Parties in connection with the subject matter of this Agreement (whether oral or
written, express or implied, statutory or otherwise).
8.6 Waiver . A waiver of any default, breach or non-compliance under this
Agreement is not effective unless in writing and signed by the Party to be bound
by the waiver. No waiver shall be inferred from or implied by any failure to
act or delay in acting by a Party in respect of any default, breach or non-
observance or by anything done or omitted to be done by the other Party. The
waiver by a Party of any default, breach or non-compliance under this Agreement
shall not operate as a waiver of that Party's rights under this Agreement in
respect of any continuing or subsequent default, breach or non-observance
(whether of the same or any other nature).
8.7 Severability . Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such prohibition or unenforceability and shall be severed from
the balance of this Agreement, all without affecting the remaining provisions of
this Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction.
8.8 Injunctive Relief. The Parties specifically acknowledge and agree that
a remedy at law for breach of the provisions of this Agreement will be
inadequate and that a Party, in addition to any other relief available to it,
shall be entitled to temporary and permanent injunctive relief.
8.9 Governing Law . This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri (which is the jurisdiction in
which Buyer's parent corporation is headquartered and which the Parties
acknowledge has a reasonable nexus with the subject matter of this Agreement),
exclusive of principles of conflicts of laws.
8.10 Successors and Assigns . This Agreement shall inure to the benefit
of, and be binding on, the Parties and their respective successors and permitted
assigns. Neither Party may assign or transfer, whether absolutely, by way of
security or otherwise, all or any part of its respective rights or obligations
under this Agreement without the prior written consent of the other Party;
provided, that Buyer may assign its rights and/or delegate its duties under this
Agreement in whole or in part to a wholly-owned subsidiary, but such assignment
or delegation shall not discharge Buyer from any obligations hereunder without
the express written consent of Seller.
8.11 No Third-Party Beneficiaries . No Person shall be a third-party
beneficiary of any covenant in this Agreement except as expressly provided in
Article 6 or Section 7.10.
8.12 Counterparts . This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument.
Counterparts may be executed either in original or faxed form and the Parties
adopt any signature of a Party received by a receiving fax machine as an
original signature of the Party; provided, however, that a Party providing its
signature in such manner shall promptly forward to the other Party an original
of the signed copy of this Agreement which was so faxed.
IN WITNESS WHEREOF, the Parties have executed this Agreement.
Buyer: SPARTECH CORPORATION
By:/s/ Bradley B. Buechler
Bradley B. Buechler
Chairman of the Board, President
and Chief Executive Officer
Seller: HIGH PERFORMANCE PLASTICS, INC.
By:/s/ Howard R. Curd
Howard R. Curd
Chairman of the Board
and Chief Executive Officer
Holdings: UNIROYAL HPP HOLDINGS, INC.
By: /s/ Howard R. Curd
Howard R. Curd
Chairman of the Board
and Chief Executive Officer
Uniroyal: UNIROYAL TECHNOLOGY CORPORATION
By: /s/ Howard R. Curd
Howard R. Curd
Chairman of the Board
and Chief Executive Officer
APPENDIX A - Exhibits and Schedules
Exhibits
A Bill of Sale
B Assignment and Assumption Agreement
C Seller's Officer's Certificate
D Seller's Secretary's Certificate
E Opinion of Seller's Counsel
F Buyer's Officer's Certificate
G Buyer's Secretary's Certificate
H Opinion of Buyer's Counsel
Schedules
2.1(1) Certificate of Incorporation and Bylaws; Lists of Officers and
Directors of Seller
2.1(4) Liens; Purchased Asset Locations
2.1(5) Real Property
2.1(6) Leased Premises
2.1(7) Personal Property
2.1(8) Personal Property Leases
2.1(9) Material Contracts; Excluded Contracts
2.1(10) Receivables
2.1(11) Payables
2.1(12) Inventories
2.1(13) Intellectual Property
2.1(14) Year 2000 Readiness
2.1(15) Licenses and Permits
2.1(16) Consents and Approvals
2.1(17) Notices
2.1(19) Litigation
2.1(20) Insurance
2.1(21) Environmental Matters
2.1(22) Employees
2.1(23) Collective Bargaining Agreements
2.1(24) Employee Plans
2.1(25) Bonuses, etc.
2.1(26) Customers and Suppliers
2.1(32) Warranties
2.1(33) Exceptions to Ordinary Course of Business
APPENDIX B - Glossary
For the purposes of this Agreement:
"Accountant" has the meaning given in Section 1.5(e).
"Affiliate" means, with respect to any Person, any other Person who directly
or indirectly controls, is controlled by, or is under direct or indirect common
control with, such Person, and includes any Person in like relation to an
Affiliate. A Person shall be deemed to control a Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; and the term "controlled" shall
have a corresponding meaning.
"Agreement" means this Agreement, including the Exhibits and the Schedules
to this Agreement, as it or they may be amended or supplemented from time to
time, and the expressions "hereof," "herein," "hereto," "hereunder," "hereby"
and similar expressions refer to this Agreement and not to any particular
Section or other portion of this Agreement.
"Applicable Employee Benefit Laws" has the meaning given in Section 2.1(24).
"Applicable Law" means, with respect to any Person, property, transaction,
event or other matter, any Law relating or applicable to such Person, property,
transaction, event or other matter. Applicable Law also includes, where
appropriate, any interpretation of the Law (or any part) by any Person having
jurisdiction over it, or charged with its administration or interpretation.
"Assigned Contracts" means all rights and interests of Seller to and in all
pending and/or executory contracts, agreements, leases and arrangements Related
to the Business to or by which Seller or any of the Purchased Assets or Business
is bound or affected including the Material Contracts and the Leases (but not
including the Excluded Contracts).
"Assumed Liabilities" means only the following Liabilities of Seller,
subject to the exclusions described in clauses (1) through (6) of this
definition:
(i) Payables. Seller's accounts payable incurred in the ordinary course
of the Business, as they exist at the Effective Time;
(ii) Contract Liabilities. Liabilities (other than liabilities under
any Employee Plans) arising in respect of the period commencing at
the Effective Time under the Assigned Contracts;
(iii) Liabilities Related to Customer-Owned Inventory. Any
liabilities at the Effective Time with respect to Customer-Owned
Inventory on the Business premises; and
(iv) Product Warranties. Seller's warranty fulfillment obligations
with respect to products sold by Seller before the Effective Time in
the ordinary course of the Business, but only to the extent that
such obligations do not exceed the cost to Buyer of (at Buyer's
option) repair, replacement or refund of an amount not exceeding the
purchase price of the warranted Products, and excluding incidental
or consequential damages and product liability claims.
Without limiting the foregoing, it is expressly agreed that none of the
following shall be an Assumed Liability:
(1) Any product liability claim, whether known or unknown to Seller, or
any other liability or obligation in respect of or arising out of
products manufactured or sold by Seller or services performed by
Seller, except the limited warranty fulfillment obligations
expressly set out above; or
(2) Any liability for contributions (including without limitation any
unfunded benefit liabilities) to, or for payment of benefits under,
any Employee Plan; or any liability under Title IV of ERISA; or
(3) Any liability arising out of any litigation, claim, dispute or
employee grievance pending at the Effective Time; or
(4) Any payable or other liability, including termination and shutdown
costs, related to Seller's former facility in Newport, Delaware or
Uniroyal's facility in Stirling, New Jersey; or
(5) Any residual or contingent liability to the respective sellers
incurred by reason of Seller's purchases of Townsend Plastics,
ViPlex Corporation, Happel Marine, Inc. or the "Willow Bank S-A-R
business;" or
(6) Any claim or liability that is required to be disclosed to Buyer
under this Agreement but is not so disclosed.
"Best Knowledge of Seller," when used to qualify a statement of fact, means
that, with respect to the statement so qualified, Seller shall be deemed, for
purposes of this Agreement, to have fully satisfied and complied with its
obligations to Buyer in respect of the truth of such statement if
(i) Any of Seller's corporate officers,
(ii) Any manager of any plant, any divisional director of
manufacturing, or any department head at South Bend,
(iii) Any person in charge of a principal business function, with
respect to that function,
(iv) Any person with purchasing responsibilities, with respect to
matters involving suppliers,
(v) Any sales manager, with respect to matters involving products or
customers within such person's authority or territory, or
(vi) Any person at the level of controller or above, with respect to
financial matters,
has personal knowledge of the truth of such statement or, to the extent that
such person does not possess sufficient personal knowledge thereof, such person
has obtained and/or confirmed the truth of such statement through inquiries of
other officers or Employees of Seller who, having regard to their positions, job
descriptions and responsibilities, should reasonably be expected to have and
disclose knowledge and information relevant to the matter in question upon
inquiry.
"Books and Records" means all books, records, files and papers Related to
the Business or the Purchased Assets including drawings, engineering
information, computer programs (including source code), software programs,
manuals and data, sales and advertising materials, sales and purchases
correspondence, trade association files, research and development records, lists
of present and former customers and suppliers, personnel, employment and other
records, and all copies and recordings of the foregoing.
"Business" means the business carried on by Seller's "Polycast Acrylics" and
"Royalite Thermoplastics" divisions.
"Business Day" means any day except Saturday, Sunday or any day on which
banks are generally not open for business in the cities of Clayton, Missouri,
Sarasota, Florida or New York, New York.
"Buyer" has the meaning given in the Preamble.
"Buyer's Counsel" means Jeffrey D. Fisher, Esq., the Vice President and
General Counsel of Buyer.
"Claim" has the meaning given in Section 6.1.
"Closing" means the completion of the purchase and sale of the Purchased
Assets in accordance with the provisions of this Agreement.
"Closing Date" has the meaning given in Section 5.1.
"Closing Report" has the meaning given in Section 1.5(a).
"Condition of the Business" means the condition (financial or otherwise) of
the Business taken as a whole, having regard to its earnings, assets,
liabilities, properties, operations and prospects.
"Confidential Information" of a Party at any time means all information
relating to such Party's business, including without limitation data, plans,
reports, drawings, forecasts, trade secrets, business and financial information,
which:
(i) At the time is of a confidential nature (whether or not specifically
identified as confidential) and is known or should be known by the
other Party or its Representatives as being confidential, and
(ii) Has been or is from time to time made known to or is otherwise
learned by the other Party or any of its Representatives as a result
of the matters provided for in this Agreement,
including the terms of this Agreement. However, Confidential Information shall
not include any information that is:
(i) Already known to the receiving Party at the time of receipt thereof;
or
(ii) Publicly available at the time of its receipt by the receiving
Party or subsequently becomes publicly available other than through
a breach of the receiving Party's confidentiality obligations to
another Party; or
(iii) Received by the receiving Party from a third party who is not
under a restriction or duty of confidentiality as to such
information.
"Consents and Approvals" means all consents and approvals required to be
obtained by Seller in connection with the execution and delivery of this
Agreement and the completion of the transactions contemplated by this Agreement,
including without limitation any contractually required consents to Seller's
assignment of any Purchased Assets to Buyer.
"Customer-Owned Inventory" means customer-owned inventory in or in transit
to or from Seller's plants.
"Data Processing System" has the meaning given in Section 2.1(14).
"Direct Claim" has the meaning given in Section 6.4.
"Effective Date" means the day after the Closing Date, or such earlier or
later date as may be agreed upon in writing by the Parties.
"Effective Time" means 12:01 a.m. Eastern Standard Time on the Effective
Date or such other time as may be agreed upon in writing by the Parties.
"Employee" means an individual who is employed by Seller in the Business, or
who is employed by Holdings or Uniroyal and who is primarily assigned to or
whose employment duties are primarily rendered to the Business, and "Employees"
means every Employee.
"Employee Advances" means Seller's advances to and receivables from the
Transferred Employees, and excludes any obligations of Transferred Employees to
Employee Plans.
"Employee Plans" has the meaning given in Section 2.1(24).
"Environmental Laws" means Applicable Law in respect of the natural
environment, public or occupational health or safety, and the manufacture,
importation, handling, transportation, storage, disposal and treatment of
Hazardous Substances.
"Environmental Permits" means all permits, certificates, approvals,
consents, registrations and licenses issued or required by any Environmental
Laws or any court or governmental authority and relating to or required for the
ownership and/or operation of the Business and/or the Purchased Assets.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estimated Purchase Price" has the meaning given in Section 1.3.
"Excluded Assets" means only the following property and assets of Seller:
(i) Unrelated Assets. All assets, properties, interests and rights not
Related to the Business.
(ii) Excluded Receivables. Any Receivables over 90 days old at the
Closing Date which Buyer elects (not later than the Closing) not to
purchase, and any Receivables from Employees other than Transferred
Employees, or from officers, directors or Affiliates of Seller,
Holdings or Uniroyal.
(iii) Notes from Affiliates. Long-term notes receivable from Seller's
Affiliates or other related parties.
(iv) Deferred Taxes. Deferred taxes or deferred costs and similar
balance sheet accounting adjustments.
(v) Corporate Records. Any minute books, share certificates and other
records having to do with the corporate organization of Seller.
(vi) Excluded Contracts. All Excluded Contracts.
(vii) Bank Accounts and Cash. Seller's accounts with financial
institutions, and all cash on hand or in banks or other
depositories.
(viii) Employee Plans. All rights and interests in and to all Employee
Plans of Seller and any related assets.
(ix) Certain Insurance Refunds and Proceeds. Any insurance and/or
worker's compensation premium refunds and proceeds from claims
arising out of occurrences prior to the Effective Time, and any
prepaid insurance premiums on policies which are not assigned to
Buyer.
(x) Employee Life Insurance Policies. Any insurance policies owned by
Seller on the life of any Employee or former Employee.
(xi) Customer-Owned Molds. Any ownership interest in customer-owned
molds and tooling, provided that Buyer shall succeed to whatever
possessory, contractual or other rights Seller may have in such
items.
(xii) Stirling Facility. The Real Property, including Improvements,
at Uniroyal's Stirling, New Jersey facility.
(xiii) Newport Facility. Any Real Property or Premises Leases related
to Seller's now-closed Newport, Delaware facility.
(xiv) Townsend/Glasflex Business. Any portion of the
Townsend/Glasflex Business which is not acquired by Buyer.
(xv) Rights in Transaction. The rights of Seller relating to this
Agreement or any agreements or documents made pursuant to this
Agreement.
"Excluded Contracts" means
(i) All agreements to incur, assume or repay debt, including promissory
notes, except any which Buyer may expressly agree to assume;
(ii) All Financing Leases, except any which Buyer may expressly agree
to assume;
(iii) All employment, consulting or sales representative contracts,
except for any such contract which Buyer and the employee,
consultant or sales representative mutually agree shall be assumed,
or which is assignable to Buyer without the consent of the other
party and which Buyer may expressly agree to assume;
(iv) All contracts not Related to the Business or related solely to
Excluded Assets;
(v) All contracts not entered into in the ordinary course of the
Business, except for any such contract which Buyer may expressly
agree to assume; and
(vi) Any other contracts and agreements listed in Schedule 2.1(9) as
Excluded Contracts.
"Financial Statements" has the meaning given in Section 2.1(30).
"Financing Lease" means any lease, conditional sales contract or other
agreement of similar nature whose primary purpose is to provide a financing
vehicle for Seller's acquisition of Personal Property and under which Seller has
the right to acquire ownership of the subject Personal Property at the end of
the term thereof for a price less than its then fair market value.
"FTC" means the United States Federal Trade Commission.
"GAAP" means generally accepted United States accounting principles.
"Hackensack Property" has the meaning given in Section 7.10.
"Hazardous Substance" means any solid, liquid, gas, odor, heat, sound,
vibration, radiation or combination of them that may impair the natural
environment, injure or damage property or plant or animal life or harm or impair
the health of any individual.
"Holdings" has the meaning given in the Preamble.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act, 15 U.S.C.
Section 18a, as amended.
"Improvements" means all buildings, fixtures, sidings, parking lots,
roadways, structures, fixtures and appurtenances situated on, in, under, over or
forming part of the Leased Premises or the Real Property, as the case may be.
"Including" means "including without limitation," and "includes" means
"includes without limitation."
"Indemnified Party" means a Person whom Seller or Buyer, as the case may be,
has agreed to indemnify under Article 6 or Section 7.10, as the case may be.
"Indemnifying Party" means, in relation to an Indemnified Party, the Party
to this Agreement that has agreed to indemnify that Indemnified Party under
Article 6 or Section 7.10, as the case may be.
"Intellectual Property" means all rights to and interests in:
(i) All business and trade names, corporate names, brand names and
slogans Related to the Business;
(ii) All inventions, patents, patent rights, patent applications
(including all reissues, divisions, continuations, continuations-in-
part and extensions of any patent or patent application), industrial
designs and applications for registration of industrial designs
Related to the Business;
(iii) All copyrights and trademarks (whether used with wares or
services and including the goodwill attaching to such trademarks),
registrations and applications for trademarks and copyrights (and
all future income from such trademarks and copyrights) Related to
the Business;
(iv) All rights and interests in and to processes, lab journals,
notebooks, data, trade secrets, designs, know-how, product formulae
and information, manufacturing, engineering and other drawings and
manuals, technology, blueprints, research and development reports,
agency agreements, technical information, technical assistance,
engineering data, design and engineering specifications, and similar
materials recording or evidencing expertise or information Related
to the Business;
(v) All of the intellectual property affected by the registrations,
applications for registration, permissions and licenses listed in
Schedule 2.1(13);
(vi) All other intellectual and industrial property rights throughout
the world Related to the Business;
(vii) All licenses of the intellectual property listed in items (i) to
(vi) above;
(viii) All future income and proceeds from any of the intellectual
property listed in items (i) to (vi) above and the licenses listed
in item (vii) above; and
(ix) All rights to sue and rights to damages and profits by reason of
the infringement of any of the intellectual property listed in items
(i) to (vii) above;
provided that Buyer shall not acquire any interest in the name "Uniroyal."
"Interim Period" means the period from the date of this Agreement to the
Closing.
"Inventories" means all inventories of stock-in-trade and merchandise
including materials, supplies (including office supplies), work in progress,
finished goods, regrind materials, and purchased finished goods Related to the
Business, including those in possession of suppliers, customers and other third
parties, and including any and all rights of Seller in and with respect to
Customer-Owned Inventory.
"Law" means any law, rule, statute, regulation, order, decree,
administrative or judicial decision, treaty or other requirement having the
force of law.
"Leased Premises" means the property subject to the Premises Leases, and the
Improvements thereon as the context permits.
"Leases" means the Personal Property Leases and the Premises Leases.
"Liabilities" means all costs, expenses (including reasonable attorneys'
fees), charges, debts, liabilities, claims, demands and obligations, whether
primary or secondary, direct or indirect, fixed, contingent, absolute or
otherwise, under or in respect of any contract, agreement, arrangement, lease,
commitment or undertaking, Applicable Law and Taxes.
"Licenses and Permits" means all governmental licenses, permits, filings,
authorizations, approvals or indicia of authority Related to the Business or
necessary for the conduct of the Business, and includes the Environmental
Permits.
"Lien" means any lien, mortgage, pledge, security interest, prior
assignment, option, warrant, lease, sublease, right to possession, encumbrance,
claim, right or restriction which affects, by way of a conflicting ownership
interest or otherwise, the right, title or interest in or to any particular
property.
"Material Adverse Change" means a change in the Condition of the Business
which has had or would reasonably be expected to have a material adverse effect
on the operations or value of the Business or the value of the Purchased Assets.
"Material Contract" means an agreement (whether oral or written) Related to
the Business to which Seller is a party or by which Seller or the Business or
any of the Purchased Assets is bound or affected, except any agreement which (i)
is terminable by its terms on not more than 90 days notice without penalty or
liability for any post-termination payments and (ii) by its terms involves the
payment to or by Seller of less than $10,000 over the term of the agreement; and
which in either case is not otherwise material to the Condition of the Business.
"Net Working Capital" as of a specified date or time means Seller's current
assets as of such date or time less Seller's current liabilities as of such date
or time, all as properly carried and valued on Seller's balance sheet in
accordance with GAAP consistently applied on a basis consistent with Seller's
past practices as reflected in Seller's September 26, 1999 audited financial
statements or as otherwise described in Section 1.5, but after excluding (i)
from current assets, any current asset which is an Excluded Asset, and (ii) from
current liabilities, any liability which is not an Assumed Liability.
"Notice of Claim" has the meaning given in Section 6.4.
"Parties" means Buyer, Seller, Holdings and Uniroyal, and "Party" means any
of the Parties; and any reference to a Party includes its successors and
permitted assigns.
"Permitted Liens" means:
(i) Liens for Taxes if such Taxes are not due and payable;
(ii) Mechanics', materialmen's, warehousemen's, carriers', workers'
or other similar liens (inchoate or otherwise) which (i)
individually or in the aggregate are not material, (ii) have arisen
or were incurred in the ordinary course of business, (iii) have not
been filed or recorded in accordance with Applicable Law, and (iv)
of which notice of intent to so file or record has not been given to
Seller by the lien holder;
(iii) Minor title defects or irregularities consisting of minor survey
exceptions and other minor unrecorded restrictions as to the use of
the Leased Premises, which title defects, irregularities or
restrictions do not, in the aggregate, materially impair the
operation of the Business or the continued use of the Leased
Premises to which they relate after the Closing on substantially the
same basis as the Business is currently being operated and such
Leased Premises are currently being used;
(iv) Easements, covenants, rights of way and other restrictions of
record, provided that they do not, in the aggregate, materially
impair the operation of the Business or the continued use of the
Leased Premises to which they relate after the Closing on
substantially the same basis as the Business is currently being
operated and such Leased Premises are currently being used;
(v) Liens which will be discharged at or before the Closing; and
(vi) Liens which arise under an Assigned Contract.
"Person" is to be broadly interpreted and includes an individual, a
corporation, a partnership, a trust, an unincorporated organization, the
government of a country, state or any political subdivision thereof, or any
agency or department of any such government, and the executors, administrators
or other legal representatives of an individual in such capacity.
"Personal Property" means all machinery, equipment, furniture, motor
vehicles and other chattels Related to the Business (including those in
possession of or owned by third parties) including the personal property listed
in Schedule 2.1(7).
"Personal Property Leases" means Financing Leases, rental agreements, and
other agreements granting Seller the right to use or possess personal property
Related to the Business.
"Pleasant Hill Site" has the meaning given in Section 7.10.
"Polycast Consolidation" means the project which Seller has referred to as
the "$9 million Polycast consolidation/modernization project."
"Premises Leases" means all leases, agreements to lease, subleases, license
agreements and occupancy or other agreements granting Seller the right to use or
occupy real property Related to the Business.
"Prepaid Amounts" means all prepayments, prepaid charges, deposits, and
other sums and fees Related to the Business or in respect of the Purchased
Assets, but only to the extent reasonably anticipated to be recoverable by or
reimbursable to Buyer in the course of its conduct of the Business after the
Effective Time.
"Prime Rate" means the rate of interest quoted by Bank of America (Chicago)
from time to time as its "prime rate," it being understood that such rate is not
necessarily the lowest rate charged by such bank.
"Purchase Price" has the meaning given in Section 1.2.
"Purchased Assets" means all the properties, assets, interests and rights of
Seller which are Related to the Business (other than the Excluded Assets)
including the following:
(i) The Receivables, except that Buyer may elect not later than Closing
not to purchase any Receivables which are more than 90 days old as
of the Closing Date, in which case such non-purchased Receivables
shall be Excluded Assets;
(ii) The Inventories;
(iii) The Prepaid Amounts;
(iv) The Employee Advances;
(v) The Personal Property;
(vi) The Real Property;
(vii) All rights and interests of Seller to and in the Leased Premises
and under the Premises Leases, including prepaid rents, security
deposits and options to renew or purchase, rights of first refusal
under the Premises Leases and all leasehold improvements owned by
Seller and forming part of the Leased Premises;
(viii) All rights and interests under or pursuant to all warranties,
representations and guarantees, express, implied or otherwise, of or
made by suppliers or others in connection with the Purchased Assets
or the Assumed Liabilities or otherwise Related to the Business;
(ix) The Intellectual Property;
(x) The Assigned Contracts;
(xi) The Licenses and Permits, to the extent transferable to Buyer;
(xii) The Books and Records;
(xiii) All good will Related to the Business including the present
telephone numbers, Internet and e-mail addresses and other
communications numbers and addresses of the Business; and
(xiv) All proceeds of any or all of the foregoing received or
receivable after the Effective Time.
"Real Property" means any real property, and any interests in real property,
owned by Seller Related to the Business, and any Improvements thereon.
"Receivables" means all trade accounts receivable, bills and notes
receivable, insurance claims and other receivables Related to the Business
together with any unpaid interest accrued on such items and any security or
collateral for such items, including recoverable deposits.
"Related to the Business" means, directly or indirectly, used in, arising
from, or relating in any manner to the Business.
"Related Documents" has the meaning given in Section 2.1(1).
"Release" includes an actual or potential discharge, deposit, spill, leak,
pumping, pouring, emission, emptying, injection, escape, leaching, seepage or
disposal of a Hazardous Substance which is or may be in breach of any
Environmental Laws.
"Representatives" with respect to a Party means the directors, officers,
employees, agents and other representatives and advisers of such Party and its
Affiliates.
"Right" has the meaning given in Section 5.5.
"Rome Property" has the meaning given in Section 7.10.
"Seller" has the meaning given in the Preamble.
"Seller's Counsel" means Oliver J. Janney, Esq., the Vice President, General
Counsel and Secretary of Seller, Holdings and Uniroyal.
"Stamford Property" has the meaning given in Section 7.10.
"Subsidiaries" means all business entities a majority of whose equity or
voting power is owned directly or indirectly by Seller, or which are otherwise
controlled directly or indirectly by Seller.
"Taxes" means all taxes, charges, fees, levies, imposts and other
assessments, including all income, sales, use, goods and services, value added,
capital, capital gains, alternative, net worth, transfer, profits, withholding,
payroll, employer health, excise, franchise, real property and personal property
taxes, and any other taxes, customs duties, fees, assessments or similar charges
in the nature of a tax, unemployment insurance payments and workers compensation
premiums, together with any installments with respect thereto, and any interest,
fines and penalties, imposed by any governmental authority (including federal,
state, municipal and foreign governmental authorities), and whether disputed or
not.
"Third Party Claim" has the meaning given in Section 6.4.
"Townsend/Glasflex Business" means Seller's clear cell-cast acrylic tube
business, which is the subject of a current investigation by the Federal Trade
Commission.
"Transferred Employees" means Employees who have accepted an offer of
employment from Buyer as of the Closing.
"Uniroyal" has the meaning given in the Preamble.
"Warsaw Property" has the meaning given in Section 7.10.
AT THE COMPANY:
Bradley B. Buechler Randy C. Martin
Chairman, President and Vice President-Finance and
Chief Executive Officer Chief Financial Officer
(314) 721-4242 (314) 721-4242
FOR IMMEDIATE RELEASE
Tuesday, February 29, 2000
SPARTECH CORPORATION COMPLETES PURCHASE OF
UNIROYAL TECHNOLOGY'S HIGH PERFORMANCE PLASTICS GROUP
St. Louis, Missouri, February 29, 2000 -- Spartech Corporation (NYSE:SEH)
announced today that it completed the purchase of substantially all of the
assets of Uniroyal Technology Corporation's (Nasdaq NMS: UTCI) High Performance
Plastics, Inc. ("HPP")--a well-established manufacturer of proprietary plastic
products based in South Bend, Indiana. HPP, through its two operating divisions
- -Polycast (cell cast acrylic) and Royalite (extruded thermoplastic sheet)--had
annual sales of $130 million for its most recent fiscal year which ended
September 26, 1999.
Spartech's Chairman, President and CEO, Bradley B. Buechler stated, "This
purchase represents our largest and most strategic acquisition to date. HPP
will (1) expand our product offerings to several new growth industries--
aerospace, mass transit, and medical; (2) increase our technical & marketing
expertise in a broad array of new formulations and processing techniques--adding
cell cast acrylics, flame retardant sheet products, and acrylic rods & tubes;
and (3) expand our production capacity with nine additional manufacturing
facilities located throughout North America. The addition of HPP's new product
lines in extruded thermoplastic sheet and cell cast acrylics, coupled with our
1999 acquisitions of Lustro (PETG sheet), Alltrista Corporation's Plastic
Packaging Division (multi-layer barrier rollstock), and OS Plastics (corrugated
sheet), have nearly doubled the available custom sheet & rollstock market in
which we operate, from $1.3 to $2.5 billion. HPP also increases Spartech's
consolidated annual sales from $768 million, reported in our fiscal year ended
October 30, 1999, to a level approaching $950 million for fiscal 2000."
Spartech's Vice President-Finance and CFO, Randy Martin said: "The
acquisition price for HPP was approximately $216 million and financed through
the Company's new $250 million bank credit facility. As a result of our recent
placement of $100 million of 7% Convertible Preferred Securities (convertible
into Spartech common stock at $34 per share), our debt to total capitalization
remains at approximately 50%. This is consistent with the levels in which we
feel comfortable operating--with nearly 60% of our financing at fixed interest
rates averaging 7%."
-more-
Mr. Buechler further stated, "We currently plan to upgrade HPP's
manufacturing equipment and put additional capital into their nine facilities
during the next 12-18 months. In addition, the $9 million modernization project
at Polycast's Stamford, Connecticut facility is near completion and should add
significant production efficiencies and capacity to our results over the next 6-
12 months. The acquisition will be accretive to Spartech's earnings per share
immediately, and should have even greater benefits, as we install new equipment
and integrate production capabilities & marketing efforts throughout our
combined operations during the next few years."
Spartech, which recently announced its 33rd consecutive quarter of
increased year-over-year results, is a leading producer of engineered
thermoplastic materials, polymeric compounds, and molded & profile products,
with annual production capacity of more than 1.7 billion pounds from its 53
manufacturing facilities located in North America and Europe.
Safe Harbor For Forward-Looking Statements
Statements contained herein which are not historical facts are forward-
looking statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934 which are intended to be covered by the safe
harbors created thereby. For a summary of important facts which could cause the
Company's actual results to differ materially from those included in, or
inferred by, the forward-looking statements, refer to the Company's Form 10-K
for the fiscal year ended October 31, 1999, which is on file with the Securities
and Exchange Commission.
-30-
